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Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from      to      .
Commission File No. 000-26770
NOVAVAX, INC.
(Exact name of Registrant as specified in its charter)
Delaware 22-2816046
(State of incorporation)
(I.R.S. Employer Identification No.)




21 Firstfield Road,
Gaithersburg, Maryland 20878
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (240) 268-2000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, Par Value $0.01 per share NVAX The Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: Not Applicable
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant had elected not to use the extended transition period for complying with any new or revised financial accounting standards provide pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.     ☒

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant (based on the last reported sale price of Registrants common stock on June 30, 2020 on the Nasdaq Global Select Market) was approximately $5,078,700,000.
As of February 24, 2021, there were 73,858,882 shares of the Registrant’s common stock outstanding.
Documents incorporated by reference: Portions of the Registrant’s Definitive Proxy Statement to be filed no later than 120 days after the fiscal year ended December 31, 2020 in connection with the Registrant’s 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent indicated herein.



Table of Contents
NOVAVAX, INC.
TABLE OF CONTENTS
Page
PART I
5
24
50
50
50
50
PART II
51
52
53
65
66
66
66
67
PART III
67
67
67
68
68
PART IV
68
Item 16.
FORM 10-K SUMMARY
73

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CERTAIN DEFINITIONS
All references in this Annual Report on Form 10-K to “Novavax,” the “Company,” “we,” “us” and “our” refer to Novavax, Inc. and its wholly-owned subsidiaries, Novavax AB and Novavax CZ (formerly, Praha Vaccines a.s.) (unless the context otherwise indicates).
NOTE REGARDING TRADEMARKS
Novavax™, NanoFlu™, Matrix-M™, Matrix™, Prepare™, Resolve™, and ResVax™ are trademarks of Novavax. Any other trademarks referred to in this Annual Report on Form 10-K are the property of their owners. All rights reserved. We do not intend our use or display of other companies’ trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.
FORWARD-LOOKING INFORMATION
This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements. Please also see the disclaimer under the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS

Our business is subject to numerous risks which are discussed more fully under the heading “Risk Factors” in this Annual Report on Form 10-K. These risks include, but are not limited to, the following:

We have a history of losses and our future profitability is uncertain.

We will continue to require significant funding to maintain our current level of operations and fund the further development of our vaccine candidates.

Because our vaccine product development efforts depend on new and rapidly evolving technologies, we cannot be certain that our efforts will be successful.

Although we have made rapid progress, the regulatory and commercial success of our COVID-19 vaccine candidate, NVX-CoV2373, remains uncertain. We may be unable to obtain regulatory approval or produce a successful vaccine in a timely manner, if at all.

We are a biotechnology company and face significant risk in developing, manufacturing and commercializing our products.

Because we depend on third-parties to conduct some of our laboratory testing and clinical trials, and a significant amount of our vaccine manufacturing and distribution, we may encounter delays in or lose some control over our efforts to develop and supply products.

Many of our competitors have significantly greater resources and experience, which may negatively impact our commercial opportunities and those of our current and future licensees.

There is significant competition in the development of a vaccine against COVID-19, influenza, and RSV and we may never see returns on the significant resources we are devoting to our vaccine candidates.

We have not completed the development of vaccine products and we may not succeed in obtaining the FDA licensure necessary to sell such vaccine products.

The regulatory pathway for NVX-CoV2373 is continually evolving, and may result in unexpected or unforeseen challenges.

We are conducting, and plan to conduct in the future, a number of clinical trials for NVX-CoV2373 at sites outside the United States and the FDA may not accept data from trials conducted in such locations.

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Even if regulatory approval is received for our vaccine candidates, the later discovery of previously unknown problems with a product, manufacturer or facility may result in restrictions, including withdrawal of the product from the market.

Our success depends on our ability to maintain the proprietary nature of our technology.

Our business may be adversely affected if we do not successfully execute our business development initiatives.

Servicing our 3.75% convertible senior unsecured notes due 2023 (the “Notes”) requires a significant amount of cash, and we may not have sufficient cash flow resources to pay our debt.

Because our stock price has been and will likely continue to be highly volatile, the market price of our common stock may be lower or more volatile than expected.

Litigation could have a material adverse impact on our results of operation and financial condition.

We or the third parties upon whom we depend may be adversely affected by natural or man-made disasters or public health emergencies, such as the COVID-19 pandemic.
PART I
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Item 1.    BUSINESS
Overview
Novavax, Inc., together with our wholly-owned subsidiaries, Novavax AB and Novavax CZ, is a biotechnology company promoting improved global health through the discovery, development and commercialization of innovative vaccines to prevent serious infectious diseases and address urgent, global health needs. Our vaccine candidates, including both our coronavirus vaccine candidate, (“NVX-CoV2373”) and our nanoparticle seasonal quadrivalent influenza vaccine candidate (“NanoFlu”), are genetically engineered, three-dimensional nanostructures of recombinant proteins critical to disease pathogenesis. We believe that our protein-subunit-based candidates elicit differentiated immune responses that may be more efficacious than naturally occurring immunity or other, more traditional vaccine approaches. Our technology may be used to target a variety of infectious diseases. Our unique technology is paired with our proprietary immune stimulating adjuvants, developed at Novavax AB, our wholly owned Swedish subsidiary.

We were incorporated in 1987 under the laws of the State of Delaware. Our principal executive offices are located at 21 Firstfield Road, Gaithersburg, Maryland, 20878, and our telephone number is (240) 268-2000. We were incorporated in 1987 under the laws of the State of Delaware. Our common stock is listed on the Nasdaq Global Select Market under the symbol “NVAX.”
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Product Pipeline

NVAX-20201231_G1.JPG

(1)Supported by funding from the U.S. government partnership formerly known as Operation Warp Speed (“OWS”), U.S. Department of Defense (the “DoD”), Coalition for Epidemic Preparedness Innovations (“CEPI”) and the Bill & Melinda Gates Foundation (“BMGF”)
(2)Ongoing PREVENT-19, a Phase 3 clinical trial in U.S. and Mexico; Ongoing Phase 3 in UK; Ongoing Phase 2b in South Africa
(3)Supported by a grant from BMGF

Technology Overview

Recombinant Nanoparticle Vaccine Technology

Novavax’ recombinant nanoparticle vaccines combine the power and speed of genetic engineering to efficiently produce a new class of highly immunogenic vaccines that target a variety of viral pathogens.

Once a pathogenic threat has been identified, the genetic sequence encoding the antigen is selected for subsequent use in developing the vaccine construct. The genetic sequence may be optimized to enhance protein stability or confer resistance to degradation. This genetic construct is inserted into the baculovirus Spodoptera frugiperda (Sf9/BV) insect cell-expression system, which enables efficient, large-scale expression of the optimized protein. The Sf9/BV system produces proteins that are properly folded and modified – which can be critical for functional, protective immunity – as the vaccine
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antigen. Protein antigens are purified and organized around a polysorbate-based nanoparticle core, in a configuration that resembles their native presentation. This presentation results in a highly immunogenic nanoparticle that is ready to be formulated with Matrix-M adjuvant.
Matrix-M Adjuvant

Matrix-M is composed of 40 nanometer particles derived from saponin extracted from the bark of the Quillaja saponaria Molina tree. Once purified these particles are fused with a unique formulation of cholesterol and phospholipid. This proprietary adjuvant has demonstrated potent and well-tolerated efficacy by stimulating the entry of antigen presenting cells (APCs) into the injection site and enhancing antigen presentation in local lymph nodes, which in turn activates T cell, B cell, and APC populations, thereby boosting immune response. Matrix-M has been shown to increase neutralizing antibodies and induces long-lasting memory B cells, which enhances B-cell immunity and recruits and increases the frequency of CD4+ and CD8+ T cells to enhance T cell immunity. The potent immune-stimulating mechanism of action is designed to enables a lower dose of antigen required to achieve the desired immune response, ultimately contributing to increased supply and manufacturing capacity. These immune-boosting and dose-sparing capabilities contribute to the adjuvant’s highly unique profile.
To date, we have formulated many of the vaccine candidates in our pipeline with Matrix-M, including NVX-CoV2373 and NanoFlu. Matrix-M has been well tolerated in human studies to date.

Pipeline Overview
As the world continues to address the global COVID-19 pandemic, we remain focused today on bringing our NVX-CoV2373 vaccine candidate to market following global regulatory approvals. In addition to this focus, NanoFlu continues to be a priority for our team, especially as it relates to a potential combined NanoFlu / NVX-CoV2373 vaccine. Although NVX-CoV2373 and NanoFlu are our near-term priorities, we remain optimistic that the additional programs in our pipeline including our vaccine candidates for RSV and other emerging infectious diseases, present viable opportunities for future development.

Coronavirus

Coronaviruses (“CoV”), so named for their “crown-like” appearance, are a large family of viruses, some of which are believed to have spread from animals to humans. These viruses cause human diseases such as Middle East Respiratory Syndrome (“MERS”) and Severe Acute Respiratory Syndrome (“SARS”), and COVID-19, the disease resulting from the SARS CoV-2 coronavirus. COVID-19 first emerged in late 2019 in China, and, as of March 2020, the World Health Organization declared it a global pandemic.

NVX-CoV2373

We have successfully produced NVX-CoV2373, designed to provide protection against SARS-CoV-2. We engineered NVX-CoV2373 from the genetic sequence of SARS-CoV-2 using our recombinant nanoparticle technology to generate the antigen derived from the coronavirus spike (S) protein. NVX-CoV2373 includes our proprietary Matrix-M adjuvant.

NVX-CoV2373 Preclinical Development

In April 2020, we announced that NVX-CoV2373 demonstrated high immunogenicity in animal models measuring spike protein-specific antibodies, antibodies that block the binding of the spike protein to the receptor and high levels of wild-type virus neutralizing antibodies.

NVX-CoV2373 Clinical Development

PREVENT-19 Phase 3 U.S. and Mexico

In February 2021, we completed enrollment of our PREVENT-19 pivotal Phase 3 study in the U.S. and Mexico initiated in December 2020. PREVENT-19 is a randomized, placebo-controlled, observer-blinded study to evaluate the efficacy, safety and immunogenicity of NVX-CoV2373 with Matrix-M adjuvant that enrolled more than 30,000 participants aged 18 years or older. The trial largely reached its demographic goal of enrolling participants at high-risk for COVID-19 including adults over the age of 65, people with medical co-morbidities and racial/ethnic subgroups who are at greater risk of infection and disease. The participant study population is composed of the following: 20% LatinX, 13% African American, 6% Native American, 5% Asian American, and 13% older adults aged 65 years and older. The trial design has been
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harmonized to align with other Phase 3 trials conducted under the auspices of OWS, including the use of a single external independent Data and Safety Monitoring Board to evaluate safety and conduct an unblinded review when predetermined interim analysis events are reached. The trial’s primary endpoint is the prevention of PCR-confirmed, symptomatic COVID-19. The primary and secondary endpoints will be assessed at least seven days after the second study vaccination in volunteers who have not been previously infected with SARS-CoV-2. Two thirds of the participants will be assigned to randomly receive two intramuscular injections of the vaccine, administered 21 days apart, while one third of the trial participants will receive placebo. The primary efficacy analysis is event-driven, based on the number of participants with symptomatic mild, moderate or severe COVID-19 disease. Participants will be followed for 24 months following the second injection. Dependent on the overall COVID-19 attack rate, interim data in this event-driven trial are expected in the second quarter of 2021. PREVENT-19 is being conducted with support from OWS, including a $1.7 billion agreement. Our blinded crossover protocol for this Phase 3 trial has been submitted to the FDA. We have posted that updated protocol, including details of the crossover, on our website under resources.

Phase 3 United Kingdom (“UK”)

In January 2021, we announced that NVX-CoV2373 demonstrated 89.3% efficacy in an interim analysis of our Phase 3 UK study initiated in September 2020. Our Phase 3 study in the UK was in partnership with the UK Government’s Vaccines Taskforce. The trial was a randomized, placebo-controlled, observer-blinded study to evaluate the efficacy, safety and immunogenicity of NVX-CoV2373 in over 15,000 enrolled participants aged 18 to 84 years, including 27 percent of participants over the age of 65. Half of the trial participants received two intramuscular injections of NVX‑CoV2373 comprising 5 micrograms of antigen with 50 micrograms of Matrix‑M, administered 21 days apart, while the other half of the trial participants received placebo. The primary endpoint was first occurrence of PCR-confirmed symptomatic COVID-19 with onset at least seven days after the second study vaccination in volunteers who have not been previously infected with SARS-CoV-2. Preliminary analysis indicates that the UK variant strain that was increasingly prevalent was detected in over 50% of the PCR-confirmed symptomatic cases. Interim results from this trial showed that efficacy by strain was 95.6% against the original COVID-19 strain and 85.6% against the UK variant strain. The interim analysis included a preliminary review of the safety database, which showed that severe, serious, and medically attended adverse events occurred at low levels and were balanced between vaccine and placebo groups.

Phase 2b South Africa

In January 2021, we announced that NVX-CoV2373 demonstrated 60% efficacy for the prevention of mild, moderate and severe COVID-19 disease for the portion of the study population that was HIV-negative (94% of study participants) in an interim analysis of our South Africa Phase 2b clinical trial initiated in August 2020. The Phase 2b clinical trial in South Africa enrolled over 4,400 participants. CEPI funded the manufacturing of doses of NVX-CoV2373 for this Phase 2b clinical trial, which was supported in part by a $15.0 million grant from the BMGF. Interim results from this trial showed that NVX-CoV2373 achieved its primary efficacy endpoint in the overall trial population, with efficacy of 49.4%, including HIV-positive and HIV-negative participants. Data suggested that NVX-CoV2373 provided significant protection from the South Africa escape variant, which was widely circulating at the time and attributable for approximately 92.6% of sequenced cases. Importantly in this trial, approximately 1/3 of the participants enrolled, but not included in the primary analyses, were seropositive, demonstrating prior COVID-19 infection at baseline. Based on temporal epidemiology data in the region, the pre-trial infections are thought to have been caused by the original COVID-19 strain (i.e., non-variant), while the subsequent infections during the study were largely attributable to the variant virus. These data suggest that prior infection with COVID-19 may not completely protect against subsequent infection by the South Africa escape variant, however, vaccination with NVX-CoV2373 provided significant protection.

Phase 1/2 U.S. and Australia

In August 2020, we announced positive preliminary immunogenicity and safety results from our Phase 1 portion of the Phase 1/2 clinical trial of NVX-CoV2373 initiated in May 2020. The Phase 1 portion was a randomized, observer-blinded, placebo-controlled trial in 131 participants at two sites in Australia. The trial was designed to evaluate the immunogenicity and safety of NVX‑CoV2373, both adjuvanted with Matrix‑M and unadjuvanted. The protocol’s two-dose trial regimen assessed two dose levels (5 and 25 micrograms) with Matrix‑M and without. Results from this trial showed that NVX-CoV2373 was generally well-tolerated, elicited robust antibody responses numerically superior to that seen in human convalescent sera and induced robust polyfunctional CD4+ T cell responses. In September 2020, the Phase 1 portion clinical results were published in The New England Journal of Medicine. In January 2021, we reported favorable six-month immunogenicity (IgG ELISA) data during the J.P. Morgan 39th Annual Healthcare Conference. In August 2020, we initiated the Phase 2 portion of the Phase 1/2 clinical trial. The Phase 2 portion is designed to evaluate the safety and immunogenicity of NVX-CoV2373 with Matrix-M in participants aged 18 to 84 years. The Phase 2 portion will assess two dose levels (5 and 25 micrograms), each with 50 micrograms of Matrix‑M. We completed enrollment of 1,288 healthy volunteers in October
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2020, with approximately 50 percent of participants 60 years of age and older, at up to 40 sites in the U.S. and Australia. In late October 2020, we reported favorable preliminary reactogenicity data from the Phase 2 portion of the trial during the Centers for Disease Control and Prevention Advisory Committee on Immunization Practices meeting. As of March 2021, some participants from this trial are receiving a six-month boost dose of NVX-CoV2373 to examine the functional immune response of our vaccine candidate.

NVX-CoV2373 Clinical Development Conducted by Partner

Phase 1/2 Japan

In February 2021, Takeda Pharmaceutical Company Limited (“Takeda”) initiated a Phase 1/2 clinical trial of NVX-CoV2373 in Japan. This placebo-controlled trial will evaluate the immunogenicity and safety in 200 participants aged 20 years and older.

Variant Strain (Booster and/or Bivalent)

In January 2021, we initiated development of new constructs against the emerging strains of COVID-19, and in February 2021, we selected candidates for variant strain vaccines as standalone and bivalent candidates. We are currently evaluating these candidates in ongoing non-human primate studies and plan to begin clinical evaluation of variant vaccine candidates in mid-2021.

NVX-CoV2373 Regulatory and Licensure

In February 2021, we announced the initiation of a rolling submission with non-clinical data to the UK Medicines and Healthcare products Regulatory Agency (“MHRA”). We expect to file for authorization by early second quarter of 2021 after we have gathered sufficient data.

In November 2020, we announced that the U.S. Food and Drug Administration ("FDA") granted NVX-CoV2373 Fast Track designation, which is intended for products that treat serious or life-threatening diseases or conditions and that demonstrate the potential to address unmet medical needs for such diseases or conditions. The Fast Track program is designed to facilitate development and expedite the review of drugs to treat serious conditions, with the intent of providing patients with earlier access to important new drugs. Specifically, Fast Track designation facilitates meetings with the FDA to discuss all aspects of development to support licensure and provides the opportunity to submit sections of a Biologics Licensing Application (“BLA”) on a rolling basis as data become available. We continue to be in communication with the FDA through submissions to our open investigational new drug application (“IND”) and discussions on various aspects of the program required to support the regulatory approval process. We also plan to file submissions for Emergency Use Authorization (“EUA”) with the FDA and expect to complete our EUA filing in the second quarter of 2021.

In addition, we initiated the rolling review process with submissions to several regulatory agencies worldwide, including the European Medicines Agency (“EMA”), Health Canada, Australian Therapeutic Goods Administration (“TGA”) and New Zealand Medsafe. As part of the rolling review, we will continue to submit additional information, including clinical and manufacturing data as they become available. These rolling reviews are initiated to expedite the assessment of vaccines, particularly during public health emergencies.

COVID-19 Vaccine Funding

In May 2020, we signed a restated funding agreement which was amended in November 2020, with CEPI (the “CEPI Funding Agreement”), under which we are entitled to receive funding of up to $399.5 million to be used by us for the development of NVX-CoV2373. Pursuant to the CEPI Funding Agreement, if approved, a portion of the NVX-CoV2373 supply produced by us, other than vaccine manufactured under the OWS Agreement (as defined below), is expected to be procured and allocated through the COVAX Facility component of the Access to COVID‑19 Tools (ACT) Accelerator, an international equitable vaccine purchasing initiative launched by the World Health Organization, Gavi the Vaccine Alliance ("Gavi"), CEPI and other global non-governmental organizations and governmental leaders in 2020.

In June 2020, we were awarded a contract by the DoD which was last amended in January 2021 under which we are entitled to receive funding of up to $45.7 million to support certain activities related to the development of NVX-CoV2373, including the manufacturing and delivery of 10 million doses of NVX-CoV2373 to the U.S. government.

In July 2020, we were selected to participate in OWS, a U.S. government sponsored program working to accelerate the development, manufacturing and distribution of COVID-19 vaccines, therapeutics and diagnostics. Through a Base
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Agreement and a Project Agreement (together, the “OWS Agreement”) entered into with Advanced Technology International, Inc., the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with OWS, which was last amended in December 2020, we have been allotted funding of $1.6 billion and are entitled to receive maximum funding up to $1.75 billion to support certain activities related to the development of NVX-CoV2373, and including the manufacture and delivery of 100 million doses of NVX-CoV2373 to the U.S. government. We expect this funding will assist in rapidly developing our large-scale manufacturing capacity and transitioning into ongoing production, including the capability to stockpile and distribute large quantities of NVX-CoV2373 for use in clinical trials and potentially for commercial sale, if authorized for emergency use or licensed. The OWS Agreement will fund the late-stage clinical studies necessary to determine the safety and efficacy of NVX-CoV2373, including PREVENT-19. Funding under the OWS Agreement is also expected to support our plans to file submissions for EUA and licensure with the FDA.
NVX-CoV2373 Manufacturing and Supply
In 2020, we established a global supply chain to support the commercialization of NVX-CoV2373. The acquisition of Praha Vaccines a.s. (“Praha Vaccines”) in the Czech Republic in May 2020 demonstrated the Company’s first major step toward building out our global manufacturing capabilities. Since May 2020, we have established partnerships worldwide to amplify and solidify our global reach.

We remain committed to partnering globally in efforts to end the COVID-19 pandemic, as demonstrated through our partnership with Serum Institute of India Private Limited ("SIIPL") to supply NVX-CoV2373 to India and low- and middle-income countries. In August 2020, we expanded upon our manufacturing and supply capabilities to include partnerships with both Takeda in Japan and SK Bioscience Co., Ltd. (“SK bioscience”) in South Korea and furthered these collaborations in February 2021. These additional partnerships will further increase our production capacity and are expected to support a rapid roll-out of NVX-CoV2373 globally.

To date, we have increased our projected global manufacturing production rate of NVX-CoV2373 to be over two billion annualized doses when we are at full capacity, which we expect to occur in mid-2021. Of this anticipated capacity, approximately one billion doses will be manufactured by SIIPL.

NVX-CoV2373 and its components are being manufactured at the following Novavax (in bold) and partnered sites:

NVAX-20201231_G2.JPG

A summary and status of key manufacturing and supply developments follows:

In February 2021, we announced a Memorandum of Understanding ("MOU") with Gavi to provide 1.1 billion doses of NVX-CoV2373 for the COVAX Facility. The vaccine doses will be manufactured and distributed globally by us and SIIPL, the latter under an existing agreement between Gavi and SIIPL. We expect to work with Gavi, which leads the design and implementation of the COVAX Facility, to finalize an advance purchase agreement for vaccine supply and global
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distribution via the COVAX Facility and its partners. We have licensed our NVX-CoV2373 technology to SIIPL and are jointly committed with SIIPL to deliver the 1.1 billion doses to the COVAX Facility. We expect to supply doses to primarily high-income countries, with SIIPL providing the majority of supply for low-, middle, and upper-middle-income countries, utilizing a tiered pricing schedule.

In February 2021, we also reached a MOU with the Canadian government to produce NVX-CoV2373 in Canada. We plan to produce NVX-CoV2373 at the National Research Council’s Biologics Manufacturing Centre in Montreal once both the vaccine candidate and the facility receive Health Canada approvals. The MOU also includes a broader intention for the Government of Canada and us to work together to increase our Canadian presence. We will explore a range of partnership opportunities for us to expand vaccine production in Canada, including partnerships with Canadian contract manufacturers. We recently initiated the rolling submission process for regulatory approval to Health Canada.

In August 2020, we entered into a development and supply agreement with SK bioscience, and in February 2021, announced an expanded collaboration and license agreement with SK bioscience. Under these agreements, SK bioscience has been granted an exclusive license to develop, manufacture and commercialize NVX-CoV2373 in the Republic of Korea. Concurrently, SK bioscience finalized an advance purchase agreement with the Republic of Korea to supply 40 million doses of NVX-CoV2373 beginning in 2021. SK bioscience will expand its capacity to manufacture the antigen component of NVX-CoV2373 for use in the final drug product globally, including product distributed by the COVAX Facility, during the COVID-19 pandemic. SK bioscience will also purchase a certain quantity of the finished vaccine product directly from us, subject to the approval by relevant regulatory authority, and sufficient doses of our Matrix-M adjuvant to manufacture the remainder of the 40 million doses of finished vaccine product SK bioscience expects to sell to the Korean government. SK bioscience will pay a tiered royalty in the low to middle double-digit range on the sale of NVX-CoV2373 in the Republic of Korea, net of certain agreed costs.

In August 2020, we announced a collaboration agreement with Takeda, and in February 2021, we finalized an exclusive license agreement with Takeda for the development, manufacturing and commercialization of NVX-CoV2373 in Japan. We will transfer technology and supply our Matrix-M adjuvant to Takeda, who will manufacture the vaccine antigen. Takeda will receive funding from the Government of Japan’s Ministry of Health, Labour and Welfare to support the technology transfer, establishment of infrastructure and scale-up of manufacturing. We anticipate that Takeda has a manufacturing capacity of over 250 million doses per year. We will be entitled to receive payments based on the achievement of certain development and commercial milestones, as well as a portion of net profits from vaccine sales. Takeda is responsible for regulatory submission to Japan’s Pharmaceutical and Medical Devices Agency (“PMDA”).

In July 2020, we announced a manufacturing agreement with FDB allowing for the large-scale contract production of NVX-CoV2373 in connection with our OWS Agreement, beginning at FDB’s North Carolina facility.

Also in July 2020, we entered into a supply and license agreement with SIIPL, as amended by the parties in September 2020, under which we granted exclusive and non-exclusive licenses to SIIPL for the development, co-formulation, filling and finishing, registration and commercialization by SIIPL of NVX‑CoV2373. SIIPL has agreed to purchase Matrix-M adjuvant from us and we have granted SIIPL a non-exclusive license to manufacture the antigen drug substance component of NVX-CoV2373 in SIIPL’s licensed territory solely for use in the manufacture of NVX-CoV2373 under the terms of the agreement. We will equally split with SIIPL the revenue from SIIPL’s sale of NVX-CoV2373 in its licensed territory, net of agreed costs. We granted to SIIPL (i) an exclusive license in India during the agreement, and (ii) a non-exclusive license (a) during the “Pandemic Period” (as declared by the WHO), in all countries other than specified countries designated by the World Bank as upper-middle or high-income countries, with respect to which we retain rights, and (b) after the Pandemic Period, in only those countries designated as low or middle-income by the World Bank. Following the Pandemic Period, we may notify SIIPL of any bona fide opportunities for us to license NVX‑CoV2373 to a third party in such low and middle- income countries and SIIPL would have an opportunity to match or improve such third party terms, failing which, we would have the discretion to remove one or more non-exclusive countries from SIIPL’s license. We anticipate SIIPL will manufacture approximately one billion doses of NVX‑CoV2373 in 2021.

In June 2020, we entered into contract manufacturing arrangements with AGC Biologics and the Polypeptide Group to provide contract development and manufacturing services, supplying us with large-scale production of Matrix-M.

In May 2020, we announced the acquisition of Praha Vaccines, formerly part of the Cyrus Poonawalla Group, in an all cash transaction of approximately $167 million. The acquisition includes a biologics manufacturing facility and associated assets in Bohumil, Czech Republic. The acquisition included a 150,000-square foot state-of-the-art vaccine and biologics manufacturing facility and other support buildings, along with the existing employees and all related and required infrastructure. The facility is expected to provide annual capacity of over 1 billion doses of antigen starting in 2021 for NVX-CoV2373. The facility is completing a renovation that includes Biosafety Level-3 (BSL-3) capabilities. As part of the
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transaction, approximately 150 employees with significant experience in vaccine manufacturing and support joined Novavax. The acquisition of Praha Vaccines was supported by our funding arrangements with CEPI, which we expect will enable us to dramatically expand our manufacturing capacity.

NVX-CoV2373 Supply Agreements

We have entered into advance purchase agreements (referred to as "APAs" or "supply agreements" throughout this Annual Report on Form 10-K) with various countries globally that, if our product candidate is approved, are expected to result in the delivery of approximately 200 million doses of NVX-CoV2373 throughout 2021 and into the first half of 2022. The APAs typically contain terms that include upfront payments intended to assist us in funding investments related to building out and operating our manufacturing and distribution network, among other expenses, in support of our global supply commitment. Such upfront payments generally become non-refundable upon our achievement of certain development milestones. We expect to sign additional APAs that are currently in active discussions and negotiations.
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A summary and status of these supply agreements follows:

In October 2020, we entered into a SARS-CoV-2 vaccine supply agreement with The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the UK (the “Authority”), for the purchase of 60 million doses of NVX-CoV2373, plus such additional orders as the Authority may make from time to time. We agreed to continue to conduct a UK-based Phase 3 clinical trial of NVX-CoV2373 to assess the efficacy of NVX-CoV2373 in the UK population, establish a dedicated supply chain for NVX-CoV2373 in the UK and seek regulatory approval for the NVX‑CoV2373 in the UK. FDB’s UK site is expected to produce up to 180 million doses annually. Excess supply of antigen manufactured at the FDB’s site in Billingham, Stockton-on-Tees may be available for us to sell to additional markets outside the UK.

In January 2021, we finalized an APA with the Government of Canada to supply up to 76 million doses of NVX-CoV2373. Canada has committed to purchase 52 million doses of NVX-CoV2373 with the option for up to an additional 24
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million doses. Under the agreement, we expect to supply doses of NVX-CoV2373 to Canada following authorization by Canada’s regulatory agency.

In December 2020, we finalized an APA with the Australian Federal Government to supply up to 61 million doses. Australia is committed to purchase 51 million doses of NVX-CoV2373 with the option for up to an additional 10 million doses. We will work with Australia’s regulatory agency, the Therapeutics Goods Administration (TGA), to seek product approvals upon demonstrating efficacy in clinical studies.

In December 2020, we finalized an APA with the government of New Zealand for the purchase of 10.72 million doses of NVX-CoV2373. Under the terms of the agreement, we will manufacture all doses of NVX-CoV2373 delivered to New Zealand under the agreement.

In February 2021, we executed a binding Heads of Terms with the government of Switzerland to supply six million doses of NVX-CoV2373. Following this Heads of Terms, we intend to negotiate a final agreement with Switzerland, with initial delivery of vaccine doses slated to ship following successful clinical development and regulatory review.
Seasonal Influenza
NanoFlu Program (Older Adults)

Influenza is a world-wide infectious disease with serious illness generally occurring in more susceptible populations such as children under and older adults, but also occurring in the general population. According to a 2019 Global Data forecast of influenza vaccines, the market for seasonal influenza vaccines is expected to grow from approximately $4.6 billion in 2018 to approximately $6.5 billion in 2028 (in the countries comprising the eight major markets).

In March 2020, we announced positive top-line results from our Phase 3 clinical trial of NanoFlu, which includes our proprietary Matrix-M adjuvant. In October 2020, we announced the formation of a leadership team within the Company focused on advancing NanoFlu to regulatory licensure. The leadership team has established a separate NanoFlu development unit within our Company, which benefits from joint shared services with key cross-functional departments within the Company and builds on the Company’s established knowledge base in the discovery and development of innovative vaccines to prevent serious infectious diseases.

We continue to seek regulatory approval from the FDA under the accelerated approval pathway previously granted to the Company and explore the potential for a combination NanoFlu / NVX-CoV2373 vaccine to be used in a post-pandemic setting.

Combination Vaccines

With the ongoing development of NanoFlu, NVX-CoV2373, and respiratory syncytial virus fusion (F) protein nanoparticle vaccine candidate (“RSV F Vaccine”), a strong rationale exists for potentially developing three combination respiratory vaccines designed to protect susceptible populations against these diseases. Although testing is at an early stage, we believe that combination vaccines against influenza in combination with COVID-19, influenza in combination with RSV, and influenza in combination with both RSV and COVID-19 may be achievable since these vaccines are created using our recombinant nanoparticle technology and include our proprietary Matrix-M adjuvant.
Respiratory Syncytial Virus ("RSV")
Currently, there is no approved RSV vaccine available to combat the estimated 64 million RSV infections that occur globally each year. We have identified three susceptible target populations that we believe could benefit from the development of our respiratory syncytial virus fusion (F) protein nanoparticle vaccine candidate (“RSV F Vaccine”) in different formulations: (1) infants via maternal immunization, (2) older adults (60 years and older) and (3) children six months to five years old (“pediatrics”). With our current estimates of the annual global cost burden of RSV in excess of $88 billion, we believe our RSV F Vaccine represents a multi-billion dollar worldwide opportunity.
ResVax Program (Infants via Maternal Immunization)
ResVax is our adjuvanted RSV F Vaccine for infants via maternal immunization. RSV is the most common cause of lower respiratory tract infections (“LRTI”) and the leading viral cause of severe lower respiratory tract disease in infants and young children worldwide. In the U.S., RSV is the leading cause of hospitalization of infants and, globally, is second only to malaria as a cause of death in children under one year of age.

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In February 2019, we announced data from our Prepare trial, initiated in December 2015. The Prepare trial was conducted to determine whether ResVax reduced incidence of medically significant RSV-positive LRTI in infants through a minimum of the first 90 days of life and up through the first six months of life. While the data did not meet the trial’s primary efficacy endpoint, it did demonstrate efficacy against a secondary objective by reducing RSV LRTI hospitalizations in treated infants. In July 2020, these data were published in the New England Journal of Medicine. BMGF supported the Prepare trial for ResVax through a grant of up to $89.1 million pursuant to a grant agreement we entered into with BMGF in September 2015 (the “BMGF Grant Agreement”) data. We are assessing opportunities to bring ResVax to market, in conjunction with our pursuit of a regulatory licensure approach for the U.S., the European Union and other geographies.
RSV Older Adults Program
Older adults (60 years and older) are at increased risk for RSV disease due in part to immunosenescence, the age- related decline in the human immune system. RSV infection can also lead to exacerbation of underlying co-morbidities such as chronic obstructive pulmonary disease, asthma and congestive heart failure. In the U.S. alone, a reported RSV incidence rate of 5.5% in older adults would account for approximately 2.5 million infections per year. We estimate that approximately 900,000 medical interventions are caused by RSV disease in this U.S. population each year. We followed up the 2016 Phase 3 clinical trial of our RSV F Vaccine, which failed to meet its pre-specified primary or secondary efficacy objectives, with a 2017 Phase 2 clinical trial in older adults, to assess safety and immunogenicity of one and two dose regimens of our RSV F Vaccine, with and without aluminum phosphate or our proprietary Matrix-M adjuvant. Immunogenicity results from the 2017 trial indicate that both adjuvants increase the magnitude, duration and quality of the immune response versus the non-adjuvanted RSV F Vaccine. We continue to assess the development opportunities for our RSV F Vaccine in older adults.
RSV Pediatrics Program
By the age of five, essentially all children will have been exposed to RSV and will likely develop natural immunity against the virus; however, children under five remain vulnerable to RSV disease, offering a strong rationale for a pediatric vaccine that could offer enhanced protection. In 2015, we announced positive results in our Phase 1 clinical trial evaluating the safety and immunogenicity of our RSV F Vaccine in healthy children between two and six years of age. We continue to assess the development opportunities for our RSV F Vaccine for pediatrics.
Other Emerging Infectious Diseases
We have extensive history working with coronaviruses and developing vaccine candidates, notably our successful production of a vaccine candidate designed to provide protection against MERS, as well as preclinical work associated with SARS. Through this experience, we have demonstrated our ability to quickly produce viable vaccine candidates for emerging infectious diseases, including both MERS/SARS and Ebola virus (“EBOV”).

MERS/SARS

Historically, we developed a vaccine candidate against MERS, a novel coronavirus first identified in 2012, and a vaccine candidate against SARS in 2005. In 2012, within weeks of obtaining the sequence of the circulating MERS strain, we successfully produced a vaccine candidate designed to provide protection. Our MERS candidate was based on the major surface spike protein, which we had previously identified as the antigen of choice in our work with our SARS vaccine candidate. In 2014, in collaboration with the University of Maryland, School of Medicine, we published results that showed our MERS and SARS vaccine candidates both blocked infection in laboratory studies. Although not in active development, our MERS and SARS vaccine candidates remain viable opportunities to potentially develop independently or in conjunction with other coronavirus development activities.
Ebola Virus
EBOV is a filovirus that produces severe, often fatal illness in humans. Within the last decade, it has produced two large outbreaks in Sub-Saharan Africa with high mortality. There are currently two vaccines licensed to prevent EBOV.
We developed an EBOV glycoprotein vaccine candidate (“Ebola GP Vaccine”) expressed in insect cells, using our core recombinant baculovirus technology. Although not in active development, our Ebola GP Vaccine is a viable development opportunity.

Competition in COVID-19, Influenza and RSV

The vaccine market is intensely competitive, characterized by rapid technological progress. Our technology is based upon utilizing the baculovirus expression system in insect cells to make recombinant vaccines. We believe this system offers
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many advantages when compared to other technologies and is uniquely well-suited for developing COVID-19, influenza, and RSV vaccines, as well as vaccines against a number of other infectious diseases.

A number of vaccine manufacturers, research institutions, and other organizations are developing a vaccine for SARS-CoV-2, the virus that causes COVID-19 disease. A variety of different vaccine technologies are being studied, including nucleic acid (RNA/DNA), viral vectors, live attenuated or inactivated, and protein-based vaccines. According to a coronavirus vaccine tracker published by The New York Times, there are 69 vaccines in clinical trials and 20 have reached the final stages of testing. As of February 2021, Pfizer, Moderna, and Johnson & Johnson have each received approval under Emergency Use Authorization by the FDA in the U.S for their COVID-19 vaccines. NVX-CoV2373 is currently being evaluated in two pivotal Phase 3 trials: a trial in the U.K that completed enrollment in November and the PREVENT-19 trial in the U.S. and Mexico that began in December. It is also being tested in two ongoing Phase 2 studies that began in August: a Phase 2b trial in South Africa, and a Phase 1/2 continuation in the U.S. and Australia. Based on the interim efficacy from the Phase 3 in the UK and the Phase 2b in South Africa, our vaccine candidate has demonstrated strong efficacy and will play an important role in solving this global public health crisis. Importantly, we are the first vaccine to demonstrate clinical efficacy against the original strain of COVID-19 and both of the rapidly emerging variants in the U.K. and South Africa.

A number of companies are developing and selling vaccines for seasonal influenza employing both traditional (egg-based) and new vaccine technologies (cell-based). Many seasonal influenza vaccines are currently approved and marketed, and most of these are marketed by major pharmaceutical companies such as Sanofi Pasteur, GSK and Seqirus. Competition in the sale of seasonal influenza vaccines is intense. For the older adult segment, Sanofi currently supplies Fluzone-HD® and Flublok® to the majority of older adults in the U.S. Therefore, newly developed and approved products must be differentiated from existing vaccines in order to have commercial success. In order to show differentiation in the seasonal influenza market, a product may need to be more efficacious and/or be less expensive and quicker to manufacture. Many of our competitors are working on new products and new generations of current products, some by adding an adjuvant that is used to increase the immunogenicity of that product, each of which is intended to be more efficacious than currently marketed products. Despite the significant competition and advancing technologies, some of which are similar to our own, based on our completed Phase 3 trial results, we believe that NanoFlu, our adjuvanted nanoparticle seasonal influenza product could be as efficacious as, or more so than, current products or products being developed by our competitors.
In general, competition among pharmaceutical products is based in part on product efficacy, safety, reliability, availability, price and patent position. An important factor is the relative timing of the market introduction of our products and our competitors’ products. Accordingly, the speed with which we can develop products, complete the clinical trials and approval processes and supply commercial quantities of the products to the market is an important competitive factor. Our competitive position also may depend upon our ability to show differentiation with a product that is more efficacious and/or less expensive and quicker to manufacture. Other factors affecting our competitive position include our ability to attract and retain qualified personnel, obtain patent protection or otherwise develop proprietary products or processes and secure sufficient capital resources for the lengthy period between technological conception and commercial sale.
Patents and Proprietary Rights
We generally seek patent protection for our technology and product candidates in the U.S. and abroad. The patent position of biotechnology and pharmaceutical firms generally is highly uncertain and involves complex legal and factual questions. Our success will depend, in part, on whether we can:
obtain patents to protect our own technologies and product candidates;
obtain licenses to use the technologies of third-parties, which may be protected by patents;
protect our trade secrets and know-how; and
operate without infringing the intellectual property and proprietary rights of others.
Patent Rights; Licenses.
We have intellectual property (patents, licenses, know-how) related to our vaccines, manufacturing processes and other technologies. Currently, we have or have rights to over 450 U.S. patents and corresponding foreign patents and patent applications relating to vaccines and vaccine-related technologies.
Patents related to our VLP program include U.S. Patent No. 7,763,450, which covers, in part, the use of influenza gene sequences for high-yield production of consistent influenza VLP vaccines to protect against current and future seasonal and pandemic strains of influenza viruses. Corresponding European patent, European Patent No. 1644037 also covers this technology. U.S. Patent Nos. 8,080,255, 8,551,756, 8,506,967 and 8,592,197 are directed to methods of producing VLPs and inducing substantial immunity to an influenza virus infection by administering VLPs comprising HA and NA proteins, and
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our M1 protein derived from the avian influenza strain, A/Indonesia/5/05. Certain claims also encompass similar methods and compositions where the M1 protein is from a different strain of influenza virus than the influenza HA protein and the influenza NA protein. Related patent protection in Europe is provided by European Patent No. 2343084, which covers, in part, vaccine compositions containing VLPs that contain M1, HA, and NA proteins. Our VLP patent portfolio contains many other patents, including U.S. Patent Nos. 8,951,537, 8,992,939, 9,144,607, 9,050,290, 9,180,180, 9,381,239, 9,464,276, 9,474,799, and other patents in multiple ex-U.S. jurisdictions.
We also have been issued patents directed to other core programs, including our RSV and influenza programs. Issued patents directed to various aspects of the RSV program include U.S. Patent Nos. 8,715,692, 9,675,685, 9,731,000, 9,717,786, 10,022,437, and 10,426,829. Additional patents in the family include EP237009 in Europe, as well as others throughout the world. Patents related to our rabies program include 9,724,405 and 10,086,065 in the U.S., and EP2635257 and EP3246019 in Europe. Related patents have been issued in other world markets. Issued patents in our influenza nanoparticle program include US Patent No. 10,426,829. In addition to our focus on vaccine programs, we also pursue patent protection for our Matrix Adjuvant program. Issued U.S. Patent Nos. 7,838,019, 9,205,147, 9,901,634, 8,821,881, and 10,729,764 provide examples of patents related to our Matrix Adjuvant program.
We pursue patents related to NVX-CoV2373, our COVID-19 vaccine candidate. Our applications include PCT/US2021/015220 and U.S. Serial No. 16,997,001, which the U.S Patent Office has allowed.
We continue to prepare, file, and prosecute patent applications to provide broad and strong protection of our proprietary rights, including next generation applications focused on our RSV Program, our influenza nanoparticle program, and our adjuvant program.
The Federal Technology Transfer Act of 1986 and related statutory guidance encourages the dissemination of science and technology innovation. While our expired contract with the U.S. Department of Health and Human Services, (“DHHS”), Biomedical Advanced Research and Development Authority (“HHS BARDA”) provided us with the right to retain ownership in our inventions that may have arisen during performance of that contract, with respect to certain other collaborative research efforts with the U.S. government, certain developments and results that may have commercial potential are to be freely published, not treated as confidential, and we may be required to negotiate a license to developments and results in order to commercialize products. There can be no assurance that we will be able to successfully obtain any such license at a reasonable cost, or that such development and results will not be made available to our competitors on an exclusive or non-exclusive basis.
Trade Secrets
We also rely significantly on trade secret protection and confidentiality agreements to protect our interests. It is our policy to require employees, consultants, contractors, manufacturers, collaborators and other advisors to execute confidentiality agreements upon the commencement of employment, consulting or collaborative relationships with us. We also require confidentiality agreements from any entity that is to receive confidential information from us. With respect to employees, consultants and contractors, the agreements generally provide that all inventions made by the individual while rendering services to us shall be assigned to us as our property.
Government Regulations
The development, production and marketing of biological products, which include the vaccine candidates being developed by Novavax or our collaborators, are subject to regulation for safety, efficacy and quality by numerous governmental authorities in the U.S. and other countries. Although we focus on the U.S. regulatory process and the standards imposed by the FDA, the International Conference on Harmonisation (“ICH”) and other agencies because we believe meeting U.S. and ICH standards generally allows us to satisfy regulatory agencies in other countries where we intend to do business; however, we are mindful that expectations in some venues, notably in the European Union, differ to some degree and we take proactive steps to address such differences by maintaining regular filings and correspondence and attending regular meetings with many other non-U.S. regulatory agencies. In the U.S., the development, manufacturing and marketing of human pharmaceuticals and vaccines are subject to extensive regulation under the Federal Food, Drug, and Cosmetic Act, and biological products are subject to regulation under provisions of that act and the Public Health Service Act. The FDA not only assesses the safety and efficacy of these products but it also regulates, among other things, the testing, manufacture, labeling, storage, record-keeping, advertising and promotion of such products. The process of obtaining FDA licensure for a new vaccine is costly and time-consuming.
Vaccine clinical development follows the same general regulatory pathway as drugs and other biologics. Before applying for FDA licensure to market any new vaccine candidate, we expect to first submit an investigational new drug application (“IND”) that explains to the FDA, among other things, the results of preclinical toxicology testing conducted in laboratory animals, the method of manufacture, quality control tests for release, the stability of the investigational product
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and what we propose to do for human testing. At this stage, the FDA decides whether it is reasonably safe to move forward with testing the vaccine candidate in humans. We must then conduct Phase 1 clinical trials and larger-scale Phase 2 and 3 clinical trials that demonstrate the safety, immunogenicity and efficacy of our vaccine candidate to the satisfaction of the FDA. Following successful completion of all three phases of clinical development, a BLA can be submitted to the FDA requesting licensure of the vaccine for marketing based on the vaccine’s safety and efficacy. Similar pathways exist in Europe and other geographies.
The FDA will only approve a BLA if the vaccine is demonstrated to be safe, pure and potent. During the FDA’s review of a BLA, the proposed manufacturing facility undergoes a pre-approval inspection during which the FDA examines in detail the production of the vaccine, the manufacturing facility and the quality documentation related to the vaccine. Vaccine licensure also requires the provision of adequate product labeling to allow health care providers to understand the vaccine’s proper use, including its potential benefits and risks, to communicate with patients and parents, and to safely deliver the vaccine to the public. Until a vaccine is given to the general population, all potential adverse events cannot be anticipated. Thus, the FDA typically requires Phase 4 post-marketing clinical trials for vaccines after licensure to continue gathering safety, and sometimes effectiveness/efficacy data in the indicated and additional populations.
The Commissioner of the FDA may, under delegated authority from the Secretary of the DHHS, and under certain circumstances, issue an EUA, that would permit the use of an unapproved medical product or unapproved use of an approved medical product to diagnose, treat, or prevent serious or life-threatening diseases or conditions when there are no adequate, approved, and available alternatives. When issuing an EUA, the FDA imposes conditions of authorization, with which the EUA holder must comply. Such conditions include, but may not be limited to, compliance with labeling, distribution of materials designed to ensure proper use, reporting obligations, and restrictions on advertising and promotion. The EUA is only effective for the duration of the public health emergency. The FDA may also revise or revoke the EUA sooner if, the criteria for issuance are no longer met or other circumstances make a revision or revocation appropriate to protect the public health or safety. For example, an EUA may be revoked when the FDA determines that the underlying public health emergency no longer exists or warrants such authorization, or for reasons such as significant adverse inspectional findings, reports of adverse events linked to or suspected of being caused by the EUA product, or newly emerging data that may demonstrate the product may not be effective.
In order to ensure continuing safety, the FDA and most other non-U.S. based regulatory agencies continue to oversee the production of vaccines even after the vaccine and manufacturing processes are approved. For example, monitoring of the vaccine and of production activities, including periodic facility inspections, must continue as long as the manufacturer holds a license for the product. Manufacturers may also be required to submit the results of their own tests for potency, safety and purity for each vaccine lot, if requested by the relevant regulatory agency. They may also be required to submit samples of each vaccine lot to the agency for testing.
In addition to obtaining FDA licensure for each product, each domestic manufacturing establishment must be registered with the FDA, is subject to FDA inspection and must comply with current Good Manufacturing Practices (“GMP”) regulations. To supply products for use either in the U.S. or outside the U.S., including clinical trials, U.S. and foreign manufacturing establishments, including third-party facilities, must comply with GMP regulations and are subject to periodic inspection by the FDA or by corresponding regulatory agencies in their home country.
The FDA has several programs designed to expedite the development and approval of drugs and biological products intended to treat serious or life-threatening diseases or conditions, including fast track designation, breakthrough therapy designation, priority review designation, and accelerated approval. First, the FDA may designate a product for Fast Track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life-threatening disease or condition and demonstrates the potential to address unmet medical needs for such a disease or condition. For Fast Track products, sponsors may have more frequent interactions with the FDA and the FDA may initiate review of sections of a Fast Track product’s application before the application is complete. The FDA granted Fast Track Designation for NVX-CoV2373 in November 2020 and for NanoFlu, our recombinant quadrivalent seasonal influenza vaccine candidate, in January 2020.
Second, a product may be designated as a Breakthrough Therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. The FDA may hold meetings with the sponsor throughout the development process; provide timely advice to the product sponsor regarding development and approval; involve more senior staff in the review process; assign a cross-disciplinary project lead for the review team; and take other steps to design the clinical trials in an efficient manner.

Third, the FDA may designate a product for priority review if it is a product that treats a serious disease or life-threatening condition and, if approved, would provide a significant improvement in safety or effectiveness over available
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therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting product reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and, for a drug product (including a vaccine), to shorten the FDA’s goal for taking action on a marketing application from ten months to six months.

Fourth, a product may be eligible for accelerated approval, if it treats a serious or life-threatening condition and generally provides a meaningful advantage over available therapies. In addition, it must demonstrate an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM that is reasonably likely to predict an effect on IMM or other clinical benefit. As a condition of approval, the FDA may require that a sponsor of a drug or biologic receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials to confirm efficacy using a clinically meaningful endpoint, thereby confirming efficacy observed pre-approval using a surrogate endpoint. In June 2019, we announced that the FDA acknowledged that the accelerated approval pathway is available for NanoFlu.

In addition to regulatory approvals that must be obtained in the U.S., an investigational product is also subject to regulatory approval in other countries in which it is intended to be marketed. No such product can be marketed in a country until the regulatory authorities of that country have approved an appropriate marketing application. FDA licensure does not guarantee approval by other regulatory authorities. In addition, in many countries, the government is involved in the pricing of the product. In such cases, the pricing review period often begins after market approval is granted.
We are also subject to regulation under the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act and other present and potential federal, state or local regulations, including national and local regulations that govern our facility in Sweden. These and other laws govern our use, handling and disposal of various biological and chemical substances used in, and waste generated by our operations. Our research and development involves the controlled use of hazardous materials, chemicals and viruses. Although we believe that our safety procedures for handling and disposing of such materials comply with the standards prescribed by state and federal regulations, the risk of accidental contamination or injury from these materials cannot be completely eliminated. In the event of such an accident, we could be held liable for any damages that result and any such liability could exceed our resources. Additionally, for formulations containing controlled substances, we are subject to Drug Enforcement Act regulations.

In both domestic and foreign markets, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payers. Third-party payers include government authorities or programs, private health insurers (including managed care plans) and other organizations. These third-party payers are increasingly challenging the price and examining the cost-effectiveness of medical products and services. In addition, significant uncertainty exists as to the reimbursement status of newly approved healthcare products. We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the cost-effectiveness of our products. There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the indications for which the product is approved by the FDA or similar regulatory authorities outside the United States. Our product candidates may not be considered cost-effective at certain prices. Adequate third-party reimbursement may not be available in certain markets to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. Third-party payers may also control access to, or manage utilization of, our products with various utilization management techniques. Decreases in third-party reimbursement for our product candidates or a decision by a third-party payor to not cover our product candidates could reduce physician utilization of our products and have a material adverse effect on our sales, results of operations and financial condition.
Within the U.S., if we obtain appropriate approval in the future to market any of our product candidates, those products could potentially be covered by various government health benefit programs as well as purchased by government agencies. The participation in such programs or the sale of products to such agencies is subject to regulation. In exchange for coverage, we may be obligated to provide rebates or offer discounts under government health programs or to government and private purchasers.

The U.S. and state governments continue to propose and pass legislation designed to reform delivery of, or payment for, health care, including initiatives to reduce the cost of healthcare. For example, in March 2010, the U.S. Congress enacted the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (“Healthcare Reform Act”) which includes changes to the coverage and reimbursement of drug products under government health care programs. Under the Trump administration, there were several efforts to modify or repeal all or certain provisions of the Healthcare Reform Act, and some modifications were implemented. Adoption of price controls and cost-containment measures and
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adoption of more restrictive policies in jurisdictions with existing controls and measures could further limit our net revenue and results.

Other legislative changes have been proposed and adopted in the United States since the Healthcare Reform Act was enacted. For example, through the process created by the Budget Control Act of 2011, there are automatic reductions of Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2030 due to subsequent legislative amendments contained in the Coronavirus Aid, Relief, and Economic Security Act, commonly referred to as the “CARES Act”. In November 2020, the Centers for Medicare and Medicaid Services (“CMS”) issued an interim final rule that seeks to lower prescription drug costs by paying no more for certain Medicare Part B drugs than the lowest price paid for such drugs in certain other countries (the "Most Favored Nation Rule”). Under the rule, the lower payment rates for affected drugs would be phased in over a period of four years, beginning in 2021. The rule has been challenged by industry associations on a number of grounds. On December 28, 2020, the U.S. District Court for the Northern District of California issued a nationwide preliminary injunction in Biotechnology Innovation Organization v. Azar, No. 3:20-cv-08603, which preliminarily enjoins CMS from implementing the Most Favored Nation Rule. Given this preliminary injunction, the Most Favored Nation Rule was not implemented on January 1, 2021 and will not be implemented without further rule-making. However, this interim final rule or any similar type of reference pricing regulation could potentially harm our business if expanded to include our products.

Recently, there has been considerable public and government scrutiny in the U.S. of pharmaceutical pricing and proposals to address the perceived high cost of pharmaceuticals. There have also been several recent state legislative efforts to address drug costs, which generally have focused on increasing transparency around drug costs or limiting drug prices or price increases. Adoption of new legislation at the federal or state level could affect demand for, or pricing of, our product candidates if approved for sale. It is also possible that additional governmental action will be taken in response to the COVID-19 pandemic. We cannot predict the ultimate content, timing or effect of any federal and state reform efforts. There is no assurance that federal or state health care reform will not adversely affect our future business and financial results.

Within the U.S., we may be subject to various federal and state laws pertaining to health care “fraud and abuse,” including anti-kickback laws and false claims laws, for activities related to future sales of any of our product candidates that may in the future receive regulatory and marketing approval. Anti-kickback laws generally prohibit a pharmaceutical manufacturer from soliciting, offering, receiving or paying any remuneration to generate business, including the purchase, prescription or use of a particular drug. Although the specific provisions of these laws vary, their scope is generally broad and there may not be regulations, guidance or court decisions that apply the laws to particular industry practices. There is therefore a possibility that our practices might be challenged under such anti-kickback laws. False claims laws, including the federal False Claims Act (“FCA”), prohibit anyone from knowingly and willingly presenting, or causing to be presented, any claims for payment for reimbursed drugs or services to third party payers (including Medicare and Medicaid) that are false or fraudulent. Our activities relating to the sale and marketing of our products may be subject to scrutiny under these laws. Violations of fraud and abuse laws may be punishable by criminal or civil sanctions, including fines and civil monetary penalties, and exclusion from federal health care programs (including Medicare and Medicaid). In the U.S., federal and state authorities are paying increased attention to enforcement of these laws within the pharmaceutical industry and private individuals have been active in alleging violations of the laws and bringing suits on behalf of the government under the FCA. If we were subject to allegations concerning, or were convicted of violating, these laws, our business could be harmed.

On November 20, 2020, the DHHS published a Final Rule entitled “Removal of Safe Harbor Protection for Rebates to Plans or PBMs Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection,” commonly referred to as the “Rebate Rule”, which amends the federal Anti-Kickback Statute discount safe harbor by eliminating protection for price concessions, including rebates, that are offered by pharmaceutical manufacturers to plan sponsors, or pharmacy benefit managers under contract with them, under the Medicare Part D program and Medicare Advantage Plans, unless the price reduction is one required by law. Effective January 1, 2022, in advance of the calendar year 2022 Part D plan year, safe harbor protection will be eliminated for manufacturer rebates paid directly (or indirectly through a pharmacy benefit manager) to Part D prescription drug plans and Medicare Advantage prescription drug plans. Effective December 30, 2020, the Rebate Rule established two new safe harbors. The first new safe harbor protects price reductions paid by manufacturers to prescription drug plans (including prescription drug plans offered by Medicare Advantage organizations) and Medicaid managed care organizations, which are fully reflected at the point-of-sale. The second new safe harbor protects fair-market-value service fees paid to pharmacy benefit managers by manufacturers. This new rule could result in a change in incentives for health plans and pharmacy benefit managers in negotiating rebates and discounts with manufactures for preferred formulary placement. At this time we cannot predict how these changes will impact our business and operations once our product candidates are commercialized.

Within the European Union, the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is prohibited. The provision
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of benefits or advantages to physicians is also governed by the national anti-bribery laws of EU Member States, such as the U.K. Bribery Act 2010. Infringement of these laws could result in substantial fines and imprisonment.

We are also subject to the U.S. Foreign Corrupt Practices Act (“FCPA”), which prohibits any U.S. individual or business from paying, offering, authorizing payment or offering anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the U.S. to comply with certain accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, the FCPA presents particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials. Certain payments to hospitals in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions. Various laws, regulations and executive orders also restrict the use and dissemination outside the U.S. or the sharing with certain non-U.S. nationals, of information classified for national security purposes, as well as certain products and technical data relating to those products. As we expand our presence outside the U.S., it will require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling certain products and product candidates outside the United States, which could limit our growth potential and increase our development costs. We cannot guarantee that we, our employees, our consultants, or our third-party contractors are or will be in compliance with all federal, state, and foreign regulations regarding bribery and corruption. Moreover, our strategic collaborators and third-party contractors located outside the U.S. may have inadequate compliance programs or may fail to respect the laws and guidance of the territories in which they operate. The failure to comply with laws governing international business practices may result in substantial civil and criminal penalties and suspension or debarment from government contracting. The SEC also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the FCPA’s accounting provisions. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could also have an adverse effect on our business, financial condition, and results of operations.

The Federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their implementing regulations, impose requirements regarding the privacy and security of individually identifiable health information, including mandatory contractual terms, for covered entities, or certain healthcare providers, health plans, and healthcare clearinghouses, and their business associates that provide services to the covered entity that involve individually identifiable health information and their subcontractors that use, disclose or otherwise process individually identifiable health information. HITECH also increased the civil and criminal penalties that may be imposed against covered entities and business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA. While pharmaceutical and biotechnology companies are typically not directly regulated by HIPAA, our business may be indirectly impacted by HIPAA in our interactions with providers, payors, and others that have HIPAA compliance obligations. We are also subject to state and foreign laws governing the privacy and security of health or personal information such as the European Union General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018 (“CCPA”).

There has been a recent trend of increased federal and state regulation of payments made to physicians and other healthcare providers. The Physician Payments Sunshine Act imposes annual reporting requirements on certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, for payments made by them to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Beginning in 2022, applicable manufacturers will also be required to report information related to payments and other transfers of value provided in the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives.

Within the European Union, payments made to physicians in certain EU Member States must be publicly disclosed. Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, their competent professional organization, or the regulatory authorities of the individual EU Member States. These requirements are provided in the national laws, industry codes, or professional codes of conduct, applicable in the European
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Union Member States. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines, or imprisonment.

Laws and regulations have been enacted by the federal government and various states to regulate the sales and marketing practices of pharmaceutical manufacturers with marketed products. The laws and regulations generally limit financial interactions between manufacturers and health care providers and/or require disclosure to the government and public of such interactions. Many of these laws and regulations contain ambiguous requirements or require administrative guidance for implementation. Given the lack of clarity in laws and their implementation, any future activities (if we obtain approval and/or reimbursement from federal healthcare programs for our product candidates) could be subject to challenge.

Given the significant global impact of the COVID-19 pandemic, it is possible that one or more government entities may take actions, including the U.S. Government under the Defense Production Act of 1950, as amended, which could directly or indirectly have the effect of diminishing some of our rights or opportunities with respect to NVX-CoV2373 and the economic value of a COVID-19 vaccine to us could be limited. In addition, during a global health crisis, such as the COVID-19 pandemic, where the spread of a disease needs to be controlled, closed or heavily regulated national borders will create challenges and potential delays in our development and production activities and may necessitate that we pursue strategies to develop and produce our vaccine candidates within self-contained national or international borders, at potentially much greater expense and with longer timeframes for public distribution.

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. In the United States, the Public Readiness and Emergency Preparedness Act (the “PREP Act”), provides immunity for manufacturers from all claims under state or federal law for "loss" arising out of the administration or use of a “covered countermeasure.” However, injured persons may still bring a suit for "willful misconduct" against the manufacturer under some circumstances. "Covered countermeasures" include security countermeasures and "qualified pandemic or epidemic products", including products intended to diagnose or treat pandemic or epidemic disease, such as pandemic vaccines, as well as treatments intended to address conditions caused by such products. For these immunities to apply, the Secretary of DHHS must issue a declaration in cases of public health emergency or “credible risk” of a future public health emergency. On March 17, 2020, the Secretary of DHHS issued a declaration under the PREP Act and has issued subsequent amendments thereto since then to provide liability immunity for activities related to certain countermeasures against the ongoing COVID-19 pandemic. While we believe our products would be covered under the provisions of the PREP Act, this cannot be assured.

Also, there can be no assurance that the Secretary of the HHS will make other declarations in the future that cover any of our other product candidates or that the U.S. Congress will not act in the future to reduce coverage under the PREP Act or to repeal it altogether. If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.
HUMAN CAPITAL

Employees

As of February 24, 2021, we have 791 full-time employees, of whom 90 hold M.D. or Ph.D. degrees and 189 of whom hold other advanced degrees. Of our total workforce, 653 are engaged primarily in research, development and manufacturing activities and 139 are engaged primarily in executive, business development, finance and accounting, legal and administrative functions. None of our U.S. and Czech employees are represented by labor unions or covered by collective bargaining agreements; 68 of our 69 Swedish employees are covered by typical collective bargaining agreements. To nurture, grow, and treat our employees fairly is imbued in our culture. We were recognized as the Top 50 employers to work for in the US by our employees.

To nurture, grow, and treat our employees fairly is imbued in our culture. We are proud to have been recognized in the 2021 Top Workplaces USA list based on employee surveys. We believe this award reflects our investment in an exceptional culture.

COVID-19 Employee Safety and Benefits

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With the emergence of the COVID-19 global pandemic, we took precautions to reduce the risk of virus exposure for all employees. We encouraged all of our employees who were able to work from home to do so and reduced the number of people in our offices significantly with the remote work option. Because of our business, it was necessary for essential employees to remain onsite. For those employees and any other employees who entered our offices, we adopted new safety protocols including, social distancing, face mask requirements, temperature screening and health questionnaires.

In March 2020, we recognized the severity of COVID-19 and offered a special enrollment period to our employees to provide them with an additional opportunity to participate in our health insurance plan. We have also established an emergency relief fund for our employees whose immediate families have been materially and negatively impacted by the COVID-19 emergency.

Compensation and Benefits; Health and Wellness

Our total rewards are designed to attract, motivate, and retain top talent in the industry. We strive to provide pay, comprehensive benefits and services that help meet the varying needs of our employees. Our generous total rewards package includes competitive market pay, fully covered healthcare benefits for employees, a health savings account, a 401(k) retirement savings plan, paid vacation, family leave, flexible work schedules, an employee assistance program, and onsite and online concierge services. In addition, we offer every employee, the benefit of equity ownership in the company through stock option and restricted stock unit grants and our employee stock purchase plan.

Recruitment, Development and Training

The attraction, development, and retention of employees is a critical success factor for Novavax. We utilize a variety of recruitment vehicles to source top talent, including strategic partnerships with search firms, leveraging social media channels, and a robust employee referral program. Since March 2020, we have hired over 400 full-time and part-time employees to address the global COVID-19 pandemic and bring our NVX-CoV2373 vaccine candidate to market following global regulatory approvals.

To support the growth and advancement of our employees, we offer tuition and continuing education reimbursement, and an array of training and professional development opportunities, including on-the-spot coaching with executive coaches and access to the LinkedIn Learning library of over 16,000 on-demand video tutorials that address skill, knowledge and behaviors related to business, leadership, technology, and creativity. In the last 12 months, videos were viewed and completed over 7000 times by our employees. We provide an Executive Development Program for employees identified as having high potential and for potential successors to leadership positions, executive coaching engagements, and leadership development programs to strengthen our leadership bench and accelerate and prepare our top talent for future growth.

Internal Communications

We employ a variety of tools to facilitate open and direct communication, including global forums with executives, employee surveys, and engagement through forums and committees. Our executive leadership team continues to recognize the importance of increased employee engagement.

Diversity and Inclusion

Our culture of diversity, equity and inclusion enables us to create, develop and fully leverage the strengths of our workforce to meet our growth objectives. We recently completed an evidence-based analysis of current state on diversity, equity and inclusion to understand how best to create a culture of inclusion and diverse workforce and how to build a sustainable strategy to drive diversity and inclusion at Novavax. We are very fortunate to have a diverse workforce and we believe our DEI strategy will enable us to continuously improve and excel.

Corporate Social Responsibility

We are endeavoring to develop relationships, give back to our communities and engage in corporate social responsibility and sustainability initiatives. As we grow our employee base, we are focused on extending our efforts in these areas.

Availability of Information
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Our website address is www.novavax.com. We make available, free of charge and through our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and our other filings with the Securities and Exchange Commission (“SEC”), and any amendments to any such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after filed with or furnished to the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
We use our website (www.novavax.com) as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the SEC. These disclosures are included on our website (www.novavax.com) in the “Investors” or “News” sections. Accordingly, investors should monitor these portions of our website (www.novavax.com), in addition to following our press releases, SEC filings and public conference calls and webcasts.
Also available on our website is information relating to corporate governance at Novavax and our Board of Directors, including our Code of Business Conduct and Ethics. We intend to disclose on our website any future amendments to and waivers from this code that apply to our Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer and Controller, and persons performing similar functions, as promptly as practicable, as may be required under applicable SEC and Nasdaq rules.
We webcast our earnings calls and certain events we participate in or host with members of the investment community on the investor relations section of our website. Additionally, we provide notifications of news or announcements regarding press and earnings releases as part of the investor relations section of our website. The contents of our website are not part of this Annual Report on Form 10-K, or any other report we file with, or furnish to, the SEC.
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Item 1A.    RISK FACTORS

You should carefully consider the following risk factors in evaluating our business. A number of risk factors could cause our actual results to differ materially from those that are indicated by forward-looking statements. Some risks relate principally to our business and the industry in which we operate. Others relate principally to the securities market and ownership of our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties of which we are unaware, or that we currently deem immaterial, also may become important factors that affect us. If any of the following risks occur, our business, financial condition or results of operations could be materially and adversely affected. You also should consider the other information included in this Annual Report on Form 10-K.

Risks Related to Our Financial Condition and Capital Requirements

We have a history of losses and our future profitability is uncertain.

Our expenses have exceeded our revenue since our formation in 1987, and our accumulated deficit at December 31, 2020 was $1.9 billion. Our revenue for the last three fiscal years was $475.6 million in 2020, $18.7 million in 2019 and $34.3 million in 2018. We may not be successful in entering into collaborations, strategic alliances and marketing, distribution or licensing arrangements with other companies or government agencies that result in significant revenue to offset our expenses. Our net losses for the last three fiscal years were $418.3 million in 2020, $132.7 million in 2019 and $184.7 million in 2018.

Historically, our losses have resulted predominantly from research and development expenses for our vaccine candidates, manufacturing-related expenses, costs related to protection of our intellectual property and other general and administrative operating expenses, a significant portion of which have been noncash. Our expenses have exceeded our revenue since inception, and we believe our expenses will fluctuate over time, and may substantially increase in some years, as a result of continuing research and development efforts to support our vaccine development efforts, and, if our product candidates are approved, commercialization efforts.

As of the end of fiscal year 2020, our investment in the development and manufacture of NVX-CoV2373 has been significant and we expect such levels of investment to continue through 2021 and beyond, although the precise magnitude of our total investment will be subject to clinical trial data results, the duration of the COVID-19 pandemic and other factors, including our competitive landscape and regulatory outcomes. If we are unable to timely commercialize a vaccine against COVID-19, we may never recoup this investment. We expect to continue to incur significant operating expenses and anticipate significant losses over time as we seek to:

conduct clinical trials and seek regulatory approval for NVX-CoV2373 and other potential vaccine candidates;
conduct preclinical studies for other potential vaccine candidates;
expand our global manufacturing and distribution capacity; and
maintain, expand and protect our intellectual property portfolio.
As a result, we expect our cumulative operating losses to increase until such time, if ever, that product sales, licensing fees, royalties, milestones, contract research and other sources generate sufficient revenue to fund our operations. We may never achieve profitability and may not sustain profitability, if achieved.

We will continue to require significant funding to maintain our current level of operations and fund the further development of our vaccine candidates.

We do not currently generate sufficient revenue from product sales, licensing fees, royalties, milestones, contract research or other sources to fully fund our operations. We will therefore use our cash resources, and expect to require additional funds, to maintain our operations, continue our research and development programs, commence future preclinical studies and clinical trials, seek regulatory approvals and manufacture and market our products.

To date, we have financed our operations primarily through the sale of equity and debt securities, government funding and grant agreements, and we cannot be certain that additional such funding will be available to us on favorable terms, or at all. Although we have recently started entering into supply agreements for NVX-CoV2373 that include
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prepayments from the purchasers, until we can generate sufficient product revenue in amounts sufficient to fully fund our operations, which we may never do, we expect to finance our future cash needs through a combination of additional public or private equity or debt financings, as well as potential collaborations, strategic alliances and marketing, distribution or licensing arrangements and non-dilutive funding from governmental and non-governmental funding entities, as well as other sources. While we may continue to apply for contracts or grants from academic institutions, non-profit organizations and governmental entities, we may not be successful. Adequate additional funding may not be available to us on acceptable terms, if at all. Furthermore, any negative clinical trial data or setbacks, or perceived setbacks, with respect to our vaccine candidates, particularly NVX-CoV2373, could impair our ability to raise additional financing on favorable terms, or at all. If we cannot raise the additional funds required for our anticipated operations, we may be required to delay significantly, reduce the scope of or eliminate one or more of our research or development programs, downsize our organization, or seek alternative measures to avoid insolvency, including arrangements with collaborative partners or others that may require us to relinquish rights to certain of our technologies or vaccine candidates. If we raise additional funds through future offerings of shares of our common stock or other securities, such offerings would cause dilution of current stockholders’ percentage ownership in the Company, which could be substantial. Future offerings also could have a material and adverse effect on the price of our common stock.

Economic uncertainty may adversely affect our access to capital, cost of capital and ability to execute our business plan as scheduled.

Generally, worldwide economic conditions remain uncertain, particularly due to the COVID-19 pandemic. Access to capital markets is critical to our ability to operate. Traditionally, biotechnology companies have funded their research and development expenditures through raising capital in the equity markets. Declines and uncertainties in these markets in the past have severely restricted raising new capital and have affected companies’ ability to continue to expand or fund existing research and development efforts. We require significant capital for research and development for our vaccine candidates and clinical trials. The general economic and capital market conditions, both in the U.S. and worldwide, have been volatile in the past and at times have adversely affected our access to capital and increased the cost of capital. There is no certainty that the capital and credit markets will be available to raise additional capital on favorable terms, particularly given the ultimate impact of the COVID-19 pandemic on the economies of countries worldwide is unknown. If economic conditions become worse, as a result of the COVID-19 pandemic or otherwise, our future cost of equity or debt capital and access to the capital markets could be adversely affected. In addition, if we are unable to access the capital markets on favorable terms, our ability to execute our business plan as scheduled would be compromised. Moreover, we rely and intend to rely on third-parties, including clinical research organizations, contract manufacturing organizations and other important vendors and consultants. Global economic conditions may result in a disruption or delay in the performance of our third-party contractors and suppliers. If such third-parties are unable to adequately satisfy their contractual commitments to us in a timely manner, our business could be adversely affected.

Our existing funding and supply agreements do not assure success of our vaccine candidates or that we will be able to fully fund our vaccine candidates.

The OWS Agreement, the DoD Agreement and the CEPI Funding Agreement each reimburse a portion of the expenses associated with the development and commercialization of NVX-CoV2373. To the extent funding commitments in such agreements are conditioned on our meeting certain milestones or conditions, including regulatory approval in applicable jurisdictions, we may not ultimately receive the full amount of committed funds and could be exposed to urgent needs for additional funding to support our NVX-CoV2373 development, manufacturing and distribution activities. There can be no assurance that we will be able to timely obtain additional government or private funding, if at all. Additionally, we have entered into, and plan to continue entering into, supply agreements for NVX-CoV2373 that include prepayments from the purchasers. In the event we are unable to successfully develop and commercialize NVX-CoV2373 or fail to meet certain product volume or delivery timing obligations under our supply agreements, we may be required to refund significant portions of the prepayments, which could have a material and adverse effect on our financial condition. Our inability to succeed with key clinical or development activities could jeopardize our ability to obtain licensure from the FDA or other regulatory authorities to sell NVX-CoV2373. We can make no assurance that the OWS Agreement, the DoD Agreement and the CEPI Funding Agreement will be sufficient to fund our vaccine candidate development or our supply agreements will be sufficient to fund our commercial launch.

Similarly, the Grant Agreement with BMGF reimburses a portion of specified expenses associated with the development of ResVax. The Grant Agreement with BMGF does not assure success of ResVax or that the vaccine candidate will be licensed by the FDA. Additional development activities likely will be needed and BMGF may not reimburse us for any portion of these activities.
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Risks Related to Product Development and Commercialization

Because our vaccine product development efforts depend on new and rapidly evolving technologies, we cannot be certain that our efforts will be successful.

Our vaccine development efforts depend on new, rapidly evolving technologies and on the marketability and profitability of our products. Our development efforts and, if those are successful, commercialization of our vaccines could fail for a variety of reasons, and include the possibility that:

our recombinant nanoparticle vaccine technologies, any or all of the products based on such technologies or our proprietary manufacturing process will be ineffective or unsafe, or otherwise fail to receive necessary regulatory approvals or achieve commercial viability;
we or our third-party manufacturer facilities will be unable or unwilling to scale-up manufacturing capabilities for our products in a cost-effective manner;
the products, if safe and effective, will be difficult to manufacture on a large-scale or uneconomical to market;
our in-house or third-party manufacturing facilities will fail to continue to pass regulatory inspections;
proprietary rights of third-parties will prevent us or our collaborators from exploiting technologies, and manufacturing or marketing products; and
third-party competitors will gain greater market share due to superior products or marketing capabilities.

Although we have made rapid progress, the regulatory and commercial success of our COVID-19 vaccine candidate, NVX-CoV2373, remains uncertain. We may be unable to obtain regulatory approval or produce a successful vaccine in a timely manner, if at all.

In response to the outbreak of COVID-19, we are pursuing the development and manufacture of our vaccine candidate, NVX-CoV2373, which is currently in Phase 3 of clinical testing. Even though we have reported positive data from Phase 1, 2 and 3 clinical trials, our development of NVX-CoV2373 is ongoing and such results may not be predictive of future clinical trial results or whether future clinical trial results will be sufficient to support regulatory authorization or approval, accelerated or otherwise. We may be unable to produce a vaccine that successfully prevents COVID-19 in a timely manner, if at all.

Additionally, even if NVX-CoV2373 receives regulatory approval, our ability to successfully commercialize it depends on our ability to effectively scale up manufacturing capabilities at our own locations and those of our manufacturing partners and contractors. In May 2020, we acquired Novavax CZ (formerly Praha Vaccines, a.s.) including its vaccine manufacturing facility in Bohumil, Czech Republic and approximately 150 of its employees. We are also actively entering into agreements with third parties to manufacture the antigen component of NVAX-CoV2373 and our proprietary Matrix-M adjuvant, as well as to distribute NVX-CoV2373. Because of contractual restraints and the limited number of third-party manufacturers with the expertise, required regulatory approvals and facilities to manufacture NVX-CoV2373 on a potentially commercial scale, replacement of a manufacturer may be expensive and time-consuming and may cause interruptions in production. Manufacturing of NVX-CoV2373 involves a complicated process that will require significant investments of time and financial resources to implement. We cannot guarantee that we will be able to timely and effectively produce NVX- CoV2373 in adequate quantities to meet global demand.

The Company has not previously had a commercial launch of any vaccine product, and doing so in a pandemic environment with an urgent, critical global need creates additional challenges. In addition to scaling up our manufacturing capabilities, we will need to develop global distribution channels and form partnerships with third parties worldwide, as well as hire, train and integrate additional management, administrative and sales and marketing personnel. Rapid and significant growth may strain our administrative and operational infrastructure, imposing significant additional responsibilities on our organization, and our efforts to establish these capabilities may not meet initial expectations as to timing, scale-up, yield, cost or quality. If we are unable to successfully manage our growth and the increased complexity of our operations, our business, financial position, results of operations and prospects may be materially and adversely affected.
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We are a biotechnology company and face significant risk in developing, manufacturing and commercializing our products.
We focus our research and development activities on vaccines, an area in which we believe we have particular strengths and a technology that appears promising. The outcome of any research and development program is highly uncertain. Only a small fraction of biopharmaceutical development programs ultimately result in commercial products or even product candidates and a number of events could delay our development efforts and negatively impact our ability to obtain regulatory approval for, and to manufacture, market and sell, a vaccine. Vaccine candidates that initially appear promising often fail to yield successful products. In many cases, preclinical studies or clinical trials will show that a product candidate is not efficacious or that it raises safety concerns or has other side effects that outweigh its intended benefit. Success in preclinical or early clinical trials may not translate into success in large-scale clinical trials. Further, success in clinical trials often leads to increased investment, accelerating cumulative losses. Even if clinical trial results appear positive, regulatory approval may not be obtained if the FDA does not agree with our interpretation of the results, and we may face challenges when scaling-up the production process to commercial levels. Even after a product is approved and launched, general usage or post-marketing clinical trials may identify safety or other previously unknown problems with the product, which may result in regulatory approvals being suspended, limited to narrow the scope of the approval, or revoked, which may otherwise prevent successful commercialization. Intense competition in the vaccine industry could also limit the successful commercialization of any products for which we receive commercial approval.

Because we depend on third-parties to conduct some of our laboratory testing and clinical trials, and a significant amount of our vaccine manufacturing and distribution, we may encounter delays in or lose some control over our efforts to develop and supply products.

We are highly dependent on third-party organizations to conduct some of our laboratory testing and clinical trials and a significant amount of our vaccine manufacturing activities and distribution. If we are unable to obtain any necessary services on acceptable terms, we may not complete our product development efforts in a timely manner. We may lose some control over these activities or become too dependent upon these parties. These third-parties may not complete testing, manufacturing or distribution activities on schedule, or in satisfaction of regulatory or commercial requirements. Certain of our facilities are also contracted for defined time frames and through association with OWS and CEPI, and may not be available for sufficient periods of time to adequately supply our products.

We are responsible for confirming that each of our clinical trials is conducted in accordance with its general investigational plan and protocol. Moreover, the FDA and foreign regulatory agencies require us to comply with regulations and standards, commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, safety and welfare of clinical trial participants are adequately protected. The FDA and foreign regulatory agencies also require us to comply with good manufacturing practices. Our reliance on third-parties does not relieve us of these responsibilities and requirements. These third-parties may not successfully carry out their contractual duties or regulatory obligations. Furthermore, if our third-party manufacturer is producing materials or products for themselves or other companies, our third-party manufacturer may be exposed to regulatory risks for the production of such materials and products. As a result, failure to meet the regulatory requirements for the production of those materials and products may generally affect the regulatory status of the third-party manufacturer’s facility, which could impact its ability to produce our materials and products. Any of our third-party service providers may need to be replaced, the quality or accuracy of the data they obtain may be compromised, or the product they manufacture may be contaminated due to the failure to adhere to our clinical and manufacturing protocols, regulatory requirements or for other reasons. In any such event, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval of, or successfully commercially manufacture, our vaccine candidates.

The results from the Prepare trial, including that ResVax failed to meet the primary endpoint of the trial, will likely create challenges, some of which may be significant, around further development of that vaccine.

While the Prepare results suggest that ResVax is safe and is likely efficacious in more serious manifestations of RSV disease, the trial failed to achieve its primary clinical endpoint. Not achieving the primary clinical endpoint has been viewed negatively by our investors. Although the failure to achieve the primary endpoint in the trial is not evidence that the vaccine is ineffective, it means that regulatory agencies like the FDA and EMA are likely to require additional clinical trial data prior to licensure. This development may be viewed negatively by our potential collaborators and partners, which may make the ongoing development of ResVax, and any other RSV F Vaccine candidates, more challenging.

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We may have product liability exposure.

The administration of drugs or vaccines to humans, whether in clinical trials or after marketing approval, can result in product liability claims. We maintain product liability insurance coverage for our current clinical programs, including our NVX-CoV2373 trials. If and when we obtain marketing approval for any vaccine candidate, we intend to expand our insurance coverage to include the sale of commercial products; however, we may not be able to obtain or maintain insurance coverage on commercially reasonable terms, at a reasonable cost or in sufficient amounts to protect us against losses due to liability. Furthermore, such insurance coverage and our resources may not be sufficient to satisfy all liabilities that result from product liability claims. A successful claim may prevent us from obtaining adequate product liability insurance in the future on commercially desirable terms, if at all. Even if a claim is not successful, defending such a claim would be time- consuming and expensive, may damage our reputation in the marketplace and would likely divert management’s attention.

In addition, because we are developing NVX-CoV2373 in response to the outbreak of COVID-19, a global pandemic, we may have a widely used vaccine in the U.S. and other countries as an investigational vaccine or a product authorized for temporary or emergency use prior to our receipt of marketing approval. Unexpected safety issues in these circumstances could lead to product liability claims and our existing insurance may not be adequate for such claims.

Regardless of merit or eventual outcome, liability claims may result in:

decreased demand for our products;
withdrawal of regulatory approvals;
voluntary or mandatory recalls of our products;
necessity for additional nonclinical or clinical studies, changes in labeling, or changes to manufacturing processes, specifications and/or facilities;
impairment of our business reputation and negative media attention;
withdrawal of clinical trial participants;
costs of related litigation;
substantial monetary awards to participants or other claimants;
loss of revenue; and
inability to commercialize our vaccine candidates.
In the United States, the PREP Act, provides immunity for manufacturers from all claims under state or federal law for "loss" arising out of the administration or use of a “covered countermeasure.” However, injured persons may still bring a suit for "willful misconduct" against the manufacturer under some circumstances. "Covered countermeasures" include security countermeasures and "qualified pandemic or epidemic products", including products intended to diagnose or treat pandemic or epidemic disease, such as pandemic vaccines, as well as treatments intended to address conditions caused by such products. For these immunities to apply, the Secretary of DHHS must issue a declaration in cases of public health emergency or “credible risk” of a future public health emergency. On March 17, 2020, the Secretary of DHHS issued a declaration under the PREP Act and has issued subsequent amendments thereto since then to provide liability immunity for activities related to certain countermeasures against the ongoing COVID-19 pandemic. While we believe our products would be covered under the provisions of the PREP Act, this cannot be assured. Also, there can be no assurance that the Secretary of the HHS will make other declarations in the future that cover any of our other product candidates or that the U.S. Congress will not act in the future to reduce coverage under the PREP Act or to repeal it altogether. If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

If we are unable to manufacture our vaccines in sufficient quantities, at sufficient yields or are unable to obtain regulatory approvals for a manufacturing facility for our vaccines, we may experience delays or an adverse impact on product development, clinical trials, regulatory approval and commercial distribution.

Completion of our clinical trials and commercialization of our vaccine candidates require access to, or development of, facilities to manufacture our vaccine candidates at sufficient yields and at commercial-scale. We have limited experience manufacturing any of our vaccine candidates in the volumes that will be necessary to support large-scale clinical trials or commercial sales. While we have recently increased our projected global manufacturing capacity
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for NVX-CoV2373, our efforts to establish manufacturing capabilities may not meet expectations as to scheduling, scale-up, reproducibility, yield, purity, cost, potency or quality. The antigen component of NVX-CoV2373 is currently being manufactured at Novavax CZ, as well as numerous partnered manufacturing sites, including FUJIFILM in the United States, SIIPL in India and Takeda in Japan, among others.

Manufacturing our vaccine candidates involves a complicated process with which we have limited experience. We are highly dependent on third-party organizations to conduct a significant amount of our vaccine manufacturing activities. If we and our third-party manufacturing organizations are unable to manufacture our vaccine candidates in clinical quantities or, when necessary, in commercial quantities and at sufficient yields, then we will need to identify and reach supply arrangements with additional third-parties. Third-party manufacturers must also receive FDA or equivalent foreign regulatory body approval before they can produce clinical material or commercial products. Our vaccines may be in competition with other products for access to these third-party facilities and may be subject to delays in manufacture if third-parties give other products higher priority. We may not be able to enter into any necessary additional third-party manufacturing arrangements on acceptable terms, or on a timely basis. In addition, we have to enter into technical transfer agreements and share our know-how with the third-party manufacturers, which can be time-consuming and may result in delays.

Because of contractual restraints and the limited number of third-party manufacturers with the expertise, required regulatory approvals and facilities to manufacture our bulk vaccines on a commercial-scale, replacement of a manufacturer may be expensive and time-consuming and may cause interruptions in the production of our vaccine. We and our third-party manufacturers may also encounter difficulties in production. These problems may include:

difficulties with production costs, scale up and yields;
availability of raw materials and supplies;
quality control and assurance;
shortages of qualified personnel;
compliance with strictly enforced and evolving federal, state and foreign regulations that vary in each country where products might be sold including nationalization or other territory restrictions placed on our owned and third-party manufacturing sites; and
lack of capital funding.
As a result, any delay or interruption could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We must identify vaccines for development with our technologies and establish successful third-party relationships.

The near and long-term viability of our vaccine candidates will depend in part on our ability to successfully establish new strategic collaborations with pharmaceutical and biotechnology companies, non-profit organizations and government agencies. Establishing strategic collaborations and obtaining government funding is difficult and time-consuming. Potential collaborators may reject collaborations based upon their assessment of our financial, regulatory or intellectual property position or based on their internal pipeline; government agencies may reject contract or grant applications based on their assessment of public need, the public interest, our products’ ability to address these areas, or other reasons beyond our expectations or control. Past success in establishing strategic collaborations with pharmaceutical and biotechnology companies, non-profit organizations and government agencies in the past is no guarantee of future success. If we fail to establish a sufficient number of collaborations or government relationships on acceptable terms, we may not be able to commercialize our vaccine candidates or generate sufficient revenue to fund further research and development efforts.

There is no guarantee that the collaborations we have established or will establish will result in the successful development or commercialization of any vaccine candidates for several reasons, including the fact that:

we may not have the ability to control the activities of our partners and cannot provide assurance that they will fulfill their obligations to us, including with respect to the license, development and commercialization of vaccine candidates, in a timely manner or at all;
such partners may not devote sufficient resources to our vaccine candidates or properly maintain or defend our intellectual property rights;
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our partners could independently develop, or develop with third parties, products that compete directly or indirectly with our vaccine candidates if such partners believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
any failure on the part of our partners to perform or satisfy their obligations to us could lead to delays in the development or commercialization of our vaccine candidates and affect our ability to realize product revenue; and
disagreements, including disputes over the ownership of technology developed with such collaborators, could result in litigation, which would be time consuming and expensive, and may delay or terminate research and development efforts, regulatory approvals and commercialization activities.
If we or our collaborators fail to maintain our existing agreements or in the event we fail to establish agreements as necessary, we could be required to undertake research, development, manufacturing and commercialization activities solely at our own expense. These activities would significantly increase our capital requirements and, given our lack of sales, marketing and distribution capabilities, significantly delay the commercialization of our vaccine candidates.

Even if licensed to market, our vaccine products may not be initially or ever profitable.

Whether Novavax makes a profit from the sale of its vaccine products is dependent on a number of variables, including the costs we incur manufacturing, testing and releasing, packaging and shipping such vaccine product. Additionally, the CEPI Funding Agreement necessitates that we allocate a certain number of doses of NVX-CoV2373 to certain middle and lower income countries and the Grant Agreement with BMGF necessitates that we commit to a specific amount of sales in certain specified middle and lower income countries, which may impact our ability to make profits. We cannot predict when, if at all, our approved vaccine products will be profitable to the Company.

Even if we successfully commercialize any of our vaccine candidates, either alone or in collaboration, we face uncertainty with respect to pricing, third-party reimbursement and healthcare reform, all of which could adversely affect any commercial success of our vaccine candidates.

Our ability to collect revenue from the commercial sale of our vaccines may depend on our ability, and that of any current or potential future collaboration partners or customers, to obtain adequate levels of approval, coverage and reimbursement for such products from third-party payers such as:

government health administration authorities such as the Advisory Committee for Immunization Practices of the Centers for Disease Control and Prevention;
private health insurers;
managed care organizations;
pharmacy benefit management companies; and
other healthcare related organizations.
Third-party payers are increasingly challenging the prices charged for medical products and may deny coverage or offer inadequate levels of reimbursement if they determine that a prescribed product has not received appropriate clearances from the FDA, or foreign equivalent, or other government regulators; is not used in accordance with cost-effective treatment methods as determined by the third-party payer; or is experimental, unnecessary or inappropriate. Prices could also be driven down by managed care organizations that control or significantly influence utilization of healthcare products.

In both the U.S. and some foreign jurisdictions, there have been a number of legislative and regulatory proposals and initiatives to change the health care system in ways that could affect our ability to sell vaccines and could adversely affect the prices that we receive for our vaccine candidates, if approved. Some of these proposed and implemented reforms could result in reduced pharmaceutical pricing or reimbursement rates for medical products, and while we have no current vaccines available for commercial sale, the impact of such reform could nevertheless adversely affect our business strategy, operations and financial results. For example, the Healthcare Reform Act contained several cost containment measures that could adversely affect our future revenue, including, for example, increased drug rebates under Medicaid for brand name prescription drugs, extension of Medicaid rebates to Medicaid managed care organizations, and extension of so-called 340B discounted pricing on pharmaceuticals sold to certain healthcare providers. Additional provisions of the healthcare reform laws that may negatively affect our future revenue and prospects for profitability include the assessment of an annual fee based on our proportionate share of sales of brand name prescription drugs to
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certain government programs, including Medicare and Medicaid. The Healthcare Reform Act also established a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable branded on drugs (including vaccines) to eligible beneficiaries during their coverage gap period (the so-called “donut hole”), as condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D. Other aspects of healthcare reform, such as expanded government enforcement authority and heightened standards that could increase compliance-related costs, could also affect our business. In addition, we face uncertainties because there are ongoing federal legislative and administrative efforts to repeal, substantially modify or invalidate some or all of the provisions of the Healthcare Reform Act. For example, in 2017, the former U.S. President announced that his administration will withhold the cost-sharing subsidies paid to health insurance exchange plans serving low-income enrollees. The Tax Cut and Jobs Act (“TCJA”) was also enacted at the end of 2017 and includes provisions that will affect healthcare insurance coverage and payment, such as the elimination of the tax penalty for individuals who do not maintain sufficient health insurance coverage beginning in 2019 (the so-called “individual mandate”).

On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas ruled that the individual mandate is a critical and inseverable feature of the Affordable Care Act, and therefore, because it was repealed as part of the TCJA, the remaining provisions of the Affordable Care Act are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the 5th Circuit ruled that the individual mandate was unconstitutional but remanded the case back to the District Court to determine whether the remaining provisions of the Affordable Care Act are invalid as well. On March 2, 2020, the U.S. Supreme Court granted the petitions for writs of certiorari to review the case, and oral arguments were heard on November 10, 2020. It is unclear when a decision will be made or how the U.S. Supreme Court will rule.

Other legislative changes have been proposed and adopted since the Healthcare Reform Act was enacted. These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year pursuant to the Budget Control Act of 2011 and subsequent laws, which began in 2013 and, due to subsequent legislative amendments, will stay in effect through 2030 unless additional Congressional action is taken. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. New laws may result in additional reductions in Medicare and other healthcare funding, which may materially adversely affect customer demand and affordability for our products and, accordingly, the results of our financial operations. Additionally, the pharmaceutical industry has also been the subject of significant publicity in recent years regarding the pricing of pharmaceutical products, including publicity and pressure resulting from prices charged by pharmaceutical companies for new products as well as price increases by pharmaceutical companies on older products that some people have deemed excessive. As a result, pharmaceutical product prices have been the focus of increased scrutiny by the U.S. government, including certain state attorneys general, members of congress, presidential candidates and the United States Department of Justice. If reforms in the health care industry make reimbursement for our potential products less likely, the market for our potential products will be reduced, and we could lose potential sources of revenue. The existence or threat of cost control measures could cause our corporate collaborators to be less willing or able to pursue research and development programs related to our vaccine candidates. Further, it is also possible that additional governmental action is taken in response to the COVID-19 pandemic. We cannot predict the ultimate content, timing or effect of any healthcare reform legislation or the impact of potential legislation on us.

We have limited marketing capabilities, and if we are unable to enter into collaborations with marketing partners or develop our own sales and marketing capability, we may not be successful in commercializing any approved products.

Although we have initiated preliminary activities in anticipation of commercialization of our vaccine candidates, we currently have limited dedicated sales, marketing or distribution capabilities. As a result, we depend on collaborations with third-parties that have established distribution systems and sales forces, including our collaboration with SIIPL, among others. To the extent that we enter into co-promotion or other licensing arrangements, our revenue will depend upon the efforts of third-parties, over which we may have little or no control. If we are unable to reach and maintain agreements with one or more pharmaceutical companies or collaborators, we may be required to market our products directly. Developing a marketing and sales force is expensive and time-consuming and could delay a product launch. We may not be able to attract and retain qualified sales personnel or otherwise develop this capability.

Our vaccine candidates may never achieve market acceptance even if we obtain regulatory approvals.

Even if we receive regulatory approvals for the commercial sale of our vaccine candidates, the commercial success of these vaccine candidates will depend on, among other things, their acceptance by physicians, patients and third-party payers, such as health insurance companies and other members of the medical community, as a vaccine and
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cost-effective alternative to competing products. If our vaccine candidates fail to gain market acceptance, we may be unable to earn sufficient revenue to continue our business. Market acceptance of, and demand for, any product that we may develop and commercialize will depend on many factors, including:

our ability to provide acceptable evidence of safety and efficacy;
the prevalence and severity of adverse side effects;
whether our vaccines are differentiated from other vaccines;
availability, relative cost and relative efficacy of alternative and competing treatments;
the effectiveness of our marketing and distribution strategy;
publicity concerning our products or competing products and treatments; and
our ability to obtain sufficient third party insurance coverage or reimbursement.
If our vaccine candidates do not become widely accepted by physicians, patients, third-party payers and other members of the medical community, our business, financial condition and results of operations could be materially and adversely affected.

We may not be able to secure sufficient supplies of a key component of our adjuvant technology.

Because an important component of our adjuvant technology is extracted from a species of soap-bark tree (Quillaja saponaria) grown in Chile, we need long term access to quillaja extract with a consistent and sufficiently high quality. We need a secure supply of raw material, as well as back-up suppliers, or our adjuvant products may be delayed and we may not be able to meet our obligations under our various collaboration and supply agreements.

Current or future regional relationships may hinder our ability to engage in larger transactions.

We have entered into regional collaborations to develop, manufacture and distribute our vaccine candidates in certain parts of the world, and we anticipate entering into additional regional collaborations. Our relationships with SIIPL, Cadila and BMGF are examples of these regional relationships. These relationships often involve the licensing of our technology to our partner or entering into a distribution agreement, frequently on an exclusive basis. Generally, exclusive agreements are restricted to certain territories. Because we have entered into exclusive license and distribution agreements, larger companies may not be interested, or able, to enter into collaborations with us on a worldwide-scale. Also, these regional relationships may make us an unattractive target for an acquisition.

Our product candidates are sensitive to shipping and storage conditions, which could subject our vaccine candidates to risk of loss or damage.

Our vaccine candidates are sensitive to storage and handling conditions. Loss in vaccine candidates could occur if the product or product intermediates are not stored or handled properly. It is possible that our vaccine candidates could be lost due to expiration prior to use. If we do not effectively maintain our supply logistics, then we may experience an unusual number of returned or out of date products. Failure to effectively maintain our supply logistics, by us or third parties, could lead to additional manufacturing costs and delays in our ability to supply required quantities for clinical trials or otherwise.

Our vaccine candidates could become subject to a product recall which could harm our reputation, business, and financial results.

The FDA and similar foreign governmental authorities have the authority to require the recall of certain vaccine candidates. Manufacturers may, under their own initiative, recall a product if any material deficiency in a product is found. A government-mandated or voluntary recall by us or our strategic collaborators could occur as a result of manufacturing errors, design or labeling defects or other deficiencies and issues. Recalls of any of our vaccine candidates would divert managerial and financial resources and have an adverse effect on our financial condition and results of operations. A recall announcement could harm our reputation with customers and negatively affect our sales, if any.

Risks Related to Our Industry and Competition

Many of our competitors have significantly greater resources and experience, which may negatively impact our commercial opportunities and those of our current and future licensees.
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The biotechnology and pharmaceutical industries are subject to intense competition and rapid and significant technological change. We have many potential competitors, including major pharmaceutical companies, specialized biotechnology firms, academic institutions, government agencies and private and public research institutions. Many of our competitors have significantly greater financial and technical resources, experience and expertise in:

research and development;
preclinical testing;
designing and implementing clinical trials;
regulatory processes and approvals;
production and manufacturing; and
sales and marketing of approved products.
Principal competitive factors in our industry include:

the quality and breadth of an organization’s technology;
management of the organization and the execution of the organization’s strategy;
the skill and experience of an organization’s employees and its ability to recruit and retain skilled and experienced employees;
an organization’s intellectual property portfolio;
the range of capabilities, from target identification and validation to drug discovery and development to manufacturing and marketing; and
the availability of substantial capital resources to fund discovery, development and commercialization activities.
Large and established companies, such as Merck & Co., Inc., GlaxoSmithKline plc, CSL Ltd, Sanofi Pasteur, SA, Pfizer Inc. and AstraZeneca, among others, compete in the vaccine market. In particular, these companies have greater experience and expertise in securing government contracts and grants to support their research and development efforts, conducting testing and clinical trials, obtaining regulatory approvals to market products, manufacturing such products on a broad scale and marketing approved products.

Regardless of the disease, smaller or early-stage companies and research institutions also may prove to be significant competitors, particularly through collaborative arrangements with large and established pharmaceutical companies. As these companies develop their technologies, they may develop proprietary positions, which may prevent or limit our product development and commercialization efforts. We will also face competition from these parties in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and participant registration for clinical trials and in acquiring and in-licensing technologies and products complementary to our programs or potentially advantageous to our business. If any of our competitors succeed in obtaining approval from the FDA or other regulatory authorities for their products sooner than we do or for products that are more effective or less costly than ours, our commercial opportunity could be significantly reduced.

In order to effectively compete, we will have to make substantial investments in development, testing, manufacturing and sales and marketing or partner with one or more established companies. We may not be successful in gaining significant market share for any vaccine. Our technologies and vaccines also may be rendered obsolete or non-competitive as a result of products introduced by our competitors to the marketplace more rapidly and at a lower cost.

There is significant competition in the development of a vaccine against COVID-19, influenza, and RSV and we may never see returns on the significant resources we are devoting to our vaccine candidates.

We may be unable to produce a successful COVID-19 vaccine, and establish a competitive market share for our vaccine before a competitor, or before the COVID-19 outbreak is contained or significantly diminished. A large number of vaccine manufacturers, academic institutions and other organizations have developed COVID-19 vaccines or are developing COVID-19 vaccine candidates. In particular, Moderna, Pfizer/BioNTech, and Johnson & Johnson have received emergency use authorizations for their COVID-19 vaccines in the U.S., among other countries, and many other companies, including AstraZeneca, Sinovac Biotech, Sinopharm, and Inovio are in various stages of developing COVID-19 vaccine candidates. Despite funding provided to us to date, many of our competitors pursuing vaccine
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candidates have significantly greater product candidate development, manufacturing and marketing resources than we do. Larger pharmaceutical and biotechnology companies have extensive experience in clinical testing and obtaining regulatory approval for their products, and may have the resources to heavily invest to accelerate discovery and development of their vaccine candidates. Our business could be materially and adversely affected if competitors develop and commercialize one or more COVID-19 vaccines before we can complete development and seek approval for our vaccine candidate, or if they develop and commercialize one or more COVID-19 vaccines that are safer, more effective, have fewer or less severe side effects, have broader market acceptance, are more convenient or are less expensive than any vaccine candidate that we may develop. Furthermore, if any competitors are successful in producing a more efficacious vaccine or other treatment for COVID-19, or if any competitors are able to manufacture and distribute any such vaccines or treatments with greater efficiency, there may be a diversion of potential governmental and other funding away from us and toward such other parties.

We are allocating significant financial and personnel resources to the development of NVX-CoV2373, which may cause delays in or otherwise negatively impact our other development programs. Our business could be negatively impacted by our allocation of significant resources to combatting a global health threat that is unpredictable or against which our vaccine, if developed, may not be partially or fully effective, and may ultimately prove unsuccessful or unprofitable.

Many seasonal influenza vaccines are currently approved and marketed. Competition in the sale of these seasonal influenza vaccines is intense. Therefore, newly developed and approved products must be differentiated from existing vaccines in order to have commercial success. In order to show differentiation in the seasonal influenza market, a product may need to be more efficacious, particularly in older adults, and/or be less expensive and quicker to manufacture. Many of our competitors are working on new products and new generations of current products, intended to be more efficacious than those currently marketed. Our nanoparticle seasonal influenza vaccine candidate may not prove to be more efficacious than current products or products under development by our competitors. Further, our in-house or third-party manufacturing arrangements may not provide enough savings of time or money to provide the required differentiation for commercial success.

We are also aware that there are multiple companies with active RSV vaccine programs at various stages of development. Thus, while there is no RSV vaccine currently on the market, there is likely to be significant and consistent competition as these active programs mature. Different RSV vaccines may work better for different segments of the population, so it may be difficult for a single RSV vaccine manufacturer to provide vaccines that are marketable to multiple population segments. Geographic markets are also likely to vary significantly, which may make it difficult to market a single RSV vaccine worldwide. Even if a manufacturer brings an RSV vaccine to license, it is likely that competitors will continue to work on new products that could be more efficacious and/or less expensive. Our RSV vaccine candidate may not be as far along in development as other active RSV vaccine programs about which we are not aware, nor as efficacious as products under development by competing companies. Even if our RSV vaccine candidate receives regulatory approval, it may not achieve significant sales if other, more effective vaccines under development by our competitors are also approved.

Risks Related to Regulatory and Compliance Matters

We have not completed the development of vaccine products and we may not succeed in obtaining the FDA licensure necessary to sell such vaccine products.

The development, manufacture and marketing of our pharmaceutical and biological products are subject to government regulation by the U.S. FDA and regulatory authorities in other countries, including the European Medicines Agency EMA, the State Institute for Drug Control (SUKL) with respect to our manufacturing facility in the Czech Republic and the Swedish Medical Products Agency (Läkemedelsverket, LV) with respect to our adjuvant product being developed in Sweden, as well as other country authorities into which active pharmaceutical ingredients and excipients are imported and/or manufactured by us or our sub-contracted manufacturers. In the U.S. and most foreign countries, we must complete rigorous preclinical testing and extensive clinical trials that demonstrate the safety and efficacy of a product in order to apply for regulatory approval to market the product. None of our vaccine candidates has yet gained regulatory approval in the U.S. or elsewhere. We also have vaccine candidates in clinical trials and preclinical laboratory or animal studies. The steps generally required by the FDA before our proposed investigational products may be marketed in the U.S. include:
performance of preclinical (animal and laboratory) tests;
submission to the FDA of an IND, which must become effective before clinical trials may commence;
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performance of adequate and well controlled clinical trials to establish the safety and efficacy of the investigational product in the intended target population;
performance of a consistent and reproducible manufacturing process at commercial scale capable of passing FDA inspection;
submission to the FDA of a BLA or a NDA; and
FDA approval of the BLA or NDA before any commercial sale or shipment of the product.
These processes are expensive and can take many years to complete, and we may not be able to demonstrate the safety and efficacy of our vaccine candidates to the satisfaction of regulatory authorities. The start of clinical trials can be delayed or take longer than anticipated for many and varied reasons, many of which are out of our control. Safety concerns may emerge that could lengthen the ongoing clinical trials or require additional clinical trials to be conducted. Promising results in early clinical trials may not be replicated in subsequent clinical trials. Regulatory authorities may also require additional testing, and we may be required to demonstrate that our proposed products represent an improved form of treatment over existing therapies, which we may be unable to do without conducting further clinical trials. Moreover, if the FDA grants regulatory approval of a product, the approval may be limited to specific indications or limited with respect to its distribution. Expanded or additional indications for approved products may not be approved, which could limit our revenue. Foreign regulatory authorities may apply similar limitations or may refuse to grant any approval. Consequently, even if we believe that preclinical and clinical data are sufficient to support regulatory approval for our vaccine candidates, the FDA and foreign regulatory authorities ultimately may not grant approval for commercial sale in any jurisdiction, or may impose regulatory requirements that make further pursuit of approval uneconomical in one or more jurisdictions. If our vaccine candidates are not approved, our ability to generate revenue will be limited and our business will be adversely affected.

We may fail to obtain regulatory approval for our products on a timely basis or comply with our continuing regulatory obligations after approval is obtained.

Delays in obtaining regulatory approval can be extremely costly in terms of lost sales opportunities, loss of any potential marketing advantage of being early to market and increased clinical trial costs. The speed with which we begin and complete our preclinical studies necessary to begin clinical trials, clinical trials and our applications for marketing approval will depend on several factors, including the following:

our ability to manufacture or obtain sufficient quantities of materials for use in necessary preclinical studies and clinical trials;
regulatory agency review and approval of proposed clinical trial protocols;
approval of clinical trials protocols and informed consent forms by institutional review boards responsible for overseeing the ethical conduct of the trial;
the rate of participant enrollment and retention, which is a function of many factors, including the size of the participant population, the proximity of participants to clinical sites, the eligibility criteria for the clinical trial and the nature of the protocol;
unfavorable test results or side effects experienced by clinical trial participants;
analysis of data obtained from preclinical and clinical activities, which are susceptible to varying interpretations and which interpretations could delay, limit, result in the suspension or termination of, or prevent further conduct of clinical studies or regulatory approval;
the availability of skilled and experienced staff to conduct and monitor clinical trials and to prepare the appropriate regulatory applications; and
changes in the policies of regulatory authorities for drug or vaccine approval during the period of product development.
We have limited experience in conducting and managing the preclinical studies and clinical trials necessary to obtain regulatory marketing approvals. We may not be permitted to continue or commence additional clinical trials. We also face the risk that the results of our clinical trials may be inconsistent with the results obtained in preclinical studies or clinical trials of similar products or that the results obtained in later phases of clinical trials may be inconsistent with those obtained in earlier phases. A number of companies in the biotechnology and product development industry have suffered significant setbacks in advanced clinical trials, even after experiencing promising results in early animal and human testing.

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Regulatory agencies may require us or our collaborators to delay, restrict or discontinue clinical trials on various grounds, including a finding that the participants are being exposed to an unacceptable health risk. In addition, we or our collaborators may be unable to submit applications to regulatory agencies within the time frame we currently expect. Once submitted, applications must be approved by various regulatory agencies before we or our collaborators can commercialize the product described in the application. All statutes and regulations governing the conduct of clinical trials are subject to change in the future, which could affect the cost of such clinical trials. Any unanticipated costs or delays in our clinical trials could delay our ability to generate revenue and harm our financial condition and results of operations.

Failure to obtain regulatory approval in foreign jurisdictions would prevent us from marketing our products internationally.

We intend to have our vaccine candidates marketed outside the U.S. In furtherance of this objective, we have entered into supply agreements with various foreign governments and international distribution agreements with commercial entities. In order to market our products in the European Union, United Kingdom, India, Asia and many other non-U.S. jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing and data review. The time required to obtain foreign regulatory approval may differ from that required to obtain FDA approval. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We may not obtain foreign regulatory approvals on a timely basis, if at all. Approval by a regulatory agency, such as the FDA, does not ensure approval by regulatory agencies in other foreign countries. However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in other jurisdictions, including approval by the FDA. The failure to obtain regulatory approval in foreign jurisdictions could harm our business.

The regulatory pathway for NVX-CoV2373 is continually evolving, and may result in unexpected or unforeseen challenges.

The regulatory pathway for NVX-CoV2373 is evolving and failure by us to comply with any laws, rules and standards, some of which may not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences, including penalties, fines and delays in vaccine licensure. Efforts to comply with evolving laws, regulations and standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention to regulatory compliance activities. For example, the rules, regulations and standards governing OWS are uncertain and may evolve as the program progresses. Such rules or standards may adversely affect our plans to develop NVX-CoV2373 and failure by us to comply with any laws, rules or standards, some of which may not exist yet or may change, could result in a range of adverse consequences, such as penalties, fines or failure to receive funding.

The speed at which multiple stakeholders are moving to create, test and approve a vaccine for COVID-19 is highly unusual and may increase the risks associated with traditional vaccine development, which typically takes between eight and ten years. Given this accelerated timeline, we and regulators, such as the FDA, the EMA, and the MHRA, may make decisions more rapidly than is typical. Evolving or changing plans or priorities at the FDA or other regulatory bodies, including based on new knowledge of COVID-19 and how the disease affects the human body, may significantly affect the regulatory pathway for NVX-CoV2373. Results from clinical testing may raise new questions and require us to redesign proposed clinical trials, including revising proposed endpoints or adding new clinical trial sites or cohorts of subjects. In addition, the FDA’s or other regulators’ analysis of clinical data may differ from our interpretation, or regulators’ requirements and expectations for vaccine authorization or approval may change over time, with the result that the FDA or other regulators may require that we conduct additional clinical trials or non-clinical studies. There can be no guarantee that the evolving regulatory pathway will not impede the development, commercialization and/or licensure of NVX-CoV2373.

In addition, because the path to licensure of any vaccine against COVID-19 is unclear, we may have a widely used vaccine in circulation in the U.S. or another country as an investigational vaccine or a product authorized for temporary or emergency use prior to our receipt of marketing approval. Unexpected safety issues in these circumstances could lead to significant reputational damage for Novavax and our technology platform going forward and other issues, including delays in our other programs, the need for re-design of our clinical trials and the need for significant additional financial resources.

Participants or prospective participants in our clinical trials of NVX-CoV2373 could receive one of multiple COVID-19 vaccines that have been granted emergency use authorizations or approvals in the United States or other countries, which could impact or delay our clinical development program for NVX-CoV2373.
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Multiple COVID-19 vaccines have received temporary or emergency use authorization in the U.S. or in other countries. Moderna, Pfizer/BioNTech, and Johnson & Johnson have received emergency use authorizations for their COVID-19 vaccines in the U.S., among other countries, and AstraZeneca, Sinovac Biotech, Sinopharm, and others have been authorized in some manner in at least one country. Participants in our clinical trials could choose to receive a COVID-19 vaccine authorized or approved in the United States or other countries. Some participants in current studies of NVX-CoV2373 could choose to receive an authorized or approved COVID-19 vaccine or drop out of our studies altogether, particularly if they believe they may be in the placebo arm in one of our trials. The availability of authorized COVID-19 vaccines could affect our clinical trial results and impede our ability to collect sufficient data from previously enrolled participants, which could require additional enrollment or trials, either of which would be costly and time-consuming and could delay or permanently halt our development of NVX-CoV2373.

We are conducting, and plan to conduct in the future, a number of clinical trials for NVX-CoV2373 at sites outside the United States and the FDA may not accept data from trials conducted in such locations.

We are currently conducting several clinical trials of NVX-COV2373 at sites outside the U.S., including a Phase 3 trial in the U.K., a Phase 2b trial in South Africa, and a Phase 1/2 trial partially in Australia. We also plan in the future to conduct (or collaborate to conduct) a Phase 2/3 trial in India, Phase 2 trial in Czech Republic, and Phase 1/2 trial in Japan. Although the FDA may accept data from clinical trials conducted outside the U.S., acceptance of these data is subject to conditions imposed by the FDA. For example, the clinical trial must be well designed and conducted and be performed by qualified investigators in accordance with ethical principles. The trial population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will depend on its determination that the trials also complied with all applicable U.S. laws and regulations. If the FDA does not accept the data from any trial that we conduct outside the U.S., it could result in delay pending completion of our trials conducted in the U.S. or result in the need for additional trials, which would be costly and time-consuming and could delay or permanently halt our development of NVX-CoV2373.

Even if regulatory approval is received for our vaccine candidates, the later discovery of previously unknown problems with a product, manufacturer or facility may result in restrictions, including withdrawal of the product from the market.

Even after a product gains regulatory approval, the product and the manufacturer of the product will be subject to continuing regulatory review, including adverse event reporting requirements and the FDA’s general prohibition against promoting products for unapproved uses. Failure to comply with any post-approval requirements can, among other things, result in warning letters, product seizures, recalls, substantial fines, injunctions, suspensions or revocations of marketing licenses, operating restrictions and criminal prosecutions. Any such enforcement actions, any unanticipated changes in existing regulatory requirements or the adoption of new requirements, or any safety issues that arise with any approved products, could adversely affect our ability to market products and generate revenue and thus adversely affect our ability to continue our business.

We also may be restricted or prohibited from marketing or manufacturing a product, even after obtaining product approval, if previously unknown problems with the product or its manufacture are subsequently discovered. We cannot provide assurance that newly discovered or developed safety issues will not arise following regulatory approval. With the use of any vaccine by a wide patient population, serious adverse events may occur from time to time that did not arise in the clinical trials of the product or that initially appeared to be unrelated to the vaccine itself and only with the collection of subsequent information were found to be causally related to the product. Any such safety issues could cause us to suspend or cease marketing of our approved products, possibly subject us to substantial liabilities, and adversely affect our ability to generate revenue and our financial condition.

Our ability to produce a successful vaccine may be curtailed by one or more government actions or interventions, which may be more likely during a global health crisis such as COVID-19.

Given the significant global impact of the COVID-19 pandemic, it is possible that one or more government entities may take actions, including the U.S. Government under the Defense Production Act of 1950, as amended, which could directly or indirectly have the effect of diminishing some of our rights or opportunities with respect to NVX-CoV2373 and the economic value of a COVID-19 vaccine to us could be limited. In addition, during a global health crisis, such as the COVID-19 pandemic, where the spread of a disease needs to be controlled, closed or heavily regulated national borders will create challenges and potential delays in our development production and distribution activities and
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may necessitate that we pursue strategies to develop, produce and distribute our vaccine candidates within self-contained national or international borders or with additional safety measures or checks in place, at potentially much greater expense and with longer timeframes for public distribution.
Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise perform their normal functions on which the operation of our business may rely, which could negatively impact our ability to develop or commercialize new products or services, access capital markets, or otherwise operate our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough employees and stop or slow the pace of critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Fast Track Designation by the FDA or other regulatory acceleration options may not actually lead to a faster development or regulatory review or approval process and does not assure approval.

If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address an unmet medical need for this condition, the drug sponsor may apply for FDA Fast Track Designation or similar fast track processes with other regulatory agencies, such as conditional marketing authorizations from the EMA. However, Fast Track Designation does not ensure that the drug sponsor will receive marketing approval or that approval will be granted within any particular timeframe. The FDA granted Fast Track Designation for NVX-CoV2373 in November 2020 and for NanoFlu, our recombinant quadrivalent seasonal influenza vaccine candidate, in January 2020. We may also seek Fast Track Designation for more of our other vaccine candidates. If we do seek Fast Track Designation for our other vaccine candidates, we may not receive it, and even if we receive Fast Track Designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures. In addition, the FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program. Fast Track Designation alone does not guarantee qualification for the FDA’s priority review procedures.

Obtaining a Fast Track Designation does not change the standards for product approval, but may expedite the development or approval process. Even though the FDA has granted such designation for NVX-CoV2373 and NanoFlu, it may not actually result in faster clinical development or regulatory review or approval. Furthermore, such a designation does not increase the likelihood that NVX-CoV2373 or NanoFlu will receive marketing approval in the U.S.

Because we are subject to environmental, health and safety laws, we may be unable to conduct our business in the most advantageous manner.

We are subject to various laws and regulations relating to safe working conditions, laboratory and manufacturing practices, the experimental use of animals, emissions and wastewater discharges, and the use and disposal of hazardous or potentially hazardous substances used in connection with our research, including infectious disease agents. We also cannot accurately predict the extent of regulations that might result from any future legislative or administrative action. Any of these laws or regulations could cause us to incur additional expense or restrict our operations.

Our facilities in Maryland are subject to various local, state and federal laws and regulations relating to safe working conditions, laboratory practices, the experimental use of animals and the use and disposal of hazardous or potentially hazardous substances, including chemicals, microorganisms and various hazardous compounds used in connection with our research and development activities. In the U.S., these laws include the Occupational Safety and Health Act, the Toxic Test Substances Control Act and the Resource Conservation and Recovery Act. Similar national
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and local regulations govern our facilities in Sweden and the Czech Republic. We cannot eliminate the risk of accidental contamination or discharge or injury from these materials. Federal, state and local laws and regulations govern the use, manufacture, storage, handling and disposal of these materials. We could be subject to civil damages in the event of an improper or unauthorized release of, or exposure of individuals to, these hazardous materials. In addition, claimants may sue us for injury or contamination that results from our use or the use by third-parties of these materials, and our liability may exceed our total assets. Compliance with environmental laws and regulations may be expensive, and current or future environmental regulations may impair our research, development or production efforts.

Although we have general liability insurance, these policies contain exclusions from insurance against claims arising from pollution from chemicals or pollution from conditions arising from our operations. Our collaborators are working with these types of hazardous materials in connection with our collaborations. In the event of a lawsuit or investigation, we could be held responsible for any injury we or our collaborators cause to persons or property by exposure to, or release of, any hazardous materials. However, we believe that we are currently in compliance with all material applicable environmental and occupational health and safety regulations.

For our product candidates, we will be subject to additional healthcare laws and our failure to comply with those laws could have a material adverse effect on our results of operations and financial conditions.

Within the U.S. (and within foreign countries), if we obtain approval for any of our product candidates and begin commercializing them, our operations may be directly, or indirectly through our arrangements with third-party payors and customers, subject to additional healthcare regulation and enforcement by the federal and state governments (or the regulatory bodies or governments of foreign countries), which may constrain the business or financial arrangements and relationships through which we sell, market and distribute our products. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials. The applicable U.S. federal and state healthcare laws and regulations (which may be comparable to foreign laws existing in foreign countries) that may affect our ability to operate include:
the Federal Food, Drug and Cosmetic Act, which among other things, strictly regulates drug product marketing and promotion and prohibits manufacturers from marketing such products for unapproved uses;
the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving or providing remuneration, directly or indirectly, to induce the referral for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid;
federal false claims laws, including the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, information or claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent;
manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims; the FCA also permits a private individual acting as whistleblower to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery;
federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs;
the federal Physician Payment Sunshine Act and its implementing regulations, which require manufacturers of drugs, devices, biologicals, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the DHHS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; effective January 1, 2022, these reporting obligations will extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners;
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the federal law known as HIPAA, which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
state law equivalents of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state gift ban and transparency laws, many of which state laws differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts; and
state laws restricting interactions with healthcare providers and other members of the healthcare community or requiring pharmaceutical manufacturers to implement certain compliance standards.
Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to, on a corporate or individual basis, penalties, including civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, the exclusion from participation in federal and state healthcare programs and even imprisonment, any of which could materially adversely affect our ability to operate our business and our financial results. In addition, the cost of implementing sufficient systems, controls, and processes to ensure compliance with all of the aforementioned laws could be significant. Any action for violation of these laws, even if successfully defended, could cause us to incur significant legal expenses and divert management’s attention from the operation of the company’s business. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, that person or entity may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs. Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect business in an adverse way.

It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent inappropriate conduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights those actions, our business may be impaired.

Risks Related to our Intellectual Property

Our success depends on our ability to maintain the proprietary nature of our technology.

Our success in large part depends on our ability to maintain the proprietary nature of our technology and other trade secrets. To do so, we must prosecute and maintain existing patents, obtain new patents and pursue trade secret and other intellectual property protection. We also must operate without infringing the proprietary rights of third-parties or allowing third-parties to infringe our rights. We currently have or have rights to over 450 U.S. patents and corresponding foreign patents and patent applications covering our technologies. However, patent issues relating to pharmaceuticals and biologics involve complex legal, scientific and factual questions. To date, no consistent policy has emerged regarding the breadth of biotechnology patent claims that are granted by the U.S. Patent and Trademark Office (“USPTO”) or enforced by the federal courts. Therefore, we do not know whether any particular patent applications will result in the issuance of patents, or that any patents issued to us will provide us with any competitive advantage. We also cannot be sure that we will develop additional proprietary products that are patentable. Furthermore, there is a risk that others will independently develop or duplicate similar technology or products or circumvent the patents issued to us.

There is a risk that third-parties may challenge our existing patents or claim that we are infringing their patents or proprietary rights. We could incur substantial costs in defending patent infringement suits or in filing suits against others to have their patents declared invalid or claim infringement. It is also possible that we may be required to obtain licenses from third-parties to avoid infringing third-party patents or other proprietary rights. We cannot be sure that such third-party licenses would be available to us on acceptable terms, if at all. If we are unable to obtain required third-party licenses, we may be delayed in or prohibited from developing, manufacturing or selling products requiring such licenses.
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Although our patent filings include claims covering various features of our vaccine candidates, including composition, methods of manufacture and use, our patents do not provide us with complete protection against the development of competing products. Some of our know-how and technology is not patentable. To protect our proprietary rights in unpatentable intellectual property and trade secrets, we require employees, consultants, advisors and collaborators to enter into confidentiality agreements. These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information.

Third parties may claim we infringe their intellectual property rights.

Our research, development and commercialization activities, including any vaccine candidates resulting from these activities, may be found to infringe patents owned by third-parties and to which we do not hold licenses or other rights. There may be rights we are not aware of, including applications that have been filed, but not published that, when issued, could be asserted against us. These third-parties could bring claims against us, and that may cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or biologic drug candidate that is the subject of the suit.

As a result of patent infringement claims, or in order to avoid potential claims, we may choose or be required to seek a license from the third-party. These licenses may not be available on acceptable terms, or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be non- exclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms. All of the issues described above could also impact our collaborators, which would also impact the success of the collaboration and therefore us.

There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical and biotechnology industries.

We may become involved in litigation to protect or enforce our patents or the patents of our collaborators or licensors, which could be expensive and time-consuming.

Competitors may infringe our patents or the patents of our collaborators or licensors. As a result, we may be required to file suit to counter infringement for unauthorized use. This can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover its technology. An adverse determination of any litigation or defense proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at the risk of not issuing.

Even if we are successful, litigation may result in substantial costs and distraction to our management. Even with a broad portfolio, we may not be able, alone or with our collaborators and licensors, to prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the U.S.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, during the course of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If investors perceive these results to be negative, the market price for our common stock could be significantly harmed.

The scope, validity, and ownership of our patent claims may be challenged in various venues and, if we do not prevail, our ability to exclude competitors may be harmed, potentially reducing our ability to succeed commercially.

We may be subject to a variety of challenges from third-parties that relate to the scope of the claims or to their validity. Such challenges can be mounted in post-grant review, ex parte re-examination, and inter partes review proceedings before the USPTO, or similar adversarial proceedings in other jurisdictions. If we are unsuccessful in any such challenge, the scope of our claims could be narrowed or could be invalidated. Any such outcome could impair our ability to exclude competitors from the market in those countries, potentially impacting our commercial success.

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Our patents may be subject to various challenges related to ownership and inventorship, including interference or derivation proceedings. Third-parties may assert that they are inventors on our patents or that they are owners of the patents. While we perform inventorship analyses to insure that the correct inventors are listed on our patents, we cannot be certain that a court of competent jurisdiction would arrive at the same conclusions we do. If we are unsuccessful in defending against ownership or inventorship challenges, a court may require us to list additional inventors, may invalidate the patent, or may transfer ownership of the patent to a third-party. Any of these outcomes may harm our ability to exclude competitors and potentially impact our commercial success. Further, if ownership is transferred to a third-party we may be required to seek a license to those rights to preserve our exclusive ability to practice the invention. Such a license may not be available on commercially reasonable terms, or at all. If we are unable to obtain a license, we may be required to expend time, effort, and other resources to design around the patent. Any such license may be non-exclusive and if a competitor is able to obtain a license from the third-party, our ability to exclude that competitor from the market may be negatively impacted.

Even if we are ultimately successful, defending any such challenges may cause us to incur substantial expenses and may require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.

We may need to license intellectual property from third-parties and, if our right to use the intellectual property we license is affected, our ability to develop and commercialize our vaccine candidates may be harmed.

We have in the past, and we expect in the future to license intellectual property from third-parties and that these licenses will be material to our business. We will not own the patents or patent applications that underlie these licenses, and we may not control either the prosecution or the enforcement of the patents. Under such circumstances, we may be forced to rely upon our licensors to properly prosecute and file those patent applications and prevent infringement of those patents.

While many of the licenses under which we have rights provide us with rights in specified fields, the scope of our rights under these and other licenses may be subject to dispute by our licensors or third-parties. In addition, our rights to use these technologies and practice the inventions claimed in the licensed patents and patent applications are subject to our licensors abiding by the terms of those licenses and not terminating them. Any of our licenses may be terminated by the licensor if we are in breach of a term or condition of the license agreement, or in certain other circumstances.

Further, any disputes regarding obligations in licenses may require us to take expensive and time-consuming legal action to resolve, and, even if we are successful, may delay our ability to commercialize products and generate revenue. Further, if we are unable to resolve license issues that arise we may lose rights to practice intellectual property that is required to make, use, or sell products. Any such loss could compromise our development and commercialization efforts for current or future product candidates and/or may require additional effort and expense to design around.

Our vaccine candidates and potential vaccine candidates will require several components that may each be the subject of a license agreement. The cumulative license fees and royalties for these components may make the commercialization of these vaccine candidates uneconomical.

If patent laws or the interpretation of patent laws change, our competitors may be able to develop and commercialize our discoveries.

Important legal issues remain to be resolved as to the extent and scope of available patent protection for biopharmaceutical products and processes in the U.S. and other important markets outside the U.S., such as Europe and Japan. In addition, foreign markets may not provide the same level of patent protection as provided under the U.S. patent system. Litigation or administrative proceedings may be necessary to determine the validity and scope of certain of our and others’ proprietary rights. Any such litigation or proceeding may result in a significant commitment of resources in the future and could force us to do one or more of the following: cease selling or using any of our products that incorporate the challenged intellectual property, which would adversely affect our revenue; obtain a license from the holder of the intellectual property right alleged to have been infringed, which license may not be available on reasonable terms, if at all; and redesign our products to avoid infringing the intellectual property rights of third-parties, which may be time-consuming or impossible to do. In addition, changes in, or different interpretations of, patent laws in the U.S. and other countries may result in patent laws that allow others to use our discoveries or develop and commercialize our products. We cannot provide assurance that the patents we obtain or the unpatented technology we hold will afford us significant commercial protection.

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If we do not obtain patent term extension and/or patent term adjustment in the United States under the Hatch- Waxman Act and similar extensions in foreign countries, our ability to exclude competitors may be harmed.

In the United States, the patent term is 20 years from the earliest U.S. non-provisional filing date. Extensions of patent term may be available under certain circumstances. Depending upon the timing, duration and conditions of FDA marketing approval of our product candidates, we may be able to extend the term of one patent that covers a marketed product under the Drug Price Competition and Patent Term Restoration Act of 1984, (the “Hatch-Waxman Amendments”) and similar legislation in the European Union.

The Hatch-Waxman Amendments permit patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process. We may not receive any extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request. If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may obtain approval to market competing products sooner.

Patent term covering our products may also be extended for time spent during the prosecution of the patent application in the USPTO. This extension is referred to as Patent Term Adjustment (“PTA”). The laws and regulations governing how the USPTO calculates the PTA is subject to change and changes in the law can reduce or increase any such PTA. Further, the PTA granted by the USPTO may be challenged by a third-party. If we do not prevail under such a challenge, the PTA may be reduced or eliminated, shortening the patent term, which may negatively impact our ability to exclude competitors.

Risks Related to Employee Matters, Managing Growth and Information Technology

Our business may be adversely affected if we do not successfully execute our business development initiatives.

We anticipate growing through both internal development projects, as well as external opportunities, which include the acquisition, partnering and in-licensing of products, technologies and companies or the entry into strategic alliances and collaborations. The availability of high quality opportunities is limited, and we may fail to identify candidates that we and our stockholders consider suitable or complete transactions on terms that prove advantageous. In order to pursue such opportunities, we may require significant additional financing, which may not be available to us on favorable terms, if at all. Even if we are able to successfully identify and complete acquisitions, like our business combinations with Novavax CZ (formerly Praha Vaccines) and Novavax AB, strategic transactions involve many risks, including, among others, those related to diversion of management’s attention from other business concerns, unanticipated expenses and liabilities, and increased complexity of our operations, which could prevent us from effectively exploiting acquired facilities, successfully integrating the acquired business and personnel, or fully realizing expected synergies.

To effectively manage our current and future potential growth, we will need to continue to enhance our operational, financial and management processes and to effectively expand, train and manage our employee base. Supporting our growth initiatives will require significant expenditures and management resources, including investments in research and development, manufacturing in-house and through third-party manufacturers and other areas of our business. If we do not successfully manage our growth and do not successfully execute our growth initiatives, then our business and financial results may be adversely impacted, and we may incur asset impairment or restructuring charges.

Security breaches and other disruptions could compromise our information and expose us to liability, and our failure to comply with data protection laws and regulations could lead to government enforcement actions, which would cause our business and reputation to suffer.

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and data about our clinical participants, suppliers and business partners and personally identifiable information. The secure maintenance of this information is critical to our operations and business strategy. Some of this information could be an attractive target of criminal attack by malicious third parties with a wide range of motives and expertise, including organized criminal groups, “hacktivists,” patient groups, disgruntled current or former employees and others. Hacker attacks are of ever-increasing levels of sophistication, and despite our security measures, our information technology and infrastructure may be vulnerable to such attacks or may be breached due to employee
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error or malfeasance. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Furthermore, if our systems become compromised, we may not promptly discover the intrusion. Like other companies in our industry, we have experienced attacks to our data and systems, including malware and computer viruses. Attacks could have a material impact on our business, operations or financial results. Any access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations, and damage our reputation, which could adversely affect our business. In addition, privacy and data protection laws may be interpreted and applied differently from country to country and may create inconsistent or conflicting requirements, which can increase the costs incurred by us in complying with such laws. The European Union’s GDPR, which greatly increases the jurisdictional reach of European Union law and became effective in May 2018, adds a broad array of requirements for handling personal data including the public disclosure of significant data breaches, and imposes substantial penalties for non-compliance of up to the greater of €20 million or 4% of global annual revenue for the preceding financial year. Our efforts to comply with GDPR and other privacy and data protection laws may impose significant costs and challenges that are likely to increase over time, and we could incur substantial penalties or litigation related to violations of existing or future data privacy laws and regulations.

Additionally, the CCPA, which became effective January 1, 2020, substantially expands privacy obligations of many businesses. The CCPA requires new disclosures to California consumers, imposes new rules for collecting or using information about minors, and affords consumers new abilities, such as the right to know whether the data is sold or disclosed and to whom, the right to request that a company delete personal information collected, the right to opt-out of the sale of personal information and the right to non-discrimination in terms of price or service when a consumer exercises a privacy right. If we fail to comply with these regulations, we could be subject to civil sanctions, including fines and penalties for noncompliance. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. Moreover, a newly passed ballot initiative, the California Privacy Rights Act (“CPRA”), which will become operational in 2023, expands on the CCPA, creating new consumer rights and protections, including the right to correct personal information, the right to opt out of the use of personal information in automated decision making, the right to opt out of “sharing” consumer’s personal information for cross-context behavioral advertising, and the right to restrict use of and disclosure of sensitive personal information, including geolocation data to third parties. We will need to evaluate and potentially update our privacy program to ensure compliance with the CPRA and may incur additional costs and expenses in our effort to comply

Collaborations and contracts of our wholly owned subsidiaries Novavax AB and Novavax CZ, with regional partners, such as SIIPL and Cadila, as well as with international providers, expose us to additional risks associated with doing business outside the U.S.

Swedish-based Novavax AB and Czech Republic-based Novavax CZ are wholly owned subsidiaries of Novavax, Inc. We also have established a manufacturing and distribution agreement with SIIPL, formed a joint venture with Cadila in India, and have entered into other agreements and arrangements with foreign governments and companies in other countries. We plan to continue to enter into collaborations or partnerships with companies, non-profit organizations and local governments in various parts of the world. Risks of conducting business outside the U.S. include negative consequences of:

the costs associated with seeking to comply with multiple regulatory requirements that govern our ability to develop, manufacture and sell products in local markets;
failure to comply with anti-bribery laws such as the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions;
new or changes in interpretations of existing trade protections measures, including tariffs, embargoes and import and export licensing requirements;
difficulties in and costs of staffing, managing and operating our international operations;
changes in environmental, health and safety laws;
fluctuations in foreign currency exchange rates;
new or changes in interpretations of existing tax laws;
political instability and actual or anticipated military or potential conflicts;
economic instability, inflation, recession and interest rate fluctuations;
minimal or diminished protection of intellectual property in many jurisdictions; and
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possible nationalization and expropriation.
These risks, individually or in the aggregate, could have a material adverse effect on our business, financial conditions, results of operations and cash flows.

If we are unable to attract or retain key management or other personnel, our business, operating results and financial condition could be materially adversely affected.

We depend on our senior executive officers, as well as key scientific and other personnel. The loss of these individuals could harm our business and significantly delay or prevent the achievement of research, development or business objectives. Turnover in key executive positions resulting in lack of management continuity and long-term history with our Company could result in operational and administrative inefficiencies and added costs.

We may not be able to attract qualified individuals for key positions on terms acceptable to us. Competition for qualified employees is intense among pharmaceutical and biotechnology companies, and the loss of qualified employees, or an inability to attract, retain and motivate additional highly skilled employees could hinder our ability to complete clinical trials successfully and otherwise develop marketable products.

We also rely from time to time on outside advisors who assist us in formulating our research and development and clinical strategy. We may not be able to attract and retain these individuals on acceptable terms, which could delay our development efforts.

Risks Related to Our Convertible Senior Notes

Servicing our 3.75% convertible senior unsecured notes due 2023 (the “Notes”) requires a significant amount of cash, and we may not have sufficient cash flow to pay our debt.

In 2016, we issued $325 million aggregate principal amount of Notes. Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness, including the Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. We do not expect our business to be able to generate cash flow from operations sufficient to service our debt and make necessary capital expenditures and may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness, which is non-callable and matures in 2023, will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations, and limit our flexibility in planning for and reacting to changes in our business.

We may not have the ability to raise the funds necessary to repurchase the Notes as required upon a fundamental change, and our future debt may contain limitations on our ability to repurchase the Notes.

Holders of the Notes will have the right to require us to repurchase their Notes for cash upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any. A fundamental change may also constitute an event of default or prepayment under, and result in the acceleration of the maturity of, our then-existing indebtedness. We cannot assure that we will have sufficient financial resources, or will be able to arrange financing, to pay the fundamental change repurchase price in cash with respect to any Notes surrendered by holders for repurchase upon a fundamental change. In addition, restrictions in our then existing credit facilities or other indebtedness, if any, may not allow us to repurchase the Notes upon a fundamental change. Our failure to repurchase the Notes upon a fundamental change when required would result in an event of default with respect to the Notes which could, in turn, constitute a default under the terms of our other indebtedness, if any. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes.

Capped call transactions entered into in connection with our Notes may affect the value of our common stock.

In connection with our Notes, we entered into capped call transactions (the “capped call transactions”) with certain financial institutions. The capped call transactions are expected to generally reduce the potential dilution upon conversion of the Notes into shares of our common stock.

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In connection with establishing their initial hedges of the capped call transactions, these financial institutions or their respective affiliates entered into various derivative transactions with respect to our common stock and/or to purchase our common stock. The financial institutions, or their respective affiliates, may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the Notes. This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the Notes, which could affect the value of our common stock.

Risks Related to Ownership of Our Common Stock

Because our stock price has been and will likely continue to be highly volatile, the market price of our common stock may be lower or more volatile than expected.

Our stock price has been highly volatile. From January 1, 2020 through December 31, 2020, the closing sale price of our common stock has been as low as $6.31 per share and as high as $178.51 per share. The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may cause the market price of our common stock to be lower or more volatile than expected.

Furthermore, given the global focus on the COVID-19 pandemic and our investment in developing a COVID-19 vaccine, information in the public arena on this topic, whether or not accurate, has had and will likely continue to have an outsized impact (positive or negative) on our stock price. Information related to our development, manufacturing, regulatory and commercialization efforts with respect to NVX-CoV2373, or information regarding such efforts by competitors with respect to their COVID-19 vaccines and vaccine candidates, may meaningfully impact our stock price. As a result of this volatility, you may not be able to sell your common stock at or above your initial purchase price. The market price of our common stock may be influenced by many other factors, including:

future announcements about us or our collaborators or competitors, including the results of testing, technological innovations or new commercial products;
clinical trial results;
depletion of our cash reserves;
sale of equity securities or issuance of additional debt;
announcement by us of significant strategic partnerships, collaborations, joint ventures, capital commitments or acquisitions;
changes in government regulations;
impact of competitor successes and in particular development success of vaccine candidates that compete with our own vaccine candidates;
developments in our relationships with our collaboration partners;
announcements relating to health care reform and reimbursement levels for new vaccines and other matters affecting our business and results, regardless of accuracy;
sales of substantial amounts of our stock by us or existing stockholders (including stock by insiders or 5% stockholders);
development, spread or new announcements related to pandemic diseases;
litigation;
public concern as to the safety of our products;
significant set-backs or concerns with the industry or the market as a whole;
regulatory inquiries, reviews and potential action, including from the FDA or the SEC;
recommendations by securities analysts or changes in earnings estimates; and
the other factors described in this Risk Factors section.
In the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation often has been instituted against that company. Such litigation, if instituted against us, could cause us to incur
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substantial costs to defend such claims and divert management’s attention and resources, which could seriously harm our business, financial condition, and results of operations, and prospects.

Raising additional capital by issuing securities or through collaboration and licensing arrangements may cause dilution to existing stockholders or require us to relinquish rights to our technologies or vaccine candidates.

If we are unable to partner with a third-party to advance the development of one or more of our vaccine candidates, we will need to raise money through additional debt or equity financings. To the extent that we raise additional capital by issuing equity securities, our stockholders will experience immediate dilution, which may be significant. There is also a risk that such equity issuances may cause an ownership change under the Internal Revenue Code of 1986, as amended, and similar state provisions, thus limiting our ability to use our net operating loss carryforwards and credits. To the extent that we raise additional capital through licensing arrangements or arrangements with collaborative partners, we may be required to relinquish, on terms that may not be favorable to us, rights to some of our technologies or vaccine candidates that we would otherwise seek to develop or commercialize ourselves. In addition, economic conditions may also negatively affect the desire or ability of potential collaborators to enter into transactions with us. They may also have to delay or cancel research and development projects or reduce their overall budgets.

Provisions of our Second Amended and Restated Certificate of Incorporation and Amended and Restated By-Laws and Delaware law could delay or prevent the acquisition of the Company, even if such acquisition would be beneficial to stockholders, and could impede changes in our Board.

Provisions in our organizational documents could hamper a third-party’s attempt to acquire, or discourage a third-party from attempting to acquire control of, the Company. Stockholders who wish to participate in these transactions may not have the opportunity to do so. Our organizational documents also could limit the price investors are willing to pay in the future for our securities and make it more difficult to change the composition of our Board in any one year. For example, our organizational documents provide for a staggered board with three classes of directors serving staggered three-year terms and advance notice requirements for stockholders to nominate directors and make proposals.

As a Delaware corporation, we are also afforded the protections of Section 203 of the Delaware General Corporation Law, which will prevent us from engaging in a business combination with a person who acquires at least 15% of our common stock for a period of three years from the date such person acquired such common stock, unless advance board or stockholder approval was obtained.

Any delay or prevention of a change of control transaction or changes in our Board or management could deter potential acquirers or prevent the completion of a transaction in which our stockholders could receive a substantial premium over the then current market price for their shares.

We have never paid dividends on our capital stock, and we do not anticipate paying any such dividends in the foreseeable future.

We have never paid cash dividends on our common stock. We currently anticipate that we will retain all of our earnings for use in the development of our business and do not anticipate paying any cash dividends in the foreseeable future. As a result, capital appreciation, if any, of our common stock would be the only source of gain for stockholders until dividends are paid, if at all.

General Risk Factors

Litigation could have a material adverse impact on our results of operation and financial condition.

In addition to intellectual property litigation, from time to time, we may be subject to other litigation. Regardless of the merits of any claims that may be brought against us, litigation could result in a diversion of management’s attention and resources and we may be required to incur significant expenses defending against these claims. If we are unable to prevail in litigation, we could incur substantial liabilities. Where we can make a reasonable estimate of the liability relating to pending litigation and determine that it is probable, we record a related liability. As additional information becomes available, we assess the potential liability and revise estimates as appropriate. However, because of uncertainties relating to litigation, the amount of our estimates could be wrong.

We or the third parties upon whom we depend may be adversely affected by natural or man-made disasters or public health emergencies, such as the COVID-19 pandemic.
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Our operations, and those of our clinical research organizations, contract manufacturing organizations, vendors of materials needed in manufacturing, collaboration partners, distributors and other third parties upon whom we depend, could be subject to fires, extreme weather conditions, earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, war, political unrest, sabotage or terrorism and other natural or man-made disasters, as well as public health emergencies, such as the COVID-19 pandemic. The occurrence of any of these business disruptions could prevent us from using all or a significant portion of our facilities and it may be difficult or impossible for us to continue certain activities for a substantial period of time. The disaster recovery and business continuity plans we have in place may prove inadequate in the event of a serious disaster or similar event and we may incur substantial expenses and delays as a result. Our ability to manufacture our product candidates and obtain necessary clinical supplies for our product candidates could be disrupted if the operations of our contract manufacturing organizations or suppliers are affected by a natural or man-made disaster, or a public health emergency.

The outbreak of COVID-19 may materially and adversely affect our business and our financial results.

The COVID-19 pandemic continues to present substantial global economic and public health challenges, which may materially and adversely impact our business, financial condition and results of operations. In response to COVID-19, various aspects of our business operations have been, and could continue to be, disrupted. We continue to implement a work from home policy, with our administrative employees working outside of our offices, and on-site staff restricted to only those required to execute certain laboratory and related support activities. Working remotely could increase our cybersecurity risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations. In addition, as a result of state or local restrictions, our on-site staff conducting research and development may not be able to access our laboratories, and these core activities may be significantly limited or curtailed, possibly for extended periods of time. Travel restrictions and other governmental measures may also result in a disruption or delay in the performance of our third-party contractors and suppliers. If such third parties are unable to adequately satisfy their contractual commitments to us in a timely manner, our business could be adversely affected.

Our clinical trials, whether planned or ongoing, may be affected by the COVID-19 pandemic. Study procedures (particularly any procedures that may be deemed non-essential), site initiation, participant recruitment and enrollment, participant dosing, shipment of our product candidates, distribution of clinical trial materials, study monitoring, site inspections and data analysis may be paused or delayed due to changes in hospital or research institution policies, federal, state or local regulations, prioritization of hospital and other medical resources toward efforts to treat or prevent COVID-19, or other reasons related to the pandemic. In addition, there could be a potential effect of COVID-19 to the operations of the FDA or other health authorities, which could result in delays of reviews and approvals, including with respect to our product candidates. Any prolongation or de-prioritization of our clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of our product candidates.

The trading prices for our common stock and that of other biopharmaceutical companies have been highly volatile due to the COVID-19 pandemic, especially as a result of investor concerns and uncertainty related to the impact of the outbreak on the economies of countries worldwide. These broad market and industry fluctuations, as well as general economic, political and market conditions, may negatively impact the market price of shares of our common stock.

The COVID-19 pandemic continues to rapidly evolve. The extent to which the outbreak impacts our business, preclinical studies and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the U.S. and other countries, business closures or business disruptions and the effectiveness of actions taken in the U.S. and other countries to contain and treat the disease.

The United Kingdom’s withdrawal from the European Union could result in increased regulatory and legal complexity, which may make it more difficult for us to do business in the UK and/or Europe and impose additional challenges in securing regulatory approval of our product candidates in the UK and/or Europe.

The United Kingdom’s exit from the European Union as of January 31, 2020, with a transitional period up to December 31, 2020, commonly referred to as “Brexit”, has caused political and economic uncertainty, including in the regulatory framework applicable to our operations and vaccine candidates in the United Kingdom and the European Union, and this uncertainty may persist for years. Brexit could, among other outcomes, disrupt the free movement of goods, services and people between the United Kingdom and the European Union, and result in increased legal and regulatory complexities, as well as potential higher costs of conducting business in Europe. As one of the Brexit consequences, the
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EMA has relocated from the United Kingdom to the Netherlands. This has led to a significant reduction of the EMA workforce, which has resulted and could further result in significant disruption and delays in its administrative procedures, such as granting clinical trial authorization or opinions for marketing authorization, disruption of importation and export of active substance and other components of new drug formulations, and disruption of the supply chain for clinical trial product and final authorized formulations. As any European Union marketing authorization for NVX-CoV2373 would be issued after January 1, 2021, if at all, it would not be grandfathered in the UK. We therefore must seek to obtain a separate marketing authorization for the UK, increasing our regulatory burden.

The cumulative effects of the disruption to the regulatory framework may add considerably to the development lead time to marketing authorization and commercialization of products in the European Union and/or the United Kingdom. It is possible that there will be increased regulatory complexities, which can disrupt the timing of our clinical trials and regulatory approvals. In addition, changes in, and legal uncertainty with regard to, national and international laws and regulations may present difficulties for our clinical and regulatory strategy. Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, would prevent us from commercializing our product candidates in the United Kingdom and/or the European Union and restrict our ability to generate revenues and achieve and sustain profitability.

In addition, as a result of Brexit, other European countries may seek to conduct referenda with respect to their continuing membership with the European Union. Given these possibilities and others we may not anticipate, as well as the absence of comparable precedent, it is unclear what financial, regulatory and legal implications the withdrawal of the United Kingdom from the European Union will have, how such withdrawal will affect us, and the full extent to which our business could be adversely affected.

We are increasingly a target for public scrutiny, and our business may be impacted by unfavorable publicity.

Given that COVID-19 represents an unprecedented urgent public health crisis, that we are developing NVX-CoV2373 as a COVID-19 vaccine candidate, and that we have received significant funding from the U.S. and foreign governments and other sources to support the development and potential commercialization of NVX-CoV2373, we have observed and are likely to continue to face significant public attention and scrutiny over the complex decisions we have made and will be making regarding the development, testing, manufacturing, allocation and pricing of NVX-CoV2373. If we are unable to successfully manage these risks, we could face significant reputational harm, which could negatively affect our stock price. The intense public interest, including speculation by the media, in the development of NVX-CoV2373 has caused significant volatility in our stock price, which we expect to continue as data and other information from our ongoing clinical trials become publicly available. If concerns should arise about the actual or anticipated efficacy or safety of any of our product candidates, such concerns could adversely affect the market’s perception of these candidates, which could lead to a decline in investors’ expectations and a decline in the price of our common stock.

The increasing use of social media platforms presents new risks and challenges to our business.

Social media is increasingly being used to communicate about pharmaceutical companies’ research, product candidates, and the diseases such product candidates are being developed to prevent. Social media practices in the pharmaceutical industry continue to evolve and regulations relating to such use are not always clear. This evolution creates uncertainty and risk of noncompliance with regulations applicable to our business, resulting in potential regulatory actions against us. For example, subjects may use social media channels to comment on their experience in an ongoing blinded clinical trial or to report an alleged adverse event. When such events occur, there is a risk that we fail to monitor and comply with applicable adverse event reporting obligations or we may not be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our investigational product candidates. There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social media or networking website. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions, or incur reputational or other harm to our business.
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Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 2. PROPERTIES

We lease three facilities in Gaithersburg, Maryland, Novavax AB leases a facility in Uppsala, Sweden and Novavax CZ owns a facility in Bohumil, Czech Republic. A summary of our current facilities is set forth below. Although we believe that our facilities are suitable and adequate for our present needs, the Company’s management continues to review and assess real property requirements that may be necessary to address our current business plan.
Property
Location
Approximate
Square Footage
Brief Property
Description
700QO Gaithersburg, MD 170,000  Manufacturing, research and development facility and offices
21FF Gaithersburg, MD 53,000  Research and development facility and offices
22FF Gaithersburg, MD 40,000  Executive, administrative, clinical and regulatory offices
Uppsala, Sweden 37,300  Adjuvant manufacturing and research and development facility and offices
Bohumil, Czech Republic 138,400 
Manufacturing facility and offices
Total square footage 438,700 

Item 3. LEGAL PROCEEDINGS
We currently have no material pending legal proceedings.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
Item 5.    MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock trades on the Nasdaq Global Select Market under the symbol “NVAX.” Our common stock was held by approximately 129 stockholders of record as of February 24, 2021, one of which is Cede & Co., a nominee for Depository Trust Company (“DTC”). All of the shares of common stock held by brokerage firms, banks and other financial institutions as nominees for beneficial owners are deposited into participant accounts at DTC, and are therefore considered to be held of record by Cede & Co. as one stockholder. We do not anticipate declaring or paying any cash dividends in the foreseeable future.
Securities Authorized for Issuance under our Equity Compensation Plans
Information regarding our equity compensation plans, including both stockholder approved plans and non-stockholder approved plans, is included in Item 12 of this Annual Report on Form 10-K.
Performance Graph
The graph below compares the cumulative total stockholders return on our common stock for the last five fiscal years with the cumulative total return on the Nasdaq Composite Index and the Russell 2000 Growth Biotechnology Index (which includes Novavax) over the same period, assuming the investment of $100 in our common stock, the Nasdaq Composite Index and the Russell 2000 Growth Biotechnology Index on December 31, 2015, and reinvestments of all dividends.
COMPARISON OF 5 YEAR CUMULATIVE RETURN*
Among Novavax Inc., the NASDAQ Composite index
and the Russell2000 Growth Biotechnology Index
NVAX-20201231_G4.JPG
*$100 invested on 12/21/15 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.

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Value of $100 invested on December 31, 2015 in stock or index, including reinvestment of dividends, for fiscal years ended December 31:
12/31/15 12/30/16 12/29/17 12/31/18 12/31/19 12/31/20
Novavax, Inc. $ 100  $ 15.02  $ 14.78  $ 21.93  $ 2.37  $ 66.45 
NASDAQ Composite $ 100  $ 108.87  $ 141.13  $ 137.12  $ 187.44  $ 271.64 
Russell 2000 Growth Biotechnology $ 100  $ 79.71  $ 127.4  $ 105.07  $ 153.35  $ 238.36 
This graph is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Item 6.    SELECTED FINANCIAL DATA
The following table sets forth selected financial data for each of the years in the five-year period ended December 31, 2020, which have been derived from our audited consolidated financial statements. The information below should be read in conjunction with our consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report. These historical results are not necessarily indicative of results for future periods.
Year Ended December 31,
2020(1)
2019(2)
2018(3)
2017(4)
2016
(in thousands, except per share amounts)
Statements of Operations Data(5):
Revenue $ 475,598  $ 18,662  $ 34,288  $ 31,176  $ 15,353 
Net loss (418,259) (132,694) (184,748) (183,769) (279,966)
Basic and diluted net loss per share (7.27) (5.51) (9.99) (12.56) (20.68)
Weighted average shares used in computing basic and diluted net loss per share 57,554  24,100  18,488  14,633  13,540 

As of December 31,
2020(1)
2019(2)
2018(3)
2017(4)
2016
(in thousands)
Balance Sheet Data:
Cash and cash equivalents, marketable securities and restricted cash $ 806,387  $ 82,180  $ 103,939  $ 186,427  $ 270,383 
Total current assets 1,248,203  97,247  119,276  203,311  287,830 
Working capital(6) 668,531  71,452  73,737  129,636  221,424 
Total assets(7) 1,582,479  172,957  207,978  302,493  394,301 
Long-term debt 322,035  320,611  319,187  317,763  316,339 
Accumulated deficit (1,874,199) (1,431,801) (1,299,107) (1,114,359) (929,996)
Total stockholders’ (deficit) equity 627,209  (186,017) (167,935) (101,732) (5,546)
______________________________
(1)In 2020, we had sales of 32.4 million shares of common stock and we sold 0.4 million shares of preferred stock, which were converted to 4.4 million shares of common stock in the fourth quarter 2020, resulting in total net proceeds of approximately $1.1 billion.
(2)In 2019, we had sales of 13.0 million shares of common stock resulting in net proceeds of approximately $98 million.
(3)In 2018, we had sales of 2.9 million shares of common stock resulting in net proceeds of approximately $100 million.
(4)In 2017, we had sales of 2.5 million shares of common stock resulting in net proceeds of approximately $63 million.
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(5)All share and per share amounts have been retroactively restated for all periods presented to reflect the Reverse Stock Split (see Note 12 to the accompanying consolidated financial statements).
(6)Working capital is computed as the excess of current assets over current liabilities.
(7)In 2019, the Company adopted ASU 20160-02, Leases (Topic 842), under which the Company recorded right-of-use assets associated with its leases on the consolidated balance sheet (see Note 7 to the accompanying consolidated financial statements).
Item 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Any statements in the discussion below and elsewhere in this Annual Report about expectations, beliefs, plans, objectives, assumptions or future events or performance of Novavax, Inc. (“Novavax,” together with its wholly owned subsidiaries Novavax AB and Novavax CZ, the “Company,” “we” or “us”) are not historical facts and are forward-looking statements. Such forward-looking statements include, without limitation, statements about our capabilities, goals, expectations regarding future revenue and expense levels and capital raising activities; potential market sizes and demand for our product candidates; the efficacy, safety and intended utilization of our product candidates; the development of our clinical-stage product candidates and our recombinant vaccine and adjuvant technologies; the development of our preclinical product candidates; the conduct, timing and potential results from clinical trials and other preclinical studies; plans for and potential timing of regulatory filings; our expectation of manufacturing capacity, timing, production and delivery for NVX-CoV2373; our expectations with respect to the anticipated ongoing development and potential commercialization or licensure of NVX- CoV2373 and NanoFlu™; the expected timing and content of regulatory actions; funding from the U.S. government partnership formerly known as Operation Warp Speed (“OWS”), the U.S. Department of Defense (“DoD”) and the Coalition for Epidemic Preparedness Innovations (“CEPI”), and payments from the Bill & Melinda Gates Foundation (“BMGF”); our available cash resources and usage and the availability of financing generally; plans regarding partnering activities, business development initiatives; and other matters referenced herein. Generally, forward-looking statements can be identified through the use of words or phrases such as “believe,” “may,” “could,” “will,” “would,” “possible,” “can,” “estimate,” “continue,” “ongoing,” “consider,” “anticipate,” “intend,” “seek,” “plan,” “project,” “expect,” “should,” “would,” or “assume,” the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.

Forward-looking statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. Any or all of our forward-looking statements in this Annual Report may turn out to be inaccurate or materially different from actual results.

Because the risk factors discussed in this Annual Report and other risk factors of which we are not aware could cause actual results or outcomes to differ materially from those expressed or implied in any forward-looking statements made by or on behalf of us, you should not place undue reliance on any such forward-looking statements. These statements are subject to risks and uncertainties, known and unknown, which could cause actual results and developments to differ materially from those expressed or implied in such statements. We have included important factors that could cause results to differ in the cautionary statements included in this Annual Report, particularly those identified in Part I, Item 1A “Risk Factors” of this Annual Report. These and other risks may also be detailed and modified or updated in our reports and other documents filed with the Securities and Exchange Commission (“SEC”) from time to time. You are encouraged to read these filings as they are made.

We cannot guarantee future results, events, level of activity, performance or achievement. Further, any forward- looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Overview

We are a biotechnology company promoting improved global health through the discovery, development and commercialization of innovative vaccines to prevent serious infectious diseases and address urgent, global health needs. Our vaccine candidates, including both our coronavirus vaccine candidate, NVX-CoV2373, and our influenza vaccine candidate, NanoFlu, are genetically engineered, three-dimensional nanostructures of recombinant proteins. We believe that our protein-subunit-based candidates elicit differentiated immune responses that may be more efficacious than naturally occurring immunity or other, more traditional vaccine approaches. Our technology may be used to target a variety of infectious diseases. Our unique technology is paired with our proprietary immune-stimulating adjuvants, developed at Novavax AB, our wholly owned Swedish subsidiary. To date, we have formulated many of the vaccine candidates in our pipeline with our lead adjuvant,
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Matrix-M™, including NVX-CoV2373 and NanoFlu. Matrix-M has been shown to enhance functional immune responses and has been well-tolerated in multiple clinical trials. Matrix-M also enables dose-sparing properties.

As the world continues to address the global COVID-19 pandemic, we remain focused today on bringing our NVX-CoV2373 vaccine candidate to market. We have begun rolling reviews with five regulatory authorities worldwide and have initiated submissions to the U.S. Food and Drug Administration (“FDA”) for our open investigational new drug application. In addition, NanoFlu continues to be a priority for our team, and we are exploring the potential for a combined NanoFlu / NVX-CoV2373 vaccine. Our dedicated NanoFlu team continues to seek approval from the FDA under an accelerated approval pathway. Although NVX-CoV2373 and NanoFlu are our near-term priorities, we remain optimistic that the additional programs in our pipeline, including our vaccine candidates for respiratory syncytial virus (“RSV”) and other emerging infectious diseases, present viable opportunities for future development.

Near-term Clinical Development Focus

Our development pipeline encompasses vaccine candidates addressing therapeutic areas including coronavirus, seasonal influenza, RSV and other emerging infectious diseases. At the forefront of our pipeline, we have evaluated our COVID-19 vaccine candidate, NVX-CoV2373, in various preclinical and clinical trials, including two Phase 3 trials, one Phase 2b trial, and one Phase 1/2 trial. Through our clinical development program, we have demonstrated the safety and efficacy of NVX-CoV2373. Additionally, in February 2021, we selected candidates for COVID-19 variant strain vaccines as standalone and bivalent candidates. We plan to initiate clinical testing of these new variant vaccine candidates in mid-2021. Outside of our COVID-19 vaccine candidate, we have advanced our NanoFlu program through a Phase 3 clinical trial, demonstrating positive top-line results and achieving statistical significance across secondary endpoints. We continue to evaluate the viability of certain combination vaccines, including combinations of our NanoFlu, NVX-CoV2373 and respiratory syncytial virus fusion (F) protein nanoparticle vaccine candidate (“RSV F Vaccine”).

A summary and status of our clinical and preclinical development program follows:

NVAX-20201231_G5.JPG

1.Supported by funding from the OWS, DoD, CEPI and BMGF
2.Ongoing PREVENT-19, a Phase 3 clinical trial in U.S. and Mexico; Ongoing Phase 3 in UK; Ongoing Phase 2b in South Africa

COVID-19 Vaccine Funding

Funding for our NVX-CoV2373 clinical development program encompasses over $2 billion from sources including CEPI, the DoD, and OWS.

A summary and status of our key COVID-19 funding developments follows:
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NVAX-20201231_G6.JPG

NVX-CoV2373 Manufacturing and Supply

With respect to the global manufacturing and supply of NVX-CoV2373, we have secured manufacturing for our antigen component and Matrix-M adjuvant, as well as secured fill / finish activities for NVX-CoV2373 at several sites globally. Through our various manufacturing partnerships, we expect our projected global manufacturing production rate of NVX-CoV2373 to be over two billion doses annually when we are at full capacity, which we expect to occur in mid-2021. Of this anticipated capacity, approximately one billion doses will be manufactured by Serum Institute of India Private Limited ("SIIPL").

NVX-CoV2373 and its components are being manufactured at the following Novavax (in bold) and partnered sites:

NVAX-20201231_G2.JPG

A summary and status of key manufacturing developments follows:
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NVAX-20201231_G7.JPG

NVX-CoV2373 Supply Agreements

Through the date of filing this Form 10-K, we have entered into several supply agreements with various countries globally that, if our COVID-19 product candidate is approved, are expected to result in the delivery of approximately 200 million doses of NVX-CoV2373, throughout 2021 and into the first half of 2022. In addition to these supply agreements, we have committed 110 million doses of NVX-CoV2373 to the U.S. government in relation to the funding received from OWS and the DoD.

A summary of our current supply agreements follows:
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NVAX-20201231_G3.JPG

Sale of Assets
In July 2019, we closed a transaction under an asset purchase agreement (the “Purchase Agreement”) with Catalent, pursuant to which we sold to Catalent certain assets related to our biomanufacturing and development activities located at the facilities situated at each of 20 Firstfield Road in Gaithersburg, MD 20878 and 9920 Belward Campus Drive in Rockville, MD 20850 for approximately $18 million and recorded a gain on the disposition of such assets of $9.0 million. Pursuant to the transactions contemplated by the Purchase Agreement, approximately 100 Novavax manufacturing and quality employees transferred to Catalent, and we assigned two facility leases to Catalent. We also entered into other ancillary agreements upon the closing of the transaction, including a Non-Commercial GMP Manufacturing Services Agreement pursuant to which we were required to purchase $6.0 million in certain services from Catalent set forth therein, through July 31, 2020. The transaction was treated as an asset disposition for accounting purposes.
Sale of Preferred Stock
In June 2020, we entered into a redeemable Series A Convertible Preferred Stock Subscription Agreement, pursuant to which we sold and issued in a private placement 438,885 shares of our newly designated redeemable Series A Convertible Preferred Stock, par value $0.01 per share (“Preferred Stock”), at a purchase price of $455.70 per share, for total gross proceeds of $200.0 million. During the fourth quarter of 2020, all outstanding shares of the Preferred Stock was converted and we issued 4,388,850 shares of common stock, par value $0.01 per share and reclassified $199.8 million from preferred stock to additional paid in capital. We recognized a beneficial conversion feature of approximately $24.1 million at the time of issuance of the Preferred Stock that was recorded in additional paid-in capital and accumulated deficit as the Preferred Stock issuance was contingently redeemable and convertible at any time at the option of the holder.
Sales of Common Stock
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In January 2021, we entered into an At Market Issuance Sales Agreement ("January 2021 Sales Agreement"), which allows us to issue and sell up to $500 million in gross proceeds of our common stock. From January 22 through February 24, 2021, we sold $1.7 million shares of common stock under the January 2021 Sales Agreement resulting in $452.0 million in net proceeds, leaving $42.2 million remaining.
During 2020, we entered into various At Market Issuance Sales Agreements, which allowed us to issue and sell up to $1.0 billion in gross proceeds of our common stock. During 2020, we sold a total of 25.2 million shares of common stock under such Sales Agreements resulting in $835.6 million in net proceeds (this amount excludes $3.2 million received in the first quarter of 2021 for shares traded in late December 2020). From January 1, 2021 through January 20, 2021, we sold $0.9 million shares of common stock from our At Market Issuance Sales Agreement entered into in November 2020 (“November 2020 Sales Agreement”) resulting in $113.0 million in net proceeds, leaving $27.2 million remaining under its November 2020 Sales Agreement. We terminated the November 2020 Sales Agreement by mutual agreement upon entering into the January 2021 Sales Agreement.
Critical Accounting Policies and Use of Estimates
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States.
The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates, particularly estimates relating to accounting for revenue, lease accounting and accounting for research and development expenses have a material impact on our consolidated 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.
Revenue Recognition
We perform research and development under government funding, grant, license and clinical development agreements. Our revenue primarily consists of funding under U.S. government contracts and other arrangements to advance the clinical development and manufacturing of NVX-CoV2373. Our U.S. government contracts include the DoD Contract and the OWS Agreement. Other funding arrangements primarily include a grant and forgivable loan funding from CEPI.
At contract inception, we analyze our revenue arrangements to determine the appropriate accounting under U.S. GAAP. Currently, our revenue arrangements represent customer contracts within the scope of ASC Topic 606, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) or are subject to the contribution guidance in Accounting Standards Codification (ASC) Topic 958-605, Not-for-Profit Entities – Revenue Recognition (“ASC 958-605”) which applies to business entities that receive contributions within the scope of ASC 958-605. We recognize revenue from arrangements within the scope of ASC 606 following the five-step model: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to our customer. We recognize contribution revenue within the scope of ASC 958-605 when the funder-imposed conditions have been substantially met. Contributions are recorded as deferred revenue until the period in which research and development activities are performed that satisfy the funder-imposed conditions.
Under our U.S government contracts, we are entitled to receive funding, on a reimbursable-cost or reimbursable-cost-plus fixed fee basis to support certain activities related to the development, manufacture and delivery of NVX-CoV2373 to the U.S. Government. We analyzed these contracts and determined that they are within the scope of ASC 606. Our obligations under each of the contracts are not distinct in the context of the contract as they are highly interdependent or interrelated and, as such, they are accounted for as a single performance obligation. The transaction price under these arrangements is the consideration we expect to receive and consists of the funded contract amount and the unfunded variable amount to the extent that it is probable that a significant reversal of revenue will not occur. We recognize revenue for these contracts over time as we transfer control over the goods and services and satisfy our performance obligation. We measure progress toward satisfaction of our performance obligation using an Estimate-at-Completion (“EAC”) process, which is a cost-based input method that reviews and monitors the progress towards the completion of our performance obligation. Under this process, we consider the costs that
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have been incurred to-date, as well as projections to completion using various inputs and assumptions, including, but not limited to, progress towards completion, labor costs and level of effort, material and subcontractor costs, indirect administrative costs, and other identified risks. Estimating the total allowable cost at completion of our performance obligation under a contract is subjective and requires us to make assumptions about future activity and cost drivers. Changes in these estimates can occur for a variety of reasons and, if significant, may impact the timing of revenue and fee recognition on our contracts. Allowable contract costs include direct costs incurred on the contract and indirect costs that are applied in the form of rates to the direct costs. Progress billings under the contracts are initially based on provisional indirect billing rates, agreed upon between us and the U.S. government. These indirect rates are subject to audit on an annual basis. The impact of changes in the indirect billing rates are recorded in the period when such changes are identified and reflect the difference between actual indirect costs incurred compared to the estimated amounts used to determine the provisional indirect billing rates agreed upon with the U.S. government. We recognize revenue on our U.S government contracts based on reimbursable allowable contract costs incurred in the period up to the transaction price. For our reimbursable-cost-plus fixed fee contracts, we recognize the fixed fee based on the proportion of reimbursable contract costs incurred to total estimated allowable contract costs expected to be incurred on completion of the underlying performance obligation as determined under the EAC process. Changes in estimates related to the EAC process are recognized in the period when such changes are made on a cumulative catch-up basis. We include the transaction price comprising both funded and unfunded portions of customer contracts, in this estimate. We have not experienced any material difference as a result of change in estimate arising from the EAC process.
Our other funding arrangements primarily include the CEPI Grant Funding and CEPI Forgivable Loan Funding (each as defined in “Note 2―Summary of Significant Accounting Policies” included in our Notes to Consolidated Financial Statements). The CEPI Forgivable Loan Funding is designated for the prepayment of certain manufacturing activities. We analyzed these other funding arrangements and determined that they are not within the scope of ASC 606 as they do not provide a direct economic benefit to the grantor. Payments received under the grant funding arrangements are considered conditional contributions under the scope of ASC 958-605 and are recorded as deferred revenue until the period in which such research and development activities are actually performed that satisfy the funder-imposed conditions. Payments received under the CEPI Forgivable Loan Funding agreements are only repayable if the proceeds of sales to one or more third parties of NVX-CoV2373 cover our costs of manufacturing such vaccine candidate, not including manufacturing costs funded by CEPI. As the financial risk remains with CEPI, we have determined that the use of the CEPI Forgivable Loan Funding is outside the scope of ASC Topic 470, Debt. The research and development risk is considered substantive, such that it is not yet probable that the development will be successful. Therefore, we have concluded that ASC Topic 730, Research and Development is considered applicable and most appropriate. Given the financial risk associated with the research and development activities lies with CEPI because repayment of any funds provided by CEPI depends solely on the results of the research and development activities having future economic benefit, we will account for our obligation under the CEPI Forgivable Loan Funding as a contract to perform research and development for others. We have determined that payments received under these agreements should be recorded as revenue under ASC 958-605 rather than a reduction to research and development expenses. This is consistent with our policy of presenting such amounts as revenue. In reaching this determination, we considered a number of factors, including whether we are principal under the arrangement, and whether the arrangement is significant to, and part of, our core operations. We will record revenue as we perform the contractual research and development services.
We have manufacturing and supply arrangements that include a license to use our intellectual property. The licensing arrangements include sales-based royalties, as well as certain development and commercial milestone payments, and the license is deemed to be the predominant item to which the milestone payments and sales-based royalties relate. The fulfillment of our obligation for the license is subject to a constraint, the achievement of the development and commercial milestone or the royalty-related sales under the arrangement. For milestone payments, the constraint is overcome and we recognize revenue, when the development and commercial milestone is achieved.

Lease Accounting
We determine at the inception or modification of a contract if an arrangement is, or contains, a lease, which exists when the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. In determining if a contract contains a lease, we evaluate whether the contract, either explicitly or implicitly, is for the use of an identified asset and whether we have the right to direct the use of, and obtain substantially all of the benefit from, the identified asset. Depending on the contract, the lease commencement date, defined as the date on which the lessor makes the underlying asset available for use by the lessee and is the date on which the Company is required to accrue lease expenses, may be different than the inception date of the contract. We evaluate changes to the terms and conditions of a lease contract to determine if they result in a new lease or a modification of an existing lease. For lease modifications, we remeasure and reallocate the remaining consideration in the contract and reassess the lease classification at the effective date of the modification. We classify leases as either operating or finance leases based on the economic substance of the agreement.
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We enter into non-cancelable lease agreements for facilities and certain equipment. We also enter into manufacturing supply agreements with CMOs and CDMOs to manufacture our vaccine candidates. Certain of these manufacturing supply agreements include the use of identified manufacturing facilities and equipment that are controlled by us and for which we obtain substantially all the output, and may qualify as an embedded lease. We treat manufacturing supply agreements that contain a lease as lease arrangements in their entirety.
For leases that have a lease term of more than 12 months at the lease commencement date, we recognize lease liabilities, which represent our obligation to make lease payments arising from the lease, and corresponding right-of-use (“ROU”) assets, which represent the right to use an underlying asset for the lease term, based on the present value of the fixed future payments over the lease term. We calculate the present value of future payments using the discount rate implicit in the lease, if available, or our incremental borrowing rate. For all leases that have a lease term of 12 months or less at the commencement date (referred to as “short-term” leases), we have elected to apply the practical expedient in ASC Topic 842, Leases (“ASC 842”) to not recognize a lease liability or ROU asset but instead, recognize lease payments as an expense on a straight-line basis over the lease term and variable lease payments that do not depend on an index or rate, as an expense in the period in which the variable lease costs are incurred based on performance or usage in accordance with contractual agreements. In determining the lease period, we evaluate facts and circumstances that could affect the period over which we are reasonably certain to use the underlying asset while taking into consideration the non-cancelable period over which we have the right to use the underlying asset and any option period to extend or terminate the lease if we are reasonably certain to exercise the option. We re-evaluate short-term leases that are modified and if they no longer meets the requirements to be treated as short-term leases, we recognize and measure the lease liability and ROU asset as if the date of the modification is the lease commencement date (see Note 7 to the accompanying consolidated financial statements).
For operating leases, we recognize lease expense related to fixed payments on a straight-line basis over the lease term and lease expense related to variable payments as incurred based on performance or usage in accordance with the contractual agreements. For finance leases, we recognize the amortization of the ROU asset over the shorter of the lease term or useful life of the underlying asset. We expense ROU assets acquired for research and development activities under ASC Topic 730, Research and Development, if they do not have an alternative future use, in research and development projects or otherwise.
We use significant assumptions and judgment in evaluating our lease contracts and other agreements under ASC 842, including the determination of whether an agreement is or contains a lease, whether a change in the terms and conditions of a lease contract represent a new or modified lease, whether a lease represents an operating or finance lease, the discount rate used to determine the present value of lease obligations and the term of embedded leases in our manufacturing supply agreements.
Accounting for Research and Development Expenses
We estimate our prepaid and accrued expenses related to our research and development activities using a process that involves reviewing contracts and purchase orders, communicating with our project managers and service providers to identify services that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or for which we have been invoiced in advance of the service. This estimation process includes a review of:
expenses incurred under agreements with contract research organizations (“CROs”) that conduct our clinical trials and third party consultants; and
the cost of developing and manufacturing vaccine components under third-party CMOs and CDMOs agreements, including expenses incurred for the procurement of raw materials, laboratory supplies and equipment.
We base our expenses on our estimates of the services provided and efforts expended pursuant to contracts, statements of work and related change orders with the service provider, as well as discussion with internal personnel and external service providers as to the progress of the services and the agreed-upon fee to be paid for such services. The financial terms of these agreements are based on negotiated terms, vary from contract to contract and may result in an uneven level of activity over time. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. Additionally, invoicing from third-party service providers may not coincide with actual work performed and can result in a prepaid or an accrual position at the end of the period. The estimation process requires us to make significant judgments and estimates in determining the services incurred as of the balance sheet date, which may result in either a prepaid or an accrual balance. As actual costs become known, we adjust our estimates. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed may vary from the related estimates and could result in us reporting amounts that are too high or too low in a particular period. Our prepaid and accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from CROs, CMOs, CDMOs and third-party service providers. Due to the nature of the estimation process, there may be a difference between estimated costs and actual costs incurred. Historically, we have not experienced any material differences in prior periods.
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Recent Accounting Pronouncements
See “Note 2―Summary of Significant Accounting Policies” included in our Notes to Consolidated Financial Statements (under the caption “Recent Accounting Pronouncements”).
Results of Operations for Fiscal Years 2020 and 2019
The following is a discussion of our historical consolidated financial condition and results of operations, and should be read in conjunction with the consolidated financial statements and notes thereto set forth in this Annual Report. Additional information concerning factors that could cause actual results to differ materially from those in our forward-looking statements is described under Part I, Item 1A, “Risk Factors” of this Annual Report.
For our discussion of the year ended December 31, 2019, compared to the year ended December 31, 2018, please read Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations located in Annual Report on Form 10-K for the year ended December 31, 2019.
Revenue:
2020 2019 Change
Revenue (in thousands):
Government contracts $ 217,246  7,500  $ 209,746 
Grants and other 258,352 11,162  250,852 
Total revenue $ 475,598  $ 18,662  $ 460,598 

Revenue for 2020 was $475.6 million as compared to $18.7 million for 2019, an increase of $460.6 million. The significant increase in revenue in 2020 was a result of our development activities related to NVX-CoV2373 and was primarily comprised of revenue for services performed under the OWS Agreement and the CEPI Funding Agreement. Revenue for the year ended December 31, 2019 was primarily comprised of revenue for services performed under the BMGF Grant Agreement and recovery of costs on the close-out of our contract with HHS BARDA.

We expect revenue in 2021 to significantly increase due to our NVX-CoV2373 program, which we anticipate will continue to be funded by OWS and CEPI and/or other revenue sources. Further, we anticipate bringing our NVXCoV2373 vaccine candidate to market following global regulatory approvals which, if achieved, should significantly impact revenue (also see below under Liquidity and Capital Resources in this Management's Discussion and Analysis). In anticipation, we have entered into various APAs with government customers that are expected to result in the delivery of approximately 200 million doses of NVX-CoV2373 throughout 2021 and into the first half of 2022. We also entered into multiple supply and license agreements with strategic partners to supply NVX-CoV2373 in their specified territories under which we are entitled to receive royalty revenue from the sale of NVX-CoV2373 by such partners.
2020 2019 Change
Expenses (in thousands):
Research and development $ 747,027  $ 113,842  $ 633,185 
Gain on sale of assets —  (9,016) 9,016 
General and administrative 145,290  34,417  110,873 
Total expenses $ 892,317  $ 139,243  $ 753,074 
Research and Development Expenses
During 2020, our research and development activities were primarily focused on the development of NVX-CoV2373. During 2020, direct external research and development expenses related to NVX-CoV2373 were $609.4 million and comprised of costs related to the following:
expenses incurred under agreements with CROs that conduct our clinical trials and third party consultants related to the development of NVX-CoV2373;
developing and manufacturing the antigen drug substance and Matrix-M components of NVX-CoV2373 under agreements that we established with third-party CMOs and CDMOs;
expenses incurred for the procurement of raw materials, laboratory supplies and equipment; and
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other costs related to preclinical studies and regulatory consulting, as well as related program management activities to support our growing global operations.
In 2020, we also incurred significant costs related to developing our NVX-CoV2373 manufacturing and supply network, including the immediate expense recognition of $245.9 million of ROU assets associated with such manufacturing supply agreements.
Research and development expenses increased to $747.0 million for 2020 as compared to $113.8 million for 2019, an increase of $633.2 million primarily due to the development of NVX-CoV2373, as shown in the table below.
The following summarizes our research and development expenses for the years ended December 31, 2020 and 2019 (in millions):
2020 2019
NVX-CoV2373 $ 609,401  $ — 
NanoFlu 14,802  23,851 
Other vaccine development programs 2,651  27,016 
Total direct external research and development expense 626,854  50,867 
Employee expenses 45,882  33,389 
Stock-based compensation expense 55,954  8,436 
Facility expenses 7,232  9,243 
Other expenses 11,105  11,907 
Total research and development expenses $ 747,027  $ 113,842 
We do not provide forward-looking estimates of costs and time to complete our research programs due to the many uncertainties associated with vaccine development. As we obtain data from preclinical studies and clinical trials, we may elect to discontinue or delay clinical trials in order to focus our resources on more promising vaccine candidates. Completion of clinical trials may take several years or more, but the length of time can vary substantially depending upon the phase, size of clinical trial, primary and secondary endpoints and the intended use of the vaccine candidate. The cost of clinical trials may vary significantly over the life of a project as a result of a variety of factors, including:
the number of participants who participate in the clinical trials;
the number of sites included in the clinical trials;
if clinical trial locations are domestic, international or both;
the time to enroll participants;
the duration of treatment and follow-up;
the safety and efficacy profile of the vaccine candidate; and
the cost and timing of, and the ability to secure, regulatory approvals.
As a result of these uncertainties, we are unable to determine the duration and completion costs of our research and development projects or when, and to what extent, we will generate future cash flows from our research projects.

For 2021, we expect research and development expenses to increase significantly over 2020 expenses due to our continued development activities for our NVX-CoV2373 program (see discussion on our NVX-CoV2373 program above) and increases in employee-related costs. Following regulatory approval of NVX-CoV2373, we expect products sales will result in certain types of costs recorded as research and development in 2020 being capitalized as inventory and expensed as cost of goods sold when product is delivered in 2021 and beyond. Cost of goods sold expenses could be significant depending on our commercial shipment levels.
Gain on Sale of Assets
As a result of the sale of assets transaction in 2019, we recorded a gain of $9.0 million.
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General and Administrative Expenses

General and administrative expenses increased to $145.3 million for 2020 from $34.4 million for 2019, a increase of $110.9 million. The increase in general and administrative expenses is primarily due to increased employee-related costs, primarily stock-based compensation expense, and increased professional fees to support our NVX-CoV2373 program and relating to the acquisition and integration of Novavax CZ. As of December 31, 2020, we had 116 employees dedicated to general and administrative functions versus 41 employees as of December 31, 2019.

For 2021, we expect general and administrative expenses to increase significantly over 2020 expenses due to increased activities related to supporting our NVX-CoV2373 program and increases in employee-related costs.

Other Income (Expense):
2020 2019 Change 
Other Income (Expense) (in thousands):
Investment income $ 1,014  $ 1,512  $ (498)
Interest expense (15,145) $ (13,612) (1,533)
Other income (expense) 12,591  $ (13) 12,604 
Total other income (expense), net $ (1,540) $ (12,113) $ 10,573 

We had total other expense, net of $1.5 million for 2020 compared to total other expense, net of $12.1 million for 2019, an increase of $10.6 million. In the year ended December 31, 2020, we recorded a $12.6 million gain on the intercompany loan with Novavax CZ due to changes in the exchange rates, and additional net interest expense of $1.5 million attributable to finance leases.
Net Loss:
2020 2019 Change 
Net Loss (in thousands, except per share information):
Net loss $ (418,259) $ (132,694) $ (285,565)
Net loss per share $ (7.27) $ (5.51) $ (1.76)
Weighted average shares outstanding 57,554  24,100  33,454 

Net loss for 2020 was $418.3 million, or $7.27 per share, as compared to $132.7 million, or $5.51 per share, for 2019, an increase of $285.6 million. The increase in net loss was primarily due to increased development activities relating to NVX-CoV2373, including the immediate expense recognition of $245.9 million of ROU assets associated with our manufacturing supply agreements for NVX-CoV2373 and increased employee-related costs, primarily stock-based compensation expense, partially offset by increased revenue under the CEPI Funding Agreement and the OWS Agreement.

The increase in weighted average shares outstanding for 2020 is primarily a result of the sale of 32.4 million shares of common stock in 2020 and, to a lesser degree, the conversion of our Series A Convertible Preferred Stock to 4.4 million shares of our common stock in the fourth quarter of 2020, weighted for the period the shares were outstanding during the year.
Liquidity Matters and Capital Resources
Our future capital requirements depend on numerous factors including, but not limited to our projected activities related to the development of NVX-CoV2373, including significant commitments under various CRO, CMO and CDMO agreements, the progress of preclinical studies and clinical trials, the time and costs involved in obtaining regulatory approvals, the costs of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights and other manufacturing, sales and distribution costs. We plan to continue developing other vaccines and product candidates, such as NanoFlu and potential combination vaccines candidates, which are in various stages of development. We believe our operating expenses and capital requirements will fluctuate depending upon the timing of events, such as the progress of our NVX-CoV2373 clinical trials and approval for the use of NVX-CoV2373 in the U.S. and internationally, as well as the scope, initiation and progress of our preclinical studies and clinical trials related to other research and development activities.
We have entered into APAs or supply agreements with various countries globally that, if our product candidate is approved, are expected to result in the delivery of approximately 200 million doses of NVX-CoV2373 throughout 2021 and
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into the first half of 2022. The APAs or supply agreements typically contain terms that include upfront payments intended to assist us in funding investments related to building out and operating our manufacturing and distribution network, among other expenses, in support of our global supply commitment. Such upfront payments generally become non-refundable upon our achievement of certain development milestones. We expect to sign additional APAs or supply agreements that are currently in active discussions and negotiations.
We have also entered into supply and license agreements with strategic partners to supply NVX-CoV2373 in their specified territories under which we are entitled to receive royalty revenue primarily from the sale of NVX-CoV2373 by our partners.
We funded our operations in 2020 with proceeds from the sale of common stock and preferred stock in equity offerings together with revenue under our CEPI Funding Agreement and the OWS Agreement that support our NVX-CoV2373 vaccine development activities. We anticipate our future operations to be funded by our cash, cash equivalents and marketable securities, revenue under our OWS, CEPI, DoD agreements, upfront payments under our APAs, and following any potential global regulatory approvals, revenue from product sales, royalty arrangements with our strategic partners and/or other potential funding sources.
As of December 31, 2020, we had $806.4 million in cash and cash equivalents, marketable securities and restricted cash as compared to $82.2 million as of December 31, 2019. These amounts consisted of $553.4 million in cash and cash equivalents, $157.6 million in marketable securities and $95.3 million in restricted cash as of December 31, 2020 as compared to $78.8 million in cash and cash equivalents and $3.4 million in restricted cash as of December 31, 2019.
The following table summarizes cash flows for 2020 and 2019:
2020 2019 Change
Summary of Cash Flows (in thousands):
Net cash (used in) provided by:
Operating activities $ (42,541) $ (136,623) $ 94,082 
Investing activities (377,778) 38,492  (416,270)
Financing activities 984,762  98,384  886,378 
Effect on exchange rate on cash, cash equivalents and restricted cash 2,115  (32) 2,147 
Net increase in cash, cash equivalents and restricted cash 566,558  221  566,337 
Cash, cash equivalents and restricted cash at beginning of year 82,180  81,959  221 
Cash, cash equivalents and restricted cash at end of year $ 648,738  $ 82,180  $ 566,558 
Net cash used in operating activities decreased to $42.5 million for 2020, as compared to $136.6 million for 2019. The decrease is primarily due to payments received under the CEPI Funding Agreement and OWS Agreement, and the timing of payments to third-parties.
During 2020, our investing activities primarily consisted of capital expenditures, purchases and maturities of marketable securities and our acquisition of Novavax CZ. During 2019, our investing activities primarily consisted of purchases and maturities of marketable securities and proceeds from the sale of assets. Capital expenditures for the year ended December 31, 2020 and 2019 were $54.6 million and $1.9 million, respectively, and the increase was primarily due to the build out of our facilities and related capital expenditures to support NVX-CoV2373. For 2021, we expect an increase in our capital expenditures due to further development activities for our NVX-CoV2373 program, including the additional build out of research and development and manufacturing facilities and related equipment, and the build-out of our new corporate office facility to accommodate anticipated increases in headcount.
Our financing activities consisted primarily of sales of our common stock under our At Market Issuance Sales Agreements and, to a much lesser extent, stock option exercises and purchases under our employee stock purchase plan. In 2020, we received net proceeds of $874.1 million (this amount excludes $3.2 million received in the first quarter of 2021 for shares traded in late December 2020) from the sale of shares of common stock through our At Market Issuance Sales Agreements and $200.0 million through the issuance of preferred stock in a private placement. In 2019, we received net proceeds of $97.5 million from selling shares of common stock through our At Market Issuance Sales Agreements.
Contractual Obligations
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The following table summarizes our contractual obligations as of December 31, 2020 (in thousands):
Contractual Obligations: Total Less than 
One Year
1 – 3
Years
3 – 5
Years
More than
5 Years
Operating leases $ 19,135  $ 5,392  $ 6,902  $ 4,762  $ 2,079 
Finance leases obligation 153,800  112,625  41,175  —  — 
Convertible notes (a) 325,000  —  325,000  —  — 
Contractual obligations recognized as of December 31, 2020 497,935  118,017  373,077  4,762  2,079 
Purchase commitments (b) 420,166  383,754  36,412  —  — 
Facilities lease agreement (c) 103,141  —  12,151  12,263  78,727 
Total contractual obligations $ 1,021,242  $ 501,771  $ 421,640  $ 17,025  $ 80,806 
(a)    See Note 11 to the consolidated financial statements included in this Annual Report regarding our Notes, which will mature on February 1, 2023, and bear cash interest of 3.75%, payable February 1 and August 1 of each year.
(b)    This amount represents our non-cancelable fixed payment obligations under certain CMO and CDMO agreements that we are not contractually able to terminate for convenience. Certain agreements provide for termination rights subject to termination fees. Under such agreements, we are contractually obligated to make payments to vendors, mainly to reimburse them for their estimated unrecoverable expenses incurred. As of December 31, 2020, these agreements are active ongoing arrangements and the Company expects to receive value from these arrangements in the future. The exact amount of such obligations is dependent on the timing of termination, and the exact terms of the relevant agreement, and cannot be reasonably estimated.
(c)    This relates to the lease of 700 Quince Orchard that did not commence as of December 31, 2020 (see Note 7 to the consolidated financial statements).
In addition to the above obligations, we enter into a variety of agreements and financial commitments in the normal course of business. The terms generally allow us the option to cancel, reschedule, and adjust our requirements based on our business needs, prior to the delivery of goods or performance of services. It is not possible to predict the maximum potential amount of future payments under these agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement.
Off-Balance Sheet Arrangements
We are not involved in any off-balance sheet agreements that have or are reasonably likely to have a material future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to certain risks that may affect our results of operations, cash flows and fair values of assets and liabilities, including volatility in foreign currency exchange rates and interest rate movements.

Foreign Currency Exchange Risk

Although we are headquartered in the U.S. where we conduct the vast majority of our business activities, our results of operations are subject to foreign currency exchange rate fluctuations, including our foreign subsidiaries’ operations. We have two foreign consolidated subsidiaries, Novavax AB, which is located in Sweden, and Novavax CZ, which is located in the Czech Republic.

While the financial results of our global activities are reported in U.S. dollars, the functional currency for our foreign subsidiaries is their respective local currency. Fluctuations in the foreign currency exchange rates of the countries in which we do business will affect our operating results, often in ways that are difficult to predict. A 10% decline in the exchange rate between the U.S. dollar and Swedish Krona would result in a decline of stockholders’ equity (deficit) of approximately $4.7 million as of December 31, 2020. A 10% decline in the exchange rate between the U.S. dollar and Czech Koruna would result in a decline of stockholders’ equity (deficit) of approximately $9.9 million as of December 31, 2020.

Interest Rate Risk
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Our exposure to interest rate risk is primarily confined to our investment portfolio. As of December 31, 2020, our investments were 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 marketable securities when they mature and the proceeds are reinvested into new marketable securities and, therefore, could impact our cash flows and results of operations.
Our Notes have a fixed interest rate and we have no additional material debt. As such, we do not believe that we are exposed to any material interest rate risk as a result of our borrowing activities.
Item 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is set forth on pages F-1 to F-31.
Item 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

Item 9A.    CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The term “disclosure controls and procedures” (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within time periods specified in the rules and forms of the Securities and Exchange Commission. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The Company’s management, with the participation of the chief executive officer and the chief financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report (the “Evaluation Date”). Based on that evaluation, the Company’s chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, such controls and procedures were effective at the reasonable assurance level.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, as a process designed by, or under the supervision of, the Company’s principal executive officer and principal financial officer and effected by the Company’s board of directors, management and other personnel, 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 in the United States (“GAAP”). Such internal control includes those policies and procedures that:
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
provide reasonable assurance regarding prevention or timely detection of an unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. In making this assessment, our management used the criteria set forth in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, our management has determined that, as of December 31, 2020, our internal controls over financial reporting are effective based on those criteria.
On May 27, 2020, we completed our acquisition of Novavax CZ. We are in the process of evaluating the existing controls and procedures of Novavax CZ and integrating it into our internal control over financial reporting. In accordance with SEC Staff guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial reporting for the year in which the acquisition is completed, we have excluded the business that we acquired in the Novavax CZ acquisition from our assessment of the effectiveness of internal control over financial reporting as of December 31, 2020. The business that we acquired in the Novavax CZ acquisition represented 15% of the Company’s total assets as of December 31, 2020, none of the Company’s revenue and less than 3% of the Company’s net loss for the year ended December 31, 2020.
Ernst & Young LLP has issued a report on our internal control over financial reporting. This report is included in the Reports of Independent Registered Public Accounting Firm in Item 15.(a)(1).
Changes in Internal Control over Financial Reporting
Our management, including our chief executive officer and chief financial officer, has evaluated any changes in our internal control over financial reporting that occurred during the quarterly period ended December 31, 2020 and has concluded that there was no change that occurred during the quarterly period ended December 31, 2020 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s assessment of and conclusion on the effectiveness of disclosure controls and procedures and internal controls over financial reporting did not include the internal controls related to the operations acquired in the acquisition of Novavax CZ that are included in our December 31, 2020 consolidated financial statements. Our audit of internal control over financial reporting also did not include an evaluation of the internal control over financial reporting of Novavax CZ.
Item 9B.    OTHER INFORMATION
None.
PART III
Item 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item is incorporated by reference from our definitive Proxy Statement for our 2021 Annual Meeting of Stockholders scheduled to be held in June 2021 (the “2021 Proxy Statement”). We expect to file the 2021 Proxy Statement within 120 days after the close of the fiscal year ended December 31, 2020.
Item 11.    EXECUTIVE COMPENSATION
We incorporate herein by reference the information required by this item concerning executive compensation to be contained in the 2021 Proxy Statement.
Item 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
We incorporate herein by reference the information required by this item concerning security ownership of certain beneficial owners and management and related stockholder matters to be contained in the 2021 Proxy Statement.
The following table provides our equity compensation plan information as of December 31, 2020. Under these plans, our common stock may be issued upon the exercise of stock options and purchases under our Employee Stock Purchase Plan (“ESPP”). See also the information regarding our stock options and ESPP in Note 13 to the consolidated financial statements included herewith.
Equity Compensation Plan Information
67

Plan Category Number of Securities
to be Issued
Upon Exercise of
Outstanding Options,
Warrants and Rights
(a)
Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
(b)
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a))
(c)
Equity compensation plans approved by security holders(1) 6,679,629 39.96 2,729,512
Equity compensation plans not approved by security holders N/A N/A N/A
(1)Includes our 2015 Stock Incentive Plan, 2005 Stock Incentive Plan and ESPP. The weighted-average exercise price in column (b) excludes restricted stock units, which are not subject to an exercise price.
Item 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
We incorporate herein by reference the information required by this item concerning certain related party transactions set forth in Note 16 to our consolidated financial statements included herewith. We incorporate herein by reference other information required by this item concerning certain other relationships and related transactions and director independence to be contained in the 2021 Proxy Statement.
Item 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES
We incorporate herein by reference the information required by this item concerning principal accountant fees and services to be contained in the 2021 Proxy Statement.
PART IV
Item 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)The following documents are filed as part of the Annual Report:
(1)Index to Financial Statements
F- 2
F- 5
F- 6
F- 7
F- 8
F- 9
(2)Financial Statement Schedules
Financial statement schedules are omitted because they are not applicable, not required under the instructions or all the information required is set forth in the financial statements or notes thereto.
(3)Exhibits

Exhibits marked with a single asterisk (*) are filed herewith.

Exhibits marked with a double plus sign (††) refer to management contracts, compensatory plans or arrangements.
Confidential treatment has been granted for portions of exhibits marked with a double asterisk (**).
Confidential information contained in exhibits marked with a caret (^) has been omitted because it (i) is not material and/or (ii) would be competitively harmful if publicly disclosed.

68

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All other exhibits listed have previously been filed with the SEC and are incorporated herein by reference.

Exhibit
Number
Description
3.1
3.2
3.3
3.4
4.1
4.2
4.3
4.4*
10.1††
10.2††
10.3††
10.4††
10.5††
10.6††
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10.7††
10.8††
10.9††
10.10††
10.11††
10.12††
10.13††
10.14††
10.15††
10.16††
10.17††*
10.18††*
10.19††
10.20††
10.21††
10.22††
10.23
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10.24
10.25
10.26
10.27*
10.28**
10.29**
10.30^
10.31^
10.32**
10.33**
10.34^
10.35*^
10.36*^
10.37*^
10.38^
10.39^
71

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10.40^
10.41*^
10.42*^
10.43*^
10.44*^
10.45*^
10.46
10.47
10.48*^
10.49*^
10.50
10.51
10.52
10.53
10.54
10.55
10.56*^
72

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10.57
14
21*
23.1*
31.1*
31.2*
32.1*
32.2*
101
The following financial information from our Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets as of December 31, 2020 and 2019, (ii) the Consolidated Statements of Operations for the three years in the period ended December 31, 2020, (iii) the Consolidated Statements of Comprehensive Loss for the three years in the period ended December 31, 2020, (iv) the Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three years in the period ended December 31, 2020, (v) the Consolidated Statements of Cash Flows for the three years in the period ended December 31, 2020, and (vi) the Notes to Consolidated Financial Statements.

Item 16.    FORM 10-K SUMMARY
Not applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NOVAVAX, INC.
By:  /s/ Stanley C. Erck
Stanley C. Erck
President and Chief Executive Officer
Date: March 1, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

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Name Title Date
/s/ Stanley C. Erck President and Chief Executive Officer and Director (Principal Executive Officer) March 1, 2021
Stanley C. Erck
/s/ Gregory F. Covino
Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)
March 1, 2021
Gregory F. Covino
/s/ James F. Young Chairman of the Board of Directors March 1, 2021
James F. Young
/s/ Gregg H. Alton Director March 1, 2021
Gregg H. Alton
/s/ Richard H. Douglas Director March 1, 2021
Richard H. Douglas
/s/ Gary C. Evans Director March 1, 2021
Gary C. Evans
/s/ Rachel K. King Director March 1, 2021
Rachel K. King
/s/ Margaret G. McGlynn Director March 1, 2021
Margaret G. McGlynn
/s/ Michael A. McManus Director March 1, 2021
Michael A. McManus
/s/ Rajiv I. Modi Director March 1, 2021
Rajiv I. Modi
/s/ David M. Mott Director March 1, 2021
David M. Mott

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2020, 2019 and 2018
Contents
F- 2
F- 5
F- 6
F- 7
F- 8
F- 9

F- 1

Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Novavax, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Novavax, Inc. (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 1, 2021 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the account or disclosures to which they relate.

Revenue recognition related to the cost-based input method for U.S. government contracts
Description of the Matter
As described in Note 2 to the consolidated financial statements, the Company recorded $217.2 million of revenue from U.S. government contracts to advance the clinical development and manufacturing of NVX-CoV2373 on a reimbursable-cost or reimbursable-cost-plus fixed fee basis. The Company measures progress toward satisfaction of its performance obligations using a cost-based input method that requires an estimate of total allowable cost at completion. Estimating the total allowable costs at completion is highly subjective. Changes in the estimated total allowable cost at completion could materially impact the timing of revenue recognition. Allowable contract costs include direct costs incurred on the contract and indirect costs that are applied in the form of rates to the direct costs.

Auditing revenue recognition based on the cost-based input method involved subjective auditor judgment. The estimates of costs at completion are based on management’s assessment of the costs necessary to fulfill its performance obligations under the contracts. Auditing allowable contract costs was complex due to the specialized knowledge needed to evaluate the costs included in the calculation of indirect rates and the contract terms.
F- 2

Table of Contents
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over recognition of revenue under the cost-based input method. For example, we tested controls over the appropriateness of significant assumptions regarding the estimation of allowable costs to be incurred for the performance obligations and controls over the appropriateness of the indirect rate calculation.

To test the recognition of revenue under the cost-based input method, our audit procedures included among others, reviewing management’s estimate of total allowable costs at completion for consistency with contract terms, obtaining an understanding of the stage of completion through review of project deliverables, evidencing of stage of completion including discussion with clinical research and manufacturing teams, and comparing actual results to prior management estimates. To test the recognition of revenue related to indirect rates, our audit procedures included among others, testing the allowability of the underlying costs used in the Company’s calculation of indirect rates. We utilized specialists to evaluate the treatment of significant indirect cost types.
Identification of embedded leases related to manufacturing supply agreements
Description of the Matter
As described in Note 7 to the consolidated financial statements, the Company entered into multiple manufacturing supply agreements with contract manufacturing organizations and contract development and manufacturing organizations. The Company determined that certain of these arrangements contain embedded leases as it has the exclusive use of, and control over, a portion of the manufacturing facility or equipment of the contract manufacturing organization during the contractual term of the arrangements. As a result of identifying embedded leases in certain of these arrangements, the Company immediately expensed $245.9 million, which represented the right of use assets related to these arrangements that currently do not have alternative future use.

Auditing embedded leases within manufacturing supply agreements was complex due to the judgment required to evaluate whether each arrangement included a lease and the related lease term. This significant auditor judgment involves the assessment of whether the Company has the right to obtain substantially all of the economic benefits from the use of identified assets and an assessment of the lease term, including whether the Company is reasonably certain not to exercise its termination provisions within the arrangements.

How We Addressed the Matter in Our Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the identification of embedded leases in supply agreements. For example, we tested controls over management’s review of the supply agreements that evaluated whether management was entitled to substantially all of the economic benefits, as well as management’s assessment of the various termination provisions.

To test the Company’s identification of embedded leases, our audit procedures included among others, reviewing the terms of manufacturing supply agreements with contract manufacturing organizations and contract development and manufacturing organizations, obtaining an understanding of the facilities and equipment subject to the arrangements through discussions with representatives of the counterparties, and evaluating the identification of embedded leases and determination of the lease term.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2014.
Tysons, Virginia
March 1, 2021
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Novavax, Inc.
Opinion on Internal Control over Financial Reporting
We have audited Novavax, Inc.’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Novavax, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.
As indicated in the accompanying Management's Report on Internal Control over Financial Reporting included in item 9A, management's assessment of and conclusion of the effectiveness of internal control over financial reporting did not include the internal controls of Novavax CZ (formerly Praha Vaccines a.s.), which is included in the 2020 consolidated financial statements of the Company and constituted 15% of total assets, as of December 31, 2020, and 0% and 3% of revenue and net loss, respectively, for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Novavax CZ.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and our report dated March 1, 2021 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting included in Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Tysons, Virginia
March 1, 2021
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Table of Contents
NOVAVAX, INC. 
CONSOLIDATED BALANCE SHEETS
December 31,
2020 2019
(in thousands, except share and per share information)
ASSETS
Current assets:
Cash and cash equivalents $ 553,398  $ 78,823 
Marketable securities 157,649  — 
Restricted cash 93,880  2,947 
Accounts receivable 262,012  7,500 
Prepaid expenses and other current assets 181,264  7,977 
Total current assets 1,248,203  97,247 
Restricted cash 1,460  410 
Property and equipment, net 179,954  11,445 
Intangible assets, net 5,725  5,581 
Goodwill 135,379  51,154 
Other non-current assets 11,758  7,120 
Total assets $ 1,582,479  $ 172,957 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:    
Accounts payable 54,332  $ 2,910 
Accrued expenses 137,390  14,867 
Accrued interest 5,078  5,078 
Deferred revenue 273,228  1,678 
Current portion of finance lease liabilities 105,862  — 
Other current liabilities 3,782  1,262 
Total current liabilities 579,672  25,795 
Convertible notes payable 322,035  320,611 
Non-current finance lease liabilities 40,083  — 
Other non-current liabilities 13,480  12,568 
Total liabilities 955,270  358,974 
Commitments and contingencies
Preferred stock, $0.01 par value, 2,000,000 shares authorized at December 31, 2020 and 2019; no shares issued and outstanding at December 31, 2020 and 2019
—  — 
Stockholders’ Equity (Deficit):
Common stock, $0.01 par value, 600,000,000 shares authorized at December 31, 2020 and 2019; and 71,350,365 shares issued and 70,953,739 shares outstanding at December 31, 2020 and 32,399,352 shares issued and 32,352,416 shares outstanding at December 31, 2019
714  324 
Additional paid-in capital 2,535,476  1,260,551 
Accumulated deficit (1,874,199) (1,431,801)
Treasury stock, 396,626 shares, cost basis at December 31, 2020 and 46,936 shares, cost basis at December 31, 2019
(41,806) (2,583)
Accumulated other comprehensive income (loss) 7,024  (12,508)
Total stockholders’ equity (deficit) 627,209  (186,017)
Total liabilities and stockholders’ equity (deficit) $ 1,582,479  $ 172,957 
The accompanying notes are an integral part of these financial statements.
F- 5

Table of Contents
NOVAVAX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
  Year Ended December 31,
  2020 2019 2018
  (in thousands, except per share information)
Revenue:      
Government contracts $ 217,246  $ 7,500  $ — 
Grants and other 258,352  11,162  34,288 
Total revenue 475,598  18,662  34,288 
Expenses:
Research and development 747,027  113,842  173,797 
Gain on sale of assets —  (9,016) — 
General and administrative 145,290  34,417  34,409 
Total expenses 892,317  139,243  208,206 
Loss from operations (416,719) (120,581) (173,918)
Other income (expense):
Investment income 1,014  1,512  2,674 
Interest expense (15,145) (13,612) (13,612)
Other income (expense) 12,591  (13) 108 
Net loss $ (418,259) $ (132,694) $ (184,748)
Basic and diluted net loss per share $ (7.27) $ (5.51) $ (9.99)
Basic and diluted weighted average number of common shares outstanding 57,554  24,100  18,488 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
  Year Ended December 31,
  2020 2019 2018
  (in thousands)
Net loss $ (418,259) $ (132,694) $ (184,748)
Other comprehensive income (loss):
Net unrealized gains on marketable securities available-for-sale 12 
Foreign currency translation adjustment 19,523  (1,322) (2,586)
Other comprehensive income (loss) 19,532  (1,317) (2,574)
Comprehensive loss $ (398,727) $ (134,011) $ (187,322)
The accompanying notes are an integral part of these financial statements.
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Table of Contents
NOVAVAX, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
Year Ended December 31, 2020, 2019 and 2018
  Common Stock Additional
Paid-in
Capital
Accumulated
Deficit
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’ Equity (Deficit)
  Shares Amount
  (in thousands, except share information)  
Balance at December 31, 2017 16,184,241  $ 162  $ 1,023,532  $ (1,114,359) $ (2,450) $ (8,617) $ (101,732)
Non-cash stock-based compensation —  —  18,314  —  —  —  18,314 
Stock issued under incentive programs 120,561  2,744  —  —  —  2,745 
Restricted stock cancelled (938) —  —  —  —  —  — 
Issuance of common stock, net of issuance costs of $4,265
2,941,438  29  100,031  —  —  —  100,060 
Unrealized gain on marketable securities —  —  —  —  —  12  12 
Foreign currency translation adjustment —  —  —  —  —  (2,586) (2,586)
Net loss —  —  —  (184,748) —  —  (184,748)
Balance at December 31, 2018 19,245,302  192  1,144,621  (1,299,107) (2,450) (11,191) (167,935)
Non-cash stock-based compensation
—  —  17,048  —  —  —  17,048 
Stock issued under incentive programs 173,873  1,122  —  (132) —  992 
Fractional shares purchased in stock split —  —  —  —  (1) —  (1)
Issuance of common stock, net of issuance costs of $1,655
12,980,177  130  97,760  —  —  —  97,890 
Unrealized gain on marketable securities —  —  —  —  — 
Foreign currency translation adjustment —  —  —  —  —  (1,322) (1,322)
Net loss —  —  —  (132,694) —  —  (132,694)
Balance at December 31, 2019 32,399,352  324  1,260,551  (1,431,801) (2,583) (12,508) (186,017)
Preferred stock beneficial conversion feature     —  —  24,139  (24,139) —  —  — 
Conversion of preferred stock 4,388,850  44  199,778  —  —  —  199,822 
Non-cash stock-based compensation —  —  128,035  —  —  —  128,035 
Stock issued under incentive programs 2,168,725  22  44,447  —  (39,223) —  5,246 
Issuance of common stock, net of issuance costs of $11,416
32,393,438  324  878,526  —  —  —  878,850 
Unrealized gain on marketable securities —  —  —  —  — 
Foreign currency translation adjustment —  —  —  —  —  19,523  19,523 
Net loss —  —  —  (418,259) —  —  (418,259)
Balance at December 31, 2020 71,350,365  $ 714  $ 2,535,476  $ (1,874,199) $ (41,806) $ 7,024  $ 627,209 
The accompanying notes are an integral part of these financial statements.
F- 7

Table of Contents
NOVAVAX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended December 31,
  2020 2019 2018
  (in thousands)
Operating Activities:      
Net loss $ (418,259) $ (132,694) $ (184,748)
Reconciliation of net loss to net cash used in operating activities:
Depreciation and amortization 4,885  5,676  8,159 
Gain on sale of assets —  (9,016) — 
Non-cash impact of lease termination —  —  (4,381)
Amortization of debt issuance costs 1,424  1,424  1,424 
Right-of-use assets expensed 245,861  —  — 
Non-cash stock-based compensation 128,035  17,048  18,314 
Other (16,504) 4,957  (2,451)
Changes in operating assets and liabilities:
Accounts receivable, prepaid expenses and other assets (422,689) (4,202) 1,212 
Accounts payable and accrued expenses 163,161  (11,485) (6,744)
Deferred revenue 271,545  (8,331) (15,610)
Net cash used in operating activities (42,541) (136,623) (184,825)
Investing Activities:
Capital expenditures (54,622) (1,857) (1,372)
Acquisition of Novavax CZ, net of cash acquired (165,516) —  — 
Proceeds from sale of assets —  18,333  — 
Purchases of marketable securities (363,202) (17,484) (120,150)
Proceeds from maturities of marketable securities 205,562  39,500  150,118 
Net cash (used in) provided by investing activities (377,778) 38,492  28,596 
Financing Activities:
Net proceeds from sale of preferred stock
199,822  —  — 
Net proceeds from sales of common stock 875,623  97,392  100,060 
Proceeds from the exercise of stock-based awards 44,469  992  2,745 
Treasury stock related to tax withholding on stock-based awards (39,087) —  — 
Finance lease payments (96,065) —  — 
Net cash provided by financing activities 984,762  98,384  102,805 
Effect of exchange rate on cash, cash equivalents and restricted cash 2,115  (32) (48)
Net increase (decrease) in cash, cash equivalents and restricted cash 566,558  221  (53,472)
Cash, cash equivalents and restricted cash at beginning of year 82,180  81,959  135,431 
Cash, cash equivalents and restricted cash at end of year $ 648,738  $ 82,180  $ 81,959 
Supplemental disclosure of non-cash activities:
Sale of common stock under the Sales Agreement not settled at year-end $ 3,227  $ 497  $ — 
Capital expenditures included in accounts payable and accrued expenses $ 9,255  $ 49  $ 519 
Right-of-use assets from new lease agreements
$ 247,599  $ —  $ — 
Supplemental disclosure of cash flow information:
Cash interest payments, net of amounts capitalized $ 13,705  $ 12,188  $ 12,188 
The accompanying notes are an integral part of these financial statements.
F- 8

Table of Contents
NOVAVAX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020, 2019 and 2018
Note 1 – Organization

Novavax, Inc. (“Novavax,” and together with its wholly owned subsidiaries, Novavax AB and Novavax CZ (formerly, Praha Vaccines a.s.), the “Company”) is a late-stage biotechnology company that promotes improved global health through the discovery, development and commercialization of innovative vaccines to prevent serious infectious diseases and address urgent, global health needs. The Company’s vaccine candidates, including both its coronavirus vaccine candidate, NVX-CoV2373, and its lead influenza vaccine candidate, NanoFluTM, are genetically engineered, three-dimensional nanostructures of recombinant proteins critical to disease pathogenesis and may elicit differentiated immune responses, which may be more efficacious than naturally occurring immunity or traditional vaccines.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of Novavax, Inc. and its wholly owned subsidiaries, Novavax AB and Novavax CZ. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of highly liquid investments with maturities of three months or less from the date of purchase. Cash and cash equivalents consist of the following at December 31 (in thousands):
  2020 2019
Cash $ 122,312  $ 15,863 
Money market funds  96,116  42,960 
Government-backed securities 44,250  20,000 
Treasury securities 44,052  — 
Corporate debt securities 246,668  — 
Cash and cash equivalents $ 553,398  $ 78,823 
Cash equivalents are recorded at cost, which approximate fair value due to their short-term nature.
Marketable Securities
Marketable securities consist of debt securities with maturities greater than three months from the date of purchase that have historically included commercial paper, government-backed securities, treasury securities, corporate notes and agency securities. Classification of marketable securities between current and non-current is dependent upon the maturity date at the balance sheet date taking into consideration the Company’s ability and intent to hold the investment to maturity.
Interest and dividend income are recorded when earned and included in investment income in the consolidated statements of operations. Premiums and discounts, if any, on marketable securities are amortized or accreted to maturity and included in investment income in the consolidated statements of operations. The specific identification method is used in computing realized gains and losses on the sale of the Company’s securities.
The Company classifies its marketable securities with readily determinable fair values as “available-for-sale.” Investments in securities that are classified as available-for-sale are measured at fair market value in the consolidated balance
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sheets, and unrealized gains and losses on marketable securities are reported as a separate component of stockholders’ equity (deficit) until realized. Marketable securities are evaluated periodically to determine whether a decline in value is “other-than-temporary.” The term “other-than-temporary” is not intended to indicate a permanent decline in value. Rather, it means that the prospects for a near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security. Management reviews criteria, such as the magnitude and duration of the decline, as well as the Company’s ability to hold the securities, including whether the Company will be required to sell a security prior to recovery of its amortized cost basis, the investment issuer’s financial condition and business outlook to predict whether the loss in value is other-than-temporary. If a decline in value is determined to be other-than-temporary, the value of the security is reduced and the impairment is recorded as other income (expense) in the consolidated statements of operations.
Concentration of Credit Risk
Financial instruments expose the Company to concentration of credit risk and consist primarily of cash and cash equivalents and marketable securities. The Company’s investment policy limits investments to certain types of instruments, including asset-backed securities, high-grade corporate debt securities and money market funds, places restrictions on maturities and concentrations in certain industries and requires the Company to maintain a certain level of liquidity. At times, the Company maintains cash balances in financial institutions, which may exceed federally insured limits. The Company has not experienced any losses relating to such accounts and believes it is not exposed to a significant credit risk on its cash and cash equivalents.
Fair Value Measurements
The Company applies Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), for financial and non-financial assets and liabilities.
ASC 820 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
Restricted Cash

The Company’s current and non-current restricted cash includes payments received under the Coalition for Epidemic Preparedness Innovations (“CEPI”) funding agreements (see Note 8), payments received under the Bill & Melinda Gates Foundation (“BMGF”) grant agreements (see Note 8), escrow funds paid in connection with the acquisition of Novavax CZ (see Note 6), escrow funds received in connection with a sale of assets transaction in 2019, and cash collateral accounts under letters of credit that serve as security deposits for certain facility leases. The Company will utilize the CEPI and BMGF funds as it incurs expenses for services performed under these agreements.

As of December 31, 2020, the restricted cash balances (both current and non-current) consisted of $1.5 million for payments received from BMGF, $92.4 million of payments under the CEPI funding agreements, and $1.5 million of security deposits. As of December 31, 2019, the restricted cash balances (both current and non-current) consisted of $1.4 million for payments received from BMGF, $1.5 million held in escrow received in connection with the sale of assets transaction and $0.4 million of security deposits.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows at December 31 (in thousands):
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  2020 2019
Cash and cash equivalents $ 553,398  $ 78,823 
Restricted cash current 93,880  2,947 
Restricted cash non-current 1,460  410 
Cash, cash equivalents and restricted cash $ 648,738  $ 82,180 
Property and Equipment
Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, generally three to twenty-five years. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the estimated useful lives of the improvements or the remaining term of the lease. Repairs and maintenance costs are expensed as incurred.
Lease Accounting

The Company determines at the inception or modification of a contract if an arrangement is, or contains, a lease, which exists when the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. In determining if a contract contains a lease, the Company evaluates whether the contract, either explicitly or implicitly, is for the use of an identified asset and the Company has the right to direct the use of, and obtain substantially all of the benefit from, the identified asset. Depending on the contract, the lease commencement date, defined as the date on which the lessor makes the underlying asset available for use by the lessee and is the date on which the Company is required to accrue lease expenses, may be different than the inception date of the contract. The Company evaluates changes to the terms and conditions of a lease contract to determine if they result in a new lease or a modification of an existing lease. For lease modifications, the Company remeasures and reallocates the remaining consideration in the contract and reassesses the lease classification at the effective date of the modification. Leases are classified as either operating or finance leases based on the economic substance of the agreement.

The Company enters into non-cancelable lease agreements for facilities and certain equipment. Further, the Company enters into manufacturing supply agreements with contract manufacturing organizations and contract development and manufacturing organizations to manufacture its vaccine candidates. Certain of these manufacturing supply agreements include the use of identified manufacturing facilities and equipment that are controlled by the Company and, if the Company receives substantially all of the output of the underlying assets, qualify as an embedded lease. manufacturing supply agreements that contain a lease are treated as lease arrangements in their entirety.

For leases that have a lease term of more than 12 months at the lease commencement date, the Company recognizes lease liabilities, which represent the Company’s obligation to make lease payments arising from the lease, and corresponding right-of-use (“ROU”) assets, which represent the right to use an underlying asset for the lease term, based on the present value of the fixed future payments over the lease term. The Company calculates the present value of future payments using the discount rate implicit in the lease, if available, or the Company’s incremental borrowing rate. For all leases that have a lease term of 12 months or less at the commencement date (referred to as “short-term” leases), the Company has elected to apply the practical expedient in ASC Topic 842, Leases (“ASC 842”), to not recognize a lease liability or ROU asset but instead, recognize lease payments as an expense on a straight-line basis over the lease term and variable lease payments that do not depend on an index or rate, as an expense in the period in which the variable lease costs are incurred based on performance or usage in accordance with contractual agreements. In determining the lease period, the Company evaluates facts and circumstances that could affect the period over which it is reasonably certain to use the underlying asset while taking into consideration the non-cancelable period over which it has the right to use the underlying asset and any option period to extend or terminate the lease if it is reasonably certain to exercise the option. The Company re-evaluates short-term leases that are modified and if they no longer meet the requirements to be treated as short-term leases, recognizes and measures the lease liability and ROU asset as if the date of the modification is the lease commencement date.

For operating leases, the Company recognizes lease expense related to fixed payments on a straight-line basis over the lease term and lease expense related to variable payments as incurred based on performance or usage in accordance with the contractual agreements. For finance leases, the Company recognizes the amortization of the ROU asset over the shorter of the lease term or useful life of the underlying asset. The Company expenses ROU assets acquired for research and development activities under ASC Topic 730, Research and Development, if they do not have an alternative future use, in research and development projects or otherwise.

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The Company uses significant assumptions and judgment in evaluating its lease contracts and other agreements under ASC 842, including the determination of whether an agreement is or contains a lease, whether a change in the terms and conditions of a lease contract represent a new or modified lease, whether a lease represents an operating or finance lease, the discount rate used to determine the present value of lease obligations and the term of a lease embedded in its manufacturing supply agreements.
Revenue

The Company performs research and development under government funding, grant, license and clinical development agreements. The revenue primarily consists of funding under U.S. government contracts and other arrangements to advance the clinical development and manufacturing of NVX-CoV2373. The Company’s U.S. government contracts are with the U.S. Department of Defense (the “DoD”) and its participation in formerly known as Operation Warp Speed (“OWS”) (see Note 8). Other funding arrangements primarily include a grant and forgivable loan funding from CEPI (see Note 8).

At contract inception, the Company analyzes the revenue arrangement to determine the appropriate accounting under U.S. GAAP. Currently, the Company’s revenue arrangements represent customer contracts within the scope of ASC Topic 606, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) or are subject to the contribution guidance in ASC Topic 958-605, Not-for-Profit Entities – Revenue Recognition (“ASC 958-605”), which applies to business entities that receive contributions within the scope of ASC 958-605. The Company recognizes revenue from arrangements within the scope of ASC 606 following the five-step model: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) it satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to its customer. The Company recognizes contribution revenue within the scope of ASC 958-605 when the funder-imposed conditions have been substantially met. Contributions are recorded as deferred revenue until the period in which research and development activities are performed that satisfy the funder-imposed conditions.

Under the U.S. government contracts, the Company is entitled to receive funding of up to $1.8 billion, on a reimbursable-cost or reimbursable-cost-plus-fixed-fee basis, to support certain activities related to the development, manufacture and delivery of NVX-CoV2373 to the U.S. government. The Company analyzed these contracts and determined that they are within the scope of ASC 606. The obligations under each of the contracts are not distinct in the context of the contract as they are highly interdependent or interrelated and, as such, they are accounted for as a single performance obligation. The transaction price under these arrangements is the consideration the Company is expecting to receive and consists of the funded contract amount and the unfunded variable amount to the extent that it is probable that a significant reversal of revenue will not occur. The Company recognizes revenue for these contracts over time as the Company transfers control over the goods and services and satisfies the performance obligation. The Company measures progress toward satisfaction of the performance obligation using an Estimate-at-Completion (“EAC”) process, which is a cost-based input method that reviews and monitors the progress towards the completion of the Company’s performance obligation. Under this process, management considers the costs that have been incurred to-date, as well as projections to completion using various inputs and assumptions, including, but not limited to, progress towards completion, labor costs and level of effort, material and subcontractor costs, indirect administrative costs and other identified risks. Estimating the total allowable cost at completion of the performance obligation under a contract is subjective and requires the Company to make assumptions about future activity and cost drivers. Changes in these estimates can occur for a variety of reasons and, if significant, may impact the timing of revenue and fee recognition on the Company’s contracts. Allowable contract costs include direct costs incurred on the contract and indirect costs that are applied in the form of rates to the direct costs. Progress billings under the contracts are initially based on provisional indirect billing rates, agreed upon between the Company and the U.S. government. These indirect rates are subject to audit on an annual basis. The Company records the impact of changes in the indirect billing rates in the period when such changes are identified. These changes reflect the difference between actual indirect costs incurred compared to the estimated amounts used to determine the provisional indirect billing rates agreed upon with the U.S. government. The Company recognizes revenue on the U.S government contracts based on reimbursable allowable contract costs incurred in the period up to the transaction price. For reimbursable-cost-plus-fixed-fee contracts, the Company recognizes the fixed-fee based on the proportion of reimbursable contract costs incurred to total estimated allowable contract costs expected to be incurred on completion of the underlying performance obligation as determined under the EAC process. The Company recognizes changes in estimates related to the EAC process in the period when such changes are made on a cumulative catch-up basis. The Company includes the transaction price comprising both funded and unfunded portions of customer contracts, in this estimate.

The Company’s other funding agreements currently include funding from CEPI of $399.5 million in the form of a grant of $257.0 million (“CEPI Grant Funding”) and one or more forgivable no interest term loans of $142.5 million (“CEPI Forgivable Loan Funding”). Under the Company’s grant funding arrangements, including the CEPI Grant Funding, the Company is primarily entitled to reimbursement for costs that support development related activities of NVX-CoV2373. The
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CEPI Forgivable Loan Funding is designated for the prepayment of certain manufacturing activities. The Company analyzed these other funding arrangements and determined that they are not within the scope of ASC 606 as they do not provide a direct economic benefit to the grantor. Payments received under the grant funding arrangements are considered conditional contributions under the scope of ASC 958-605 and are recorded as deferred revenue until the period in which such research and development activities are actually performed that satisfy the funder-imposed conditions. Payments received under the CEPI Forgivable Loan Funding agreements are only repayable if the proceeds of sales to one or more third parties of NVX-CoV2373 cover the Company’s costs of manufacturing such vaccine candidate, not including manufacturing costs funded by CEPI. As the financial risk remains with CEPI, the Company determined that the use of the CEPI Forgivable Loan Funding is outside the scope of ASC Topic 470, Debt. The research and development risk is considered substantive, such that it is not yet probable that the development will be successful. Therefore, the Company has concluded that ASC 730 is considered applicable and most appropriate. Given the financial risk associated with the research and development activities lies with CEPI because repayment of any funds provided by CEPI depends solely on the results of the research and development activities having future economic benefit, the Company has accounted for the obligation under the CEPI Forgivable Loan Funding as a contract to perform research and development for others. The Company has determined that payments received under these agreements should be recorded as revenue under ASC 958-605 rather than a reduction to research and development expenses. This is consistent with the Company’s policy of presenting such amounts as revenue. In reaching this determination, the Company considered a number of factors, including whether it is principal under the arrangement, and whether the arrangement is significant to, and part of, the Company’s core operations. The Company will record revenue as it performs the contractual research and development services.

The Company has manufacturing and supply arrangements that include a license to use the Company's intellectual property. The licensing arrangements include sales-based royalties, as well as certain development and commercial milestone payments, and the license is deemed to be the predominant item to which the milestone payments and sales-based royalties relate. The fulfillment of the Company's obligation for the license is subject to a constraint, the achievement of the development and commercial milestone or the royalty-related sales under the arrangement. For milestone payments, the constraint is overcome and the Company recognizes revenue, when the development and commercial milestone is achieved. For the year ended December 31, 2020, the Company recognized $20.0 million related to a development and commercial milestone payment. The Company did not recognized any revenue in 2020 related to sales-based royalties.
The opening and closing balances of receivables and contracts liabilities were $262.0 million and $7.5 million, and $273.2 million and $1.7 million, respectively, from the Company's revenue contracts with customers. The aggregate amount of the transaction price allocated to the performance obligations that were unsatisfied (or partially unsatisfied) was $1.8 billion at the end of reporting period, of which $1.5 billion relates to OWS.

Other Intangible Assets
The Company’s intangible assets include proprietary adjuvant technology and collaboration agreements, which were measured at the estimated fair values as of their acquisition dates. Amortization expense for intangible assets is recorded on a straight-line basis over the expected useful lives of the assets, ranging for 7 years to 20 years.
Impairment of Long-Lived Assets
Long-lived assets, including property and equipment and finite-lived intangible and right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable based on the criteria for accounting for the impairment or disposal of long-lived assets under ASC Topic 360, Property, Plant and Equipment. The Company calculates the estimated fair value of a long-lived asset (group) using the income approach. Impairment losses are recognized when the sum of expected future cash flows is less than the assets’ (group’s) carrying value.
Goodwill
Goodwill is subject to impairment tests annually or more frequently should indicators of impairment arise. The Company has determined that, because its only business is the development of recombinant vaccines, it operates as a single operating segment and has one reporting unit. The Company primarily utilizes the market approach and, if considered necessary, the income approach to determine if it has an impairment of its goodwill. The market approach is based on market value of invested capital. To ensure that the Company’s capital stock is the appropriate measurement of fair value, the Company considers factors such as its trading volume, diversity of investors and analyst coverage. If considered necessary, the income approach is used to corroborate the results of the market approach. Goodwill impairment may exist if the carrying value of the reporting unit exceeds its estimated fair value. If the carrying value of the reporting unit exceeds its fair value, step two of the
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impairment analysis is performed. In step two of the analysis, an impairment loss is recorded equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value, should such a circumstance arise.

During 2020, the Company changed its annual goodwill impairment testing date from December 31 to October 1. Management has determined that the change in the testing date does not represent a material change to a method of applying an accounting principle as it does not have a material effect on the Company’s consolidated financial statements in light of the Company’s internal controls and requirements under ASC Topic 350, Intangibles—Goodwill and Other, to assess goodwill impairment upon certain triggering events.
At October 1, 2020 and December 31, 2019, the Company used the market approach to determine if the Company had an impairment of its goodwill. The fair value of the Company’s single reporting unit was substantially higher than its carrying value, resulting in no impairment to goodwill as of October 1, 2020 and December 31, 2019.
Stock-Based Compensation
The Company accounts for stock-based compensation related to grants of stock options, stock appreciation rights, restricted stock awards and purchases under the Company’s Employee Stock Purchase Plan, as amended and restated (the “ESPP”) at fair value. The Company recognizes compensation expense related to such awards on a straight-line basis over the requisite service period (generally the vesting period) of the equity awards, which typically occurs ratably over periods ranging from one year to four years.
The expected term of stock options and stock appreciation rights granted is based on the Company’s historical option exercise experience and post-vesting forfeiture experience using the historical expected term from the vesting date, whereas the expected term for purchases under the ESPP is based on the purchase periods included in the offering. The expected volatility is determined using historical volatilities based on stock prices over a look-back period corresponding to the expected term. The risk-free interest rate is determined using the yield available for zero-coupon U.S. Government issues with a remaining term equal to the expected term. The Company has never paid a dividend, and as such, the dividend yield is zero, and the Company does not intend to pay dividends in the foreseeable future.
Restricted stock awards are recorded as compensation expense over the expected vesting period based on the fair value at the award date using the straight-line method of amortization.
See Note 13 for a further discussion on stock-based compensation.
Research and Development Expenses
Research and development expenses include salaries, stock-based compensation, laboratory supplies, consultants and subcontractors, including external contract research organizations (“CROs”), contract management organizations ("CMOs") and contract management and development organizations ("CDMOs") and other expenses associated with the Company’s process development, manufacturing, clinical, regulatory and quality assurance activities for its clinical development programs. In addition, related indirect costs such as fringe benefits and overhead expenses are also included in research and development expenses.
The Company estimates its research and development expense related to services performed under its contracts with external service providers based on an estimate of the level of service performed in the period. Research and development activities are expensed as incurred.
Accrued Research and Development Expenses
The Company accrues research and development expenses, including clinical trial-related expenses, as the services are performed, which may include estimates of those expenses incurred, but not invoiced. The Company uses information provided by third-party service providers and CROs, CMO's and CDMO's invoices and internal estimates to determine the progress of work performed on the Company’s behalf. Assumptions based on clinical trial protocols, contracts and participant enrollment data are also developed to determine and analyze these estimates and accruals.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Under the liability method, deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss carryforwards.
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Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred tax assets and liabilities is recognized in income in the period such changes are enacted. A valuation allowance is established when necessary to reduce net deferred tax assets to the amount expected to be realized.
Tax benefits associated with uncertain tax positions are recognized in the period in which one of the following conditions is satisfied: (1) the more likely than not recognition threshold is satisfied; (2) the position is ultimately settled through negotiation or litigation; or (3) the statute of limitations for the taxing authority to examine and challenge the position has expired. Tax benefits associated with an uncertain tax position are reversed in the period in which the more likely than not recognition threshold is no longer satisfied.
Interest and penalties related to income tax matters are recorded as income tax expense. At December 31, 2020 and 2019, the Company had no accruals for interest or penalties related to income tax matters.
Net Loss per Share
Net loss per share is computed using the weighted average number of shares of common stock outstanding. At December 31, 2020, 2019 and 2018, the Company had outstanding stock options and unvested restricted stock awards totaling 6,679,629, 4,992,792 and 2,975,481 underlying shares of the Company’s common stock, respectively. At December 31, 2020 and 2019, the Company’s Notes (as defined in Note 11) would have been convertible into approximately 2,385,800 shares of the Company’s common stock assuming a common stock price of $136.20 or higher. These and any other shares due to the Company upon settlement of its capped call transactions are excluded from the computation, as their effect is antidilutive.
Foreign Currency
The accompanying consolidated financial statements are presented in U.S. dollars. The functional currency of Novavax AB, which is located in Sweden, is the local currency (Swedish Krona) and the functional currency of Novavax CZ, which is located in the Czech Republic, is the local currency (Czech Koruna). The translation of assets and liabilities of Novavax AB and Novavax CZ to U.S. dollars are made at the exchange rate in effect at the consolidated balance sheet date, while equity accounts are translated at historical rates. The translation of the statement of operations data is made at the average exchange rate in effect for the period. The translation of operating cash flow data is made at the average exchange rate in effect for the period, and investing and financing cash flow data is translated at the exchange rate in effect at the date of the underlying transaction. Translation gains and losses are recognized as a component of accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets. The foreign currency translation adjustment balance included in accumulated other comprehensive income (loss) was $7.0 million and $(12.5) million at December 31, 2020 and 2019, respectively.
Segment Information
The Company manages its business as one operating segment: the development of recombinant vaccines. The Company does not operate separate lines of business with respect to its vaccine candidates. Accordingly, the Company does not have separately reportable segments as defined by ASC Topic 280, Segment Reporting.
Recent Accounting Pronouncements
Recently Adopted

In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017‑04, Intangibles-Goodwill and Other (Topic 350) (“ASU 2017‑04”), which will simplify the goodwill impairment calculation by eliminating Step 2 from the current goodwill impairment test. The new standard does not change how a goodwill impairment is identified. The Company will continue to perform its quantitative goodwill impairment test by comparing the fair value of its reporting unit to its carrying amount, but if the Company is required to recognize a goodwill impairment charge, under the new standard, the amount of the charge will be calculated by subtracting the reporting unit's fair value from its carrying amount. Under the current standard, if the Company is required to recognize a goodwill impairment charge, Step 2 requires it to calculate the implied value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination and the amount of the charge is calculated by subtracting the reporting unit's implied fair value of goodwill from the goodwill carrying amount. The standard was effective January 1, 2020 for the Company and will be applied prospectively from the date of adoption. The adoption of ASU 2017-04 did not have a material impact on the Company’s historical financial statements.
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Not Yet Adopted

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which will simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including certain convertible instruments and contracts on an entity’s own equity. Specifically, the new standard will remove the separation models required for convertible debt with cash conversion features and convertible instruments with beneficial conversion features. It will also remove certain settlement conditions that are currently required for equity contracts to qualify for the derivative scope exception and will simplify the diluted earnings per share calculation for convertible instruments. ASU 2020-06 will be effective January 1, 2022 for the Company and may be applied using a full or modified retrospective approach. Early adoption is permitted, but no earlier than January 1, 2021 for the Company. Management has evaluated the impact of adopting ASU 2020-06 and has determined such adoption will not have a material impact on the overall stockholders' equity (deficit) in the Company’s consolidated financial statements.
Note 3 – Fair Value Measurements
The following table represents the estimated fair value of the Company’s financial assets and liabilities (in thousands):
Fair Value at December 31, 2020 Fair Value at December 31, 2019
Assets Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Money market funds(1) $ 96,116  $ —  $ $ 42,960  $ $
Government-backed securities(2) $ 44,250  20,000 
Treasury securities(3) $ 54,088 
Corporate debt securities(4) $ 373,681 
Agency securities $ 20,600 
Total cash equivalents and marketable securities $ 96,116  $ 492,619  $ $ 42,960  $ 20,000  $
Liabilities
Convertible notes payable $ —  $ 407,238  $ $ $ 125,811  $
(1)Classified as cash and cash equivalents as of December 31, 2020 and 2019, respectively (see Note 2).
(2)Includes $44,250 and $20,000 classified as cash and cash equivalents as of December 31, 2020 and 2019, respectively, on the consolidated balance sheets.
(3)Includes $44,052 classified as cash and cash equivalents as of December 31, 2020 on the consolidated balance sheets.
(4)Includes $246,668 classified as cash and cash equivalents as of December 31, 2020 on the consolidated balance sheets.
Fixed-income investments categorized as Level 2 are valued at the custodian bank by a third-party pricing vendor’s valuation models that use verifiable observable market data, e.g., interest rates and yield curves observable at commonly quoted intervals and credit spreads, bids provided by brokers or dealers or quoted prices of securities with similar characteristics. Pricing of the Company’s Notes (as defined in Note 11) has been estimated using other observable inputs, including the price of the Company’s common stock, implied volatility, interest rates and credit spreads among others.
During the years ended December 31, 2020 and 2019, the Company did not have any transfers between Levels.
The amount in the Company’s consolidated balance sheets for accounts payable and accrued expenses approximates its fair value due to its short-term nature.
Note 4 – Marketable Securities
Marketable securities classified as available-for-sale as of December 31, 2020 and 2019 were comprised of (in thousands):
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December 31, 2020 December 31, 2019
Amortized Cost Gross
Unrealized
Gains
Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized
Gains
Gross Unrealized Losses Fair Value
Treasury securities $ 10,038  $ —  $ (2) $ 10,036  $ —  $ —  $ — 
Corporate debt securities 127,003  13  (3) 127,013  —  —  —  — 
Agency securities 20,599  —  20,600  —  —  —  — 
Total $ 157,640  $ 14  $ (5) $ 157,649  $ —  $ —  $ —  $ — 

As of December 31 2020, investments in marketable securities, including corporate debt securities, were due to mature within one year.
Note 5 – Goodwill and Other Intangible Assets
Goodwill
The changes in the carrying amounts of goodwill for the years ended December 31, 2020 and 2019 were as follows (in thousands):
Year Ended
December 31,
2020 2019
Beginning balance $ 51,154  $ 51,967 
Goodwill resulting from the acquisition of Novavax CZ 70,662  — 
Currency translation adjustments 13,563  (813)
Ending balance $ 135,379  $ 51,154 
Identifiable Intangible Assets
Purchased intangible assets consisted of the following as of December 31, 2020 and 2019 (in thousands):
December 31, 2020 December 31, 2019
Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Gross Carrying Amount Accumulated Amortization Intangible Assets, Net
Finite-lived intangible assets:
Proprietary adjuvant technology $ 9,099  $ (3,374) $ 5,725  $ 7,985  $ (2,562) $ 5,423 
Collaboration agreements 4,109  (4,109) —  3,606  (3,448) 158 
Total identifiable intangible assets $ 13,208  $ (7,483) $ 5,725  $ 11,591  $ (6,010) $ 5,581 
Amortization expense for the years ended December 2020, 2019 and 2018 was $0.6 million, $0.7 million and $0.7 million, respectively. Estimated amortization expense for existing intangible assets for each of the five succeeding years ending December 31, is as follows (in thousands):
Year Amount
2021 $ 455 
2022 455 
2023 455 
2024 455 
2025 455 

Note 6 - Acquisition of Novavax CZ

On May 27, 2020 (the “Acquisition Date”), the Company entered into a Share Purchase Agreement (the “Deed”) by and among Novavax AB, the Company’s wholly-owned Swedish subsidiary (the “Buyer”), and De Bilt Holdings B.V., Poonawalla Science Park B.V., and Bilthoven Biologicals B.V. (collectively, the “Sellers”) and, solely as guarantors, each of
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Serum International B.V. and the Company. Pursuant to the terms and conditions of the Deed, the Buyer acquired all the issued and outstanding shares of Novavax CZ (formerly, Praha Vaccines a.s.), a vaccine manufacturing company (the “Acquisition”). The assets of Novavax CZ acquired as part of the Acquisition include a biologics manufacturing facility and associated assets in Bohumil, Czech Republic and will be used by the Company to expand its manufacturing capacity.

Allocation of Purchase Price to Assets Acquired and Liabilities Assumed

The Company has accounted for the Acquisition as a business combination using the acquisition method of accounting, with the Company as the acquirer. The acquisition method requires the Company to record the assets acquired and liabilities assumed at fair value. The amount by which the purchase price exceeds the fair value of net assets acquired is recorded as goodwill. The Company completed the appraisal process necessary to assess the fair values of the assets acquired and liabilities assumed to determine the amount of goodwill to be recognized as of the Acquisition Date. The final determination of the fair value of all assets and liabilities is presented in the table below.

The table below summarizes the final allocation of the Purchase Price based upon the fair values of assets acquired and liabilities assumed (in thousands):

Prepaid expense and other current assets $ 326 
Property and equipment 96,739 
Goodwill 70,662 
Accounts payable (1,193)
Accrued expenses (205)
Other non-current liabilities (813)
Purchase Price, net of cash acquired $ 165,516 

The fair value of the assets acquired and liabilities assumed were determined using market and cost valuation methodologies. The fair value measurements were based on significant unobservable inputs that were developed by the Company using publicly available information, market participant assumptions, and cost and development assumptions. Because of the use of significant unobservable inputs, the fair value measurements represent a Level 3 measurement as defined in ASC 820. The market approach is a valuation technique that uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities, or a group of assets or liabilities. The cost approach estimates value by determining the current cost of replacing an asset with another of equivalent utility. The cost to replace a given asset reflects the estimated reproduction or replacement cost for the property, less an allowance for loss in value due to depreciation.

The cost approach was the primary approach used to value fixed assets, including the real property. Fixed assets are depreciated on a straight-line basis over their expected remaining useful lives, ranging from four years to 25 years.

The Company recorded $70.7 million in goodwill related to the Acquisition representing the Purchase Price that was in excess of the fair value of the assets acquired and liabilities assumed. The goodwill generated from the Acquisition is not expected to be deductible for U.S. federal income tax purposes. The goodwill recognized is attributable to intangible assets that do not qualify for separate recognition, such as the assembled workforce of Novavax CZ.

Current assets and current liabilities were recorded at their contractual or historical acquisition amounts, which approximate their fair value.

Impact to Financial Results for the Year Ended December 31, 2020

The results of operations from Novavax CZ have been included in the consolidated financial statements since the Acquisition Date. As a result, the consolidated financial results for the year ended December 31, 2020 does not reflect a full twelve months of Novavax CZ results. From the Acquisition Date through December 31, 2020, Novavax CZ has not recognized any revenue and has recorded a net loss from operations of $11.3 million.

The Company incurred approximately $2.7 million of costs related to the Acquisition in the year ended December 31, 2020, which are included within general and administrative expenses in the consolidated statements of operations.

Supplemental Pro Forma Financial Information (Unaudited)

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The unaudited pro forma financial information for the periods set forth below gives effect to the Acquisition as if it had occurred as of January 1, 2019. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the Acquisition been consummated as of that time. The unaudited pro forma financial information combines the historical results of operations of the Company and Novavax CZ for the periods presented below and reflects the application of certain pro forma adjustments (in thousands, except per share amounts):

Year Ended December 31,
2020 2019
(in thousands, except per share information)
Revenue $ 475,598  $ 18,662 
Net loss (419,896) (142,210)
Basic and diluted net loss per share $ (7.04) $ (3.22)

Pro forma adjustments include the recognition of depreciation expense based on the Acquisition Date fair value and remaining useful lives of Novavax CZ fixed assets (net of historical depreciation expense) and the elimination of costs related to the Acquisition, which are non-recurring in nature.
Note 7 – Leases

As of December 31, 2020, the Company had operating leases for its research and development and manufacturing facilities, corporate headquarters and offices and certain equipment, as well as embedded leases related to multiple manufacturing supply agreements with CMOs and CDMOs to manufacture the Company’s COVID-19 vaccine candidate, NVX-CoV2373.

The CMO and CDMO manufacturing supply agreements were entered into during 2020 and include the use of identified manufacturing facilities, contain fixed or minimum commitments and include variable costs related to production and material costs in excess of the fixed or minimum commitment specified in the agreements. The Company evaluated the agreements at inception and determined that certain of these arrangements contain an embedded lease under ASC 842 as it has the exclusive use of, and control over, a portion of the manufacturing facility and equipment of the supplier during the contractual term of the arrangement. The Company classified the CMO and CDMO arrangements as operating and finance leases based on the terms of the agreement. The Company recognized lease expense related to fixed payments for its short-term operating leases on a straight-line basis over the lease term and lease expense related to variable payments as incurred based on performance or usage in accordance with the contractual agreements. The Company recognized lease liabilities and ROU assets of $245.9 million for its finance leases and long-term operating leases. The Company’s weighted average Incremental Borrowing Rate for its lease obligations was 6.4%. The Company expensed the ROU assets since they relate to research and development activities for the development of NVX-CoV2373 for which the Company does not have an alternative future use. The Company used significant judgment and estimates, including the estimated value of the underlying leased asset and financial profile of comparable companies to analyze the credit spread as on the date of the lease inception.

During 2020, the Company entered into various facility lease agreements, including a lease for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland ("700QO") that is expected to commence in 2021. The lease is for approximately 170,000 square feet of space that the Company intends to use for manufacturing, research and development and offices. The term of the lease is approximately 15 years with options to extend the lease. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases, and obligates the Company to pay building operating costs. The Company anticipates that it will incur substantial tenant improvement costs, net of a landlord contribution of $30.6 million, in 2021 to bring the building to the condition, necessary for its intended use. The Company is planning to occupy the premises in phases expected to start in the second half of 2021. Since the commencement date isn’t until 2021, the lease amounts were not included as an ROU asset and lease liability as of December 31, 2020.

At December 31, 2020, the facility leases, excluding the 700QO lease, have expirations that range from approximately three to six years, some of which include options to extend the leases or terminate the leases early. Options to extend the leases or terminate the leases early are only included in the lease term when it is reasonably certain that the option will be exercised. The facility leases contain provisions for future rent increases, and obligate the Company to pay building operating costs. The Company records operating lease expense for each of its operating leases on a straight-line basis from lease commencement date through the end of the lease term.

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Supplemental balance sheet information related to leases as of December 31, 2020 was as follows (in thousands, except weighted-average remaining lease term and discount rate):
Lease Assets and Liabilities Classification Amount
Assets:
ROU assets, operating, net Other non-current assets $ 7,794
Liabilities:
Current portion of operating lease liabilities Other current liabilities $ 3,782
Current portion of finance lease liabilities Current portion of finance lease liabilities 105,862
Total current lease liabilities $ 109,644
Non-current portion of operating lease liabilities Other non-current liabilities $ 10,122
Non-current portion of finance lease liabilities Non-current finance lease liabilities 40,083
Total non-current lease liabilities $ 50,205
Weighted-average remaining lease term (years):
Operating leases 4.5
Finance leases 4.7
Weighted-average discount rate:
Operating leases 13.8  %
Finance leases 6.4  %
Lease expense for the operating and short-term leases for the year ended December 31 was as follows (in thousands):
2020
Operating lease expense $ 2,462 
Short-term lease expense 66,805 
Finance lease expense:
ROU assets expensed 242,009 
Interest expense 3,097 
Total finance lease expense $ 245,106 
Supplemental cash flow information related to leases for the year ended December 31, 2020 was as follows (in thousands):
Amount
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases $ 63,634 
Operating cash flows used in finance leases 3,097 
Financing cash flows used in finance leases 96,065 
ROU assets obtained in exchange for operating lease obligations $ 5,590 
ROU assets obtained in exchange for finance lease obligations 242,009 
As of December 31, 2020, maturities of lease liabilities were as follows (in thousands):
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Year Amount
2021 $ 118,017 
2022 44,692 
2023 3,385 
2024 2,393 
2025 2,369 
Thereafter 2,079 
Total minimum lease payments 172,935 
Less: imputed interest (13,086)
Total lease liabilities $ 159,849 

Note 8 – U.S. Government Contracts, Grants and Other Revenue Arrangements
U.S. Government Contracts
Operation Warp Speed

In July 2020, the Company entered into a Project Agreement (the “Project Agreement”) with Advanced Technology International, Inc. (“ATI”), the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with OWS. OWS is a partnership among components of the U.S. Department of Health and Human Services and the U.S. Department of Defense working to accelerate the development, manufacturing and distribution of COVID-19 vaccines, therapeutics and diagnostics. The Project Agreement, which was last amended in December 2020, relates to the Base Agreement the Company entered into with ATI in June 2020 (the “Base Agreement,” together with the Project Agreement, the “OWS Agreement”). Under the OWS Agreement, the Company is entitled to receive funding of up to $1.7 billion to support certain activities related to the development of NVX-CoV2373 and the manufacture and delivery of the vaccine candidate to the U.S. Government. Pursuant to the OWS Agreement, the Company is authorized to make expenditures or incur obligations of up to $1.6 billion.

The OWS Agreement requires the Company to conduct certain clinical, regulatory and other activities, including a pivotal Phase 3 clinical trial to determine the safety and efficacy of NVX-CoV2373, and to manufacture and deliver to the U.S. Government 100 million doses of the vaccine candidate. Funding under the OWS Agreement is payable to the Company for various development, clinical trial, manufacturing, regulatory and other activities. The OWS Agreement contains terms and conditions that are customary for U.S. Government agreements of this nature, including provisions giving the U.S. Government the right to terminate the Base Agreement and/or the Project Agreement based on a reasonable determination that the funded project will not produce beneficial results commensurate with the expenditure of resources and that termination would be in the U.S. Government’s interest. If the Project Agreement is terminated prior to completion, the Company is entitled to be paid for work performed and costs or obligations incurred prior to termination and consistent with the terms of the OWS Agreement. The performance period under the Project Agreement extends from July 2020 through December 2021, subject to early termination by the U.S. Government or extension by mutual agreement of the parties. In 2020, the Company recognized revenue under the OWS Agreement of $204.7 million.

U.S. Department of Defense

In June 2020, the Company entered into a letter contract that was last amended in January 2021 (the “DoD Contract”) with the DoD Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (“JPEO-CRBND-EB”), under which JPEO-CRBND-EB agreed to provide funding of up to $45.7 million to the Company to support the manufacture of NVX-CoV2373. Under the DoD Contract, the Company is authorized to make expenditures or incur obligations up to the full amount of the funding.

Under the DoD Contract, the Company is expected to deliver 10 million doses of NVX-CoV2373 to the DoD. The 10 million doses of NVX-CoV2373 may be used in Phase 2/3 clinical trials or under an EUA, if approved by the U.S. Food and Drug Administration (“FDA”). Pursuant to the DoD Contract, if NVX-CoV2373 is approved by the FDA, the DoD is entitled to most-favored customer status for a period of five years from the award of the DoD Contract, meaning that the Company cannot give any comparable commercial client in the United States more favorable pricing than the DoD under similar transactional circumstances. In 2020, the Company recognized revenue from the DoD Contract of $12.5 million.

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Grants and Other Revenue Arrangements

Coalition for Epidemic Preparedness Innovations

In May 2020, the Company entered into a restated funding agreement which was amended in November 2020 (the “CEPI Funding Agreement”) with CEPI, under which CEPI agreed to provide funding of up to $399.5 million to the Company to support the development of NVX-CoV2373. The CEPI Funding Agreement provides up to $257.0 million in Grant Funding and up to $142.5 million in Forgivable Loan Funding, which loans are in the form of one or more forgivable no interest term loans in order to prepay certain manufacturing activities and are not subject to restrictive or financial covenants. The Company is only required to repay any CEPI Forgivable Loan Funding under certain circumstances to the extent it sells doses of NVX-CoV2373, produced with the funds provided and included in such loan(s), to a third party.

Under the terms of the CEPI Funding Agreement, among other things, the Company and CEPI agreed on the importance of global equitable access to any vaccines produced pursuant to the CEPI Funding Agreement. Any such vaccines, if approved, are expected to be procured and allocated through global mechanisms under discussion as part of the Access to COVID-19 Tools (ACT) Accelerator, an international initiative launched by the World Health Organization (“WHO”), Gavi the Vaccine Alliance, CEPI and other global non-governmental organizations and governmental leaders in 2020.

The scope and continuation of the CEPI Funding Agreement may be amended depending on ongoing developments of the COVID-19 outbreak and the success of NVX-CoV2373 relative to other third-party COVID-19 vaccine candidates or treatments. If the WHO, CEPI or a regulatory authority having jurisdiction over a clinical trial of NVX-CoV2373 determines that a third-party product candidate has substantially greater potential than a Company vaccine product, the Company must cease its clinical trial in the relevant region, and will be reimbursed for any costs incurred as a result thereof. In addition, CEPI has the right to unilaterally terminate the CEPI Funding Agreement if CEPI reasonably determines that (i) there are material safety, regulatory or ethical issues with the development of NVX-CoV2373, (ii) NVX-CoV2373 development should be limited in scope or terminated, (iii) the Company becomes unable to discharge its obligations under the agreement, (iv) the Company fails to meet certain milestones, or (v) the Company commits fraud or a financial irregularity.

Payments received in advance that are related to future performance are deferred and recognized as revenue when the research and development activities are performed. Cash payments received under the CEPI Funding Agreement are restricted as to their use until expenditures contemplated in the funding agreements are incurred. In 2020, the Company recognized revenue of $222.8 million under the CEPI Funding Agreement.

Bill & Melinda Gates Foundation

In support of the Company's development of ResVaxTM, in September 2015, the Company entered into the grant agreement with BMGF (the “BMGF Grant Agreement”), under which it was awarded a grant totaling up to $89.1 million (the “Grant”). The Grant supports ResVax development activities, including the Company's global Phase 3 clinical trial in pregnant women in their third trimester and other regulatory efforts. Unless terminated earlier by BMGF, the BMGF Grant Agreement will continue in effect until the end of 2021. The Company concurrently entered into a Global Access Commitments Agreement (“GACA”) with BMGF as a part of the BMGF Grant Agreement. Under the terms of the GACA, among other things, the Company agreed to make a certain amount of ResVax available and accessible at affordable pricing to people in certain low- and middle-income countries. Unless terminated earlier by BMGF, the GACA will continue in effect until the later of 15 years from its effective date, or 10 years after the first sale of a product under defined circumstances. The term of the GACA may be extended in certain circumstances, by a period of up to five additional years.

In July 2020, the Company entered into a grant agreement with BMGF (the “BMGF SA Grant Agreement”) under which it was awarded a grant of $15.0 million to support a Phase 2b clinical trial in the Republic of South Africa to evaluate the safety, immunogenicity, and potential efficacy of NVX-CoV2373.

Payments received in advance that are related to future performance are deferred and recognized as revenue when the research and development activities are performed. Cash payments received under the BMGF Grant Agreement and the BMGF SA Grant Agreement are restricted as to their use until expenditures contemplated in the agreements are incurred. In 2020, the Company recognized revenue from the BMGF Grant Agreement of $0.4 million and has recognized approximately $82 million in revenue since the inception of the agreement. In 2020, the Company recognized revenue from the BMGF SA Grant Agreement of $12.4 million.
Serum Institute of India Private Limited

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In July 2020, the Company entered into a supply and license agreement with Serum Institute of India Private Limited (“SIIPL”), as amended by the parties in September 2020, under which the Company granted exclusive and non-exclusive licenses to SIIPL for the development, co-formulation, filling and finishing, registration and commercialization by SIIPL of NVX-CoV2373. SIIPL has agreed to purchase Matrix-M adjuvant from the Company and the Company has granted SIIPL a non-exclusive license to manufacture the antigen drug substance component of NVX-CoV2373 in SIIPL’s licensed territory solely for use in the manufacture of NVX-CoV2373 under the terms of the agreement. The parties will equally split the revenue from sale of NVX-CoV2373 by SIIPL in its licensed territory, net of agreed costs. The Company granted to SIIPL (i) an exclusive license in India during the agreement, and (ii) a non-exclusive license (a) during the “Pandemic Period” (as declared by the World Health Organization), in all countries other than specified countries designated by the World Bank as upper-middle or high-income countries, with respect to which the Company retains rights, and (b) after the Pandemic Period, in only those countries designated as low or middle-income by the World Bank. Following the Pandemic Period, the Company may notify SIIPL of any bona fide opportunities for the Company to license NVX-CoV2373 to a third party in such low and middle-income countries and SIIPL would have an opportunity to match or improve such third party terms, failing which, the Company would have the discretion to remove one or more non-exclusive countries from SIIPL’s license.

Takeda Pharmaceutical Company Limited

In August 2020, the Company announced a collaboration agreement with Takeda Pharmaceutical Company Limited (“Takeda”) for the exclusive development, manufacturing and commercialization of NVX-CoV2373 in Japan. Takeda will receive funding from the Government of Japan’s Ministry of Health, Labour and Welfare to support the technology transfer, establishment of infrastructure and scale-up of manufacturing. The collaboration agreement was finalized in February 2021. The Company will be entitled to receive payments based on the achievement of certain development and commercial milestones, as well as a portion of net profits from the sale of the vaccine. In 2020, the Company recognized other revenue as a result of achieving a development milestone from the Takeda arrangement of $20.0 million.

Vaccine Supply Advance Purchase Agreements

In October 2020, the Company entered into a SARS-CoV-2 vaccine supply agreement with The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the UK, the purchase of up to 60 million doses of NVX-CoV2373, plus such additional orders as the Authority may make from time to time. The Company agreed to continue to conduct a UK-based Phase 3 clinical trial of NVX-CoV2373 to assess the efficacy of NVX-CoV2373 in the UK population, establish a dedicated supply chain for NVX-CoV2373 in the UK and seek regulatory approval for NVX‑CoV2373 in the UK.

In December 2020, the Company finalized the advance purchase agreement with the Australian Federal Government to supply 51 million doses of NVX-CoV2373. We will work with Australia’s regulatory agency, the Therapeutics Goods Administration ("TGA"), to obtain product approvals upon demonstrating efficacy in clinical studies. As part of the agreement, Australia will have the option to purchase up to an additional 10 million doses. Further, in December 2020, the Company finalized an advance purchase agreement with the government of New Zealand for the purchase of 10.7 million doses of NVX-CoV2373.

Under the terms of the Company's advance purchase agreements, government counterparties make upfront payments and have certain termination rights, or rights to reduce or cancel orders, if regulatory approval for the vaccine is not received or if supply is materially interrupted, delayed or deferred. The Company expects to record such upfront payments as deferred revenue and anticipates recognizing revenue when the vaccine is delivered to its customers.

Note 9 – Preferred Stock

In June 2020, the Company entered into a redeemable Series A Convertible Preferred Stock Subscription Agreement, pursuant to which the Company agreed to issue and sell in a private placement 438,885 shares of its newly designated redeemable Series A Convertible Preferred Stock, par value $0.01 per share (“Preferred Stock”), at a purchase price of $455.70 per share, for total gross proceeds of $200.0 million. During the fourth quarter of 2020, all outstanding shares of Preferred Stock were converted and the Company issued 4,388,850 shares of common stock, par value $0.01 per share and reclassified $199.8 million from Preferred stock to additional paid in capital. The Company recognized a beneficial conversion feature of approximately $24.1 million at the time of issuance of the Preferred Stock that was recorded in additional paid-in capital and accumulated deficit as the Preferred Stock issuance was contingently redeemable and convertible at any time at the option of the holder.
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Note 10 – Other Financial Information
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following at December 31 (in thousands):
2020 2019
Prepaid expenses $ 171,602  $ 3,601 
Other current assets 9,662  4,376 
Prepaid expenses and other current assets $ 181,264  $ 7,977 
Property and Equipment, net
Property and equipment is comprised of the following at December 31 (in thousands):
2020 2019
Land and buildings $ 79,096  $ — 
Machinery and equipment 31,609  9,946 
Leasehold improvements 9,684  9,088 
Computer hardware 6,126  4,987 
Construction in progress 71,232  448 
197,747  24,469 
Less ― accumulated depreciation (17,793) (13,024)
Property and equipment, net $ 179,954  $ 11,445 
Depreciation expense was approximately $4.3 million, $5.1 million and $7.4 million for the years ended December 31, 2020, 2019 and 2018, respectively.
Accrued Expenses
Accrued expenses consist of the following at December 31 (in thousands):
2020 2019
Employee benefits and compensation $ 20,752  $ 7,504 
Research and development accruals 99,994  6,175 
Other accrued expenses 16,644  1,188 
Accrued expenses $ 137,390  $ 14,867 

Purchase Commitments

During 2020, the Company entered into agreements in the normal course of business with CMOs and CDMOs supplying the Company with production capabilities, and with vendors for preclinical studies, clinical trials and other goods or services. A number of these arrangements are within the scope of lease accounting (see Note 7). Certain agreements provide for termination rights subject to termination fees. Under such agreements, the Company is contractually obligated to make payments to vendors, mainly to reimburse them for their estimated unrecoverable expenses. The exact amount of such obligations are dependent on the timing of termination, and the terms of the relevant agreement, and cannot be reasonably estimated. As of December 31, 2020, these agreements are active ongoing arrangements and the Company expects to receive value from these arrangements in the future.

As of December 31, 2020, the Company had approximately $117 million of such non-cancelable purchase commitments with a remaining term of more than one year.
Note 11– Long-Term Debt
Convertible Notes
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In 2016, the Company issued $325 million aggregate principal amount of convertible senior unsecured notes that will mature on February 1, 2023 (the “Notes”). The Notes are senior unsecured debt obligations and were issued at par. The Notes were issued pursuant to an indenture dated January 29, 2016 (the “Indenture”), between the Company and the trustee. The Company received $315.0 million in net proceeds from the offering after deducting underwriting fees and offering expenses. The Notes bear cash interest at a rate of 3.75%, payable on February 1 and August 1 of each year, beginning on August 1, 2016. The Notes are not redeemable prior to maturity and are convertible into shares of the Company’s common stock. As a result of the Company’s one-for-twenty reverse stock split (see Note 13) and pursuant to Section 14.04(a) of the Indenture, the Notes are initially convertible into approximately 2,385,800 shares of the Company’s common stock based on the initial conversion rate of 7.3411 shares of the Company’s common stock per $1,000 principal amount of the Notes. This represents an initial conversion price of approximately $136.20 per share of the Company’s common stock, representing an approximate 22.5% conversion premium based on the last reported sale price of the Company’s common stock of $111.20 per share on January 25, 2016. In addition, the holders of the Notes may require the Company to repurchase the Notes at par value plus accrued and unpaid interest following the occurrence of a Fundamental Change (as described in the Indenture). If a holder of the Notes converts upon a Make-Whole Adjustment Event (as described in the Indenture), they may be eligible to receive a make-whole premium through an increase to the conversion rate up to a maximum of 8.9928 shares per $1,000 principal amount of Notes (subject to other adjustments as described in the Indenture).
The Notes are accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options (“ASC 470-20”) and ASC 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”). Under ASC 815-40, to qualify for equity classification (or nonbifurcation, if embedded) the instrument (or embedded feature) must be both (1) indexed to the issuer’s stock and (2) meet the requirements of the equity classification guidance. Based upon the Company’s analysis, it was determined the Notes do contain embedded features indexed to its own stock, but do not meet the requirements for bifurcation, and therefore do not need to be separately accounted for as an equity component. Since the embedded conversion feature meets the equity scope exception from derivative accounting, and also since the embedded conversion option does not need to be separately accounted for as an equity component under ASC 470-20, the proceeds received from the issuance of the convertible debt were recorded as a liability on the consolidated balance sheets.
In connection with the issuance of the Notes, the Company also paid $38.5 million, including expenses, to enter into privately negotiated capped call transactions with certain financial institutions (the “capped call transactions”). The capped call transactions are generally expected to reduce the potential dilution upon conversion of the Notes in the event that the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions, which initially corresponds to the conversion price of the Notes, and is subject to anti-dilution adjustments generally similar to those applicable to the conversion rate of the Notes. The cap price of the capped call transactions will initially be $194.60 per share, which represented a premium of approximately 75% based on the last reported sale price of the Company’s common stock of $111.20 per share on January 25, 2016, and is subject to certain adjustments under the terms of the capped call transactions. If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price, there would nevertheless be dilution upon conversion of the Notes to the extent that such market price exceeds the cap price. The Company evaluated the capped call transactions under ASC 815-10, Derivatives and Hedging – Overall and determined that it should be accounted for as a separate transaction and that the capped call transactions will be classified as an equity instrument.
The Company incurred approximately $10.0 million of debt issuance costs in 2016 relating to the issuance of the Notes, which were recorded as a reduction to the Notes on the consolidated balance sheet. The $10.0 million of debt issuance costs is being amortized and recognized as additional interest expense over the seven-year contractual term of the Notes on a straight-line basis, which approximates the effective interest rate method. The Company also incurred $0.9 million of expenses related to the capped call transactions, which were recorded as a reduction to additional paid-in-capital.
Total convertible notes payable consisted of the following at (in thousands):
  December 31,
2020
December 31,
2019
Principal amount of Notes $ 325,000  $ 325,000 
Unamortized debt issuance costs (2,965) (4,389)
Total convertible notes payable $ 322,035  $ 320,611 
Interest expense incurred in connection with the Notes consisted of the following for the years ended December 31 (in thousands):
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  2020 2019 2018
Coupon interest at 3.75%
$ 12,188  $ 12,188  $ 12,188 
Amortization of debt issuance costs 1,424  1,424  1,424 
Total interest expense on Notes $ 13,612  $ 13,612  $ 13,612 

Note 12 – Stockholders’ Equity
In 2020, the Company entered into various At Market Issuance Sales Agreements, which allows it to issue and sell up to $1.0 billion in gross proceeds of its common stock. During 2020, the Company sold 25.2 million shares of common stock under these Sales Agreements resulting in $835.6 million in net proceeds (this amount excludes $3.2 million received in the first quarter of 2021 for shares traded in late December 2020) and 7.2 million shares of common stock resulting in $38.5 million in net proceeds from the remaining portion of its At Market Issuance Sales Agreement entered into prior to 2020. From January 1, 2021 through January 20, 2021, the Company sold 0.9 million shares of common stock from its At Market Issuance Sales Agreement entered into in November 2020 ("November 2020 Sales Agreement") resulting in $113.0 million in net proceeds, leaving $27.2 million remaining under the agreement. The Company terminated the November 2020 Sales Agreement by mutual agreement upon entering into the January 2021 Sales Agreement.
In 2019, the Company sold 13.0 million shares of common stock resulting in $97.4 million in net proceeds (this amount excludes $0.5 million received in the first quarter of 2020 for shares traded in late December 2019) under its various At Market Issuance Sales Agreement.
On May 8, 2019, the Company’s stockholders of record as of March 25, 2019 approved a one-for-twenty reverse stock split of the Company’s outstanding common stock, which was effected on May 10, 2019. The number of authorized shares of common stock and preferred stock of the Company was not affected and remains at 600,000,000 and 2,000,000, respectively, but the number of shares of common stock outstanding as of May 10, 2019 was reduced from 469,453,883 to 23,472,574. The aggregate par value of the issued common stock was reduced by reclassifying a portion of the par value amount of the outstanding common shares from Common stock to Additional paid-in-capital for all periods presented. In addition, all per share and share amounts, including stock options and restricted stock awards, have been retroactively restated in the accompanying consolidated financial statements and notes thereto for all periods presented to reflect the reverse stock split.
In 2018, the Company sold 1.2 million shares of common stock resulting in $46.2 million in net proceeds under its various At Market Issuance Sales Agreements and completed a public offering of 1.7 million shares of its common stock, including 0.2 million shares of common stock that were issued upon the exercise in full of the option to purchase additional shares granted to the underwriters, at a price of $33.00 per share resulting in net proceeds, net of offering costs of $3.6 million, of approximately $54 million.
Note 13 – Stock-Based Compensation
Stock Options
The 2015 Stock Incentive Plan, as amended (“2015 Plan”), was approved at the Company’s annual meeting of stockholders in June 2015. Under the 2015 Plan, equity awards may be granted to officers, directors, employees and consultants of and advisors to the Company and any present or future subsidiary.
The 2015 Plan authorizes the issuance of up to 10,900,000 shares of common stock under equity awards granted under the 2015 Plan, which includes an increase of 7,100,000 shares approved for issuance under the 2015 Plan at the Company’s 2020 annual meeting of stockholders. All such shares authorized for issuance under the 2015 Plan have been reserved. The 2015 Plan will expire on March 4, 2025.
The Amended and Restated 2005 Stock Incentive Plan (“2005 Plan”) expired in February 2015 and no new awards may be made under such plan, although awards will continue to be outstanding in accordance with their terms.
The 2015 Plan permits and the 2005 Plan permitted the grant of stock options (including incentive stock options), restricted stock, stock appreciation rights and restricted stock units. In addition, under the 2015 Plan, unrestricted stock, stock units and performance awards may be granted. Stock options and stock appreciation rights generally have a maximum term of 10 years and may be or were granted with an exercise price that is no less than 100% of the fair market value of the Company’s common stock at the time of grant. Grants of stock options are generally subject to vesting over periods ranging from one to four years.
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Stock Options and Stock Appreciation Rights
The following is a summary of stock options and stock appreciation rights activity under the 2015 Plan and the 2005 Plan for the year ended December 31, 2020:
  2015 Plan 2005 Plan
  Stock Options Weighted-
Average
Exercise
Price
Stock
Options
Weighted-
Average
Exercise
Price
Outstanding at January 1, 2020 3,388,750  $ 35.64  501,780  $ 64.19 
Granted 3,363,766  $ 38.01  —  $ — 
Exercised (1,025,025) $ 31.39  (264,265) $ 45.89 
Canceled (307,028) $ 33.51  (23,329) $ 51.92 
Outstanding at December 31, 2020 5,420,463  $ 38.05  214,186  $ 88.11 
Shares exercisable at December 31, 2020 878,488  $ 71.27  214,186  $ 88.11 
Shares available for grant at December 31, 2020 2,473,916 

In 2019, the Company granted 192,400 stock appreciation rights, with a weighted-average exercise price of $5.95, under the 2015 Plan.

Additionally, in 2019, due to limitations on the equity awards available under the 2015 Plan, the Company granted to certain employees 1,014,240 stock options, with a weighted-average exercise price of $5.95, under the 2015 Plan that were subject to approval of an increase in the number of shares under the 2015 Plan at the Company's 2020 annual meeting of stockholders. Furthermore, in April 2020, due to limitations on the equity awards available under the 2015 Plan, the Company granted to all of its employees collectively 2,501,600 stock options, with a weighted-average exercise price of $19.08, and 326,050 restricted stock units under the 2015 Plan that include a performance requirement related to its NVX-CoV2373 program that were also subject to approval of an increase in the number of shares under the 2015 Plan at the Company's 2020 annual meeting of stockholders. Since the proposal to increase the number of shares under the 2015 Plan was approved at the Company’s 2020 annual meeting of stockholders, as discussed in the “Stock Options” section above, the Company began to record stock-based compensation expense for these awards at that time.

The fair value of stock options granted under the 2015 Plan was estimated at the date of grant or the date upon which the 2015 Plan was approved by the Company’s stockholders for stock options discussed above using the Black-Scholes option-pricing model with the following assumptions:
  2020 2019 2018
Weighted average Black-Scholes fair value of stock
options and SARs granted
$80.48 $4.98 $34.80
Risk-free interest rate
0.2%-1.5%
1.5%-2.6%
2.3%-3.1%
Dividend yield —% —% —%
Volatility
116.0%-152.2%
105.4%-134.1%
93.3%-115.6%
Expected term (in years)
3.9-7.6
3.9-7.5
4.1-7.5
The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and stock appreciation rights outstanding under the 2015 Plan and 2005 Plan as of December 31, 2020 was $427.8 million and 8.5 years, respectively. The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and stock appreciation rights exercisable under the 2015 Plan and 2005 Plan as of December 31, 2020 was $55.9 million and 5.8 years, respectively. The aggregate intrinsic value represents the total intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money stock options and stock appreciation rights) that would have been received by the holders had all stock option and stock appreciation rights holders exercised their stock options and stock appreciation rights on December 31, 2020. This amount is subject to change based on changes to the closing price of the Company’s common stock. The aggregate intrinsic value of stock options exercised and vesting of restricted stock awards for 2020, 2019 and 2018 was $187.3 million, $0.5 million and $0.4 million, respectively.
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Table of Contents
Employee Stock Purchase Plan
The Employee Stock Purchase Plan, as amended (the “ESPP”), was approved at the Company’s annual meeting of stockholders in June 2013. The ESPP currently authorizes an aggregate of 600,000 shares of common stock to be purchased. The ESPP allows employees to purchase shares of common stock of the Company at each purchase date through payroll deductions of up to a maximum of 15% of their compensation, at 85% of the lesser of the market price of the shares at the time of purchase or the market price on the beginning date of an option period (or, if later, the date during the option period when the employee was first eligible to participate). At December 31, 2020, there were 255,596 shares available for issuance under the ESPP.
The ESPP is considered compensatory for financial reporting purposes. As such, the fair value of ESPP shares was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:
  2020 2019 2018
Range of Black-Scholes fair values of ESPP
shares granted
$2.57-$92.67
$2.57-$35.00
$7.20-$70.64
Risk-free interest rate
0.2%-2.6%
1.2%-2.6%
0.7%-2.2%
Dividend yield —% —% —%
Volatility
66.6%-189.7%
52.2%-171.6%
52.2%-203.8%
Expected term (in years)
0.5-2.0
0.5-2.0
0.5-2.0
Restricted Stock Units
The following is a summary of restricted stock units activity for the year ended December 31, 2020:
  Number of
Shares
Per Share
Weighted-
Average
Fair Value
Outstanding and Unvested at January 1, 2020 1,102,311  $ 5.95 
Restricted stock units granted 837,896  94.74 
Restricted stock units vested (840,812) 9.37 
Restricted stock units forfeited (54,415) 40.37 
Outstanding and Unvested at December 31, 2020 1,044,980  $ 72.59 
The Company recorded stock-based compensation expense for awards issued under the above mentioned plans in the consolidated statements of operations as follows (in thousands):
Year Ended December 31,
2020 2019 2018
Research and development $ 55,955  $ 8,436  $ 10,575 
General and administrative 72,080  8,612  7,739 
Total stock-based compensation expense $ 128,035  $ 17,048  $ 18,314 
As of December 31, 2020, there was approximately $312 million of total unrecognized compensation expense related to unvested stock options, stock appreciation rights, restricted stock units and the ESPP. This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of 1.3 years, and will be allocated between research and development and general and administrative expenses accordingly. This estimate does not include the impact of other possible stock-based awards that may be made during future periods and awards that require approval by the stockholders.
Note 14 – Employee Benefits
The Company maintains a defined contribution 401(k) retirement plan, pursuant to which employees may elect to contribute up to 100% of their compensation on a tax deferred basis up to the maximum amount permitted by the Internal Revenue Code of 1986, as amended.
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Table of Contents
The Company matches 100% of the first 3% of the participants’ deferral, and 50% on the next 2% of the participants’ deferral, up to a potential 4% Company match. The Company’s matching contributions to the 401(k) plan vest immediately. Under its 401(k) plan, the Company has recorded expense of $0.9 million, $1.0 million and $1.2 million in 2020, 2019 and 2018, respectively.
The Company’s foreign subsidiaries have pension plans under local tax and labor laws and are obligated to make contributions to the plan. Contributions and other expenses related to this plan were $1.0 million, $0.7 million and $0.8 million in 2020, 2019 and 2018, respectively.
Note 15 – Income Taxes
The Company’s loss from operations before income tax expense by jurisdiction for the years ended December 31 are as follows (in thousands):
2020 2019 2018
Domestic $ (455,253) $ (124,189) $ (176,290)
Foreign 36,994  (8,505) (8,458)
Total net loss $ (418,259) $ (132,694) $ (184,748)

As a result of current and historical losses, there is no income tax provision for the years ended December 31, 2020, 2019 and 2018.

A reconciliation of the provision for income tax to the amount computed by applying the U.S. federal statutory tax rate to the Company’s effective tax rate is as follows:
2020 2019 2018
Statutory federal tax rate (21) % (21) % (21) %
State income taxes, net of federal benefit (3) % (2) % (3) %
Research and development and other tax credits —  % (3) % (3) %
Non-deductible expenses
% —  % —  %
Non-cash stock-based compensation (7) % —  % —  %
Other % % %
Change in tax rate (5) % % %
Change in valuation allowance 31  % 22  % 21  %
Income tax provision —  % —  % —  %

As of December 31, 2020, the Company has available federal, state, and foreign net operating losses of $1.3 billion, $756.0 million and $42.7 million, respectively, that may be applied against future taxable income. A significant portion of the federal net operating losses will begin to expire in 2037. A portion of the foreign net operating losses will begin to expire in 2023. The Company also has research tax credits of $35.1 million that begin to expire in 2020. Utilization of the net operating loss carryforwards and credits may be subject to an annual limitation due to ownership changes of the Company. As of December 31, 2020, the Company does not expect such limitation, if any, to impact the use of the net operating losses and business tax credits.

The Company files income tax returns in the U.S. federal jurisdiction and in various states, as well as in Sweden and the Czech Republic. The Company has U.S. tax net operating losses and credit carryforwards that are subject to examination from 2000 through 2020. The returns in Sweden are subject to examination from 2014 through 2020 and the returns for the Czech Republic are subject to examination from 2017 through 2020.
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Table of Contents
The significant components of the Company’s deferred tax assets and liabilities as of December 31 were as follows (in thousands):
2020 2019
Deferred tax assets:
Federal and State net operating loss carryforward $ 325,655  $ 293,736 
Foreign net operating loss carryforward 8,620  13,520 
Research tax credits 35,065  37,066 
Lease liability 39,548  2,164 
Deferred revenue 60,657  973 
Non-cash stock-based compensation 22,577  13,679 
Original discount interest 3,177  4,326 
Other 12,019  2,820 
Total deferred tax assets 507,318  368,284 
Valuation allowance (504,788) (365,772)
Net deferred tax assets $ 2,530  $ 2,512 
Deferred tax liabilities:
ROU assets (1,253) (1,033)
Intangibles (1,198) (1,279)
Other (79) (200)
Total deferred tax liabilities $ (2,530) $ (2,512)
Net deferred tax assets $ —  $ — 
The valuation allowance increased by $139.0 million and $28.3 million for the years ended December 31, 2020 and 2019, respectively, due to increases in deferred tax assets. Realization of net deferred tax assets is dependent on the Company’s ability to generate future taxable income, which is uncertain. Accordingly, a full valuation allowance was recorded against these assets as of December 31, 2020 and 2019 as management believes it is more likely than not that the assets will not be realizable.
The Company recognizes the effect of a tax position when it is more likely than not, based on the technical merits, that the tax position will be sustained upon examination. A reconciliation of the beginning and ending amounts of unrecognized tax benefits in the year ended December 31, 2020, 2019 and 2018 is as follows (in thousands):
2020 2019 2018
Unrecognized tax benefits balance at January 1, $ —  $ —  $ — 
Additions for tax positions of current year 1,413  —  — 
Additions for tax positions of prior years 7,353  —  — 
Reductions for tax positions of prior year —  —  — 
Settlements of tax positions of prior years —  —  — 
Unrecognized tax benefits balance at December 31, $ 8,766  $ —  $ — 

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2020 and 2019, the Company had no accruals for interest or penalties related to income tax matters. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $8.8 million.
Note 16 – Related Party Transaction
In June 2020, in advance of David M. Mott joining the Company’s Board of Directors, the Company agreed to sell 32,916 shares of common stock to him at a purchase price of $45.57 per share, reflecting the closing price of the Company’s common stock on the trading date prior to the date the parties’ agreement regarding the sale, for total gross proceeds of $1.5 million. Mr. Mott joined the Company’s Board of Directors later in the same month.
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Table of Contents
Note 17 – Subsequent Events

In January 2021, the Company entered into an At Market Issuance Sales Agreement ("January 2021 Sales Agreement"), which allows it to issue and sell up to $500 million in gross proceeds of its common stock. From January 22 through February 24, 2021, the Company sold 1.7 million shares of common stock under the January 2021 Sales Agreement resulting in $452.0 million in net proceeds, leaving $42.2 million remaining.

In January and February 2021, the Company finalized multiple advance purchase agreements and one binding Heads of Terms to supply. in total, approximately 75 million doses of NVX-CoV2373 to various government customers. The Company will work with the relevant regulatory agencies to obtain necessary approvals, as necessary.

In February 2021, the Company finalized an expanded collaboration and license agreement with SK bioscience to manufacture and commercialize NVX-CoV2373 for sale to the Korean government. Concurrently, SK bioscience finalized an advance purchase agreement with the Korean government to supply 40 million doses of NVX-CoV2373 to the Republic of Korea beginning in 2021. The agreement is in addition to the Company's existing manufacturing arrangement with SK bioscience.

In February 2021, the Company entered into a Memorandum of Understanding with Gavi, the Vaccine Alliance ("Gavi"), to provide 1.1 billion cumulative doses of NVX-CoV2373 for the COVAX Facility. The Company will work with Gavi to finalize an advance purchase agreement for vaccine supply and global distribution via the COVAX Facility and its partners. The vaccine doses will be manufactured and distributed globally by the Company and SIIPL.





F- 31
Exhibit 4.4
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

As of December 31, 2020, Novavax, Inc. (the “Company”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Description of Common Stock

The following description of the Company’s Common Stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the Company’s Second Amended and Restated Certificate of Incorporation, as amended, (the “Certificate of Incorporation”), Certificate of Designation of Series A Convertible Preferred Stock (the “Certificate of Designation”) and Amended and Restated By-Laws (the “By-Laws”), each of which is incorporated by reference as an exhibit to this Annual Report on Form 10-K. The Company encourages you to read the Certificate of Incorporation, the Certificate of Designation, the By-Laws, and the applicable provisions of the Delaware General Corporation Law for additional information.

Authorized Capital Shares

The Certificate of Incorporation authorizes the issuance of 600,000,000 shares of common stock, $0.01 par value per share (“Common Stock”), and 2,000,000 shares of preferred stock, $0.01 par value per share (“Preferred Stock”), of which 438,885 shares of Preferred Stock have been designated as Series A Convertible Preferred Stock, par value $0.01 per share, pursuant to the Certificate of Designation (“Series A Convertible Preferred Stock”). The outstanding shares of Common Stock are fully paid and nonassessable. As of December 31, 2020, there are no shares of Preferred Stock outstanding.

Preferred Stock

Authorized but Unissued Preferred Stock

The Board of Directors (the “Board”), without further stockholder approval, has the power to issue Preferred Stock in one or more series and determine certain terms relative to any Preferred Stock to be issued, such as the power to establish different series and to set voting rights, the dividend rights and dates, conversion rights, redemption privileges and liquidation preferences.

Series A Convertible Preferred Stock

    Each share of Series A Convertible Preferred Stock is convertible into ten shares of Common Stock, subject to mandatory conversion upon the earlier of (1) the tenth anniversary of the issuance date or (2) immediately prior to the effectiveness of certain change of control transactions.

Holders of Series A Convertible Preferred Stock are not entitled to vote on matters submitted to the holders of Common Stock and do not have the right to cumulative dividends. In the event that the Company declares a dividend upon Common Stock, a holder of the Series A Convertible Preferred Stock is entitled to receive the amount of dividends per share of Series A Convertible Preferred Stock that such holder would have been entitled to receive if it had converted such Series A Convertible Preferred Stock into Common Stock immediately prior to such declaration of a dividend.

93363062_3

Exhibit 4.4
In the event of a liquidation, dissolution or winding up of the Company that does not constitute a change of control transaction triggering mandatory conversion of the Series A Convertible Preferred Stock, any holder of Series A Convertible Preferred Stock will be entitled to receive, in preference to the holders of Common Stock and any junior Preferred Stock, an amount per share equal to the greater of (1) the sum of the purchase price plus an amount equal to any declared and unpaid dividends on the Series A Convertible Preferred Stock, or (2) the amount that such shares of Series A Convertible Preferred Stock would have been entitled to receive if they had converted into Common Stock immediately prior to such liquidation, dissolution or winding up.

As of December 31, 2020, there are no shares of the Series A Convertible Preferred Stock outstanding.

Common Stock

Dividend Rights

Subject to the rights of holders of outstanding shares of Preferred Stock, if any, the holders of Common Stock are entitled to receive dividends, if any, as may be declared from time to time by the Board in its discretion out of funds legally available for the payment of dividends.

Voting Rights

The holders of Common Stock are entitled to one vote per share on all matters voted on by the stockholders, including the election of directors, and do not have cumulative voting rights.

Classified Board

The members of the Board are divided into three classes, designated as Class I, Class II, and Class III, each serving staggered three-year terms, with no one class having more than one more director than any other class. The By-Laws provide for directors in director elections to be elected by a plurality of the votes entitled to vote.

Liquidation Rights

Subject to any preferential rights of outstanding shares of Preferred Stock, holders of Common Stock will share ratably in all assets legally available for distribution to the Company’s stockholders in the event of dissolution.

Other Rights and Preferences

The Common Stock has no redemption provisions or preemptive, conversion or exchange rights. No shares of any class of the Company’s capital stock are subject to any sinking fund provisions, restrictions on the alienability of securities to be registered, calls, assessments by, or liabilities of the Company. Holders of Common Stock may act by written consent.

Certain Provisions of the Certificate of Incorporation, By-laws, and Delaware Law

Certain provisions of the Certificate of Incorporation and By-Laws may be deemed to have an anti-takeover effect and may prevent, delay, or defer a tender offer or takeover attempt, including:
93363062_3

Exhibit 4.4

Classified Board, Removal of Directors, and Charter Amendments relating to the Board

The Certificate of Incorporation and the By-Laws provide for the division of members of the Board into three classes, with no one class having more than one more director than any other class, serving staggered three-year terms. The Certificate of Incorporation provides that any amendments to the charter relating to the number, classes, election, term, removal, vacancies, and related provisions with respect to the Board may only be made by the affirmative vote of the holders of at least 75% of the shares of capital stock issued and outstanding and entitled to vote. These provisions may have the effect of making it more difficult for a third party to acquire control of the Company, or of discouraging a third party from attempting to acquire control of the Company.

Authorized but Unissued Shares

The authorized but unissued shares of Common Stock and Preferred Stock are available for future issuance without stockholder approval, subject to any limitations imposed by the Nasdaq Stock Market. These additional shares may be utilized for a variety of corporate purposes. In particular, the Board could issue shares of Preferred Stock that could, depending on the terms of the series, impede the completion of a takeover effort. The Board may determine that the issuance of such shares of Preferred Stock is in the best interest of the Company and its stockholders. Such issuance could discourage a potential acquiror from making an unsolicited acquisition attempt through which such acquiror may be able to change the composition of the Board, including a tender offer or other transaction a majority of the Company’s stockholders might believe to be in their best interest or in which stockholders might receive a substantial premium for their stock over the then-current market price.

Advance Notice Requirements for Stockholder Proposals and Director Nominations

The By-Laws provide that a stockholder seeking to bring business before an annual meeting of stockholders, or to nominate candidates for election as directors, must provide timely notice of such stockholder’s intention in writing. To be timely, a stockholder nominating individuals for election to the Board or proposing business must provide advanced notice to the Company not less than 60 days nor more than 90 days prior to the anniversary date of the prior year’s annual meeting of stockholders or, in the case of any special meeting, not less than 60 days nor more than 90 days prior to the special meeting, unless, in the case of annual meeting, such meeting occurs more than 30 days before or after such anniversary date, or, in the case of a special meeting, such meeting occurs less than 100 days after notice or public disclosure of the date of the special meeting is given or made, in which cases notice will be timely if received not later than the close of business on the tenth day after the day on which notice or public announcement of the date of such meeting was made.

Limits on Ability of Stockholders to Act by Written Consent

The Certificate of Incorporation provides that the stockholders may not act by written consent. In addition, the Certificate of Incorporation requires that special meetings of stockholders be called only by the Board, the Company’s chief executive officer, or the Company’s president if there is no chief executive officer. Further, business transacted at any special meeting of stockholders is limited to matters relating to the purpose or purposes stated in the notice of meeting. This limit on the ability of the Company’s stockholders to act by written consent or to call a special meeting may lengthen the amount of time required to take stockholder proposed actions.

93363062_3

Exhibit 4.4
Section 203 of the General Corporation Law of the State of Delaware

The Company is subject to Section 203 of the Delaware General Corporation Law. This statute regulating corporate takeovers prohibits a Delaware corporation from engaging in any business combination with an interested stockholder for three years following the date that the stockholder became an interested stockholder, unless:

prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

upon completion of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (1) shares owned by persons who are directors and also officers, and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is any person who, together with such person’s affiliates and associates (1) owns 15% or more of a corporation’s voting securities or (2) is an affiliate or associate of a corporation and was the owner of 15% or more of the corporation’s voting securities at any time within the three year period immediately preceding a business combination governed by Section 203. The existence of this provision may have an anti-takeover effect with respect to transactions the Board does not approve.

Listing

The Company’s Common Stock is traded on The Nasdaq Global Select Market under the trading symbol “NVAX.”
93363062_3
Exhibit 10.17

Certain information identified with [***] has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is dated as of October 30, 2020, between Novavax, Inc., (“Novavax” or the “Company”) a Delaware corporation having its principal office at 21 Firstfield Road, Gaithersburg, MD 20878, and Gregory Covino, an individual having a current mailing address of [***] (“Executive”).

WHEREAS, Executive will commence employment with the Company on or about November 16, 2020, now therefore the Company and Executive hereby agree as follows:
1.Employment. The Company hereby employs Executive and Executive hereby accepts employment as Executive Vice President & Chief Financial Officer upon the terms and conditions hereinafter set forth, effective the date of employment. As used throughout this Agreement, “Company” shall mean and include any and all of its present and future subsidiaries and any and all subsidiaries of a subsidiary. Executive warrants and represents that he is free to enter into and perform this Agreement and is not subject to any employment, confidentiality, non-competition or other agreement which prohibits, restricts, or would be breached by either his acceptance or his performance of this Agreement.
2.Duties. During the Term (as hereinafter defined), Executive shall devote his full business time to the performance of services as Executive Vice President & Chief Financial Officer of Novavax, performing such services, assuming such duties and responsibilities as prescribed by the Company’s President and CEO (“CEO”) and the Company’s “Board of Directors.” During the Term, Executive’s services shall be completely exclusive to the Company and he shall devote his entire business time, attention and energies to the business of the Company and the duties which the Company shall assign to him from time to time. Executive agrees to perform his services faithfully and to the best of his ability and to carry out the policies and directives of the Company. Notwithstanding the foregoing, it shall not be a violation of this Agreement for the Executive to serve as a director of any company whose products do not compete with those of the Company and to serve as a director, trustee, officer, or consultant to a charitable or non-profit entity; provided that such service does not adversely affect Executive’s ability to perform his obligations hereunder. Executive agrees not to take any action that is in bad faith and prejudicial to the interests of the Company during his employment hereunder. Notwithstanding the location where Executive shall be based, as set forth in this Agreement, he also may be required from time to time to perform duties hereunder for reasonably short periods of time outside of said area.
3.Term. The term of this Agreement shall be the period of time beginning on the Executive’s first date of employment as Executive Vice President & Chief Financial Officer and shall continue for so long as Executive shall be an at-will employee of the Company hereunder.
4.Compensation.
(a)Base Compensation. For all Executive’s services and covenants under this Agreement, the Company shall pay Executive an annual salary, which is $440,000 as of the date of this Agreement, as established or ratified by the Board of Directors or an authorized committee thereof (in accordance with established management processes), and payable in accordance with the Company’s payroll policy as constituted from time to time. The Company may
93346201_1


withhold from any amounts payable under this Agreement all required federal, state, city or other taxes and all other deductions as may be required pursuant to any law or government regulation or ruling.
(b)Bonus Program. The Company agrees to pay the Executive a performance and incentive bonus in respect of Executive’s employment with the Company each year in an amount determined by the CEO and Board of Directors (or any committee of the Board of Directors authorized to make that determination) to be appropriate based upon Executive’s, and the Company’s, achievement of certain specified goals, with a target bonus of 40%, or any other percentage determined by the Board of Directors, of Executive’s base salary during the year to which the bonus relates. The bonus shall be paid out partly in cash and partly in shares of stock options or restricted stock, at the discretion of the Board of Directors.
5.Reimbursable Expenses. Executive shall be entitled to reimbursement for reasonable expenses incurred by him in connection with the performance of his duties hereunder in accordance with such procedures and policies for executive officers as the Company has heretofore or may hereafter establish. The amount of expenses eligible for reimbursement during any calendar year shall not affect the expenses eligible for reimbursement in any other calendar year, and the reimbursement of an eligible expense shall be made as soon as practicable after Executive submits the request for reimbursement, but not later than December 31 following the calendar year in which the expense was incurred.
6.Benefits.
(a)    Executive shall be entitled to four weeks of paid vacation time per year starting from the date of commencement of employment, calculated and administered in accordance with Company policies for executive officers in effect from time to time. The Executive shall be entitled to all other benefits associated with normal full time employment in accordance with Company policies.
(b)    Subject to approval by the Board of Directors (or any committee of the Board of Directors authorized to make that determination), Executive shall be entitled to participate in the Company’s Change of Control Severance Benefit Plan adopted on August 10, 2005, as amended and restated on July 26, 2006 and as further amended on December 31, 2008 and June 15, 2011 (the “Change of Control Severance Benefit Plan”).
7.Termination of Employment.
(a)Notwithstanding any other provision of this Agreement, Executive’s employment may be terminated, without such action constituting a breach of this Agreement:
(i)By the Company, for “Cause,” as defined in Section 7(b) below;
(ii)By the Company, without Cause
(iii)By the Company, upon 30 days’ notice to Executive, if he should be prevented by illness, accident or other disability (mental or physical) from discharging his duties hereunder for one or more periods totaling three consecutive months during any twelve-month period;
93346201_1


(iv)By the Executive with “Good Reason”, as defined in Section 7(c) below, within 30 days of the occurrence or commencement of such Good Reason;
(v)By the Executive without Good Reason upon 30 days prior written notice; or
(vi)By the event of Executive’s death during the Term.
(b)“Cause” shall mean (i) Executive’s failure or refusal to perform in all material respects the services required of him hereby, (ii) Executive’s failure or refusal to carry out any proper and material direction by the CEO or the Board of Directors with respect to the services to be rendered by him hereunder or the manner of rendering such services, (iii) Executive’s misconduct in the performance of his duties hereunder, (iv) Executive’s commission of an act of fraud, embezzlement or theft or a felony involving moral turpitude, (v) Executive’s use or disclosure of confidential information (as defined in Section 10 of this Agreement), other than for the benefit of the Company in the course of rendering services to the Company, or (vi) Executive’s engagement in any activity prohibited by Section 11 or 12 of this Agreement. For purposes of this Section 7, the Company shall be required to provide Executive a specific written warning with regard to any occurrence of subsections (b)(i), (ii) and (iii) above, which warning shall include a statement of corrective actions and a 30 day period for the Executive to respond to and implement such actions, prior to any termination of employment by the Company pursuant to Section 7(a)(i) above.
(c)“Good Reason” shall mean (a) the Company’s material reduction or diminution of Executive’s responsibilities and authority, other than for Cause, without his consent or (b) the relocation of Executive’s primary place of employment without his consent.

8.Separation Pay.
(a)    Subject to Executive’s execution and delivery to the Company of the Company’s standard form of Separation and Release Agreement, the Company shall pay Executive an amount equal to the Separation Pay upon the occurrence of the applicable Separation Event but in no case later than two and one-half months following the year in which the Separation Event occurs. Separation Pay shall be payable in accordance with the Company’s payroll policy as constituted from time to time, and shall be subject to withholding of all applicable federal, state and local taxes and any other deductions required by applicable law. In the event of Executive’s death, the Company’s obligation to pay further compensation hereunder shall cease forthwith, except that Executive’s legal representative shall be entitled to receive his fixed compensation for the period up to the last day of the month in which such death shall have occurred.
(b)    Section 8(a) above shall not apply should Executive receive severance benefits under the Company’s Change in Control Severance Benefit Plan.
(c)    “Separation Pay” shall mean a lump sum amount equal to twelve (12) months of Executive’s then effective salary.

93346201_1


(d)    “Separation Event” shall mean:
(i)the Company’s termination of Executive’s employment by the Company without Cause, during the Term; or
(ii)the termination of Executive’s employment by the Executive for Good Reason.
9.All Business to be Property of the Company; Assignment of Intellectual Property.
(a)Executive agrees that any and all presently existing business of the Company and all business developed by him or any other employee of the Company including without limitation all contracts, fees, commissions, compensation, records, customer or client lists, agreements and any other incident of any business developed, earned or carried on by Executive for the Company is and shall be the exclusive property of the Company, and (where applicable) shall be payable directly to the Company.
(b)Executive hereby acknowledges that any plan, method, data, know-how, research, information, procedure, development, invention, improvement, modification, discovery, design, process, software and work of authorship, documentation, formula, technique, trade secret or intellectual property right whatsoever or any interest therein whether patentable or non-patentable, patents and applications therefor, trademarks and applications therefor or copyrights and applications therefor (herein sometimes collectively referred to as “Intellectual Property”) made, conceived, created, invested, developed, reduced to practice and/or acquired by Executive solely or jointly with others during the Term is the sole and exclusive property of the Company, as work for hire, and that he has no personal right in any such Intellectual Property. Executive hereby grants to the Company (without any separate remuneration or compensation other than that received by him from time to time in the course of him employment) his entire right, title and interest throughout the world in and to, all Intellectual Property, which is made, conceived, created, invested, developed, reduced to practice and/or acquired by him solely or jointly with others during the Term.
(c)Executive shall cooperate fully with the Company, both during and after his employment with or engagement by the Company, with respect to the procurement, maintenance and enforcement of copyrights, patents and other intellectual property rights (both in the United States and foreign countries) relating to Intellectual Property. Without limiting the foregoing, Executive agrees that to the extent copyrightable, any such original works of authorship shall be deemed to be "works for hire" and that the Company shall be deemed the author thereof under the U.S. Copyright Act, as amended, provided that in the event and to the extent such works are determined not to constitute "works for hire" as a matter of law, Executive hereby irrevocably assigns and transfers to the Company all right, title and interest in such works, including but not limited to copyrights thereof. Executive shall sign all papers, including, without limitation, copyright applications, patent applications, declarations, oaths, formal assignments, assignments of priority rights and powers of attorney, which the Company may deem necessary or desirable in order to protect its rights and interests in any Intellectual Property (at the Company’s expense) and agrees that these obligations are binding upon his assigns, executors, administrators and other legal representatives. To that end, Executive shall provide current contact information to the Company including, but not limited to, home address,
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telephone number and email address, and shall update his contact information whenever necessary.
10.Confidentiality. Executive acknowledges his obligation of confidentiality with respect to all proprietary, confidential and non-public information of the Company, including all Intellectual Property. By way of illustration, but not limitation, confidential and proprietary information shall be deemed to include any plan, method, data, know-how, research, information, procedure, development, invention, improvement, modification, discovery, process, work of authorship, documentation, formula, technique, product, idea, concept, design, drawing, specification, technique, trade secret or intellectual property right whatsoever or any interest therein whether patentable or non-patentable, patents and applications therefor, trademarks and applications therefor or copyrights and applications therefor, personnel data, records, marketing techniques and materials, marketing and development plans, customer names and other information related to customers, including prospective customers and contacts at customers, price lists, pricing policies and supplier lists of the Company, in each case coming into Executive’s possession, or which Executive learns, or to which Executive has access, or which Executive may discover or develop (whether or not related to the business of the Company at the time this Agreement is signed or any information Executive originates, discovers or develops, in whole or in part) as a result of Executive’s employment by (either full-time or part-time), or retention as a consultant of, the Company. Executive shall not, either during the Term or for a period of ten (10) years thereafter, use for any purpose other than the furtherance of the Company’s business, or disclose to any person other than a person with a need to know such confidential, proprietary or non-public information for the furtherance of the Company’s business who is obligated to maintain the confidentiality of such information, any information concerning any Intellectual Property, or other confidential, proprietary or non-public information of the Company, whether Executive has such information in his memory or such information is embodied in writing, electronic or other tangible form.
All originals and copies of any of the foregoing, however and whenever produced, shall be the sole property of the Company. All files, letters, memoranda, reports, records, data, sketches, drawings, program listings, or other written, photographic, or other tangible or electronic material containing confidential or proprietary information or Intellectual Property, whether created by Executive or others, which shall come into Executive’s custody or possession, shall be and are the exclusive property of the Company to be used by Executive only in the performance of his duties for the Company. All electronic material containing confidential or proprietary information or Intellectual Property will be stored on a computer supplied to Executive by the Company and, under no circumstances, will it be transferred to a personal computer. Executive will promptly deliver to the Company and/or a person or entity identified by the Company all such materials or copies of such materials and all tangible property of the Company in Executive’s custody or possession, upon the earlier of (i) a request by the Company or (ii) termination of employment or engagement by the Company. After such delivery, Executive will not retain any such materials or copies or any such tangible property or any summaries or memoranda regarding same.
11.Non-Competition Covenant. As the Executive has been granted options to purchase stock in the Company and as such has a financial interest in the success of the Company’s business and as Executive recognizes that the Company would be substantially injured by Executive competing with the Company, Executive agrees and warrants that within the United States, he will not, unless acting with the Company’s express prior written consent,
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directly or indirectly, while an employee of the Company and during the Non-Competition Period, as defined below, engage in the development, production, marketing or sale of products that compete (or, upon commercialization, would compete) with products or candidate products that, as of the date of Executive’s termination or any date during the following six (6) months, are in clinical development, awaiting regulatory licensure or being actively marketed or sold by the Company; provided, however, that Executive may own, and exercise rights with respect to, less than one percent of the equity of a publicly traded company. The “Non-Competition Period” shall be a period of twelve (12) months following termination of employment.
Executive and the Company are of the belief that the period of time and the area herein specified are reasonable in view of the nature of the business in which the Company is engaged and proposes to engage, the state of its business development and Executive’s knowledge of this business; however, if such period or such area should be adjudged unreasonable in any judicial proceeding, then the period of time shall be reduced by such number of months or such area shall be reduced by elimination of such portion of such area, or both, as are deemed unreasonable, so that this covenant may be enforced in such area and during such period of time as is adjudged to be reasonable.
12.Non-Solicitation Agreement. Executive agrees and covenants that he will not, unless acting with the Company’s express written consent, directly or indirectly, during the Term of this Agreement or during the Non-Competition Period (as defined in Section 11 above) solicit, entice or attempt to entice away or interfere in any manner with the Company’s relationships or proposed relationships with any customer, officer, employee, consultant, proposed customer, vendor, supplier, proposed vendor or supplier or person or entity or person providing or proposed to provide research and/or development services to, on behalf of or with the Company.
13.Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been given on actual receipt after having been delivered by hand, mailed by first class mail, postage prepaid, or sent by Federal Express or similar overnight delivery services, as follows: (a) if to Executive, at the address shown at the head of this Agreement, or to such other person(s) or address(es) as Executive shall have furnished to the Company in writing and, if to the Company, to John A. Herrmann, III, Esq., Senior Vice President, General Counsel and Corporate Secretary, 21 Firstfield Road, Gaithersburg, MD 20878 or to such other person(s) or address(es) as the Company shall have furnished to Executive in writing.
14.Assignability. In the event of a change of control (as defined in the Company’s Change of Control Severance Benefit Plan), the terms of this Agreement shall inure to the benefit of, and be assumed by, the acquiring person (as defined in the Company’s Change of Control Severance Benefit Plan). This Agreement shall not be assignable by Executive, but it shall be binding upon, and to the extent provided in Section 8 shall inure to the benefit of, his heirs, executors, administrators and legal representatives.
15.Entire Agreement. This Agreement along with (a) the Offer Letter to Executive from the Company dated October 23, 2020, and (b) with the Non-Disclosure, Proprietary Information and Invention Assignment Agreement contain the entire agreement between the Company and Executive with respect to the subject matter hereof and there have been no oral or other prior agreements of any kind whatsoever as a condition precedent or inducement to the
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signing of this Agreement or otherwise concerning this Agreement or the subject matter hereof. Notwithstanding the foregoing, Executive acknowledges that he is required as a condition to continued employment, to comply at all times, with the Company’s policies affecting employees, including the Company’s published Code of Business Ethics, as in effect from time to time.
16.Equitable Relief. Executive recognizes and agrees that the Company’s remedy at law for any breach of the provisions of Sections 9, 10, 11 or 12 hereof would be inadequate, and he agrees that for breach of such provisions, the Company shall, in addition to such other remedies as may be available to it at law or in equity or as provided in this Agreement, be entitled to injunctive relief and to enforce its rights by an action for specific performance. Should Executive engage in any activities prohibited by this Agreement, he agrees to pay over to the Company all compensation, remuneration or monies or property of any sort received in connection with such activities; such payment shall not impair any rights or remedies of the Company or obligations or liabilities of Executive which such parties may have under this Agreement or applicable law.
17.Amendments. This Agreement may not be amended, nor shall any change, waiver, modification, consent or discharge be effected except by written instrument executed by the Company and Executive.
18.Severability. If any part of any term or provision of this Agreement shall be held or deemed to be invalid, inoperative or unenforceable to any extent by a court of competent jurisdiction, such circumstances shall in no way affect any other term or provision of this Agreement, the application of such term or provision in any other circumstances, or the validity or enforceability of this Agreement. Executive agrees that the restrictions set forth in Sections 10 and 11 above (including, but not limited to, the geographical scope and time period of restrictions) are fair and reasonable and are reasonably required for the protection of the interests of the Company and its affiliates. In the event that any provision of Section 11 or 12 relating to time period and/or areas of restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period or areas such court deems reasonable and enforceable, said time period and/or areas of restriction shall be deemed to become and thereafter be the maximum time period and/or areas which such court deems reasonable and enforceable.
19.Paragraph Headings. The paragraph headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation hereof.
20.Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the law of the State of Maryland, without regard to the principles of conflict of laws thereof.
21.Resolution of Disputes. With the exception of proceedings for equitable relief brought pursuant to Section 16 of this Agreement, any disputes arising under or in connection with this Agreement including, without limitation, any assertion by any party hereto that the other party has breached any provision of this Agreement, shall be resolved by arbitration, to be conducted in Baltimore, Maryland, in accordance with the rules and procedures of the American Arbitration Association. The parties shall bear equally the cost of such arbitration, excluding attorneys’ fees and disbursements which shall be borne solely by the party incurring the same;
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provided, however, that if the arbitrator rules in favor of Executive on at least one material component of the dispute, Company shall be solely responsible for the payment of all costs, fees and expenses (including without limitation Executive’s reasonable attorneys’ fees and disbursements) of such arbitration. The Company shall reimburse Executive for any such fees and expenses incurred by Executive in any calendar year within a reasonable time following Executive’s submission of a request for such reimbursement, which in no case shall be later than the end of the calendar year following the calendar year in which such expenses were incurred. Executive shall submit any such reimbursement request no later than the June 30th next following the calendar year in which the fees and expenses are incurred. In the event the arbitrator rules against Executive, Executive shall repay the Company the amount of such reimbursed expenses no later than 180 days following the date as of which such arbitrator’s decision becomes final. The provisions of this Section 21 shall survive the termination for any reason of the Term (whether such termination is by the Company, by Executive or upon the expiration of the Term).
22.Indemnification; Insurance. The Executive shall be entitled to liability and expense indemnification and reimbursement to the fullest extent permitted by the Company’s current Amended and Restated By-laws and Second Amended and Restated Certificate of Incorporation, whether or not the same are subsequently amended. During the Term, the Company will use commercially reasonable efforts to maintain in effect directors’ and officers’ liability insurance no less favorable to Executive than that in effect as of the date of this Agreement.
23.Survival. Sections 8 through 23 shall survive termination of this Agreement for the period and to the extent specified therein.
IN WITNESS WHEREOF, the parties have executed or caused to be executed under seal this Agreement as of the date first above written.

NOVAVAX, INC.

By: /s/ John A. Herrmann III
Name:    John A. Herrmann III
Title:Sr Vice President & General Counsel
EXECUTIVE:

/s/ Gregory F. Covino
Gregory Covino

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Exhibit 10.18

Certain information identified with [***] has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

20 Firstfield Road
Gaithersburg, MD 20878
T 240-268-2000
F 240-268-2100

www.novavax.com
Nasdaq: NVAX

    

October 30, 2020

Gregory Covino
[***]

Dear Greg,

I am pleased to offer you the full time position of Executive Vice President & Chief Financial Officer at Novavax, Inc. In this position you will report to Stan Erck, President & Chief Executive Officer. Your first day of employment is expected to be on or about November 16, 2020.

This offer is contingent upon the following:

Successful and satisfactory completion of our standard background check. All information provided by you in your employment application, interviews, and any other verbal or written correspondence will be verified by a third party background checking company or by Novavax. Any discrepancies found may delay your start date or could potentially cause withdrawal of this offer. Candidates cannot begin employment until the background check is completed, including verification of current employment.
Your assurance that there are no contractual or other obligations owed by you to previous employers or other parties that would in any way limit your ability to perform your job at the Company. If there are any obligations that might limit your ability to perform, such matters must be disclosed and resolved prior to commencement of employment.
Successful verification of your employment eligibility in the United States. In order to verify this information, please be prepared to produce acceptable documents. BY FEDERAL LAW, IT IS REQUIRED THAT YOU PRESENT THIS DOCUMENTATION WITHIN THREE DAYS OF YOUR START AT WORK.

The specific terms of this offer are outlined in the enclosed Employment Agreement, and include the following:

SALARY: Your initial annualized base salary will be $440,000 per year, payable semi-monthly, less applicable payroll taxes and authorized deductions.
    
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BONUS PROGRAM: You will be eligible to participate in the Company’s annual incentive bonus program beginning in 2021, under which award payments, if any, will be based on performance criteria and milestones to be determined by the Company, and you will be paid in the following year in which the compensation is earned. Your bonus at 100% of target will be 40% of your earnings for the performance year.

ONE TIME SIGNING BONUS: You are eligible to receive a one-time signing bonus of $88,000, which will become payable upon completion of six (6) months of continuous service with the Company. The signing bonus will be paid on a regularly scheduled pay date following the six (6) month anniversary of your employment commencement date (subject to applicable withholdings and deductions).  You agree that in the event that (i) you resign from the company before you have completed twenty-four (24) full months of service or (ii) the Company terminates your employment for any reason other than a reduction in force before you have completed twenty-four (24) full months of service, you will then, within seven (7) days of such resignation or termination, refund to the Company the gross amount of the signing bonus paid hereunder; however the repayment will be reduced by 25% for each 6 month period of service completed. 
 
COMMUTING ALLOWANCE:  The Company will provide a monthly commuting allowance of $3,500 for the cost of housing and other related commuting costs each month during the term of employment to cover costs of commuting between your home in Hopkinton, MA and the Company’s office (the “Allowance”). In addition, the Company will pay an additional sum to reimburse you for the personal income taxes associated with the Allowance such that the economic benefit is the same as if such Allowance were provided on a non-taxable basis. 

EMPLOYEE EQUITY PLAN: As an employee, you will participate in the Employee Equity Plan (”Plan”) established from time to time by the Board of Directors. The objective of the Plan is to allow employees and other stakeholders to build an equity stake in the Company and thereby participate directly in the Company’s long-term success. Following hiring grants, equity is generally granted to all employees annually at the end of the calendar year.

STOCK OPTIONS: Upon approval by the Board of Directors or your employment start date (whichever is later) you will receive an initial stock option grant of 8,200 shares of Company common stock, at an exercise price equal to fair market value on the date the options are granted. These stock options are subject to plan limits within the 2015 Stock Option Plan and will vest 25% after the first year from the date of grant and monthly thereafter for the following 36 months. The options will be non-qualified stock options to the extent permitted by law and our plan.

RESTRICTED STOCK UNITS: Subject to approval by the Company’s Board of Directors and plan limits within the 2015 Stock Option Plan, you will be granted
    
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7,300 Restricted Stock Units (“RSUs”). You will be restricted from any activity (selling or transferring) in such RSUs until vested; RSUs will vest in three years, one-third per year on the anniversary of the date of grant. You will be responsible for all taxes owed on such Stock as of the date of vesting, and Novavax will be entitled to sell sufficient Stock to address any tax withholdings as further specified in an RSU Agreement between you and the Company.
Your employment and compensation with Novavax are “at will”. At will employment is defined as an employee/employer relationship which may be ended by either the employee or employer at any time, without cause, except as otherwise provided by law or defined in the terms of the Employment Agreement.
Greg, if you agree with and accept the terms of this offer letter and the Employment Agreement, please sign below and return this letter and the Employment Agreement to my office. We are confident your employment with Novavax will prove mutually beneficial, and we look forward to you joining the Novavax team.
Sincerely,                     Accepted by:
/s/ Jill Hoyt
Jill Hoyt                      /s/ Gregory F. Covino _____________________
Executive Vice President             Gregory Covino            Date
Chief Human Resources Officer


    
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Exhibit 10.27 Certain information identified with [***] has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. LEASE AGREEMENT THIS LEASE AGREEMENT (“this Lease”) is made as of this 22 day of October, 2020, between ARE-MARYLAND NO. 51, LLC, a Delaware limited liability company (“Landlord”), and NOVAVAX, INC., a Delaware corporation (“Tenant”). BASIC LEASE PROVISIONS Address: 700 Quince Orchard Road, Gaithersburg, Maryland. Premises: That portion of the Project, containing approximately 169,420 rentable square feet, as determined by Landlord, as shown on Exhibit A. The area of the Premises has been measured pursuant to Method A of the BOMA 2017 for Office Buildings: Standard Methods of Measurement as adopted by the Building Owners and Managers Association International (ANSI/BOMA Z65.1-2017). Tenant acknowledges that such measurement shall be conclusive as to the area of the Premises. Project: The real property on which the building (“Building”) in which the Premises are located, together with all improvements thereon and appurtenances thereto as described on Exhibit B. Base Rent: $479,317.42, per month Rentable Area of Premises: 169,420 sq. ft. Rentable Area of Project: 169,420 sq. ft. Tenant’s Share of Operating Expenses: 100% Security Deposit: $[***] Target Commencement Date: November 1, 2020 Rent Adjustment Percentage: [***]% Base Term: Beginning on the Commencement Date and ending 180 months from the first day of the first full month following the Rent Commencement Date. For clarity, if the Commencement Date occurs on the first day of a month, the Base Term will be measured from that date. If the Commencement Date occurs on a day other than the first day of a month, the Base Term will be measured from the first day of the following month. Permitted Use: Research and development, laboratory, biotechnology use manufacturing, general office, and any other lawful purpose that is suitable to office, lab, and manufacturing buildings along the I-270 submarket, and otherwise in compliance with the provisions of Section 7 hereof. Address for Rent Payment: Landlord’s Notice Address: For check payments remit to: [***] For overnight courier remit to: [***] Attn: [***] For wire/ACH payments: On request, Landlord will provide information to Tenant via a secure format. Tenant’s Notice Address:


 
700 Quince Orchard Road—Novavax, Inc. —Page 2 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. Attn: Chief Legal Officer and Corporate Secretary 21 Firstfield Road Gaithersburg, MD 20878 The following Exhibits and Addenda are attached hereto and incorporated herein by this reference: [X] EXHIBIT A - PREMISES DESCRIPTION [X] EXHIBIT B - DESCRIPTION OF PROJECT [X] EXHIBIT C – WORK LETTER [X] EXHIBIT D - COMMENCEMENT DATE [X] EXHIBIT E - RULES AND REGULATIONS [X] EXHIBIT G – PARKING EASEMENT AGREEMENT [X] EXHIBIT F - TENANT’S PERSONAL PROPERTY [X] EXHIBIT H – RIGHT OF FIRST REFUSAL AGREEMENT [X] EXHIBIT I – GENERATOR LOCATION OPTIONS 1. Lease of Premises. Upon and subject to all of the terms and conditions hereof, Landlord hereby leases the Premises to Tenant and Tenant hereby leases the Premises from Landlord. The exterior portions of the Project (e.g., driveways, areas of ingress and egress, sidewalks, landscaped areas, and areas containing signage) that are for the non-exclusive use of tenants of the Project are collectively referred to herein as the “Common Areas”; provided, however, that so long as the Premises includes the entirety of the Building, the Common Areas shall be for the exclusive use of Tenant and Landlord, and Landlord’s use shall be limited to such use as is reasonably necessary to perform its obligations and exercise its rights under this Lease. Landlord reserves the right to modify Common Areas, provided that such modifications do not materially adversely affect Tenant’s use of the Premises for the Permitted Use; provided, however, that so long as the Premises includes the entirety of the Building, any modifications to the Common Areas (excepting routine maintenance, repairs, Landlord’s standard signage, landscaping, and like-kind replacements) shall be subject to Tenant’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. 2. Delivery; Acceptance of Premises; Commencement Date. Landlord shall use reasonable efforts to make the Premises available to Tenant for Tenant’s Work under the Work Letter within [***] of the satisfaction of the Conditions (as defined below) and Tenant’s delivery of evidence of the insurance required hereby and by the Work Letter (“Delivery” or “Deliver”). If Landlord fails to timely Deliver the Premises, Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, and this Lease shall not be void or voidable except as provided herein. If Landlord does not Deliver the Premises within [***] of the Target Commencement Date for any reason other than Force Majeure Delays, this Lease may be terminated by Landlord or Tenant by written notice to the other, and if so terminated by either: (a) the Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which Landlord is entitled under the provisions of this Lease), shall be returned to Tenant, and (b) neither Landlord nor Tenant shall have any further rights, duties or obligations under this Lease, except with respect to provisions that expressly survive termination of this Lease. As used herein, (i) “Force Majeure Delays” means delays arising by reason of any Force Majeure (as defined in Section 34), and (ii) “Tenant’s Work” shall have the meaning set forth in the Work Letter. If neither Landlord nor Tenant elects to void this Lease within [***] of the lapse of such [***] period, such right to void this Lease shall be waived and this Lease shall remain in full force and effect. (a) Dates. The “Commencement Date” shall mean the date on which Landlord Delivers the Premises to Tenant. The “Rent Commencement Date” shall mean January 1, 2022. Upon request of Landlord, Tenant shall execute and deliver a written acknowledgment of the Commencement Date, the Rent Commencement Date, and the expiration date of the Term when such are established in the form of the “Acknowledgement of Commencement Date” attached to this Lease as Exhibit D; provided, however, Tenant’s failure to execute and deliver such acknowledgment shall not affect Landlord’s rights hereunder.


 
700 Quince Orchard Road—Novavax, Inc. —Page 3 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. The “Term” of this Lease shall be the Base Term, as defined above in the Basic Lease Provisions and any Extension Terms that Tenant may elect pursuant to Section 39 hereof. (b) Condition of Premises. Except as set forth in the Work Letter (including Landlord’s obligation to deliver the Premises to Tenant in the shell condition described in Exhibit C-1): (i) Tenant shall accept the Premises in their condition as of the Commencement Date, subject to all applicable Legal Requirements (as defined in Section 7 hereof); (ii) Landlord shall have no obligation for any defects in the Premises; and (iii) Tenant’s taking possession of the Premises shall be conclusive evidence that Tenant accepts the Premises and that the Premises were in good condition at the time possession was taken. Any occupancy of the Premises by Tenant before the Commencement Date shall be subject to all of the terms and conditions of this Lease. (c) Complete Agreement. Tenant agrees and acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of all or any portion of the Premises or the Project, and/or the suitability of the Premises or the Project for the conduct of Tenant’s business, and Tenant waives any implied warranty that the Premises or the Project are suitable for the Permitted Use. This Lease constitutes the complete agreement of Landlord and Tenant with respect to the subject matter hereof and supersedes any and all prior representations, inducements, promises, agreements, understandings and negotiations that are not contained herein. Landlord in executing this Lease does so in reliance upon Tenant’s representations, warranties, acknowledgments and agreements contained herein. (d) Contingency. This Lease and Landlord’s obligation to Deliver the Premises to Tenant are contingent on the following events (“Conditions”) occurring: (i) Landlord and Rock Creek—Quince Orchard, a Delaware limited liability company (“Current Owner”), closing on the purchase and sale of the Project pursuant to the terms and conditions of an Agreement of Purchase and Sale dated as of October 13, 2020 (“Project Closing”), (ii) Tenant and an affiliate of Current Owner, Rockside-14 LLC, a Maryland limited liability company (“Current 14FF Owner”), closing on the purchase and sale of the approximately 9.7 acre parcel of land adjoining the Project known as 14 Firstfield Road, Gaithersburg, Maryland (“14FF”) pursuant to the terms and conditions of an Agreement of Purchase and Sale, and (iii) Landlord and Tenant, as fee owner of 14FF, executing and delivering an agreement mutually acceptable to them in form and substance granting a perpetual easement to Landlord and its tenant(s) at the Project and Landlord’s successors and assigns for the right to park and have access to not more than the Minimum Parking (as defined in Section 10) within a prescribed area located on 14FF (“Parking Easement Agreement”). The form of the Parking Easement Agreement is attached hereto as a part hereof as Exhibit G, which Parking Easement Agreement shall be recorded by Tenant among the Land Records of Montgomery County, Maryland (“Land Records”) contemporaneous with the Project Closing. Within 10 days after written request from either Landlord or Tenant, Landlord and Tenant shall execute and deliver a statement in form and substance reasonably acceptable to them confirming that the Conditions have been satisfied or waived. Landlord and Tenant currently anticipate that the Conditions will be satisfied on or about October 23, 2020. If the Conditions are not satisfied by October 23, 2020 (“Initial Closing Date”), Landlord shall have the right to extend the Initial Closing Date to a date not later than December 31, 2020 (“Extended Closing Date”) by giving written notice to Tenant by no later than the Initial Closing Date. If the Conditions are not satisfied by the Initial Closing Date (if not extended by Landlord) or the Extended Closing Date, either Landlord or Tenant shall have the right to terminate this Lease by giving written notice to the other, whereupon (A) the Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which Landlord is entitled under the provisions of this Lease), shall be returned to Tenant, and (B) neither Landlord nor Tenant shall have any further rights, duties or obligations under this Lease, except with respect to provisions that expressly survive termination of this Lease. If neither Landlord nor Tenant elects to void this Lease within 5 business days of the Initial Closing Date or Extended Closing Date, as applicable, such right to void this Lease shall be waived and this Lease shall remain in full force and effect. (e) Transfer of Surplus Density. If Tenant acquires fee title to 14FF from the Current 14FF Owner, Landlord shall, at Tenant’s request, take such action to transfer and reallocate the surplus


 
700 Quince Orchard Road—Novavax, Inc. —Page 4 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. commercial density under the currently approved sketch plan from the Project to 14FF (“Surplus Density”). The transfer of the Surplus Density shall be without cost or expense to Tenant, except for any costs associated with Tenant’s application to amend the sketch plan and/or effectuate the transfer of Surplus Density as directed by the City of Gaithersburg. Landlord shall cooperate with Tenant by providing appropriate authorizations and signatures to effectuate the transfer of Surplus Density. As of the Commencement Date, the Surplus Density is projected to be approximately 222,535 gross square feet (400,000 gross square feet based on current sketch plan less 177,465 gross square feet for the Building per the current site plan). 3. Rent. (a) Base Rent. The first month’s Base Rent and the Security Deposit shall be due and payable on delivery of an executed copy of this Lease to Landlord. Beginning on the Rent Commencement Date, Tenant shall pay to Landlord in advance, without demand, abatement, deduction or set-off, monthly installments of Base Rent on or before the first day of each calendar month during the Term hereof, in lawful money of the United States of America, at the office of Landlord for payment of Rent set forth above, or to such other person or at such other place as Landlord may from time to time designate in writing. Payments of Base Rent for any fractional calendar month shall be prorated. The obligation of Tenant to pay Base Rent and other sums to Landlord and the obligations of Landlord under this Lease are independent obligations. Tenant shall have no right at any time to abate, reduce, or set-off any Rent (as defined in Section 5) due hereunder except for any abatement as may be expressly provided in this Lease. (b) Additional Rent. In addition to Base Rent, Tenant agrees to pay to Landlord as additional rent (“Additional Rent”): (i) Tenant’s Share of “Operating Expenses” (as defined in Section 5), and (ii) any and all other amounts Tenant assumes or agrees to pay under the provisions of this Lease, including, without limitation, any and all other sums that may become due by reason of any default of Tenant or failure to comply with the agreements, terms, covenants and conditions of this Lease to be performed by Tenant, after any applicable notice and cure period. 4. Base Rent Adjustments. Base Rent shall be increased on each anniversary of the first day of the first full month during the Term of this Lease (each an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by the Rent Adjustment Percentage and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date. Base Rent, as so adjusted, shall thereafter be due as provided herein. Base Rent adjustments for any fractional calendar month shall be prorated. 5. Operating Expense Payments. Landlord shall deliver to Tenant a written estimate of Operating Expenses for each calendar year during the Term (“Annual Estimate”), which may be revised by Landlord from time to time during such calendar year. Beginning on the Commencement Date, Tenant shall pay Landlord on or before the first day of each calendar month during the Term hereof an amount equal to 1/12th of Tenant’s Share of the Annual Estimate. Payments for any fractional calendar month shall be prorated. All Operating Expenses shall be determined according to generally accepted accounting principles, consistently applied (“GAAP”). The term “Operating Expenses” means all costs and expenses of any kind or description whatsoever incurred or accrued each calendar year by Landlord with respect to the Project (including, without duplication, Taxes (as defined in Section 9), insurance, Permitted Capital Expenditures (as defined below), the Maintenance Costs (as defined in the Parking Easement Agreement), the insurance premium costs paid by Landlord under the Parking Easement Agreement, and the costs of Landlord’s third party property manager in an amount equal to the lesser of (i) [***] or (ii) [***], or, [***], administration rent in the amount of [***] of Base Rent, excluding only:


 
700 Quince Orchard Road—Novavax, Inc. —Page 5 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. (a) the original construction costs of the Project and renovation prior to the date of this Lease and costs of correcting defects in such original construction, design, or renovation; (b) any capital expenditures except for Permitted Capital Expenditures; (c) interest, principal payments of Mortgage (as defined in Section 27) debts of Landlord, financing costs and amortization of funds borrowed by Landlord, whether secured or unsecured and all payments of base rent (but not taxes or operating expenses) under any ground lease or other underlying lease of all or any portion of the Project; (d) depreciation of the Project (except for depreciation of Permitted Capital Expenditures, the cost of which are includable in Operating Expenses in accordance with the terms set forth below); (e) Intentionally deleted; (f) legal and other expenses incurred in the negotiation or enforcement of leases; (g) Intentionally deleted; (h) Intentionally deleted; (i) costs to be paid directly by Tenant, whether or not actually paid; (j) salaries, wages, benefits and other compensation paid to officers and employees of Landlord who are not assigned in whole or in part to the operation, management, maintenance or repair of the Project; (k) general organizational, administrative and overhead costs relating to maintaining Landlord’s existence, either as a corporation, partnership, or other entity, including general corporate, legal and accounting expenses; (l) costs (including attorneys’ fees and costs of settlement, judgments and payments in lieu thereof) incurred in connection with disputes with prospective tenants, and costs and expenses, including legal fees, incurred in connection with negotiations or disputes with employees, consultants, management agents, leasing agents, purchasers or mortgagees of the Building; (m) costs incurred by Landlord due to the violation by Landlord, its employees, agents or contractors or any tenant of the terms and conditions of any lease of space in the Project or any Legal Requirement (as defined in Section 7); (n) penalties, fines or interest incurred as a result of Landlord’s inability or failure to make payment of Taxes and/or to file any tax or informational returns when due, or from Landlord’s failure to make any payment of Taxes required to be made by Landlord hereunder before delinquency; (o) overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services in or to the Project to the extent the same exceeds the costs of such goods and/or services rendered by unaffiliated third parties on a competitive basis; (p) costs of Landlord’s charitable or political contributions, or of fine art maintained at the Project;


 
700 Quince Orchard Road—Novavax, Inc. —Page 6 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. (q) costs in connection with services (including electricity), items or other benefits of a type that are not standard for the Project and that are not available to Tenant without specific charges therefor, but which are provided to another tenant or occupant of the Project, whether or not such other tenant or occupant is specifically charged therefor by Landlord; (r) costs incurred in the sale or refinancing of the Project; (s) net income taxes of Landlord or the owner of any interest in the Project (except to the extent such net income taxes are in substitution for any Taxes payable hereunder), franchise, capital stock, gift, estate or inheritance taxes or any federal, state or local documentary taxes imposed against the Project or any portion thereof or interest therein; (t) Intentionally deleted; (u) reserves for future repairs and replacements; (v) interest or penalties arising solely by reason of Landlord’s failure to pay timely any Operating Expenses; (w) costs for which Landlord is reimbursed by its insurance carrier or is reimbursed by Tenant’s insurance carrier; (x) costs directly resulting from the gross negligence or willful misconduct of Landlord or its agents, contractors, or employees; (y) legal and auditing fees or other professional fees, other than those reasonably incurred in connection with the maintenance and routine operation of the Project; and (z) costs incurred by Landlord for repair or replacement of Building structural elements for which Landlord is responsible under this Lease. (i) Capital Improvements. Notwithstanding anything to the contrary contained in this Lease, Operating Expenses shall not include any cost, expense, or fee for capital repairs, improvements, or replacements to the Building, equipment, or other capital items that, in accordance with GAAP, is required to be capitalized rather than expensed in the year incurred, except for those costs that: (a) reasonably expected by Landlord to reduce overall Operating Expenses (for example, without limitation, by reducing energy usage at the Project), and (b) are made to comply with any changes in applicable Legal Requirements enacted after the Commencement Date (the foregoing clauses (i) and (ii) are collectively referred to herein as “Permitted Capital Expenditures”); provided, however, that any Permitted Capital Expenditures shall be amortized on a straight-line basis over a period of years equal to the useful life (as determined in accordance with GAAP) of the item in question and shall only be included in Operating Expenses in accordance with such amortization schedule. For the avoidance of doubt, Landlord will perform and solely bear the costs of all necessary and customary capital replacements involving the roof, roof membrane, parking areas that are part of the Common Areas of the Project, and Existing Systems (as defined in Section 13) without passing through such costs to Tenant as part of Operating Expenses. (ii) Annual Statement. Within [***] after the end of each calendar year (or such longer period as may be reasonably required), Landlord shall furnish to Tenant a statement (an “Annual Statement”) showing in reasonable detail: (a) the total and Tenant’s Share of actual Operating Expenses for the previous calendar year, and (b) the total of Tenant’s payments in respect of Operating Expenses for such year. If Tenant’s Share of actual Operating Expenses for such year exceeds Tenant’s payments of Operating Expenses for such year, the excess shall be due and payable by Tenant as Rent within [***] after


 
700 Quince Orchard Road—Novavax, Inc. —Page 7 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. delivery of such Annual Statement to Tenant. If Tenant’s payments of Operating Expenses for such year exceed Tenant’s Share of actual Operating Expenses for such year Landlord shall pay the excess to Tenant within [***] after delivery of such Annual Statement, except that after the expiration, or earlier termination of the Term or if Tenant is delinquent in its obligation to pay Rent, Landlord shall pay the excess to Tenant after deducting all other amounts due Landlord. (iii) Audit Rights. The Annual Statement shall be final and binding upon Tenant and Landlord unless Tenant, within [***] after Tenant’s receipt thereof, shall contest any item therein by giving written notice to Landlord, specifying each item contested and the reason therefor. If, during such [***] period, Tenant reasonably and in good faith questions or contests the accuracy of Landlord’s statement of Tenant’s Share of Operating Expenses, Landlord will provide Tenant with access (in the Washington, D.C. metropolitan area) to Landlord’s books and records relating to the operation of the Project and such information as Landlord reasonably determines to be responsive to Tenant’s questions (“Expense Information”). If after Tenant’s review of such Expense Information, Landlord and Tenant cannot agree upon the amount of Tenant’s Share of Operating Expenses, then Tenant shall have the right to have an independent public accounting firm selected by Tenant that has a regional or national presence, working pursuant to a fee arrangement other than a contingent fee (at Tenant’s sole cost and expense) and approved by Landlord (which approval shall not be unreasonably withheld or delayed), audit and/or review the Expense Information for the year in question (“Independent Review”). The results of any such Independent Review shall be binding on Landlord and Tenant. If the Independent Review shows that the payments actually made by Tenant with respect to Operating Expenses for the calendar year in question exceeded Tenant’s Share of Operating Expenses for such calendar year, Landlord shall at Landlord’s option either (i) credit the excess amount to the next succeeding installments of estimated Operating Expenses or (ii) pay the excess to Tenant within [***] after delivery of such statement, except that after the expiration or earlier termination of this Lease or if Tenant is delinquent in its obligation to pay Rent, Landlord shall pay the excess to Tenant after deducting all other amounts due Landlord. If the Independent Review shows that Tenant’s payments with respect to Operating Expenses for such calendar year were less than Tenant’s Share of Operating Expenses for the calendar year, Tenant shall pay the deficiency to Landlord within [***] after delivery of such statement. If the Independent Review shows that Tenant has overpaid with respect to Operating Expenses by more than [***] then Landlord shall reimburse Tenant for all costs incurred by Tenant for the Independent Review. Operating Expenses for the calendar years in which Tenant’s obligation to share therein begins and ends shall be prorated. Notwithstanding anything set forth herein to the contrary, if the Project is not at least [***] occupied on average during any year of the Term, Tenant’s Share of Operating Expenses for such year shall be computed as though the Project had been [***] occupied on average during such year. (iv) Tenant’s Share. “Tenant’s Share” shall be the percentage set forth in the Basic Lease Provisions as Tenant’s Share. Because Tenant is leasing 100% of the Project, no adjustments to Tenant’s Share shall be made regardless of changes in the physical size of the Premises or the Project occurring thereafter. Base Rent, Tenant’s Share of Operating Expenses and all other amounts payable by Tenant to Landlord hereunder are collectively referred to herein as “Rent.” (v) Tenant Performance of Property Management. Because Tenant or its agent shall be performing property management services at the Project, (A) Landlord and Tenant shall mutually agree on the terms, conditions, and scope of a management and deferred maintenance plan reasonably acceptable to Landlord (collectively, the “Property Management Plan”), and (B) Landlord shall have the right to approve any property management entity engaged by Tenant to perform property management services at the Project, such approval not to be unreasonably withheld, delayed, or conditioned. Pursuant to the Property Management Plan, Tenant shall provide, or cause to be provided, to Landlord true and complete copies of all then current service agreements and warranties for the Project, including, but not limited to, service agreements and warranties for the HVAC system, elevators, life safety systems, and roofing.


 
700 Quince Orchard Road—Novavax, Inc. —Page 8 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. 6. Security Deposit. Tenant shall deposit with Landlord, upon delivery of an executed copy of this Lease to Landlord, a security deposit (“Security Deposit”) for the performance of all of Tenant’s obligations hereunder in the amount set forth in the Basic Lease Provisions, which Security Deposit shall be in the form of an unconditional and irrevocable letter of credit (“Letter of Credit”): (i) in form and substance reasonably satisfactory to Landlord, (ii) naming Landlord as beneficiary, (iii) expressly allowing Landlord to draw upon it at any time from time to time by delivering to the issuer notice that Landlord is entitled to draw thereunder, (iv) issued by an FDIC-insured financial institution reasonably satisfactory to Landlord, and (v) redeemable by presentation of a sight draft in the State of Maryland. If Tenant does not provide Landlord with a substitute Letter of Credit complying with all of the requirements hereof at least [***] before the stated expiration date of any then current Letter of Credit, Landlord shall have the right to draw the full amount of the current Letter of Credit and hold the funds drawn in cash without obligation for interest thereon as the Security Deposit. On Landlord’s receipt of a replacement Letter of Credit that complies with the terms and conditions of this Section, Landlord shall return the unapplied cash to Tenant. The Security Deposit shall be held by Landlord as security for the performance of Tenant’s obligations under this Lease. Upon each occurrence of a Default (as defined in Section 20), Landlord may use all or any part of the Security Deposit to pay delinquent payments due under this Lease, and the cost of any damage, injury, expense or liability caused by such Default, without prejudice to any other remedy provided herein or provided by law. Upon any such use of all or any portion of the Security Deposit, Tenant shall pay Landlord within [***] after written demand the amount that will restore the Security Deposit (by posting a replacement Letter of Credit) to the amount set forth in the Basic Lease Provisions. Tenant hereby waives the provisions of any law, now or hereafter in force, which provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of Rent, to repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the act or omission of Tenant or any officer, employee, agent or invitee of Tenant. Upon bankruptcy or other debtor-creditor proceedings involving Tenant, the Security Deposit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for periods prior to the filing of such proceedings. Upon any such use of all or any portion of the Security Deposit, Tenant shall, within [***] after demand from Landlord, restore the Security Deposit to its original amount (by posting a replacement Letter of Credit). If Tenant shall fully perform every provision of this Lease to be performed by Tenant, the Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which Landlord is entitled under the provisions of this Lease), shall be returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within [***] after the expiration or earlier termination of this Lease. If Landlord transfers its interest in the Project or this Lease, Landlord shall either (a) transfer any Security Deposit then held by Landlord to a person or entity assuming Landlord’s obligations under this Section 6, or (b) return to Tenant any Security Deposit then held by Landlord and remaining after the deductions permitted herein. Upon such transfer to such transferee or the return of the Security Deposit to Tenant, Landlord shall have no further obligation with respect to the Security Deposit, and Tenant’s right to the return of the Security Deposit shall apply solely against Landlord’s transferee. The Security Deposit is not an advance rental deposit or a measure of Landlord’s damages in case of Tenant’s default. Landlord’s obligation respecting the Security Deposit is that of a debtor, not a trustee, and no interest shall accrue thereon. 7. Use. The Premises shall be used solely for the Permitted Use set forth in the Basic Lease Provisions, and in compliance with all laws, orders, judgments, ordinances, regulations, codes, directives, permits, licenses, covenants and restrictions now or hereafter applicable to the Premises, and to the use and occupancy thereof, including, without limitation, the Americans With Disabilities Act, 42 U.S.C. § 12101, et seq. (together with the regulations promulgated pursuant thereto, “ADA”) (collectively, “Legal Requirements” and each, a “Legal Requirement”). Tenant shall, upon [***] written notice from Landlord, discontinue any use of the Premises that is declared by any Governmental Authority (as defined in Section 9) having jurisdiction to be a violation of a Legal Requirement. Tenant will not use or permit the Premises to be used for any purpose or in any manner that would void Tenant’s or Landlord’s insurance, increase


 
700 Quince Orchard Road—Novavax, Inc. —Page 9 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. the insurance risk, or cause the disallowance of any sprinkler or other credits. Notwithstanding the foregoing, Landlord expressly acknowledges and agrees that Tenant’s use of the Premises for research and development, laboratory, biotechnology use manufacturing, and general office purposes in accordance with the Legal Requirements shall not be deemed to void Landlord’s insurance, increase the insurance risk, or cause the disallowance of any sprinkler or other credits. Tenant shall not permit any part of the Premises to be used as a “place of public accommodation”, as defined in the ADA or any similar legal requirement. Tenant shall reimburse Landlord promptly upon demand for any additional premium charged for any such insurance policy by reason of Tenant’s failure to comply with the provisions of this Section or otherwise caused by Tenant’s use and/or occupancy of the Premises. Tenant will use the Premises in a careful, safe and proper manner and will not commit or permit waste, overload the floor or structure of the Premises, subject the Premises to use that would damage the Premises or obstruct or interfere with the rights of Landlord, including conducting or giving notice of any auction, liquidation, or going out of business sale on the Premises, or using or allowing the Premises to be used for any unlawful purpose. Tenant shall not place any machinery or equipment weighing 500 pounds or more in or upon the Premises or transport or move such items in the Project elevators without the prior written consent of Landlord. Except as may be provided under the Work Letter, Tenant shall not, without the prior written consent of Landlord (which consent shall not be unreasonably withheld, conditioned, or delayed), use the Premises in any manner that will require ventilation, air exchange, heating, gas, steam, electricity or water beyond the existing capacity of the Project. (a) Modifications to Common Areas. Landlord shall, as an Operating Expense (to the extent such Legal Requirement is generally applicable to similar buildings in the area in which the Project is located) or at Tenant’s expense (to the extent such Legal Requirement is applicable solely by reason of Tenant’s particular use of the Premises) make any alterations or modifications to the Common Areas or the exterior of the Building that are required by Legal Requirements, including the ADA. Tenant, at its sole expense, shall make any alterations or modifications to the interior of the Premises that are required by Legal Requirements (including, without limitation, compliance of the Premises with the ADA). Notwithstanding any other provision herein to the contrary, Tenant shall be responsible for any and all demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages or judgments, and all reasonable expenses incurred in investigating or resisting the same (including, without limitation, reasonable attorneys’ fees, charges and disbursements and costs of suit) (collectively, “Claims”) arising out of or in connection with Legal Requirements, and Tenant shall indemnify, defend, hold and save Landlord harmless from and against any and all Claims arising out of or in connection with any failure of the Premises to comply with any Legal Requirement. 8. Holding Over. If, with Landlord’s express written consent, Tenant retains possession of the Premises after the termination of the Term, (i) unless otherwise agreed in such written consent, such possession shall be subject to immediate termination by Landlord at any time upon [***] written notice, (ii) all of the other terms and provisions of this Lease (including, without limitation, the adjustment of Base Rent pursuant to Section 4 hereof) shall remain in full force and effect (excluding any expansion or renewal option or other similar right or option) during such holdover period, (iii) Tenant shall continue to pay Base Rent in the amount payable upon the date of the expiration or earlier termination of this Lease or such other amount as Landlord may indicate, in Landlord’s sole and absolute discretion, in such written consent, and (iv) all other payments shall continue under the terms of this Lease. If Tenant remains in possession of the Premises after the expiration or earlier termination of the Term without the express written consent of Landlord, (A) Tenant shall become a tenant at sufferance upon the terms of this Lease except that the monthly rental shall be equal to (I) [***] of Rent in effect during the last [***] of the Term for the first [***] period of the holdover, (II) [***] of Rent in effect during the last [***] of the Term for the [***] period of the holdover, and (III) [***] of Rent in effect during the last [***] of the Term for the [***] period and thereafter of the holdover, and (B) Tenant shall be responsible for all damages suffered by Landlord resulting from or occasioned by Tenant’s holding over (including, from and after [***] after the end of the Term, consequential damages if Landlord has advised Tenant in writing in advance that a particular tenant has signed a new lease with Landlord for the Premises and any particular consequential damages that Landlord may incur or


 
700 Quince Orchard Road—Novavax, Inc. —Page 10 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. suffer under such new lease as a result of Tenant’s holding over, including, without limitation, consequential damages that Landlord may incur or suffer by reason of Landlord’s inability to lease the Premises or deliver occupancy to such particular tenant). Tenant shall pay Base Rent and Tenant’s Share of Operating Expenses on a per diem basis at such monthly rental rate for each day that Tenant so retains possession. No holding over by Tenant, whether with or without consent of Landlord, shall operate to extend this Lease except as otherwise expressly provided, and this Section 8 shall not be construed as consent for Tenant to retain possession of the Premises. Acceptance by Landlord of Rent after the expiration of the Term or earlier termination of this Lease shall not result in a renewal or reinstatement of this Lease. 9. Taxes. Landlord shall pay, as part of Operating Expenses, all taxes, levies, fees, assessments and governmental charges of any kind, existing as of the Commencement Date or thereafter enacted (collectively referred to as “Taxes”), imposed by any federal, state, regional, municipal, local or other governmental authority or agency, including, without limitation, quasi-public agencies (collectively, “Governmental Authority”) during the Term, including, without limitation, all Taxes: (i) imposed on or measured by or based, in whole or in part, on rent payable to (or gross receipts received by) Landlord under this Lease and/or from the rental by Landlord of the Project or any portion thereof, or (ii) based on the square footage, assessed value or other measure or evaluation of any kind of the Premises or the Project, or (iii) assessed or imposed by or on the operation or maintenance of any portion of the Premises or the Project, including parking, or (iv) assessed or imposed by, or at the direction of, or resulting from Legal Requirements, or interpretations thereof, promulgated by any Governmental Authority, or (v) imposed as a license or other fee, charge, tax, or assessment on Landlord’s business or occupation of leasing space in the Project. Landlord may contest by appropriate legal proceedings the amount, validity, or application of any Taxes or liens securing Taxes and any reduction in Taxes will be credited to the Operating Expenses during the Term or refunded to Tenant within [***] if received after the expiration of the Term (which credit or refund shall be net of the costs and expenses [***] incurred by Landlord in obtaining any such reduction). Taxes shall not include any net income taxes imposed on Landlord except to the extent such net income taxes are in substitution for any Taxes payable hereunder. If any such Tax is levied or assessed directly against Tenant, then Tenant shall be responsible for and shall pay the same at such times and in such manner as the taxing authority shall require. Tenant shall pay, prior to delinquency, any and all Taxes levied or assessed against any personal property or trade fixtures placed by Tenant in the Premises, whether levied or assessed against Landlord or Tenant. If any Taxes on Tenant’s personal property or trade fixtures are levied against Landlord or Landlord’s property, or if the assessed valuation of the Project is increased by a value attributable to improvements in or alterations to the Premises, whether owned by Landlord or Tenant and whether or not affixed to the real property so as to become a part thereof, higher than the base valuation on which Landlord allocates Taxes in the Project, Landlord shall have the right, but not the obligation, to pay such Taxes. Landlord’s determination of any excess assessed valuation shall be binding and conclusive, absent manifest error. The amount of any such payment by Landlord shall constitute Additional Rent due from Tenant to Landlord immediately upon demand. 10. Parking. Subject to all Legal Requirements, Force Majeure, a Taking (as defined in Section 19 below) and the exercise by Landlord of its rights hereunder, Landlord shall provide, commencing on the Commencement Date and continuing throughout the Term of this Lease (including the Base Term and any Extension Terms), a minimum of 200 surface parking spaces located within the Project for Tenant’s exclusive use. To maximize the parking capacity within the Project, Tenant shall have the right, at its sole cost and expense, to engage a third-party parking vendor to provide for the valet parking of Tenant’s employee’s vehicles to park in those areas designated for non-reserved parking, subject in each case to Landlord’s rules and regulations. Landlord shall not be responsible for enforcing Tenant’s parking rights against any third parties. (a) Parking at 14 Firstfield. Pursuant to the Parking Easement Agreement, Tenant acknowledges that a portion of the parking for its use shall be provided by the Minimum Parking located on 14FF. For purposes of this Lease, “Minimum Parking” means the number of parking spaces located on 14FF to accommodate the greater of: (i) the number of additional parking spaces to meet the minimum


 
700 Quince Orchard Road—Novavax, Inc. —Page 11 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. number of parking spaces required by applicable Legal Requirements for Tenant’s uses in the Building that are not provided within the surface parking lot within the Project, and (ii) the number of additional parking spaces to satisfy the minimum of 2.25 parking spaces per 1,000 rentable square feet of the Premises up to a maximum of 225 parking spaces. As of the Commencement Date, Landlord and Tenant agree that the Minimum Parking shall consist of 181 parking spaces. If any streets are built to public standards within the Project and are not determined by the applicable Governmental Authority to be dedicated in the future, any on-street parking spaces shall be counted towards the 2.25/1,000 rentable square feet parking ratio. 11. Utilities, Services. (a) General. Landlord shall provide, subject to the terms of this Section 11, water, electricity, heat, light, power, telephone, sewer, stormwater management, and other utilities (including gas and fire sprinklers to the extent the Project is plumbed for such services) (collectively, “Utilities”). The following Utilities will be separately metered by Landlord and charged directly to Tenant by the provider: electricity, water, sewer, and natural gas. Tenant shall pay for all Utilities used on the Premises, all maintenance charges for Utilities, and any storm sewer charges or other similar charges for Utilities imposed by any Governmental Authority or Utility provider, and any taxes, penalties, surcharges or similar charges thereon. Tenant shall (i) pay directly to the Utility provider, prior to delinquency, all Utilities and services (including trash removal and janitorial services) that may be furnished to Tenant or the Premises during the Term, and (ii) enter into and maintain during the Term a contract with a qualified and licensed entity for the removal from the Premises of any Hazardous Materials (as defined in Section 30) waste. No interruption or failure of Utilities from any cause whatsoever shall result in eviction or constructive eviction of Tenant, termination of this Lease or the abatement of Rent. (b) Energy Data. Tenant agrees to provide Landlord with access to Tenant’s water and/or energy usage data on a monthly basis, either by providing Tenant’s applicable utility login credentials to Landlord’s designated online portal, or by another delivery method reasonably agreed to by Landlord and Tenant. The costs and expenses incurred by Landlord in connection with receiving and analyzing such water and/or energy usage data (including, without limitation, as may be required pursuant to applicable Legal Requirements) shall be included as part of Operating Expenses. (c) Service Interruption. Notwithstanding anything to the contrary set forth herein, if (i) a stoppage of an Essential Service (as defined below) to the Premises shall occur and such stoppage is due solely to the negligent acts or omissions of Landlord and not due in any part to any act or omission on the part of Tenant or any Tenant Party or any matter beyond Landlord’s reasonable control (any such stoppage of an Essential Service being hereinafter referred to as a “Service Interruption”), and (ii) such Service Interruption continues for more than [***] after Landlord shall have received written notice thereof from Tenant, and (iii) as a result of such Service Interruption, the conduct of Tenant’s normal operations in the Premises are [***] affected, then, to the extent that such Service Interruption is covered by rental interruption insurance carried by Landlord pursuant to this Lease, there shall be an abatement of [***] Base Rent for each day during which such Service Interruption continues after such [***] period; provided, however, that if any part of the Premises is reasonably useable for Tenant’s normal business operations or if Tenant conducts all or any part of its operations in any portion of the Premises notwithstanding the Service Interruption, then the amount of each daily abatement of Base Rent shall only be proportionate to the nature and extent of the interruption of Tenant’s normal operations or ability to use the Premises. The rights granted to Tenant under this paragraph shall be Tenant’s sole and exclusive remedy resulting from a failure of Landlord to provide services, and Landlord shall not otherwise be liable for any loss or damage suffered or sustained by Tenant resulting from any failure or cessation of services. For purposes hereof, the term “Essential Services” shall mean the following services: heating, ventilating, and air conditioning (“”HVAC”) service, water, sewer, and electricity, but in each case only to the extent that Landlord has an obligation to provide same to Tenant under this Lease. The provisions of this paragraph shall only apply as long as Novavax, Inc. is the tenant occupying the Premises under this Lease and shall not apply to any assignee or sublessee, except in connection with a Permitted Assignment/Sublease pursuant to Section 22(c) below..


 
700 Quince Orchard Road—Novavax, Inc. —Page 12 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. 12. Alterations and Tenant’s Property. Any alterations, additions, or improvements made to the Premises by or on behalf of Tenant, including additional locks or bolts of any kind or nature upon any doors or windows in the Premises, but excluding installation, removal or realignment of furniture systems not involving any modifications to the structure or connections (other than by ordinary plugs or jacks) to Building Systems (as defined in Section 13) shall be referred to as “Alterations.” (a) Notice-Only Alterations. Tenant may construct nonstructural Alterations in the Premises that do not affect Building Systems without Landlord’s prior approval if the aggregate cost of all such work in any 12 month period does not exceed $***] (a “Notice-Only Alteration”), provided Tenant notifies Landlord in writing of such intended Notice-Only Alteration not less than 5 business days in advance of commencing construction. (b) Consent Alterations. Any Alterations other than a Notice-Only Alteration (such Alterations, “Consent Alterations”) shall be subject to Landlord’s prior written consent, which consent shall not be unreasonably withheld, delayed, or conditioned; provided, however, that if the Consent Alteration affects the structure or Building Systems, Landlord may grant or withhold its consent in its sole discretion. Tenant’s written request for consent to any Consent Alteration shall be accompanied by plans, specifications, work contracts and such other information concerning the nature and cost of the Consent Alteration as may be reasonably requested by Landlord, including the identities and mailing addresses of all persons performing work or supplying materials, which notice and accompanying materials shall be delivered to Landlord not less than [***] in advance of any proposed construction. Landlord shall respond to such request for consent within 7 business days of receipt of Tenant’s request. If Landlord does not respond to such request within such 7 business day period, Tenant shall send a second written notice to Landlord (together with a concurrent copy sent by a reputable overnight delivery service providing receipted evidence of delivery to Mr. Lawrence J. Diamond, Alexandria Real Estate Equities, Inc., 946 Clopper Road, Gaithersburg, Maryland 20878, with a concurrent copy to Kevin L. Shepherd, Esquire, Venable LLP, Suite 900, 750 East Pratt Street, Baltimore, Maryland 21202 [or such other addressees as Landlord may designated in written notice to Landlord from time to time]) requesting Landlord’s approval of the proposed Consent Alteration. If Landlord does not respond within 5 business days after receipt of such second notice, such request for Consent Alterations shall be deemed to have been approved by Landlord. Such second notice to Landlord shall state the following in bold face type in capitalized letters: LANDLORD’S FAILURE TO RESPOND WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF THIS REQUEST SHALL MEAN THAT LANDLORD HAS BEEN DEEMED TO HAVE APPROVED THE REQUEST FOR CONSENT ALTERATIONS DESCRIBED IN THIS REQUEST. Landlord’s right to review plans and specifications and to monitor construction shall be solely for its own benefit, and Landlord shall have no duty to ensure that such plans and specifications or construction comply with applicable Legal Requirements. (c) General. Tenant shall cause, at its sole cost and expense, all Alterations to comply with insurance requirements and with Legal Requirements and shall implement at its sole cost and expense any alteration or modification required by Legal Requirements as a result of any Alterations. Tenant shall pay to Landlord, as Additional Rent, on demand an amount equal to the out of pocket expense incurred by Landlord in connection with third party review of any Alteration, which amount shall not exceed [***] of the cost of such Alteration. Before Tenant begins any Alteration, Landlord may post on and about the Premises notices of non-responsibility pursuant to applicable law. Tenant shall reimburse Landlord for, and indemnify and hold Landlord harmless from, any expense incurred by Landlord by reason of faulty work done by Tenant or its contractors, delays caused by such work, or inadequate cleanup. (d) Security for Alterations. With respect to any Consent Alteration costing in excess of $[***], Tenant shall, at Tenant’s election, either evidence adequate cash balances, furnish security, or make other arrangements reasonably satisfactory to Landlord to assure payment for the completion of the Consent Alteration work free and clear of liens. With respect to all Alterations, Tenant shall provide (and cause each contractor or subcontractor to provide) certificates of insurance (in form and substance


 
700 Quince Orchard Road—Novavax, Inc. —Page 13 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. reasonably satisfactory to Landlord; form ACORD 28 [2006/07] is not satisfactory to Landlord) for workers’ compensation and other coverage in amounts and from an insurance company reasonably satisfactory to Landlord protecting Landlord against liability for personal injury or property damage during construction. Upon completion of any Consent Alterations, Tenant shall deliver to Landlord: (i) sworn statements setting forth the names of all contractors and subcontractors who did the work and final lien waivers from all such contractors and subcontractors; and (ii) “as built” plans for the Consent Alterations. Upon completion of any Notice-Only Alterations, Tenant shall deliver to Landlord “as built” plans for the Notice-Only Alterations. (e) Tenant’s Property; Installations. Other than (i) the items, if any, listed on Exhibit F attached hereto, (ii) any items agreed by Landlord in writing to be included on Exhibit F in the future, and (iii) any trade fixtures, machinery, equipment and other personal property not paid for out of the TI Fund (as defined in the Work Letter) that may be removed without material damage to the Premises, which damage shall be repaired (including capping or terminating utility hook-ups behind walls) by Tenant during the Term (collectively, “Tenant’s Property”), all property of any kind paid for with the TI Fund, all Alterations, real property fixtures, built-in machinery and equipment, built-in casework and cabinets and other similar additions and improvements built into the Premises so as to become an integral part of the Premises such as fume hoods that penetrate the roof or plenum area, built-in cold rooms, built-in warm rooms, walk-in cold rooms, walk-in warm rooms, deionized water systems, glass washing equipment, autoclaves, chillers, built- in plumbing, electrical and mechanical equipment and systems, and any power generator and transfer switch (collectively, “Installations”) shall be and shall remain the property of Landlord during the Term and following the expiration or earlier termination of the Term, shall not be removed by Tenant at any time during the Term and shall remain upon and be surrendered with the Premises as a part thereof in accordance with Section 28 following the expiration or earlier termination of this Lease; provided, however, that Landlord shall, at the time its approval of such Installation is requested or at the time it receives notice of a Notice- Only Alteration notify Tenant in writing if it has elected to cause Tenant to remove such Installation upon the expiration or earlier termination of this Lease. If Landlord so elects, Tenant shall remove such Installation upon the expiration or earlier termination of this Lease and restore any damage caused by or occasioned as a result of such removal, including, when removing any of Tenant’s Property that was plumbed, wired or otherwise connected to any of the Building Systems, capping off all such connections behind the walls of the Premises and repairing any holes. During any such restoration period, Tenant shall pay Rent to Landlord as provided herein as if such space were otherwise occupied by Tenant. (f) Mezzanine. Tenant shall have the right, at its sole cost and expense, to construct and install a mezzanine and walk-on ceiling above the third floor of the Premises (collectively, the “Mezzanine”). The Mezzanine shall constitute an Alteration and shall be subject to the provisions of this Section 12, including Landlord’s review and approval. Landlord shall not charge, impose, or assess any Base Rent or other form of Rent for Tenant’s use of the space occupied by the Mezzanine, and the area occupied by the Mezzanine shall not be factored into the calculation of the parking ratio under Section 10. On the expiration or earlier termination of the Term, Tenant shall have no obligation to remove the Mezzanine and associated items installed in or on the Mezzanine but shall surrender it in the condition and state of repair as set forth in Lease. (g) Generator and Fuel Tank. Subject to the satisfaction of all of the conditions set forth in this Section, Tenant, at its sole cost and expense, may install and once installed shall maintain in one of the locations shown on Exhibit I attached hereto for use in connection with Tenant’s business in the Premises a generator and/or an uninterruptable power supply system with adequate capacity as mutually agreed by Landlord (Landlord’s approval not to be unreasonably withheld, conditioned, or delayed) and Tenant (collectively, the “Generator”) and an above-ground fuel storage tank with adequate capacity as mutually agreed by Landlord (Landlord’s approval not to be unreasonably withheld, conditioned, or delayed) and Tenant (“Fuel Tank”). (i) Parking. The number of parking spaces occupied by the Generator and Fuel Tank shall be counted against Tenant’s pro rata share of parking spaces set forth in Section 10, but in all events


 
700 Quince Orchard Road—Novavax, Inc. —Page 14 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. any such reduction in the number of parking spaces shall not cause Landlord to be in violation of applicable Legal Requirements governing the minimum number of parking spaces Landlord is required to provide. (ii) Testing. Tenant shall be allowed to test the Generator once a week at a time mutually agreed to by Landlord and Tenant. Tenant shall immediately take all necessary actions to prevent the Generator from causing any adverse effects to the air quality of the Building. No promotional or advertising matter or signage shall be attached to, painted, or displayed on the Generator or Fuel Tank. (iii) Installation; Maintenance; Removal. The Generator and Fuel Tank and all related piping, venting, and metering devices shall be installed by a contractor reasonably acceptable to Landlord and thereafter shall be properly maintained by Tenant, all at Tenant’s sole expense. Tenant shall be responsible for connecting the Generator to the electrical supply system serving the Premises in accordance with the plans and specifications approved by Landlord (such approval not to be unreasonably withheld, conditioned, or delayed) and in accordance with any applicable permitting requirements. At the expiration or earlier termination of the Term, the Generator and Fuel Tank shall, at the request and election of Landlord, be removed at Tenant’s sole cost and expense and the area on which they were located shall be returned to the condition it was in prior to the installation of the Generator and Fuel Tank. If Landlord does not direct that the Generator and Fuel Tank be so removed, and provided that the Generator and Fuel Tank are then-owned by Tenant and not leased or financed pursuant to a bona-fide third party lease or financing, Landlord shall acquire sole ownership of the Generator and Fuel Tank free and clear of all liens and encumbrances so that Landlord has good and marketable title thereto and Tenant shall execute and deliver to Landlord a bill of sale therefor (in the absence of a bill of sale, this Section shall constitute the bill of sale). Tenant shall pay all governmental fees, charges, and taxes and all hook-up and disconnection fees associated with Tenant’s use of the Generator and Landlord shall have no liability therefor. All of the provisions of this Lease, including, without limitation, the insurance, maintenance, repair, release, and indemnification provisions set forth in this Lease shall apply and be applicable to Tenant’s installation, operation, maintenance, and removal of the Generator and Fuel Tank. Tenant shall, at its sole cost and expense, secure all necessary permits and approvals from all applicable Governmental Authorities for the size, placement, installation, and removal of the Generator and Fuel Tank. If Tenant is unable to obtain the necessary approvals and permits from any Governmental Authorities for the Generator and Fuel Tank, Tenant shall have no remedy, claim, cause of action, or recourse against Landlord, nor shall such failure or inability to obtain any necessary permits or approvals provide Tenant the right to terminate this Lease. Landlord shall cooperate with Tenant in securing all necessary permits and approvals for the Generator and Fuel Tank; provided, however, that Landlord shall not be obligated to spend any monies in connection with obtaining such permits and approvals and shall not be required to perform any act or otherwise take any action that would impose or create any liabilities on Landlord. Without limiting any other obligations of Tenant set forth in this Lease, Tenant shall, at its sole cost and expense, install, maintain, and repair the Generator and Fuel Tank and keep such equipment in good order and operating condition. The Fuel Tank shall serve as the fuel source for the Generator to be installed by Tenant. Any installation work described in this Section shall comply with the terms and conditions of this Lease. (iv) Insurance. If the presence of the Fuel Tank and all related infrastructure (including, but not limited to, piping, venting, and metering devices) is the sole cause of an increase in Landlord’s property or liability insurance premiums for the Building, Landlord shall so inform Tenant in writing and Tenant shall pay to Landlord as Additional Rent within [***] after demand therefor an amount equal to such increase. (v) Compliance. Tenant shall, at its sole cost and expense, comply with all Legal Requirements that may now or hereafter be applicable to the area in which the Generator and the Fuel Tank shall be located or to the installation, use, operation, repair, removal, maintenance, and replacement of the Generator and the Fuel Tank. The Legal Requirements include, but are not limited to, Legal Requirements (A) requiring that Tenant obtain the necessary permits for the installation, use, operation, repair, removal, maintenance, and replacement of the Generator and the Fuel Tank, (B) prohibiting oil or petroleum pollution, (C) requiring the person discharging or permitting the discharging of oil or petroleum


 
700 Quince Orchard Road—Novavax, Inc. —Page 15 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. or participating in the discharge or spilling of oil or petroleum to report such discharge or spill to the proper Governmental Authorities, (D) requiring the removal of spilled oil or petroleum, and (E) requiring certain inspections, gauging, and recordkeeping. Tenant shall pay all costs, expenses, claims, fines, penalties, and damages that may in any manner arise out of or be imposed because of the failure of Tenant to comply with this Section. Tenant shall indemnify, defend, and hold harmless Landlord and its officers, members, directors, employees, managers, employees, agents, and contractors from all claims, injuries, damages, costs, expenses, losses, and liabilities (including, but not limited to, reasonable attorneys’ fees) arising from Tenant’s failure to comply with this Section. Each party shall promptly give notice to the other of any notice of violation received by each party. Tenant shall retain all right, title, and interest in and to the Fuel Tank and all related infrastructure (including, but not limited to, piping, venting, and metering devices) during the Term, and Landlord hereby disclaims any right, title, and interest in and to the Fuel Tank and all related infrastructure (including, but not limited to, piping, venting, and metering devices). 13. Landlord’s Repairs. Landlord, as an Operating Expense (unless expressly excluded from Operating Expenses by the terms of Section 5), shall (a) maintain the Project’s grounds and landscaping, and (b) replace (but not repair and maintain, which is Tenant’s responsibility) the (i) roof and roof membrane, and (ii) the following items that exist in the Building as of the Commencement Date (collectively, the “Existing Systems”): emergency 200 kW electricity generator relocated on the roof, fire sprinkler system, 2 passenger elevators and 1 freight elevator, Datawatch access control system, and the cooling tower. Excluded from the foregoing items are reasonable wear and tear and uninsured losses and damages caused by Tenant, or by any of Tenant’s agents, servants, employees, invitees and contractors (collectively, “Tenant Parties”). Notwithstanding anything herein to the contrary, Landlord shall, at its expense and not as an Operating Expense, make capital repairs to, and replace, the roof, foundation, slab, and structural walls of the Building. Losses and damages caused by Tenant or any Tenant Party to the roof, foundation, slab, and structural walls of the Building shall be repaired by Landlord, to the extent not covered by insurance, at Tenant’s sole cost and expense and as Additional Rent. With respect to those components of the Project that Landlord is required to maintain or replace as set forth in clauses (a) and (b) above, Landlord reserves the right to stop Building Systems services when reasonably necessary (i) by reason of accident or emergency, or (ii) upon 15 business days’ notice to Tenant for planned repairs, alterations or improvements, which are, in the reasonable judgment of Landlord, desirable or necessary to be made, until such repairs, alterations or improvements shall have been completed. Landlord shall have no responsibility or liability for failure to supply Building Systems services during any such period of interruption; provided, however, that (A) Landlord shall, except in case of emergency, give Tenant 15 business days’ advance written notice of any planned stoppage of Building Systems services for routine maintenance, repairs, alterations or improvements, and (B) Landlord shall use commercially reasonable efforts to limit any such stoppage to evenings and weekends if the stoppage would materially interfere with Tenant’s business operations. Tenant shall promptly give Landlord written notice of any repair required by Landlord pursuant to this Section (or with respect to any emergency, verbal notice followed immediately by written notice), after which Landlord shall have a reasonable opportunity to effect such repair. Landlord shall not be liable for any failure to make any repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after Tenant’s written notice of the need for such repairs or maintenance. Notwithstanding the foregoing, Landlord and Tenant hereby agree that, with respect to any condition requiring repair or maintenance by Landlord, which condition materially interferes with Tenant’s business operations, Landlord shall (subject to Force Majeure) commence such repair within 24 hours after notice (which may be verbal), and Landlord shall diligently pursue completion of such repair as soon as reasonably possible under the circumstances. If Landlord fails (subject to Force Majeure) to commence such repair within such 24 hours, and/or fails to diligently pursue completion of such repair, then, to the extent reasonably necessary to remedy the condition materially interfering with Tenant’s business operations, Tenant may commence to cure the condition, which cure shall be at Tenant’s sole cost and expense; provided, however, that Tenant shall not exercise such right to cure if the condition affects the roof membrane or would otherwise be deemed a capital expenditure that would, pursuant to Section 5 above, be at Landlord’s cost and not part of Operating Expenses if performed by Landlord. Tenant waives its rights under any state or local law to terminate this Lease or to make such repairs at Landlord’s expense and agrees that the parties’ respective rights with respect to such matters shall be solely as set forth herein.


 
700 Quince Orchard Road—Novavax, Inc. —Page 16 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. Repairs required as the result of fire, earthquake, flood, vandalism, war, or similar cause of damage or destruction shall be controlled by Section 18. 14. Tenant’s Repairs. Except as expressly provided in Section 13 hereof, Tenant shall, at its expense, (a) maintain and repair the (i) roof and roof membrane, (ii) Existing Systems, and (iii) all of the structural and exterior areas of the Project, (b) maintain, repair, and replace (i) the HVAC, mechanical, electrical, and plumbing (“MEP”), loading dock, penthouse areas, life safety systems, and all other building systems of every type and nature serving the Premises and other portions of the Project (collectively, “Building Systems”), (ii) all other portions of the Project, including, without limitation, the parking area, sidewalks and walkways, windows and related components, entries, doors, ceilings, interior windows, interior walls, and the interior side of demising walls, and (iii) perform the following services at the Project: snow and ice removal; repainting, resealing, restriping, cleaning, and sweeping of sidewalks, parking areas, and driveways; exterior window cleaning, exterior light bulbs, general maintenance of the exterior Common Areas, and refuse and trash collection. All maintenance, repair, and replacement activities shall be performed in a manner consistent (as mutually agreed by Landlord and Tenant, both parties acting reasonably and in good faith) with that performed in comparable buildings in the Gaithersburg, Maryland submarket, reasonable wear and tear excluded. Such repair and replacement may include capital expenditures and repairs whose benefit may extend beyond the Term. Should Tenant fail to make any such repair or replacement or fail to maintain the Premises or Project, Landlord shall give Tenant written notice of such failure. If Tenant fails to commence cure of such failure within 10 business days of Landlord’s written notice, and thereafter diligently prosecute such cure to completion, Landlord may perform such work and shall be reimbursed by Tenant within 30 days after demand therefor; provided, however, that if such failure by Tenant creates or could create an emergency, Landlord may immediately commence cure of such failure and shall thereafter be entitled to recover the reasonable out-of-pocket costs of such cure from Tenant. Subject to Sections 17 and 18, Tenant shall bear the full uninsured cost of any repair or replacement to any part of the Project that results from damage caused by Tenant or any Tenant Party and any repair that benefits only the Premises. (a) Maintenance Contracts. Tenant, at its expense, shall at all times during the Term maintain with qualified contractors maintenance and repair contracts (“Maintenance Contracts”) for all Building Systems, including, but not limited to, the HVAC units serving the Premises, the elevators located in the Building, all life safety systems serving the Premises, the roof and roof membrane, and any emergency electrical generator(s) serving the Premises. The Maintenance Contracts shall be in form and content reasonably satisfactory to Landlord. Landlord shall be a third party beneficiary of the Maintenance Contracts and, within 30 days after Landlord’s request, Tenant shall deliver a copy of the Maintenance Contracts to Landlord. 15. Mechanic’s Liens. Tenant shall discharge, by bond or otherwise, any mechanic’s lien filed against the Premises or against the Project for work claimed to have been done for, or materials claimed to have been furnished to, Tenant within 20 days after the filing thereof, at Tenant’s sole cost and shall otherwise keep the Premises and the Project free from any liens arising out of work performed, materials furnished or obligations incurred by Tenant. Should Tenant fail to discharge, by bond or otherwise, any lien described herein, Landlord shall have the right, but not the obligation, to pay such claim or post a bond or otherwise provide security to eliminate the lien as a claim against title to the Project and the cost thereof shall be immediately due from Tenant as Additional Rent. If Tenant shall lease or finance the acquisition of office equipment, furnishings, or other personal property of a removable nature utilized by Tenant in the operation of Tenant’s business, Tenant warrants that any Uniform Commercial Code Financing Statement filed as a matter of public record by any lessor or creditor of Tenant will upon its face or by exhibit thereto indicate that such Financing Statement is applicable only to removable personal property of Tenant located within the Premises. In no event shall the address of the Project be furnished on the statement without qualifying language as to applicability of the lien only to removable personal property, located in an identified suite held by Tenant.


 
700 Quince Orchard Road—Novavax, Inc. —Page 17 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. 16. Indemnification. (a) By Tenant. Tenant hereby indemnifies, and agrees to defend, save and hold Landlord and Landlord’s members, shareholders, partners, officers, directors, managers, employees, agents, contractors, successors and assigns harmless from and against any and all Claims for injury or death to persons or damage to property occurring within or about the Premises, Building, or Project, arising directly or indirectly out of: (i) the conduct of Tenant’s business or the use or occupancy of the Premises, Building, or Project by Tenant or any Tenant Party (including without limitation any act, omission or neglect by Tenant or any Tenant Party), except to the extent caused by the willful misconduct or negligence of Landlord, or (ii) a breach or default by Tenant in the performance of any of its obligations hereunder. Landlord shall not be liable to Tenant for, and Tenant assumes all risk of damage to, personal property (including, without limitation, loss of records kept within the Premises). Tenant further waives any and all Claims for injury to Tenant’s business or loss of income relating to any such damage or destruction of personal property (including, without limitation, any loss of records). Landlord shall not be liable for any damages arising from any act, omission or neglect of any third party. (b) By Landlord. Subject to the provisions of Sections 16(a) and 36, Landlord hereby indemnifies and agrees to defend, save and hold Tenant harmless from and against any and all Claims for injury or death to persons or damage to property occurring within or about the Common Area caused by Landlord’s willful misconduct or gross negligence, except to the extent caused by the willful misconduct or negligence of Tenant or any Tenant Party. 17. Insurance. Landlord shall maintain all risk property and, if applicable, sprinkler damage insurance covering the full replacement cost of the Project. Landlord shall further procure and maintain commercial general liability insurance with a single loss limit of not less than $[***] for bodily injury and property damage with respect to the Project. Landlord may, but is not obligated to, maintain such other insurance and additional coverages as it may deem necessary, including, but not limited to, flood, environmental hazard and earthquake, loss or failure of building equipment, errors and omissions, rental loss during the period of repair or rebuilding, workers’ compensation insurance and fidelity bonds for employees employed to perform services and insurance for any improvements installed by Tenant or that are in addition to the standard improvements customarily furnished by Landlord without regard to whether or not such are made a part of the Project. All such insurance shall be included as part of the Operating Expenses. The Project may be included in a blanket policy (in which case the cost of such insurance allocable to the Project will be determined by Landlord based upon the insurer’s cost calculations). Tenant shall also reimburse Landlord for any increased premiums or additional insurance that Landlord reasonably deems necessary as a result of Tenant’s use of the Premises. Tenant, at its sole cost and expense, shall maintain during the Term (commencing on the earlier to occur of (i) completion of the Tenant Improvements and (ii) Tenant’s occupancy of the Premises): all risk property insurance with business interruption and extra expense coverage, covering the full replacement cost of all property and improvements installed or placed in the Premises by Tenant at Tenant’s expense; workers’ compensation insurance with no less than the minimum limits required by law; employer’s liability insurance with such limits as required by law; and commercial general liability insurance, with a minimum limit of not less than $[***] per occurrence for bodily injury and property damage with respect to the Premises (such insurance may be satisfied through the evidencing of Umbrella Liability coverage in support). The commercial general liability insurance policy shall name Landlord and Alexandria Real Estate Equities, Inc., and its and their respective members, officers, directors, employees, managers, and agents (collectively, “Landlord Parties”), as additional insureds; insure on an occurrence and not a claims-made basis; be issued by insurance companies that have a rating of not less than policyholder rating of A and financial category rating of at least Class X in “Best’s Insurance Guide”; shall not be cancelable for nonpayment of premium unless 30 days prior written notice shall have been given to Tenant from the insurer (it being agreed that Tenant shall immediately notify Landlord of any such cancellation of insurance); and provide primary coverage to Landlord (any policy issued to Landlord providing duplicate or similar coverage shall


 
700 Quince Orchard Road—Novavax, Inc. —Page 18 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. be deemed excess over Tenant’s policies). Certificates of insurance (in form and substance reasonably satisfactory to Landlord) showing the limits of coverage required hereunder and showing Landlord as an additional insured shall be delivered to Landlord by Tenant upon Tenant’s execution and delivery of this Lease and upon each renewal of such insurance. Tenant’s policy may be a “blanket policy” with an aggregate per location endorsement that specifically provides that the amount of insurance shall not be prejudiced by other losses covered by the policy. Tenant shall, within 5 days after the expiration of such policies, furnish Landlord with renewal certificates. In each instance where insurance is to name Landlord as an additional insured, Tenant shall upon written request of Landlord also designate and furnish certificates so evidencing Landlord as additional insured to: (i) any lender of Landlord holding a security interest in the Project or any portion thereof, (ii) the landlord under any lease wherein Landlord is tenant of the real property on which the Project is located, if the interest of Landlord is or shall become that of a tenant under a ground or other underlying lease rather than that of a fee owner, and/or (iii) any management company retained by Landlord to manage the Project. The property insurance obtained by Landlord and Tenant shall include a waiver of subrogation by the insurers and all rights based upon an assignment from its insured, against Landlord or Tenant, and their respective officers, directors, employees, managers, agents, invitees and contractors (“Related Parties”), in connection with any loss or damage thereby insured against. Neither party nor its respective Related Parties shall be liable to the other for loss or damage caused by any risk insured against under property insurance required to be maintained hereunder, and each party waives any claims against the other party, and its respective Related Parties, for such loss or damage. The failure of a party to insure its property shall not void this waiver. Landlord and its respective Related Parties shall not be liable for, and Tenant hereby waives all claims against such parties for, business interruption and losses occasioned thereby sustained by Tenant or any person claiming through Tenant resulting from any accident or occurrence in or upon the Premises or the Project from any cause whatsoever. If the foregoing waivers shall contravene any law with respect to exculpatory agreements, the liability of Landlord or Tenant shall be deemed not released but shall be secondary to the other’s insurer. Landlord may require insurance policy limits to be raised to conform with requirements of Landlord’s lender and/or, not more frequently than [***] during the Term, to bring coverage limits to levels then being generally required by landlords of buildings or projects comparable to the Building or Project in the greater Gaithersburg submarket area. 18. Restoration. If, at any time during the Term, the Project or the Premises are damaged or destroyed by a fire or other casualty, Landlord shall notify Tenant within 60 days after discovery of such damage as to the amount of time Landlord reasonably estimates it will take to restore the Project or the Premises, as applicable (“Restoration Period”). If the Restoration Period is estimated to exceed [***] (“Maximum Restoration Period”), Landlord may, in such notice, elect to terminate this Lease as of the date that is [***] after the date of discovery of such damage or destruction; provided, however, that notwithstanding Landlord’s election to restore, Tenant may elect to terminate this Lease by written notice to Landlord delivered within [***] of Tenant’s receipt of a notice from Landlord estimating a Restoration Period for the Premises longer than the Maximum Restoration Period. Unless either Landlord or Tenant so elects to terminate this Lease, Landlord shall, subject to receipt of sufficient insurance proceeds (with any deductible to be treated as a current Operating Expense), promptly restore the Premises (excluding the improvements installed by Tenant or by Landlord and paid for by Tenant unless covered by the insurance Landlord maintains as an Operating Expense hereunder, in which case such improvements shall be included, to the extent of such insurance proceeds, in Landlord’s restoration), subject to delays arising from the collection of insurance proceeds, from Force Majeure events or as needed to obtain any license, clearance or other authorization of any kind required to enter into and restore the Premises issued by any Governmental Authority having jurisdiction over the use, storage, handling, treatment, generation, release, disposal, removal or remediation of Hazardous Materials in, on or about the Premises (collectively referred to herein as “Hazardous Materials Clearances”); provided, however, that if repair or restoration of the


 
700 Quince Orchard Road—Novavax, Inc. —Page 19 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. Premises is not substantially complete as of the end of the Maximum Restoration Period or, if longer, the Restoration Period, Landlord may, in its sole and absolute discretion, elect not to proceed with such repair and restoration, or Tenant may by written notice to Landlord delivered within [***] of the expiration of the Maximum Restoration Period or, if longer, the Restoration Period, elect to terminate this Lease, in which event Landlord shall be relieved of its obligation to make such repairs or restoration and this Lease shall terminate as of the date that is [***] after the later of: (i) discovery of such damage or destruction, or (ii) the date all required Hazardous Materials Clearances are obtained, but Landlord shall retain any Rent paid and the right to any Rent payable by Tenant prior to such election by Landlord or Tenant. Tenant, at its expense, shall promptly perform, subject to delays arising from the collection of insurance proceeds, from Force Majeure (as defined in Section 34) events or to obtain Hazardous Material Clearances, all repairs or restoration not required to be done by Landlord and shall promptly re-enter the Premises and commence doing business in accordance with this Lease. Notwithstanding the foregoing, either Landlord or Tenant may terminate this Lease if the Premises are damaged during the last year of the Term and Landlord reasonably estimates that it will take more than [***] to repair such damage, or if insurance proceeds are not available for such restoration. Rent shall be abated from the date all required Hazardous Material Clearances are obtained until the Premises are repaired and restored, in the proportion that the area of the Premises, if any, that is not usable by Tenant bears to the total area of the Premises, unless Landlord provides Tenant with other space during the period of repair that is suitable for the temporary conduct of Tenant’s business. Such abatement shall be the sole remedy of Tenant, and except as provided in this Section 18, Tenant waives any right to terminate this Lease by reason of damage or casualty loss. The provisions of this Lease, including this Section 18, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, or any other portion of the Project, and any statute or regulation that is now or may hereafter be in effect shall have no application to this Lease or any damage or destruction to all or any part of the Premises or any other portion of the Project, the parties hereto expressly agreeing that this Section 18 sets forth their entire understanding and agreement with respect to such matters. 19. Condemnation. If the whole or any material part of the Premises or the Project is taken for any public or quasi-public use under governmental law, ordinance, or regulation, or by right of eminent domain, or by private purchase in lieu thereof (a “Taking” or “Taken”), and the Taking would in Landlord’s reasonable judgment either prevent or materially interfere with Tenant’s use of the Premises or materially interfere with or impair Landlord’s ownership or operation of the Project, then upon written notice by either party to the other, this Lease shall terminate and Rent shall be apportioned as of such date. If part of the Premises shall be Taken, and this Lease is not terminated as provided above, Landlord shall promptly restore the Premises and the Project as nearly as is commercially reasonable under the circumstances to their condition prior to such partial Taking and the rentable square footage of the Building, the rentable square footage of the Premises, Tenant’s Share of Operating Expenses and the Rent payable hereunder during the unexpired Term shall be reduced to such extent as may be fair and reasonable under the circumstances. Upon any such Taking, Landlord shall be entitled to receive the entire price or award from any such Taking without any payment to Tenant, and Tenant hereby assigns to Landlord Tenant’s interest, if any, in such award. Tenant shall have the right, to the extent that same shall not diminish Landlord’s award, to make a separate claim against the condemning authority (but not Landlord) for such compensation as may be separately awarded or recoverable by Tenant for moving expenses and damage to Tenant’s Property, if a separate award for such items is made to Tenant. Tenant hereby waives any and all rights it might otherwise have pursuant to any provision of state law to terminate this Lease upon a partial Taking of the Premises or the Project. 20. Events of Default. Each of the following events shall be a default (“Default”) by Tenant under this Lease:


 
700 Quince Orchard Road—Novavax, Inc. —Page 20 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. (a) Payment Defaults. Tenant shall fail to pay any installment of Rent or any other payment hereunder when due; provided, however, that Landlord will give Tenant notice and an opportunity to cure any failure to pay Rent within [***] of any such notice not more than once in any [***] period and Tenant agrees that such notice shall be in lieu of and not in addition to, or shall be deemed to be, any notice required by law. (b) Insurance. Any insurance required to be maintained by Tenant pursuant to this Lease shall be canceled or terminated or shall expire or shall be reduced or materially changed, or Landlord shall receive a notice of nonrenewal of any such insurance and Tenant shall fail to obtain replacement insurance at least [***] before the expiration of the current coverage. (c) Abandonment. Tenant shall abandon the Premises without (i) the release of the Premises of all Hazardous Materials Clearances and free of any residual impact from the Tenant HazMat Operations, and (ii) complying with the provisions of Section 28. For purposes of this paragraph, Tenant shall not be deemed to have abandoned the Premises if Tenant is not occupying the Premises but is otherwise complying with the terms and conditions of this Lease. (d) Improper Transfer. Tenant shall assign, sublease or otherwise transfer or attempt to transfer all or any portion of Tenant’s interest in this Lease or the Premises except as expressly permitted herein, or Tenant’s interest in this Lease shall be attached, executed upon, or otherwise judicially seized and such action is not released within [***] of the action; provided, however, that in the case of a sublease not permitted herein, Tenant fails to cure such default within [***] after written notice from Landlord. (e) Liens. Tenant shall fail to discharge, bond-off, or otherwise obtain the release of any lien placed upon the Premises in violation of this Lease within [***] after Tenant receives written notice that such lien has been filed against the Premises. (f) Insolvency Events. Tenant or any guarantor or surety of Tenant’s obligations hereunder shall: (A) make a general assignment for the benefit of creditors; (B) commence any case, proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or of any substantial part of its property (collectively a “Proceeding for Relief”); (C) become the subject of any Proceeding for Relief that is not dismissed within [***] of its filing or entry; or (D) die or suffer a legal disability (if Tenant, guarantor, or surety is an individual) or be dissolved or otherwise fail to maintain its legal existence (if Tenant, guarantor or surety is a corporation, partnership or other entity). (g) Estoppel Certificate or Subordination Agreement. Tenant fails to execute any document required from Tenant under Sections 23 or 27 within 7 business days after a second notice requesting such document. (h) Other Defaults. Tenant shall fail to comply with any provision of this Lease other than those specifically referred to in this Section 20, and, except as otherwise expressly provided herein, such failure shall continue for a period of 20 days after written notice thereof from Landlord to Tenant. Any notice given under Section 20(h) hereof shall: (i) specify the alleged default, (ii) demand that Tenant cure such default, (iii) be in lieu of, and not in addition to, or shall be deemed to be, any notice required under any provision of applicable law, and (iv) not be deemed a forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice; provided that if the nature of Tenant’s default pursuant to Section 20(h) is such that it cannot be cured by the payment of money and reasonably requires more than 20 days to cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within


 
700 Quince Orchard Road—Novavax, Inc. —Page 21 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. such 20 day period and thereafter diligently prosecutes the same to completion; provided, however, that such cure shall be completed no later than 60 days from the date of Landlord’s notice. 21. Landlord’s Remedies. (a) Interest. Upon a Default by Tenant hereunder, Landlord may, without waiving or releasing any obligation of Tenant hereunder, make such payment or perform such act. All sums so paid or incurred by Landlord, together with interest thereon, from the date such sums were paid or incurred, at the annual rate equal to [***]% per annum or the highest rate permitted by law (“Default Rate”), whichever is less, shall be payable to Landlord on demand as Additional Rent. Except as expressly set forth in clause (d) below, nothing herein shall be construed to create or impose a duty on Landlord to mitigate any damages resulting from Tenant’s Default hereunder. (b) Late Payment Rent. Late payment by Tenant to Landlord of Rent and other sums due will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult and impracticable to ascertain. Such costs include, but are not limited to, processing and accounting charges and late charges that may be imposed on Landlord under any Mortgage covering the Premises. Therefore, if any installment of Rent due from Tenant is not received by Landlord within [***] after the date such payment is due, Tenant shall pay to Landlord an additional sum of [***]% of the overdue Rent as a late charge (provided that Tenant shall not be required to pay such late charge upon the first occurrence during any calendar year of a late payment by Tenant of Rent). The parties agree that this late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant. In addition to the late charge, Rent not paid when due shall bear interest at the Default Rate from the [***] after the date due until paid. (c) Re-Entry. Landlord shall have the right, immediately or at any time thereafter, without further notice to Tenant (unless otherwise provided herein), to enter the Premises, by process of law, without terminating this Lease or being guilty of trespass, and do any and all acts as Landlord may deem necessary, proper or convenient to cure such default, for the account and at the expense of Tenant, any notice to quit or notice of Landlord’s intention to re-enter being hereby expressly waived, and Tenant agrees to pay to Landlord as Additional Rent all damage and/or expense incurred by Landlord in so doing, including interest at the Default Rate, from the due date until the date payment is received by Landlord. (d) Termination. Landlord shall have the right to terminate this Lease and Tenant’s right to possession of the Premises and, by process of law, take possession of the Premises and remove Tenant, any occupant and any property therefrom, without being guilty of trespass and without relinquishing any rights of Landlord against Tenant, any notice to quit, or notice of Landlord’s intention to re-enter being hereby expressly waived. Landlord shall be entitled to recover damages from Tenant for all amounts covenanted to be paid during the remainder of the Term (except for the period of any holdover by Tenant, in which case the monthly rental rate stated at Section 8 herein shall apply), which may be accelerated by Landlord at its option, together with (i) all expenses of any proceedings (including, but not limited to, the expenses set forth in Section 22(f) below) that may be necessary in order for Landlord to recover possession of the Premises, (ii) the expenses of the re-renting of the Premises (including, but not limited to, any commissions paid to any real estate agent, advertising expense and the costs of such alterations, repairs, replacements or modifications that Landlord, in its sole judgment, considers advisable and necessary for the purpose of re-renting), and (iii) interest computed at the Default Rate from the due date until paid; provided, however, that there shall be credited against the amount of such damages all amounts received by Landlord from such re-renting of the Premises, with any overage being refunded to Tenant. Landlord shall in no event be liable in any way whatsoever for failure to re-rent the Premises or, in the event that the Premises are re-rented, for failure to collect the rent thereof under such re-renting and, except as expressly provided in the following paragraph, Tenant expressly waives any duty of the Landlord to mitigate damages. No act or thing done by Landlord shall be deemed to be an acceptance of a surrender of the Premises, unless Landlord shall execute a written agreement of surrender with Tenant. Tenant’s liability


 
700 Quince Orchard Road—Novavax, Inc. —Page 22 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. hereunder shall not be terminated by the execution of a new lease of the Premises by Landlord, unless that new lease expressly so states. In the event Landlord does not exercise its option to accelerate the payment of amounts owed as provided hereinabove, then Tenant agrees to pay to Landlord, upon demand, the amount of damages herein provided after the amount of such damages for any month shall have been ascertained; provided, however, that any expenses incurred by Landlord shall be deemed to be a part of the damages for the month in which they were incurred. Separate actions may be maintained each month or at other times by Landlord against Tenant to recover the damages then due, without waiting until the end of the term of this Lease to determine the aggregate amount of such damages. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Tenant, by process of law, being evicted or being dispossessed for any cause, or in the event of Landlord, by process of law, obtaining possession of the Premises by reason of the violation by Tenant of any of the covenants and conditions of this Lease. Except as expressly provided in this paragraph and as a material inducement for Landlord to enter into this Lease, Tenant agrees and acknowledges that Landlord shall have no obligation whatsoever to mitigate any damages resulting from a Default by Tenant under this Lease. In case of a Default by Tenant under this Lease, Landlord’s sole obligation to so mitigate its damages shall be to list the Premises with a licensed broker, list the Premises on Co-Star (or its successor entity), and install (if permissible by the Legal Requirements) a “for lease” sign on or about the Project. On compliance with the foregoing criteria regarding the re-letting of the Premises after a Default by Tenant, Landlord shall be deemed to have fully satisfied Landlord’s obligation to mitigate damages under this Lease regardless of any contrary Legal Requirement in effect on the Commencement Date or at the time of Tenant’s Default. Tenant waives and releases, to the fullest extent permissible under any Legal Requirement, any right to assert in any action by Landlord to enforce the terms of this Lease, any defense, counterclaim, or rights of setoff or recoupment respecting the mitigation of damages by Landlord. (e) Lien for Rent. Upon any default by Tenant in the payment of Rent or other amounts owed hereunder, Landlord shall have a lien upon the property of Tenant in the Premises for the amount of such unpaid amounts, and Tenant hereby specifically waives any and all exemptions allowed by law. In such event, Tenant shall not remove any of Tenant’s property from the Premises except with the prior written consent of Landlord, and Landlord shall have the right and privilege, at its option, to take possession of all Tenant’s property in the Premises, to store the same on the Premises, or to remove it and store it in such place as may be selected by Landlord, at Tenant’s risk and expense. If Tenant fails to redeem the personal property so seized, by payment of whatever sum may be due Landlord hereunder (including all storage costs), Landlord shall have the right, after [***] written notice to Tenant of its intention to do so, to sell such personal property so seized at public or private sale and upon such terms and conditions as may appear advantageous to Landlord, and after the payment of all proper charges incident to such sale, apply the proceeds thereof to the payment of any balance due to Landlord on account of rent or other obligations of Tenant pursuant to this Lease. In the event there shall then remain in the hands of Landlord any balance realized from the sale of such personal property, the same shall be paid over to Tenant. The exercise of the foregoing remedy by Landlord shall not relieve or discharge Tenant from any deficiency owed to Landlord that Landlord has the right to enforce pursuant to any of the provisions of this Lease. Tenant shall also be liable for all expenses incident to the foregoing process, including any auctioneer or attorney’s fees or commissions. At Tenant’s request, Landlord shall subordinate its lien rights as set forth in this paragraph to the lien, operation, and effect of any bona fide third party financing for equipment, trade fixtures, leasehold improvements, and/or working capital pursuant to a subordination agreement in form and substance reasonably acceptable to Landlord. Such subordination shall be limited to specific items of equipment and shall not be in the form of a blanket lien subordination. (f) Expenses. Tenant shall pay, as Additional Rent and immediately upon written demand from Landlord, all costs and expenses incurred by Landlord, including, but not limited to, attorneys’ fees, expert witness fees, paralegal fees, other litigation expenses (such as expenses for photocopying, electronic legal research, and deposition transcripts), and court costs in connection with or arising out of


 
700 Quince Orchard Road—Novavax, Inc. —Page 23 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. any Default by Tenant under this Lease, including, but not limited to, any action or proceeding brought by Landlord to enforce any obligation of Tenant under this Lease or the right of Landlord in or to the Premises. Such expenses are recoverable at all levels, including appeals and post-judgment actions or proceedings. The giving of a notice of Default by Landlord shall constitute part of an action or proceeding under this Lease, entitling Landlord to reimbursement of such fees and expenses, even if an action or proceeding is not commenced in a court of law and regardless of whether the Default is cured. (g) Suspension of Funding. Upon a Default by Tenant hereunder and during the continuance thereof, Landlord shall have the right to suspend funding of any TI Allowance. (h) Other Remedies. In addition to the remedies set forth in this Section 21, Landlord, at its option, without further notice or demand to Tenant, shall have all other rights and remedies provided at law or in equity. 22. Assignment and Subletting. (a) General Prohibition. Without Landlord’s prior written consent, subject to and on the conditions described in this Section 22, Tenant shall not, directly or indirectly, voluntarily or by operation of law, assign this Lease or sublease the Premises or any part thereof or mortgage, pledge, or hypothecate its leasehold interest or grant any concession or license within the Premises, and any attempt to do any of the foregoing shall be void and of no effect. Landlord shall reply to Tenant’s request for consent within [***]. If Tenant is a corporation, partnership or limited liability company, the shares or other ownership interests thereof that are not actively traded upon a stock exchange or in the over-the-counter market, a transfer or series of transfers whereby 49% or more of the issued and outstanding shares or other ownership interests of such corporation are, or voting control is, transferred (but excepting transfers upon deaths of individual owners) from a person or persons or entity or entities that were owners thereof at time of execution of this Lease to persons or entities who were not owners of shares or other ownership interests of the corporation, partnership or limited liability company at time of execution of this Lease, shall be deemed an assignment of this Lease requiring the consent of Landlord as provided in this Section 22. (b) Permitted Transfers. If Tenant desires to assign, sublease, hypothecate or otherwise transfer this Lease or sublet the Premises other than pursuant to a Permitted Assignment/Sublease, then at least [***] before the date Tenant desires the assignment or sublease to be effective (“Assignment Date”), Tenant shall give Landlord a notice (“Assignment Notice”) containing such information about the proposed assignee or sublessee, including the proposed use of the Premises and any Hazardous Materials proposed to be used, stored handled, treated, generated in or released or disposed of from the Premises, the Assignment Date, any relationship between Tenant and the proposed assignee or sublessee, and all material terms and conditions of the proposed assignment or sublease, including a copy of any proposed assignment or sublease in its final form, and such other information as Landlord may deem reasonably necessary or appropriate to its consideration whether to grant its consent. Landlord may, by giving written notice to Tenant within [***] after receipt of the Assignment Notice: (i) grant such consent, or (ii) refuse such consent, in its reasonable discretion (provided that Landlord shall further have the right to review and approve or disapprove the proposed form of sublease prior to the effective date of any such subletting). No failure of Landlord to deliver a timely notice in response to the Assignment Notice shall be deemed to be Landlord’s consent to the proposed assignment, sublease or other transfer. [***]. (c) Permitted Assignment/Sublease; Collaborator Occupancy. Notwithstanding the foregoing, Tenant shall have the right, at any time during the Term, upon [***] prior written notice to Landlord but without obtaining Landlord’s prior written consent, to (i) assign this Lease or sublet any portion of the Premises to any entity controlling, controlled by, or under common control with Tenant, or to any corporation or other entity that is a successor-in-interest to Tenant, by way of merger, consolidation or corporate reorganization, or by the purchase of all or substantially all of the assets or the ownership interests of Tenant provided that (A) such merger or consolidation, or such acquisition or assumption, as the case may be, is


 
700 Quince Orchard Road—Novavax, Inc. —Page 24 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. for a good business purpose and not principally for the purpose of transferring this Lease, and (B) the net worth (as determined in accordance with GAAP) of the assignee is not less than the net worth (as determined in accordance with GAAP) of Tenant as of the date of Tenant’s most current quarterly or annual financial statements, and (C) such assignee shall agree in writing to assume all of the terms, covenants and conditions of this Lease arising after the effective date of the assignment (each, a “Permitted Assignment/Sublease”), provided that Landlord shall have the right to approve the form of any such sublease or assignment, and (ii) permit a business entity that is a subsidiary, affiliate, contractor, client, customer, or collaborator of Tenant, or otherwise has a business relationship with Tenant, and is providing Tenant services in the course of Tenant’s business operations at the Premises or is occupying the Building in furtherance of such business relationship with Tenant (a “Collaborator”) to use a portion of the Premises for any Permitted Use; provided, however, that (A) Tenant receives no compensation for such Collaborator use, (B) the entity remains a Collaborator for the entire duration of such use and the entity is not indicated on the Building directory or any signage on the Premises, and (C) the Collaborator occupies no more than [***] of the rentable area of the Premises (“Collaborator Occupancy”). Such Collaborator Occupancy shall not be deemed a sublease or assignment hereunder, nor shall it vest in any such Collaborator any right, title, or interest in this Lease or the Premises nor shall it relieve, release, impair, or discharge any of Tenant’s obligations hereunder. Tenant shall ensure that the Collaborator complies with the terms of this Lease, including, but not limited to, the obligation to obtain and maintain the insurance coverages as more fully described in Section 17 (Insurance). In the case of a Permitted Assignment/Sublease, Tenant shall not be required to share Excess Rents (as defined below) with Landlord. (d) Additional Conditions. As a condition to any such assignment or subletting, whether or not Landlord’s consent is required, Landlord may require: (i) that any assignee or subtenant agree, in writing at the time of such assignment or subletting, that if Landlord gives such party notice that Tenant is in default under this Lease, such party shall thereafter make all payments otherwise due Tenant directly to Landlord, which payments will be received by Landlord without any liability except to credit such payment against those due under this Lease, and any such third party shall agree to attorn to Landlord or its successors and assigns should this Lease be terminated for any reason; provided, however, in no event shall Landlord or its successors or assigns be obligated to accept such attornment; and (ii) A list of Hazardous Materials, certified by the proposed assignee or sublessee to be true and correct, which the proposed assignee or sublessee intends to use, store, handle, treat, generate in or release or dispose of from the Premises, together with copies of all documents relating to such use, storage, handling, treatment, generation, release or disposal of Hazardous Materials by the proposed assignee or subtenant in the Premises or on the Project, prior to the proposed assignment or subletting, including, without limitation: permits; approvals; reports and correspondence; storage and management plans; plans relating to the installation of any storage tanks to be installed in or under the Project (provided, such installation of tanks shall only be permitted after Landlord has given its written consent to do so, which consent may be withheld in Landlord’s sole and absolute discretion); and all closure plans or any other documents required by any and all federal, state and local Governmental Authorities for any storage tanks installed in, on or under the Project for the closure of any such tanks. Neither Tenant nor any such proposed assignee or subtenant is required, however, to provide Landlord with any portion(s) of the such documents containing information of a proprietary nature that, in and of themselves, do not contain a reference to any Hazardous Materials or hazardous activities. (e) No Release of Tenant, Sharing of Excess Rents. Notwithstanding any assignment or subletting, Tenant and any guarantor or surety of Tenant’s obligations under this Lease shall at all times remain fully and primarily responsible and liable for the payment of Rent and for compliance with all of


 
700 Quince Orchard Road—Novavax, Inc. —Page 25 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. Tenant’s other obligations under this Lease. Other than with respect to a Permitted Assignment/Sublease, if the Rent due and payable by a sublessee or assignee (or a combination of the rental payable under such sublease or assignment plus any bonus or other consideration therefor or incident thereto in any form) exceeds the sum of the rental payable under this Lease (excluding however, any Rent payable under this Section) and actual and reasonable brokerage fees, legal costs, any design or construction fees directly related to and required pursuant to the terms of any such sublease or assignment, and the unamortized costs of any improvements to the Premises directly paid for by Tenant from time to time (allocated pro rata to the portion of the Premises being subleased) (“Excess Rent”), then Tenant shall be bound and obligated to pay Landlord as Additional Rent hereunder [***]% of such Excess Rent within [***] following receipt thereof by Tenant. If Tenant shall sublet the Premises or any part thereof, Tenant hereby immediately and irrevocably assigns to Landlord, as security for Tenant’s obligations under this Lease, all rent from any such subletting, and Landlord as assignee and as attorney-in-fact for Tenant, or a receiver for Tenant appointed on Landlord’s application, may collect such rent and apply it toward Tenant’s obligations under this Lease; except that, until the occurrence of a Default, Tenant shall have the right to collect such rent. (f) No Waiver. The consent by Landlord to an assignment or subletting shall not relieve Tenant or any assignees of this Lease or any sublessees of the Premises from obtaining the consent of Landlord to any further assignment or subletting nor shall it release Tenant or any assignee or sublessee of Tenant from full and primary liability under this Lease. The acceptance of Rent hereunder, or the acceptance of performance of any other term, covenant, or condition thereof, from any other person or entity shall not be deemed to be a waiver of any of the provisions of this Lease or a consent to any subletting, assignment or other transfer of the Premises. (g) Prior Conduct of Proposed Transferee. Notwithstanding any other provision of this Section 22, if (i) the proposed assignee or sublessee of Tenant has been required by any prior landlord, lender or Governmental Authority to take remedial action in connection with Hazardous Materials contaminating a property, where the contamination resulted from such party’s action or use of the property in question, (ii) the proposed assignee or sublessee is subject to an enforcement order issued by any Governmental Authority in connection with the use, storage, handling, treatment, generation, release or disposal of Hazardous Materials (including, without limitation, any order related to the failure to make a required reporting to any Governmental Authority), or (iii) because of the existence of a pre-existing environmental condition in the vicinity of or underlying the Project, the risk that Landlord would be targeted as a responsible party in connection with the remediation of such pre-existing environmental condition would be materially increased or exacerbated by the proposed use of Hazardous Materials by such proposed assignee or sublessee, Landlord shall have the absolute right to refuse to consent to any assignment or subletting to any such party. 23. Estoppel Certificate. Tenant shall, within [***] of written notice from Landlord, execute, acknowledge and deliver a statement in writing in any form reasonably requested by a proposed lender or purchaser, (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect) and the dates to which the rental and other charges are paid in advance, if any, (ii) acknowledging that there are not any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed, and (iii) setting forth such further information with respect to the status of this Lease or the Premises as may be requested thereon. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the real property of which the Premises are a part. Tenant’s fai lure to deliver such statement within such time shall, at the option of Landlord, be conclusive upon Tenant that this Lease is in full force and effect and without modification except as may be represented by Landlord in any certificate prepared by Landlord and delivered to Tenant for execution. 24. Quiet Enjoyment. So long as Tenant shall perform all of the covenants and agreements herein required to be performed by Tenant, Tenant shall, subject to the terms of this Lease, at all times


 
700 Quince Orchard Road—Novavax, Inc. —Page 26 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. during the Term, have peaceful and quiet enjoyment of the Premises against any person claiming by, through or under Landlord. 25. Prorations. All prorations required or permitted to be made hereunder shall be made on the basis of a 360 day year and 30 day months. 26. Rules and Regulations. Tenant shall, at all times during the Term and any extension thereof, comply with all reasonable rules and regulations at any time or from time to time established by Landlord covering use of the Premises and the Project. The current rules and regulations are attached hereto as Exhibit E. If there is any conflict between such rules and regulations and other provisions of this Lease, the terms and provisions of this Lease shall control. Landlord shall not enforce such rules and regulations in a discriminatory manner. 27. Subordination. This Lease and Tenant’s interest and rights hereunder are hereby made and shall be subject and subordinate at all times to the lien of any Mortgage now existing or hereafter created on or against the Project or the Premises, and all amendments, restatements, renewals, modifications, consolidations, refinancing, assignments and extensions thereof, without the necessity of any further instrument or act on the part of Tenant; provided, however that so long as there is no Default hereunder, Tenant’s right to possession of the Premises shall not be disturbed by the Holder of any such Mortgage. Tenant agrees, at the election of the Holder of any such Mortgage, to attorn to any such Holder. Tenant agrees upon demand to execute, acknowledge and deliver such instruments, confirming such subordination, and such instruments of attornment as shall be requested by any such Holder, provided any such instruments contain appropriate non-disturbance provisions assuring Tenant’s quiet enjoyment of the Premises as set forth in Section 24 hereof. Notwithstanding the foregoing, any such Holder may at any time subordinate its Mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such Mortgage without regard to their respective dates of execution, delivery or recording and in that event such Holder shall have the same rights with respect to this Lease as though this Lease had been executed prior to the execution, delivery and recording of such Mortgage and had been assigned to such Holder. Throughout the Term and within 120 days of the execution and delivery of such Mortgage, Landlord shall use commercially reasonable efforts to obtain a subordination, non-disturbance, and attornment agreement (“SNDA”) on Holder’s standard form (with mutually agreed upon reasonable modifications) in favor of Tenant assuring Tenant’s quiet enjoyment of the Premises as set forth in Section 24 hereof. The SNDA shall not diminish any of Tenant’s rights under this Lese or materially increase Tenant’s costs or risks under this Lease. The term “Mortgage” whenever used in this Lease shall be deemed to include deeds of trust, security assignments and any other encumbrances, and any reference to the “Holder” of a Mortgage shall be deemed to include the beneficiary under a deed of trust. 28. Surrender. Upon the expiration of the Term or earlier termination of Tenant’s right of possession, Tenant shall surrender the Premises to Landlord in the same condition as received, subject to any Alterations or Installations permitted by Landlord to remain in the Premises, free of Hazardous Materials brought upon, kept, used, stored, handled, treated, generated in, or released or disposed of from, the Premises by any person other than Landlord or a Landlord Party (collectively, “Tenant HazMat Operations”) and released of all Hazardous Materials Clearances, broom clean, ordinary wear and tear and casualty loss and condemnation covered by Sections 18 and 19 excepted. At least [***] prior to the surrender of the Premises, Tenant shall deliver to Landlord a narrative description of the actions proposed (or required by any Governmental Authority) to be taken by Tenant in order to surrender the Premises (including any Installations permitted by Landlord to remain in the Premises) at the expiration or earlier termination of the Term, free from any residual impact from the Tenant HazMat Operations and otherwise released for unrestricted use and occupancy (“Surrender Plan”). Such Surrender Plan shall be accompanied by a current listing of (i) all Hazardous Materials licenses and permits held by or on behalf of any Tenant Party with respect to the Premises, and (ii) all Hazardous Materials used, stored, handled, treated, generated, released or disposed of from the Premises, and shall be subject to the review and


 
700 Quince Orchard Road—Novavax, Inc. —Page 27 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. approval of Landlord’s environmental consultant. In connection with the review and approval of the Surrender Plan, upon the request of Landlord, Tenant shall deliver to Landlord or its consultant such additional non-proprietary information concerning Tenant HazMat Operations as Landlord shall request. On or before such surrender, Tenant shall deliver to Landlord evidence that the approved Surrender Plan shall have been satisfactorily completed and Landlord shall have the right, subject to reimbursement at Tenant’s expense as set forth below, to cause Landlord’s environmental consultant to inspect the Premises and perform such additional procedures as may be deemed reasonably necessary to confirm that the Premises are, as of the effective date of such surrender or early termination of this Lease, free from any residual impact from Tenant HazMat Operations. Tenant shall reimburse Landlord, as Additional Rent, for the actual out-of-pocket expense incurred by Landlord for Landlord’s environmental consultant to review and approve the Surrender Plan and to visit the Premises and verify satisfactory completion of the same, which cost shall not exceed $[***]. Landlord shall have the unrestricted right to deliver such Surrender Plan and any report by Landlord’s environmental consultant with respect to the surrender of the Premises to third parties. (a) Failure to Provide Surrender Plan. If Tenant shall fail to prepare or submit a Surrender Plan approved by Landlord, or if Tenant shall fail to complete the approved Surrender Plan, or if such Surrender Plan, whether or not approved by Landlord, shall fail to adequately address any residual effect of Tenant HazMat Operations in, on or about the Premises, Landlord shall have the right to take such actions as Landlord may deem reasonable or appropriate to assure that the Premises and the Project are surrendered free from any residual impact from Tenant HazMat Operations, the reasonable cost of which actions shall be reimbursed by Tenant as Additional Rent, without regard to the limitation set forth in the first paragraph of this Section 28. (b) Security Systems. On the Commencement Date, Landlord shall provide Tenant, without charge, with working access cards or devices for the Building access control systems at a ratio of 5 keys per each 1,000 rentable square feet comprising the Premises. Landlord shall, at Tenant’s expense, provide replacement access cards. Upon the expiration or earlier termination of this Lease, Tenant shall immediately return to Landlord all keys and/or access cards to parking, the Project, elevators, restrooms or all or any portion of the Premises furnished to or otherwise procured by Tenant. If any such access card or key is lost, Tenant shall pay to Landlord, by mutual agreement of Landlord and Tenant, either the cost of replacing such lost access card or key or the cost of reprogramming the access security system in which such access card was used or changing the lock or locks opened by such lost key. Any Tenant’s Property, Alterations and property not so removed by Tenant as permitted or required herein shall be deemed abandoned and may be stored, removed, and disposed of by Landlord at Tenant’s expense, and Tenant waives all claims against Landlord for any damages resulting from Landlord’s retention and/or disposition of such property. All obligations of Tenant hereunder not fully performed as of the termination of the Term, including the obligations of Tenant under Section 30 hereof, shall survive the expiration or earlier termination of the Term, including, without limitation, indemnity obligations, payment obligations with respect to Rent and obligations concerning the condition and repair of the Premises. (c) Elevator Security. Landlord shall, at its sole expense and not as an Operating Expense, cause the passenger elevators serving the Premises to have programmable access control to lock-off each floor using a proximity or insert type card reader. (d) Tenant’s Security Devices. Tenant shall have the right, at its sole cost and expense, to install security devices within and at the entrances to the Premises, including a separate and proprietary security/card badge system in the Premises and the Building. 29. Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS


 
700 Quince Orchard Road—Novavax, Inc. —Page 28 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO. 30. Environmental Requirements. (a) Prohibition/Compliance/Indemnity. Tenant shall not cause or permit any Hazardous Materials (as hereinafter defined) to be brought upon, kept, used, stored, handled, treated, generated in or about, or released or disposed of from, the Premises or the Project in violation of applicable Environmental Requirements (as hereinafter defined) by Tenant or any Tenant Party. If Tenant breaches the obligation stated in the preceding sentence, or if the presence of Hazardous Materials in the Premises during the Term or any holding over results in contamination of the Premises, the Project or any adjacent property or if contamination of the Premises, the Project or any adjacent property by Hazardous Materials brought into, kept, used, stored, handled, treated, generated in or about, or released or disposed of from, the Premises by anyone other than Landlord and Landlord’s employees, agents and contractors otherwise occurs during the Term or any holding over, Tenant hereby indemnifies and shall defend and hold Landlord, its officers, directors, employees, agents and contractors harmless from any and all actions (including, without limitation, remedial or enforcement actions of any kind, administrative or judicial proceedings, and orders or judgments arising out of or resulting therefrom), costs, claims, damages (including, without limitation, damages based upon diminution in value of the Premises or the Project, or the loss of, or restriction on, use of the Premises or any portion of the Project), expenses (including, without limitation, attorneys’, consultants’ and experts’ fees, court costs and amounts paid in settlement of any claims or actions), fines, forfeitures or other civil, administrative or criminal penalties, injunctive or other relief (whether or not based upon personal injury, property damage, or contamination of, or adverse effects upon, the environment, water tables or natural resources), liabilities or losses (collectively, “Environmental Claims”) that arise during or after the Term as a result of such contamination; provided, however, that Tenant shall have no indemnification, remediation, or other obligation or responsibility under this Section 30 for any contamination or Environmental Claim if Tenant proves by a preponderance of the evidence that such contamination or Environmental Claim arises from any Hazardous Materials brought into, kept, used, stored, handled, treated, generated in or about, or released or disposed of from the Premises by Landlord, its employees or contractors, or that existed in the Premises as of the Commencement Date and were not brought into, kept, used, stored, handled, treated, generated in or about, or released or disposed of from the Premises by Tenant or any Tenant Party. This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions or any cleanup, treatment, remedial, removal, or restoration work required by any federal, state or local Governmental Authority because of Hazardous Materials present in the air, soil or ground water above, on, or under the Premises. Without limiting the foregoing, if the presence of any Hazardous Materials on the Premises, the Project, or any adjacent property caused or permitted by Tenant or any Tenant Party results in any contamination of the Premises, the Project, or any adjacent property, Tenant shall promptly take all actions at its sole expense and in accordance with applicable Environmental Requirements as are necessary to return the Premises, the Project, or any adjacent property to the condition existing prior to the time of such contamination, provided that Landlord’s approval of such action shall first be obtained, which approval shall not unreasonably be withheld so long as such actions would not potentially have any material adverse long- term or short-term effect on the Premises or the Project. (b) Business. Landlord acknowledges that it is not the intent of this Section 30 to prohibit Tenant from using the Premises for the Permitted Use. Tenant may operate its business according to prudent industry practices so long as the use or presence of Hazardous Materials is strictly and properly monitored according to all then applicable Environmental Requirements. As a material inducement to Landlord to allow Tenant to use Hazardous Materials in connection with its business, Tenant agrees to deliver to Landlord prior to the Commencement Date a list identifying each type of Hazardous Materials to be brought upon, kept, used, stored, handled, treated, generated on, or released or disposed of from, the Premises and setting forth any and all governmental approvals or permits required in connection with the presence, use, storage, handling, treatment, generation, release or disposal of such Hazardous Materials


 
700 Quince Orchard Road—Novavax, Inc. —Page 29 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. on or from the Premises (“Hazardous Materials List”). Tenant shall deliver to Landlord an updated Hazardous Materials List at least once a year and shall also deliver an updated list before any new Hazardous Material is brought onto, kept, used, stored, handled, treated, generated on, or released or disposed of from, the Premises. Tenant shall deliver to Landlord true and correct copies of the following documents (“Haz Mat Documents”) relating to the use, storage, handling, treatment, generation, release or disposal of Hazardous Materials prior to the Commencement Date, or if unavailable at that time, concurrent with the receipt from or submission to a Governmental Authority: permits; approvals; reports and correspondence; storage and management plans, notice of violations of any Legal Requirements; plans relating to the installation of any storage tanks to be installed in or under the Project (provided, such installation of tanks shall only be permitted after Landlord has given Tenant its written consent to do so, which consent may be withheld in Landlord’s sole and absolute discretion); all closure plans or any other documents required by any and all federal, state and local Governmental Authorities for any storage tanks installed in, on or under the Project for the closure of any such tanks; and a Surrender Plan (to the extent surrender in accordance with Section 28 cannot be accomplished in 3 months). Tenant is not required, however, to provide Landlord with any portion(s) of the Haz Mat Documents containing information of a proprietary nature that, in and of themselves, do not contain a reference to any Hazardous Materials or hazardous activities. It is not the intent of this Section to provide Landlord with information that could be detrimental to Tenant’s business should such information become possessed by Tenant’s competitors. (c) Tenant Representation and Warranty. Tenant hereby represents and warrants to Landlord that, to Tenant’s actual knowledge, (i) neither Tenant nor any of its legal predecessors has been required by any prior landlord, lender, or Governmental Authority at any time to take remedial action in connection with Hazardous Materials contaminating a property, which contamination was permitted by Tenant or such predecessor or resulted from Tenant’s or such predecessor’s action or use of the property in question, and (ii) Tenant is not subject to any enforcement order issued by any Governmental Authority in connection with the use, storage, handling, treatment, generation, release or disposal of Hazardous Materials (including, without limitation, any order related to the failure to make a required reporting to any Governmental Authority). If Landlord determines that this representation and warranty was not true as of the date of this Lease, Landlord shall have the right to terminate this Lease in Landlord’s sole and absolute discretion. (d) Testing. Landlord shall have access to, and a right to perform inspections and tests of, the Premises and the Project to determine Tenant’s compliance with Environmental Requirements (as defined below), its obligations under this Section 30, or the environmental condition of the Premises and the Project. In connection with such testing, upon the request of Landlord, Tenant shall deliver to Landlord or its consultant such non-proprietary and non-confidential information concerning the use of Hazardous Materials in or about the Premises by Tenant or any Tenant Party. Access shall be granted to Landlord upon Landlord’s prior notice to Tenant and at such times so as to minimize, so far as may be reasonable under the circumstances, any disturbance to Tenant’s operations. Such inspections and tests shall be conducted at Landlord’s expense (which shall not constitute an Operating Expense), unless such inspections or tests are conducted pursuant to Section 21 hereof or reveal that Tenant has not complied with any Environmental Requirement, in which case Tenant shall reimburse Landlord for the reasonable cost of such inspection and tests. Tenant shall, at its sole cost and expense, promptly and satisfactorily remediate any environmental conditions identified by such testing in accordance with all Environmental Requirements. Landlord’s receipt of or satisfaction with any environmental assessment in no way waives any rights that Landlord may have against Tenant. (e) Underground Tanks. Under no circumstances whatsoever will Tenant have the right to install any underground storage tank on or about the Premises or the Project. If underground or other storage tanks storing Hazardous Materials located on the Premises or the Project before the Commencement Date are used by Tenant, Tenant shall install, use, monitor, operate, maintain, upgrade and manage such storage tanks, maintain appropriate records, obtain and maintain appropriate insurance, implement reporting procedures, properly close any underground storage tanks if required by applicable


 
700 Quince Orchard Road—Novavax, Inc. —Page 30 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. Legal Requirements, and take or cause to be taken all other actions necessary or required under applicable state and federal Legal Requirements, as such now exists or may hereafter be adopted or amended in connection with the installation, use, maintenance, management, operation, upgrading and closure of such storage tanks. (f) Control Areas. Tenant shall be allowed to utilize up to 100% of the Hazardous Materials inventory within any control area or zone (located within the Premises), as designated from time to time by the applicable building code or other Legal Requirement, for Hazardous Materials use or storage. (g) Obligations. Each party’s obligations under this Section 30 shall survive the expiration or earlier termination of this Lease for the applicable statute of limitations period under federal, state, or local Legal Requirement. During any period of time after the expiration or earlier termination of this Lease required by Tenant or Landlord to complete the removal from the Premises of any Hazardous Materials (including, without limitation, the release and termination of any licenses or permits restricting the use of the Premises and the completion of the approved Surrender Plan), Tenant shall continue to pay the full Rent in accordance with this Lease for any portion of the Premises not relet by Landlord in Landlord’s sole discretion, which Rent shall be prorated daily. (h) Definitions. As used herein, (i) the term “Environmental Requirements” means all applicable present and future statutes, regulations, ordinances, rules, codes, judgments, orders or other similar enactments of any Governmental Authority regulating or relating to health, safety, or environmental conditions on, under, or about the Premises or the Project, or the environment, including without limitation, the following: the Comprehensive Environmental Response, Compensation and Liability Act; the Resource Conservation and Recovery Act; and all state and local counterparts thereto, and any regulations or policies promulgated or issued thereunder, and (ii) the term “Hazardous Materials” means and includes any substance, material, waste, pollutant, or contaminant listed or defined as hazardous or toxic, or regulated by reason of its impact or potential impact on humans, animals and/or the environment under any Environmental Requirements, asbestos and petroleum, including crude oil or any fraction thereof, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas). As defined in Environmental Requirements, Tenant is and shall be deemed to be the “operator” of Tenant’s “facility” and the “owner” of all Hazardous Materials brought on the Premises by Tenant or any Tenant Party, and the wastes, by-products, or residues generated, resulting, or produced therefrom. (i) Environmental Report. Tenant acknowledges receipt of a copy of the phase I environmental site assessment for the Project dated September 2020 prepared by Ramboll US Corporation. To the extent of Landlord’s actual knowledge (which knowledge shall be limited to the actual knowledge of Lawrence J. Diamond as of the Commencement Date, without any duty to investigate or make inquiry; Mr. Diamond shall have no personal liability whatsoever under this Lease), Landlord is not aware of any violations of Environmental Requirements affecting the Premises or the Project not disclosed in such phase I environmental site assessment. 31. Tenant’s Remedies/Limitation of Liability. Landlord shall not be in default hereunder unless Landlord fails to perform any of its obligations hereunder within [***] after written notice from Tenant specifying such failure (unless such performance will, due to the nature of the obligation, require a period of time in excess of [***], then after such period of time as is reasonably necessary). Upon any default by Landlord, Tenant shall give notice by registered or certified mail to any Holder of a Mortgage covering the Premises and to any landlord of any lease of property in or on which the Premises are located and Tenant shall offer such Holder and/or landlord a reasonable opportunity to cure the default, including time to obtain possession of the Project by power of sale or a judicial action if such should prove necessary to effect a cure; provided Landlord shall have furnished to Tenant in writing the names and addresses of all such persons who are to receive such notices. All obligations of Landlord hereunder shall be construed as


 
700 Quince Orchard Road—Novavax, Inc. —Page 31 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. covenants, not conditions; and, except as may be otherwise expressly provided in this Lease, Tenant may not terminate this Lease for breach of Landlord’s obligations hereunder. Notwithstanding the foregoing, if any claimed Landlord default hereunder will immediately, materially, and adversely affect Tenant’s ability to conduct its business in the Premises (a “Material Landlord Default”), Tenant shall, as soon as reasonably possible, but in any event within [***] of obtaining knowledge of such claimed Material Landlord Default, give Landlord written notice of such claim and telephonic notice to Tenant’s principal contact with Landlord. Landlord shall then have [***] to commence cure of such claimed Material Landlord Default and shall diligently prosecute such cure to completion. If Tenant failed to give Landlord the notice required hereunder within [***] of learning of the conditions giving rise to the claimed Material Landlord Default, Landlord shall be entitled to recover from Tenant, as Additional Rent, any costs incurred by Landlord in connection with such cure in excess of the costs, if any, that Landlord would otherwise have been liable to pay hereunder. If Landlord fails to commence cure of any claimed Material Landlord Default as provided above, Tenant may commence and prosecute such cure to completion, and shall be entitled to recover the costs of such cure (but not any consequential or other damages) from Landlord, to the extent of Landlord’s obligation to cure such claimed Material Landlord Default hereunder, subject to the limitations set forth in this paragraph and the other provisions of this Lease. In no event whatsoever shall any curative action by Tenant (a) affect any Building Systems serving areas outside of the Premises, or (b) affect any portion of the Building’s structure, roof, or exterior. All obligations of Landlord under this Lease will be binding upon Landlord only during the period of its ownership of the Premises and not thereafter. The term “Landlord” in this Lease shall mean only the owner for the time being of the Premises. Upon the transfer by such owner of its interest in the Premises, such owner shall thereupon be released and discharged from all obligations of Landlord thereafter accruing, but such obligations shall be binding during the Term upon each new owner for the duration of such owner’s ownership. 32. Inspection and Access. Landlord and its agents, representatives, and contractors may enter the Premises at any reasonable time to inspect the Premises and to make such repairs as may be required or permitted pursuant to this Lease and for any other business purpose. Landlord and Landlord’s representatives may enter the Premises during business hours on not less than [***] advance written notice (except in the case of emergencies in which case no such notice shall be required and such entry may be at any time) for the purpose of effecting any such repairs, inspecting the Premises, showing the Premises to prospective purchasers and, during the last year of the Term, to prospective tenants or for any other business purpose. Landlord may erect a suitable sign on the Premises stating the Premises are available to let or that the Project is available for sale. Landlord may grant easements, make public dedications, designate Common Areas and create restrictions on or about the Premises, provided that no such easement, dedication, designation or restriction materially, adversely affects Tenant’s use or occupancy of the Premises for the Permitted Use. At Landlord’s request, Tenant shall execute such instruments as may be necessary for such easements, dedications or restrictions. Tenant shall at all times, except in the case of emergencies, have the right to escort Landlord or its agents, representatives, contractors or guests while the same are in the Premises, provided such escort does not materially and adversely affect Landlord’s access rights hereunder. 33. Security. Tenant acknowledges and agrees that security devices and services, if any, while intended to deter crime may not in given instances prevent theft or other criminal acts and that Landlord is not providing any security services with respect to the Premises. Tenant agrees that Landlord shall not be liable to Tenant for, and Tenant waives any claim against Landlord with respect to, any loss by theft or any other damage suffered or incurred by Tenant in connection with any unauthorized entry into the Premises or any other breach of security with respect to the Premises. Tenant shall be solely responsible for the personal safety of Tenant’s officers, employees, agents, contractors, guests and invitees while any such person is in, on or about the Premises and/or the Project. Tenant shall at Tenant’s cost obtain insurance coverage to the extent Tenant desires protection against such criminal acts.


 
700 Quince Orchard Road—Novavax, Inc. —Page 32 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. 34. Force Majeure. Neither Landlord nor Tenant shall be responsible or liable for delays in the performance of its obligations hereunder when caused by, related to, or arising out of acts of God, strikes, lockouts, or other labor disputes, embargoes, quarantines, weather, national, regional, or local disasters, calamities, or catastrophes, inability to obtain labor or materials (or reasonable substitutes therefor) at reasonable costs or failure of, or inability to obtain, utilities necessary for performance, governmental restrictions, orders, limitations, regulations, or controls, national emergencies, delay in issuance or revocation of permits, enemy or hostile governmental action, terrorism, insurrection, riots, civil disturbance or commotion, fire or other casualty, and other causes or events beyond the reasonable control of such party (“Force Majeure”); provided, however, that in no event shall Force Majeure excuse Tenant from performing any monetary obligation under this Lease. 35. Brokers. Landlord and Tenant each represents and warrants that it has not dealt with any broker, agent or other person (collectively, “Broker”) in connection with this transaction and that no Broker brought about this transaction, other than Jones Lang LaSalle Brokerage, Inc. (“JLL”), as Tenant’s broker. JLL shall be paid by Landlord pursuant to a separate agreement between Landlord and JLL. Landlord and Tenant each hereby agree to indemnify and hold the other harmless from and against any claims by any Broker, other than JLL, claiming a commission or other form of compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard to this leasing transaction. 36. Limitation on Landlord’s Liability. NOTWITHSTANDING ANYTHING SET FORTH HEREIN OR IN ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT TO THE CONTRARY: (A) LANDLORD SHALL NOT BE LIABLE TO TENANT OR ANY OTHER PERSON FOR (AND TENANT AND EACH SUCH OTHER PERSON ASSUME ALL RISK OF) LOSS, DAMAGE OR INJURY, WHETHER ACTUAL OR CONSEQUENTIAL TO: TENANT’S PERSONAL PROPERTY OF EVERY KIND AND DESCRIPTION, INCLUDING, WITHOUT LIMITATION TRADE FIXTURES, EQUIPMENT, INVENTORY, SCIENTIFIC RESEARCH, SCIENTIFIC EXPERIMENTS, LABORATORY ANIMALS, PRODUCT, SPECIMENS, SAMPLES, AND/OR SCIENTIFIC, BUSINESS, ACCOUNTING AND OTHER RECORDS OF EVERY KIND AND DESCRIPTION KEPT AT THE PREMISES AND ANY AND ALL INCOME DERIVED OR DERIVABLE THEREFROM; (B) THERE SHALL BE NO PERSONAL RECOURSE TO LANDLORD FOR ANY ACT OR OCCURRENCE IN, ON OR ABOUT THE PREMISES OR ARISING IN ANY WAY UNDER THIS LEASE OR ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT WITH RESPECT TO THE SUBJECT MATTER HEREOF AND ANY LIABILITY OF LANDLORD HEREUNDER SHALL BE STRICTLY LIMITED SOLELY TO LANDLORD’S INTEREST IN THE PROJECT OR ANY PROCEEDS FROM SALE OR CONDEMNATION THEREOF AND ANY INSURANCE PROCEEDS PAYABLE IN RESPECT OF LANDLORD’S INTEREST IN THE PROJECT OR IN CONNECTION WITH ANY SUCH LOSS; AND (C) IN NO EVENT SHALL ANY PERSONAL LIABILITY BE ASSERTED AGAINST ANY OF LANDLORD’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS. UNDER NO CIRCUMSTANCES SHALL LANDLORD OR ANY OF LANDLORD’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS BE LIABLE FOR INJURY TO TENANT’S BUSINESS OR FOR ANY LOSS OF INCOME OR PROFIT THEREFROM. 37. Severability. If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws, then and in that event, it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby. It is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal, invalid or unenforceable, there be added, as a part of this Lease, a clause or provision as similar in effect to such illegal, invalid or unenforceable clause or provision as shall be legal, valid and enforceable. This Lease, including the exhibits attached hereto, constitutes the entire agreement between Landlord and Tenant pertaining to the subject matter hereof and supersedes all prior agreements, understandings, letters of intent, negotiations, and discussions, whether oral or written, of the parties, and there are no warranties, representations, or other agreements, express or implied, made to either party by the other party in connection with the subject matter hereof except as specifically set forth herein or in the documents delivered pursuant hereto or in connection herewith.


 
700 Quince Orchard Road—Novavax, Inc. —Page 33 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. 38. Signs; Exterior Appearance. (a) General. Tenant shall not, except as otherwise provided in Section 38(b) and without the prior written consent of Landlord, which consent shall not be unreasonably withheld, delayed, or conditioned: (i) attach any awnings, exterior lights, decorations, balloons, flags, pennants, banners, painting or other projection to any outside wall of the Project, (ii) use any curtains, blinds, shades or screens other than Landlord’s standard window coverings, (iii) coat or otherwise sunscreen the interior or exterior of any windows, (iv) place any bottles, parcels, or other articles on the window sills, (v) place any equipment, furniture or other items of personal property on any exterior balcony, or (vi) paint, affix or exhibit on any part of the Premises or the Project any signs, notices, window or door lettering, placards, decorations, or advertising media of any type that can be viewed from the exterior of the Premises. Interior signs on doors and the directory tablet shall be inscribed, painted or affixed for Tenant by Landlord at the sole cost and expense of Tenant, and shall be of a size, color and type reasonably acceptable to Landlord. Nothing may be placed on the exterior of corridor walls or corridor doors other than Landlord’s standard lettering. The directory tablet shall be provided exclusively for the display of the name and location of tenants. (b) Identification Signage. Tenant shall have the right, at its sole option, cost, and expense and in compliance with all applicable Legal Requirements, to install the maximum interior and exterior signs permitted by Legal Requirements, including, without limitation, installing and affixing to the exterior of the top level of the Building façade exactly 2 mounted, illuminated signs as desired by Tenant and permitted by applicable Legal Requirements (and related electrical connections and equipment) bearing the then- current name and the corporate logo of Tenant (“Identification Signage”). The Identification Signage shall be placed to maximize visibility on Quince Orchard Road and Firstfield Road. Such right shall be personal to Novavax, Inc. and any transferee pursuant to a Permitted Assignment/Sublease. Landlord shall have the right to approve (which approval shall not be unreasonably withheld, delayed, or conditioned) the location, color, size, and design of all such exterior signage, including, but not limited to, the Identification Signage as well as any impact the Identification Signage (as well as any other exterior signage mounted on the Building) may have on the structural integrity of the Building. Tenant shall, at its sole cost and expense, maintain all exterior signage in good order and repair consistent with a Class A building and have the right to replace, renovate, and/or update such exterior signage from time to time, subject to Landlord’s approval, which approval shall not be unreasonably withheld, delayed, or conditioned. On the expiration or earlier termination of the Term, Tenant shall, at its sole cost and expense, (i) remove such exterior signage in a good and workmanlike manner and in compliance with all applicable Legal Requirements, and (ii) repair any damage to the façade or appearance of the Building caused by installation, replacement, renovation, updating and/or removal of such exterior signage. (c) Monument Signage. Landlord shall have the right, at its sole cost and expense (which shall not be included in Operating Expenses), to install, maintain, and replace monument signage on the Project consistent with Landlord’s then current signage program. 39. Right to Extend Term. Tenant shall have the right to extend the Term of this Lease upon the following terms and conditions: (a) Extension Rights. Tenant shall have 2 consecutive rights (each, an “Extension Right”) to extend the term of this Lease for 5 years each (each, an “Extension Term”) on the same terms and conditions as this Lease (other than Base Rent) by giving Landlord written notice of its election to exercise each Extension Right at least 12 months prior, and no earlier than 18 months prior, to the expiration of the Base Term of this Lease or the expiration of any prior Extension Term. (b) Base Rent. Upon the commencement of any Extension Term, Base Rent shall be payable at 95% of the Market Rate (as defined below). Base Rent shall thereafter be adjusted on each anniversary of the commencement of the Extension Term by a percentage as determined by Landlord and agreed to


 
700 Quince Orchard Road—Novavax, Inc. —Page 34 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. by Tenant at the time the Market Rate is determined. As used herein, “Market Rate” shall mean the then market rental rate (including applicable market concessions) for comparable manufacturing, office, and laboratory space in the Gaithersburg, Maryland submarket as determined by Landlord and agreed to by Tenant. In addition, Landlord may impose a market rent for the parking rights provided hereunder. Within 30 days of the delivery to Landlord of Tenant’s written notice of Tenant’s election to exercise the Extension Right, Landlord shall deliver to Tenant Landlord’s determination of the Market Rate and the rent escalations for the Extension Term, whereupon Landlord and Tenant shall use commercially reasonable efforts to negotiate in good faith the Market Rate and rent escalations for the Extension Term (“Negotiation Period”). If Landlord and Tenant are unable to agree on the Market Rate and rent escalations by the date that is [***] prior to the expiration of the Base Term of this Lease, or the expiration of any prior Extension Term, Tenant may by written notice to Landlord not later than [***] prior to the expiration of the Base Term of this Lease, or the expiration of any then effective Extension Term, elect arbitration as described in Section 39(c) below. If Tenant does not elect such arbitration, Tenant shall be deemed to have waived any right to extend, or further extend, the Term of this Lease and all of the remaining Extension Rights shall terminate. (c) Arbitration. (i) Within [***] of Tenant’s notice to Landlord of its election to arbitrate Market Rate and escalations, each party shall deliver to the other a proposal containing the Market Rate and escalations that the submitting party believes to be correct (“Extension Proposal”). If either party fails to timely submit an Extension Proposal, the other party’s submitted proposal shall determine the Base Rent and escalations for the Extension Term. If both parties submit Extension Proposals, then Landlord and Tenant shall meet within [***] after delivery of the last Extension Proposal and make a good faith attempt to mutually appoint a single Arbitrator (as defined below) to determine the Market Rate and escalations. If Landlord and Tenant are unable to agree upon a single Arbitrator, then each shall, by written notice delivered to the other within [***] after the meeting, select an Arbitrator. If either party fails to timely give notice of its selection for an Arbitrator, the other party’s submitted proposal shall determine the Base Rent for the Extension Term. The 2 Arbitrators so appointed shall, within [***] after their appointment, appoint a third Arbitrator. If the 2 Arbitrators so selected cannot agree on the selection of the third Arbitrator within the time above specified, then either party, on behalf of both parties, may request such appointment of such third Arbitrator by application to any state court of general jurisdiction in the jurisdiction in which the Premises are located, upon [***] prior written notice to the other party of such intent. (ii) The decision of the Arbitrator(s) shall be made within [***] after the appointment of a single Arbitrator or the third Arbitrator, as applicable. The decision of the single Arbitrator shall be final and binding upon the parties. The average of the two closest Arbitrators in a three Arbitrator panel shall be final and binding upon the parties. Each party shall pay the fees and expenses of the Arbitrator appointed by or on behalf of such party and the fees and expenses of the third Arbitrator shall be borne equally by both parties. If the Market Rate and escalations are not determined by the first day of the Extension Term, then Tenant shall pay Landlord Base Rent in an amount equal to the Base Rent in effect immediately prior to the Extension Term and increased by the Rent Adjustment Percentage until such determination is made. After the determination of the Market Rate and escalations, the parties shall make any necessary adjustments to such payments made by Tenant. Landlord and Tenant shall then execute and deliver an amendment recognizing the Market Rate and escalations for the Extension Term. (iii) An “Arbitrator” shall be any person appointed by or on behalf of either party or appointed pursuant to the provisions hereof and: (i) shall be (A) a member of the American Institute of Real Estate Appraisers with not less than 10 years of experience in


 
700 Quince Orchard Road—Novavax, Inc. —Page 35 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. the appraisal of improved office and high tech industrial real estate in the greater Gaithersburg submarket area, or (B) a licensed commercial real estate broker with not less than 15 years’ experience representing landlords and/or tenants in the leasing of high tech or life sciences space in the greater Gaithersburg submarket area, (ii) devoting substantially all of their time to professional appraisal or brokerage work, as applicable, at the time of appointment and (iii) be in all respects impartial and disinterested. (d) Rights Personal. Extension Rights are personal to Tenant and are not assignable without Landlord’s consent, which may be granted or withheld in Landlord’s sole discretion separate and apart from any consent by Landlord to an assignment of Tenant’s interest in this Lease, except that the Extension Right may be assigned in connection with any Permitted Assignment/Sublease of this Lease. (e) Exceptions. Notwithstanding anything set forth above to the contrary, Extension Rights shall not be in effect and Tenant may not exercise any of the Extension Rights: (i) during any period of time that Tenant is in monetary or material non-monetary Default under any provision of this Lease; or (ii) if Tenant has been in monetary or material non-monetary Default under any provision of this Lease [***] or more times, regardless of whether the Defaults are cured, during the [***] period immediately prior to the date that Tenant intends to exercise an Extension Right, regardless of whether the Defaults are cured. (f) No Extensions. The period of time within which any Extension Rights may be exercised shall not be extended or enlarged by reason of Tenant’s inability to exercise the Extension Rights. (g) Termination. The Extension Rights shall terminate and be of no further force or effect even after Tenant’s due and timely exercise of an Extension Right, if, after such exercise, but prior to the commencement date of an Extension Term, (i) Tenant fails to timely cure any monetary or material non- monetary Default by Tenant under this Lease; or (ii) Tenant has Defaulted [***] or more times during the period from the date of the exercise of an Extension Right to the date of the commencement of the Extension Term, regardless of whether such Defaults are cured. 40. Tenant’s Right of First Refusal to Purchase Project. (a) General. If at any time during the Term of this Lease, Landlord shall receive an offer that it desires to accept from a third party (“Offeror”) to purchase fee simple title to the Project, Landlord shall deliver the terms of such offer to Tenant (“Tenant Purchase Notice”). Tenant shall have a period of [***] after Tenant’s receipt of the Tenant Purchase Notice within which to accept the terms of such offer contained in the Tenant Purchase Notice. If Tenant desires to accept the terms of the offer contained in the Tenant Purchase Notice (“Right of First Refusal”), Tenant shall send written notice of acceptance (“Tenant Acceptance Notice”) to Landlord before the expiration of such [***] period. Within [***] after the date of the Tenant Acceptance Notice, Tenant shall deliver to Chicago Title Insurance Company, as escrow agent (“Escrow Agent”), an escrow deposit in an amount equal to 5% of the purchase price set forth in such offer (“Escrow Deposit”). If Chicago Title Insurance Company is no longer in existence, the Escrow Agent shall be selected by Landlord and reasonably acceptable to Tenant. The Escrow Deposit shall be refundable in full until the expiration or earlier termination of the DD Period (as defined below). If Tenant fails to timely provide the Tenant Acceptance Notice or deliver the Escrow Deposit to Escrow Agent, Tenant shall be deemed to have irrevocably rejected the terms set forth in the Tenant Purchase Notice. Subject to the provisions of this Section 40, if Tenant does not accept (or is deemed to have rejected) the terms of the offer set forth in the Tenant Purchase Notice, then Landlord shall have the right to sell the Project to the Offeror or an Offeror Affiliate (as defined below). For purposes of this Section 40, (A) an “Offeror Affiliate” means any person or entity Controlling, Controlled by, or under common Control with Offeror, and (B) “Control” (and any form thereof, such as “Controlled” or “Controlling”) means with respect to any person or entity the possession directly or indirectly, through one or more intermediaries, of the power to: (1) vote more than 50% of the voting stock of such person or entity; or (2) direct or cause the direction of the


 
700 Quince Orchard Road—Novavax, Inc. —Page 36 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. management or policies of such person or entity, whether through the ownership of voting securities, membership interests, partnership interests, by contract, or otherwise. (b) Due Diligence. Because of Tenant’s ongoing occupancy of the Premises and knowledge of the Project and notwithstanding any contrary provision contained in the Tenant Purchase Notice, Tenant shall have a period of [***] from the date of the Tenant Acceptance Notice (“DD Period”) to perform any non-invasive studies, inspections, and other forms of due diligence of the Project. Notwithstanding any contrary provision contained in the Tenant Purchase Notice, the closing on the purchase and sale of the Project (“Closing”) shall occur not later than [***] after the expiration of the DD Period (“Closing Date”). (c) Revival of Right of First Refusal. If Tenant does not accept (or is deemed to have rejected) the terms of the offer set forth in the Tenant Purchase Notice, Landlord shall have the right to sell the Project to the Offeror or an Offeror Affiliate at a purchase price not less than [***] of the purchase price stated in the Tenant Purchase Notice. If Landlord intends to sell the Project to the Offeror or an Offeror Affiliate at a purchase price less than [***] of the purchase price stated in the Tenant Purchase Notice, Landlord shall first send a new Tenant Purchase Notice to Tenant reflecting the lower purchase price in accordance with the procedures set forth in Section 40(a) above. If Landlord has not closed on the sale of the Project to the Offeror or an Offeror Affiliate within [***] after Tenant’s rejection (or deemed rejection) of the Tenant Purchase Notice, Landlord shall again be required to comply with the provisions of this Section 40 before selling the Project to any Offeror (or any Offeror Affiliate), it being agreed that Tenant’s Right of First Refusal is intended to be a recurring right. (d) Terms of Purchase and Sale. In the event of a sale of the Project to Tenant under this Section 40, Landlord shall convey title to the Project to Tenant or its designee on the Closing Date by means of a special warranty deed in form and substance reasonably acceptable to Landlord and Tenant (“Deed”). As a material inducement by Landlord to grant Tenant the Right of First Refusal, Tenant acknowledges and agrees that the Project is being sold by Landlord in its then “AS IS, WHERE IS, WITH ALL FAULTS” condition without any representation or warranty, either express or implied, oral or written. Tenant acknowledges that Landlord has not made, does not make, and specifically negates, renounces, and disclaims any representations, warranties, promises, covenants, agreements, or guaranties of any kind or character whatsoever, whether express or implied, oral or written, as to, concerning, or with respect to, any other matter or attribute of the Project. Tenant acknowledges and agrees that Landlord shall be under no duty to make any affirmative disclosures regarding any matter that may be known to Landlord. Notwithstanding anything in this Lease to the contrary, the agreements of Tenant contained in this Section 40 shall survive the Closing and any termination of this Lease. Tenant further acknowledges and agrees that it (i) is relying solely on its own independent investigation of the Project and not on any information provided or to be provided by Landlord, it agents, or contractors, (ii) knowingly, voluntarily, and willingly assumes the risk of the physical condition and state of repair of the Project, and (iii) has not been induced by and has not relied on any representations, warranties, or statements, whether express or implied, oral or written, made by Landlord or any agent, employee, or other representative of Landlord or by any broker or any other person representing or purporting to represent Landlord, that are not expressly set forth in this Lease. The purchase price shall not be reduced as a consequence of reasonable use, wear, tear, and natural deterioration between the date of the Tenant Acceptance Notice and the Closing Date. (e) Closing Adjustments. All paid or accrued Rents under this Lease shall be prorated and apportioned as of the Closing Date. This Lease shall terminate on the consummation of the Closing; provided, however, that such termination shall not relieve or excuse Tenant from its obligations to pay to Landlord past due or delinquent Rents or other payments that have become due hereunder on or before the Closing Date. If, on the Closing Date, there are any past due or delinquent Rents or other payments that have become due hereunder, at Closing Tenant shall pay to Landlord in cash such past due, delinquent rents, or other payments that have become due hereunder. Within [***] after the Closing Date, Landlord shall deliver to Tenant a statement setting forth the actual Operating Expenses expended by Landlord


 
700 Quince Orchard Road—Novavax, Inc. —Page 37 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. during the period in which the Tenant leased the Premises in the calendar year in which the Closing occurs (“Closing Period”). If the amounts paid by Tenant during the course of the Closing Period are less than Tenant's Share of the actual Operating Expenses, then Tenant shall, within [***] after receipt of the annual statement, pay the entire amount of the deficiency as Additional Rent. If the amounts paid by Tenant during the course of the Closing Period are more than Tenant's Share of the actual Operating Expenses and Tenant has otherwise fully performed its obligations under this Lease, then Landlord shall pay such amounts to Tenant within [***] after Tenant’s receipt of such statement. (f) Closing Costs. At Closing, (i) Tenant shall pay all costs of title insurance, examination, and certification; 50% of any transfer and recordation tax due in connection with the conveyance of the Project and the recordation of the Deed; recordation taxes due in connection with the recordation of any mortgage or deed of trust securing financing obtained by Tenant in connection with the acquisition of the Project; escrow fees and costs; any sales taxes due on the sale of personal property; the fees and expenses of Tenant’s attorneys; survey costs; and all other costs incurred by Tenant or required to be paid by Tenant, (ii) Landlord shall pay 50% of any transfer and recordation tax due in connection with the conveyance of the Project and the recordation of the Deed, and all other costs and expenses incurred by Landlord or required to be paid by Landlord, including, but not limited to, attorneys’ fees incurred by Landlord in connection with the transaction contemplated by the Right of First Refusal, (iii) Landlord and Tenant shall execute and deliver a closing statement that shall, among other items, set forth the purchase price, all credits against the purchase price, the amounts of all prorations and other adjustments to the purchase price and all disbursements made at Closing on behalf of Landlord and Tenant, and (iv) Tenant shall pay to Landlord the purchase price in cash by means of a wire transfer (via Fedwire). Tenant shall receive no credit against the purchase price for any payments of Base Rent that may have been made by Tenant. To the extent not otherwise provided in this paragraph, any other closing costs shall be apportioned at Closing in the manner then customary for comparable commercial real estate transactions in Montgomery County, Maryland. In any case where sufficient information is not available at the Closing to make an accurate proration, Landlord and Tenant shall reasonably estimate the proration at the Closing and shall make a recalculation of the apportionment of the same as soon as the necessary information becomes available, at which time Landlord or Tenant, as the case may be, promptly shall make an appropriate payment to the other based on such recalculation. (g) No Right if Default, Assignment, or Sublet. Tenant shall not have a Right of First Refusal if, at the time Landlord delivers the Tenant Purchase Notice to Tenant, Tenant is in Default under any provision of this Lease. The Right of First Refusal is personal to Novavax, Inc. and is not assignable without Landlord’s consent, which consent may be granted or withheld in Landlord’s sole discretion separate and apart from any consent by Landlord to an assignment of Tenant’s interest in this Lease. (h) Certain Transfers Excluded. The Right of First Refusal shall not apply to the following (collectively, “Excluded Transfers”): (i) any sale or transfer of the Project to an entity in which Landlord or a Landlord Affiliate (as defined below) has a controlling interest; (ii) any transfer without consideration, (iii) any condemnation or eminent domain action or proceeding affecting all or any part of the Project by any Governmental Authority for any public or quasi-public use or purpose, including a sale thereof under threat of such a taking, (iv) any foreclosure proceeding or sale or any sale in lieu of a foreclosure affecting the Project, or (v) any portfolio transaction that includes at least one other real estate asset consisting of a commercial building or land capable of accommodating a new commercial building. For purposes of this Lease, “Landlord Affiliate” means any person or entity Controlling, Controlled by, or under common Control with Landlord. (i) Like-Kind Exchange. Landlord or Tenant shall have the right to structure the sale of the Project as a forward or reverse exchange thereof for other real property of a like-kind to be designated by Landlord or Tenant, with the result that the exchange shall qualify for non-recognition of gain under Section 1031 of the Internal Revenue Code, as amended (“Code”), in which case the other party shall execute and deliver any documents reasonably necessary to effect such exchange, as reasonably approved by the other party’s counsel, and otherwise assist and cooperate with the requesting party in effecting such exchange,


 
700 Quince Orchard Road—Novavax, Inc. —Page 38 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. provided that: (i) any costs and expenses incurred by the other party as a result of structuring such transaction as an exchange, as opposed to an outright sale, shall be borne by the requesting; (ii) the requesting party shall indemnify, defend, and hold harmless the other party from and against any liabilities, costs, damages, claims, demands, or expenses (including, but not limited to, reasonable attorneys’ fees) arising from, or relating to, the cooperation of the other party in effecting the exchange contemplated hereby; (iii) such exchange shall not result in any delay of the closing; and (iv) the other party’s participation shall not in any way be deemed to be a representation, warranty, or opinion regarding the qualification of such exchange for non-recognition of gain under Section 1031 of the Code. (j) Right of First Refusal Terminates After Sale to Offeror. Upon any sale of the Project (other than an Excluded Transfer) to a third-party and subject to Landlord’s compliance with the terms of this Section 40, the Right of First Refusal shall forever terminate. (k) Time of Essence. Time is of the essence with respect to all time periods and deadlines set forth in this Section 40. (l) No Recording. Because of the potential for triggering recordation and transfer taxes on this Lease and except as otherwise provided in Section 42(d), neither Landlord nor Tenant shall record any document in the Land Records any document giving notice of the Right of First Refusal or this Lease. 41. Landlord’s Right of First Refusal—14 Firstfield Road. (a) General. As long as Tenant or a Tenant Affiliate (as defined below) is the owner of fee simple title to 14FF and Tenant shall receive an offer that it desires to accept from a third party (“14FF Offeror”) to purchase fee simple title to 14FF, Tenant shall deliver the terms of such offer to Landlord (“Landlord Purchase Notice”). Landlord shall have a period of [***] after its receipt of the Landlord Purchase Notice within which to accept the terms of such offer contained in the Landlord Purchase Notice. If Landlord desires to accept the terms of the offer contained in the Landlord Purchase Notice (“14FF Right of First Refusal”), Landlord shall send written notice of acceptance (“Landlord Acceptance Notice”) to Tenant before the expiration of such [***] period. Within [***] after the date of the Landlord Acceptance Notice, Landlord shall deliver to Escrow Agent an escrow deposit in an amount equal to 5% of the purchase price set forth in such offer (“14FF Escrow Deposit”). The 14FF Escrow Deposit shall be refundable in full until the expiration or earlier termination of the 14FF DD Period (as defined below). If Landlord fails to timely provide the Landlord Acceptance Notice or deliver the 14FF Escrow Deposit to Escrow Agent, Landlord shall be deemed to have irrevocably rejected the terms set forth in the Landlord Purchase Notice. Subject to the provisions of this Section 41, if Landlord does not accept (or is deemed to have rejected) the terms of the offer set forth in the Landlord Purchase Notice, then (i) Tenant shall have the right to sell 14FF to the 14FF Offeror or a 14FF Offeror Affiliate (as defined below), and (ii) Landlord shall be deemed to have waived its 14FF Right of First Refusal. For purposes of this Section 41, a “14FF Offeror Affiliate” means any person or entity Controlling, Controlled by, or under common Control with 14FF Offeror. (b) Due Diligence. Landlord shall have a period of [***] from the date of the Landlord Acceptance Notice (“14FF DD Period”) to perform any non-invasive studies, inspections, and other forms of due diligence of 14FF. Notwithstanding any contrary provision contained in the Landlord Purchase Notice, the closing on the purchase and sale of 14FF (“14FF Closing”) shall occur not later than [***] after the expiration of the 14FF DD Period (“14FF Closing Date”). (c) Revival of 14FF Right of First Refusal. If Landlord does not accept (or is deemed to have rejected) the terms of the offer set forth in the Landlord Purchase Notice, Tenant shall have the right to sell 14FF to the 14FF Offeror or a 14FF Offeror Affiliate at a purchase price not less than 90% of the purchase price stated in the Landlord Purchase Notice. If Tenant intends to sell 14FF to the 14FF Offeror or a 14FF Offeror Affiliate at a purchase price less than 90% of the purchase price stated in the Landlord


 
700 Quince Orchard Road—Novavax, Inc. —Page 39 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. Purchase Notice, Tenant shall first send a new Landlord Purchase Notice to Landlord reflecting the lower purchase price in accordance with the procedures set forth in Section 41(a) above. If Tenant has not closed on the sale of 14FF to the 14FF Offeror or a 14FF Offeror Affiliate within 180 days after Landlord’s rejection (or deemed rejection) of the Landlord Purchase Notice, Tenant shall again be required to comply with the provisions of this Section 41 before selling 14FF to any 14FF Offeror (or any 14FF Offeror Affiliate), it being agreed that Landlord’s 14FF Right of First Refusal is intended to be a recurring right. (d) Terms of Purchase and Sale. In the event of a sale of 14FF to Landlord under this Section 41, Tenant shall convey title to 14FF to Landlord or its designee on the 14FF Closing Date by means of a special warranty deed in form and substance reasonably acceptable to Landlord and Tenant (“14FF Deed”). As a material inducement by Tenant to grant Landlord the 14FF Right of First Refusal, Landlord acknowledges and agrees that 14FF is being sold by Tenant in its then “AS IS, WHERE IS, WITH ALL FAULTS” condition without any representation or warranty, either express or implied, oral or written. Landlord acknowledges that Tenant has not made, does not make, and specifically negates, renounces, and disclaims any representations, warranties, promises, covenants, agreements, or guaranties of any kind or character whatsoever, whether express or implied, oral or written, as to, concerning, or with respect to, any other matter or attribute of 14FF. Landlord acknowledges and agrees that Tenant shall be under no duty to make any affirmative disclosures regarding any matter that may be known to Tenant. Notwithstanding anything in this Lease to the contrary, the agreements of Landlord contained in this Section 41 shall survive the 14FF Closing and any termination of this Lease. Landlord further acknowledges and agrees that it (i) is relying solely on its own independent investigation of 14FF and not on any information provided or to be provided by Tenant, it agents, or contractors, (ii) knowingly, voluntarily, and willingly assumes the risk of the physical condition and state of repair of 14FF, and (iii) has not been induced by and has not relied on any representations, warranties, or statements, whether express or implied, oral or written, made by Tenant or any agent, employee, or other representative of Tenant or by any broker or any other person representing or purporting to represent Tenant, that are not expressly set forth in this Lease. The purchase price shall not be reduced as a consequence of reasonable use, wear, tear, and natural deterioration between the date of the Landlord Acceptance Notice and the 14FF Closing Date. (e) Closing Adjustments. All paid or accrued rents under any leases, licenses, or other occupancy agreements encumbering all or a part of 14FF (collectively, the “14FF Leases”) shall be prorated and apportioned as of the 14FF Closing Date. If, on the 14FF Closing Date, there are any past due or delinquent rents or other payments that have become due under the 14FF Leases, from and after Closing Landlord (and not Tenant) shall have the right, but not the obligation, to seek collection of such amounts and retain any such amounts collected. (f) 14FF Closing Costs. At the 14FF Closing, (i) Landlord shall pay all costs of title insurance, examination, and certification; 50% of any transfer and recordation tax due in connection with the conveyance of 14FF and the recordation of the 14FF Deed; recordation taxes due in connection with the recordation of any mortgage or deed of trust securing financing obtained by Landlord in connection with the acquisition of 14FF; escrow fees and costs; any sales taxes due on the sale of personal property; the fees and expenses of Landlord’s attorneys; survey costs; and all other costs incurred by Landlord or required to be paid by Landlord, (ii) Tenant shall pay 50% of any transfer and recordation tax due in connection with the conveyance of 14FF and the recordation of the 14FF Deed, and all other costs and expenses incurred by Tenant or required to be paid by Tenant, including, but not limited to, attorneys’ fees incurred by Tenant in connection with the transaction contemplated by the 14FF Right of First Refusal, (iii) Landlord and Tenant shall execute and deliver a closing statement that shall, among other items, set forth the purchase price, all credits against the purchase price, the amounts of all prorations and other adjustments to the purchase price and all disbursements made at the 14FF Closing on behalf of Landlord and Tenant, and (iv) Landlord shall pay to Tenant the purchase price in cash by means of a wire transfer (via Fedwire). To the extent not otherwise provided in this paragraph, any other closing costs shall be apportioned at the 14FF Closing in the manner then customary for comparable commercial real estate transactions in Montgomery County,


 
700 Quince Orchard Road—Novavax, Inc. —Page 40 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. Maryland. In any case where sufficient information is not available at the 14FF Closing to make an accurate proration, Landlord and Tenant shall reasonably estimate the proration at the 14FF Closing and shall make a recalculation of the apportionment of the same as soon as the necessary information becomes available, at which time Landlord or Tenant, as the case may be, promptly shall make an appropriate payment to the other based on such recalculation. (g) Assignment or Sublet. No Right if Default, Assignment, or Sublet. Landlord shall not have a 14FF Right of First Refusal if, at the time Tenant delivers the Landlord Purchase Notice to Landlord, Landlord is in Default under any provision of this Lease. The 14FF Right of First Refusal is personal to ARE-Maryland No. 51 Holding, LLC, and is not assignable without Tenant’s consent, which consent may be granted or withheld in Tenant’s sole discretion; provided, however, that Landlord shall have the following rights without Tenant’s consent (but with notice to Tenant): (i) to designate a 700 QO Owner Affiliate to take title to 14FF, and (ii) to assign the 14FF Right of First Refusal to a 700 QO Owner Affiliate. For purposes of this Lease, “700 QO Owner Affiliate” means any person or entity Controlling, Controlled by, or under common Control with Alexandria Real Estate Equities, Inc. (h) Certain Transfers Excluded. The 14FF Right of First Refusal shall not apply to the following (collectively, “14FF Excluded Transfers”): (i) any sale or transfer of 14FF to an entity in which Tenant or a Tenant Affiliate (as defined below) has a controlling interest; (ii) any transfer without consideration, (iii) any condemnation or eminent domain action or proceeding affecting all or any part of 14FF by any Governmental Authority for any public or quasi-public use or purpose, including a sale thereof under threat of such a taking, (iv) any foreclosure proceeding or sale or any sale in lieu of a foreclosure affecting 14FF, or (v) any portfolio transaction that includes at least one other real estate asset consisting of a commercial building or land capable of accommodating a new commercial building. For purposes of this Lease, “Tenant Affiliate” means any person or entity Controlling, Controlled by, or under common Control with Tenant. (i) Like-Kind Exchange. Landlord or Tenant shall have the right to structure the sale of 14FF as a forward or reverse exchange thereof for other real property of a like-kind to be designated by Landlord or Tenant, with the result that the exchange shall qualify for non-recognition of gain under Section 1031 of the Code, in which case the other party shall execute and deliver any documents reasonably necessary to effect such exchange, as reasonably approved by the other party’s counsel, and otherwise assist and cooperate with the requesting party in effecting such exchange, provided that: (i) any costs and expenses incurred by the other party as a result of structuring such transaction as an exchange, as opposed to an outright sale, shall be borne by the requesting party; (ii) the requesting party shall indemnify, defend, and hold harmless the other party from and against any liabilities, costs, damages, claims, demands, or expenses (including, but not limited to, reasonable attorneys’ fees) arising from, or relating to, the cooperation of the other party in effecting the exchange contemplated hereby; (iii) such exchange shall not result in any delay of the 14FF Closing; and (iv) the other party’s participation shall not in any way be deemed to be a representation, warranty, or opinion regarding the qualification of such exchange for non- recognition of gain under Section 1031 of the Code. (j) 14FF Right of First Refusal Terminates After Sale to 14FF Offeror. Upon any sale of 14FF (other than a 14FF Excluded Transfer) to a third-party and subject to Tenant’s compliance with the terms of this Section 41, the 14FF Right of First Refusal shall forever terminate. (k) Time of Essence. Time is of the essence with respect to all time periods and deadlines set forth in this Section 41. (l) Recording. Landlord and Tenant shall execute and deliver to the other concurrently with the Project Closing an agreement embodying the terms of this Section 41 (which agreement shall be in the form attached hereto as Exhibit H) as well as a memorandum of that agreement that shall be recorded by Tenant contemporaneous with the Project Closing, at Landlord’s cost, among the Land Records (“14FF


 
700 Quince Orchard Road—Novavax, Inc. —Page 41 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. ROFR Memo”). The 14FF ROFR Memo shall be senior in lien priority to the lien, operation, and effect of any deed of trust, mortgage, or other form of financing secured by, or encumbering, 14FF. Concurrently with the recordation of the 14FF ROFR Memo, Landlord shall execute and deliver to Escrow Agent, in escrow, the form of termination of the 14FF ROFR Memo that shall be released from escrow, at the mutual direction of Landlord and Tenant, on the termination of the 14FF Right of First Refusal. 42. Miscellaneous. (a) Notices. All notices or other communications between the parties shall be in writing and shall be deemed duly given upon delivery or refusal to accept delivery by the addressee thereof if delivered in person, or upon actual receipt if delivered by reputable overnight guaranty courier, addressed and sent to the parties at their addresses set forth above. Landlord and Tenant may from time to time by written notice to the other designate another address for receipt of future notices. (b) Joint and Several Liability. If and when included within the term “Tenant,” as used in this instrument, there is more than one person or entity, each shall be jointly and severally liable for the obligations of Tenant. (c) Financial Information. Tenant shall furnish Landlord with true and complete copies of Tenant’s most recent annual financial statements (at Tenant’s option, such annual financial statements shall either be audited or certified by an officer of Tenant) within [***] (or such longer period as may be reasonably required for an audit if Tenant is providing audited financial statements) of the end of each of Tenant’s fiscal years during the Term. In addition to providing such statements within the foregoing time period, Tenant shall, on Landlord’s written request, also furnish a year-to-date financial statement to Landlord not more frequently than one time per calendar year. All such statements shall be treated by Landlord as confidential information belonging to Tenant. Notwithstanding the foregoing, for so long as Tenant is a publicly traded company, and Tenant’s annual financial information is publicly available and/or published on Tenant’s website, then Tenant will not be required to provide to Landlord the financial statements required by this Section 42(c). (d) Recordation. Neither this Lease nor a memorandum of lease shall be filed by or on behalf of Tenant in any public record. Landlord may prepare and file, and upon request by Landlord Tenant will execute, a memorandum of lease. (e) Interpretation. The normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Lease or any exhibits or amendments hereto. Words of any gender used in this Lease shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires. The captions inserted in this Lease are for convenience only and in no way define, limit or otherwise describe the scope or intent of this Lease, or any provision hereof, or in any way affect the interpretation of this Lease. (f) Not Binding Until Executed. The submission by Landlord to Tenant of this Lease shall have no binding force or effect, shall not constitute an option for the leasing of the Premises, nor confer any right or impose any obligations upon either party until execution of this Lease by both parties. (g) Limitations on Interest. It is expressly the intent of Landlord and Tenant at all times to comply with applicable law governing the maximum rate or amount of any interest payable on or in connection with this Lease. If applicable law is ever judicially interpreted so as to render usurious any interest called for under this Lease, or contracted for, charged, taken, reserved, or received with respect to this Lease, then it is Landlord’s and Tenant’s express intent that all excess amounts theretofore collected by Landlord be credited on the applicable obligation (or, if the obligation has been or would thereby be paid


 
700 Quince Orchard Road—Novavax, Inc. —Page 42 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. in full, refunded to Tenant), and the provisions of this Lease immediately shall be deemed reformed and the amounts thereafter collectible hereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder. (h) Choice of Law. Construction and interpretation of this Lease shall be governed by the internal laws of the state in which the Premises are located, excluding any principles of conflicts of laws. (i) Time. Time is of the essence as to the performance of Tenant’s obligations under this Lease. (j) OFAC. Tenant, and all beneficial owners of Tenant, are currently (i) in compliance with and shall at all times during the Term of this Lease remain in compliance with the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury and any statute, executive order, or regulation relating thereto (collectively, the “OFAC Rules”), (ii) not listed on, and shall not during the Term of this Lease be listed on, the Specially Designated Nationals and Blocked Persons List, Foreign Sanctions Evaders List, or the Sectoral Sanctions Identifications List, which are all maintained by OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuant to any authorizing statute, executive order, or regulation, and (iii) not a person or entity with whom a U.S. person is prohibited from conducting business under the OFAC Rules. (k) Incorporation by Reference. All exhibits and addenda attached hereto are hereby incorporated into this Lease and made a part hereof. If there is any conflict between such exhibits or addenda and the terms of this Lease, such exhibits or addenda shall control. (l) No Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly installment of Base Rent or any Additional Rent will be other than on account of the earliest stipulated Base Rent and Additional Rent, nor will any endorsement or statement on any check or letter accompanying a check for payment of any Base Rent or Additional Rent be an accord and satisfaction. Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or to pursue any other remedy provided in this Lease. (m) Non-Disclosure of Terms. Tenant acknowledges and agrees that the terms of this Lease are confidential and constitute proprietary information of Landlord. Disclosure of such terms could adversely affect the ability of Landlord and its affiliates to negotiate, manage, and administer other leases and impair Landlord’s relationship with prospective tenants. Accordingly, as a material inducement for Landlord to enter into this Lease, Tenant, on behalf of itself and its partners, managers, members, officers, directors, employees, agents, and attorneys, agrees that it shall not intentionally and voluntarily disclose the terms and conditions of this Lease to any publication or other media or any tenant or apparent prospective tenant of the Building or other portion of the Project, or real estate agent or broker, either directly or indirectly, except as necessary to seek advice from Tenant’s brokers, accountants, attorneys, lenders, consultants, employees, officers, and similar professionals having an advisory or fiduciary duty to Tenant provided Tenant obligates such recipients to maintain the confidentiality of the terms of this Lease. (n) Counterparts/Electronic Signatures. This Lease may be executed in 2 or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature process complying with the U.S. federal ESIGN Act of 2000, such as DocuSign) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. Electronic signatures shall be deemed original signatures for purposes of this Lease and all matters related thereto, with such electronic signatures having the same legal effect as original signatures.


 
700 Quince Orchard Road—Novavax, Inc. —Page 43 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. (o) Hazardous Activities. Notwithstanding any other provision of this Lease, Landlord, for itself and its employees, agents and contractors, reserves the right to refuse to perform any repairs or services in any portion of the Premises that, pursuant to Tenant’s routine safety guidelines, practices or custom or prudent industry practices, require any form of protective clothing or equipment other than safety glasses/goggles, latex gloves, or face shield. In any such case, Tenant shall contract with parties who are acceptable to Landlord, in Landlord’s reasonable discretion, for all such repairs and services, and Landlord shall, to the extent required, equitably adjust Tenant’s Share of Operating Expenses in respect of such repairs or services to reflect that Landlord is not providing such repairs or services to Tenant. (p) “Green” Certification. Tenant acknowledges that Landlord may, but shall not be obligated to, seek to obtain Leadership in Energy and Environmental Design (LEED), WELL Building Standard, or other similar “green” certification for the Project and/or the Premises, and Tenant agrees to reasonably cooperate with Landlord (at no out of pocket expense to Tenant), and to provide such information and/or documentation as Landlord may reasonably request, in connection therewith. (q) Prevailing Party. Subject to the provisions of Section 21(f), if either party commences litigation against the other for the specific performance of this Lease, for damages for the breach hereof, or otherwise for enforcement of any remedy hereunder, or for declaratory relief hereunder, the prevailing party shall be entitled to recover from the other party such costs and reasonable attorneys’ fees as may have been incurred, including any costs incurred in enforcing, perfecting, and executing such judgment. [ Signatures on next page ]


 
700 Quince Orchard Road—Novavax, Inc. —Page 44 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under seal as of the day and year first above written. TENANT: NOVAVAX, INC., a Delaware corporation By:/s/ John A. Herrmann III (SEAL) Name: John A. Herrmann III Title: EVP, CLO LANDLORD: ARE-MARYLAND NO. 51, LLC, a Delaware limited liability company By: Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as its sole member By: ARE-QRS CORP., a Maryland corporation, general partner By: /s/ [***] (SEAL) Name: [***] Title: Vice President RE Legal Affairs


 
700 Quince Orchard Road—Novavax, Inc. —Page 45 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT A TO LEASE DESCRIPTION OF PREMISES [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the description of premises has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
700 Quince Orchard Road—Novavax, Inc. —Page 46 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT B TO LEASE DESCRIPTION OF PROJECT [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the description of project has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
700 Quince Orchard Road—Novavax, Inc. —Page 47 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT C TO LEASE WORK LETTER [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the work letter has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
700 Quince Orchard Road—Novavax, Inc. —Page 48 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT C-1 TO LEASE SHELL CONDITION [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the shell condition has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
700 Quince Orchard Road—Novavax, Inc. —Page 49 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT C-2 TO LEASE ADDITIONAL HVAC ALLOWANCE—SCOPE [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the additional HVAC Allowance has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
700 Quince Orchard Road—Novavax, Inc. —Page 50 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT C-3 TO LEASE ADDITIONAL 1st FLOOR CONVERSION ALLOWANCE—SCOPE [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the additional 1st floor conversion allowance has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
700 Quince Orchard Road—Novavax, Inc. —Page 51 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT D TO LEASE ACKNOWLEDGMENT OF COMMENCEMENT DATE [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the acknowledgment of commencement date has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
Exhibit 10.27 Certain information identified with [***] has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT E TO LEASE Rules and Regulations [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the rules and regulations has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
700 Quince Orchard Road—Novavax, Inc. —Page 53 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT F TO LEASE TENANT’S PERSONAL PROPERTY [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the tenant’s personal property has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
700 Quince Orchard Road—Novavax, Inc. —Page 54 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT G TO LEASE PARKING EASEMENT AGREEMENT [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the parking easement agreement has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT H TO LEASE RIGHT OF FIRST REFUSAL AGREEMENT [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the right of first refusal agreement has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
700 Quince Orchard Road—Novavax, Inc. —Page 56 Error! Unknown document property name. Copyright © 20 07, Alexandria Real Estate Equities, Inc. ALL RIGHTS RESERVED. Confidential and Proprietary – Do Not Copy or Distribute. Alexandria and the Alexandria Logo are registered trademarks of Alexandria Real Estate Eq uities, Inc. EXHIBIT I TO LEASE GENERATOR LOCATION OPTIONS [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the generator location options has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
Exhibit 10.35 CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. [***] [***] EXECUTION VERSION DATED 22 OCTOBER 2020 NOVAVAX, INC. AND THE SECRETARY OF STATE FOR BUSINESS, ENERGY AND INDUSTRIAL STRATEGY SARS-COV-2 VACCINE SUPPLY AGREEMENT


 
CONTENTS Clause Page 1. Definitions ......................................................................................................................... 3 2. Governance ...................................................................................................................... 14 3. Facilities .......................................................................................................................... 18 4. Development, Regulatory Obligations and Information Requirements. ......................... 19 5. Manufacture and Supply of Product ................................................................................ 22 6. Production Schedules and Business Continuity .............................................................. 27 7. Ordering ........................................................................................................................... 27 8. Delivery ........................................................................................................................... 29 9. Distribution ...................................................................................................................... 31 10. Risk and Title .................................................................................................................. 32 11. Inspection and Rejection of Product ............................................................................... 32 12. Remedies and Mitigation of Losses ................................................................................ 33 13. Price ................................................................................................................................. 34 14. Invoicing and Payment .................................................................................................... 34 15. Warranty and Undertakings ............................................................................................. 35 16. Future Preparedness ........................................................................................................ 36 17. Anti-Bribery .................................................................................................................... 37 18. Product Security .............................................................................................................. 37 19. Intellectual Property ........................................................................................................ 38 20. Confidentiality ................................................................................................................. 38 21. Indemnities ...................................................................................................................... 43 22. Liability ........................................................................................................................... 44 23. Insurance ......................................................................................................................... 45 24. Force Majeure .................................................................................................................. 45 25. Duration and Termination ............................................................................................... 45 26. Consequences of Termination ......................................................................................... 47 27. Data Protection ................................................................................................................ 48 28. Independent Contractors .................................................................................................. 48 29. Right of Audit, Conflicts of Interest and Prevention of Fraud ........................................ 48 30. Tax Non-Compliance ...................................................................................................... 50 31. Environmental Considerations ........................................................................................ 50 32. Equality, Non-Discrimination and Human Rights .......................................................... 50 33. Supply Chain Rights and Protection ............................................................................... 51 34. Miscellaneous .................................................................................................................. 51


 
Schedule 1 Candidate, Product and Specifications .................................................................. 58 Schedule 2 Facilities ................................................................................................................ 59 Schedule 3 Key Performance Indicators and Meeting Schedules ........................................... 60 Schedule 4 Development and Manufacturing Plan .................................................................. 61 Schedule 5 Baselines................................................................................................................ 62 Schedule 6 Delivery Schedule ................................................................................................. 63 Schedule 7 Additional Order Pricing ....................................................................................... 64 Schedule 8 Documentation to Accompany Deliveries ............................................................ 65


 
254681-3-31828-v16.0 - 3 - 70-40746871 THIS AGREEMENT ("Agreement") is dated 22 October 2020 and made between: (1) NOVAVAX, INC., a corporation established under the laws of the state of Delaware in the US with its primary business address at 21 Firstfield Road, Gaithersburg, MD 20878 ("Novavax"); and (2) THE SECRETARY OF STATE FOR BUSINESS, ENERGY AND INDUSTRIAL STRATEGY, acting on behalf of the Crown, whose principal office is at 1 Victoria Street, London, SW1H 0ET (the "Authority"), (each a "Party", and collectively the "Parties"). INTRODUCTION (A) Novavax has discovered and is actively pursuing the clinical development of the Candidate within the Field in order to file for and secure a Marketing Authorisation for the Product with the indication in the Field before the Licensing Authority. (B) Novavax will establish a UK-located supply chain for the Product, including the supply of Antigen from Fujifilm and the provision of co-formulation, fill/finish, and labelling services of the Product by [***] (or such alternative suppliers agreed by the Parties pursuant to this Agreement). (C) The Authority, on behalf of the Crown, wishes to advance order and secure priority supplies of the Product, together with other vaccines and other therapeutic products, as part of its national and international strategy towards vaccination against, treatments for, and mitigation of the global impact arising from the spread of SARS-CoV-2. (D) Subject to Novavax actively pursuing Development of the Product, establishing the UK-located supply chain as set out in this Agreement, and pursuing the filing and grant of a Marketing Authorisation (and, in consultation with the Authority, any Emergency Use Authorisation) for the Product in the Territory, the Authority wishes to have Novavax Manufacture and supply the Product in accordance with the Authority's requirements as stated herein. (E) Novavax is willing and, notwithstanding Novavax' other agreements or funding terms with any Third Party (including the Funding Entities), able to undertake the Development and Manufacture of the Products and supply to the Authority in accordance with the terms and conditions of this Agreement. IT IS AGREED that: 1. DEFINITIONS 1.1 In this Agreement, the following words and expressions shall have the following meanings: "Additional Order" has the meaning given in clause 7.3; "Additional Order Price" means the price per Dose to be supplied pursuant to an Additional Order calculated in accordance with Schedule 7 and clause 7.4;


 
254681-3-31828-v16.0 - 4 - 70-40746871 "Adjuvant" means Novavax' proprietary Matrix‑M™ adjuvant; "Administering Entity" means any person responsible for administering or having administered the Product including all Health Service Bodies; "Affiliate" means, with respect to (i) Novavax, any Person that Controls, is Controlled by or is under common Control with Novavax from time to time; (ii) any Third Party, any Person that Controls, is Controlled by or is under common Control with that Third Party from time to time; and (iii) Authority, any Central Government Body; "Antigen" means material made using Novavax' technology intended to promote an immunological response or reaction within the Field which is incorporated in Novavax' vaccine candidate NVX-CoV2373; "Applicable Laws" means laws, rules, orders, regulations, ordinances, treaties, directives, Applicable Standards, rules of national stock exchanges and any other rules or regulations promulgated by or otherwise having the force of law of any Governmental Authority or Regulatory Authority in each case in any relevant or applicable geographical area and/or over any class of persons; "Applicable Standards" shall mean all applicable cGxP requirements and guidelines including those issued by the Licensing Authority; "Authorised Agent" means any authorised agent appointed by the Authority as notified to Novavax in writing; "Baselines" means those baselines and targets set against the applicable KPIs set out in Schedule 5; "Breaching Party" has the meaning given in clause 25.3.1; "Business Continuity Event" means any event or issue that could impact on the operations of Novavax, its Affiliates and Subcontractors, and the ability of Novavax to supply the Product including, without limitation, any pandemic, any Force Majeure event, and any circumstances, events, changes or requirement related to the withdrawal of the UK (or any part of it) from the European Union; "Business Continuity Plan" means Novavax' business continuity plan which includes its plans for continuity of the Development, Manufacture and supply of the Product during any Business Continuity Event; "Business Day" means any day that is not a Saturday, Sunday or public holiday in London, England or Washington, DC; "Candidate" means Novavax' vaccine candidate NVX‑CoV2373, consisting of the Antigen and including the Adjuvant, as described more fully in Schedule 1, as intended for the prophylaxis and vaccination against SARS-CoV-2 in humans; [***]; "Central Government Body" means a body listed in one of the following sub- categories of the UK's Central Government classification of the Public Sector


 
254681-3-31828-v16.0 - 5 - 70-40746871 Classification Guide, as published and amended from time to time by the Office for National Statistics: (i) Government Department; (ii) Non-Departmental Public Body Assembly Sponsored Public Body (advisory, executive, or tribunal); (iii) Non- Ministerial Department; or (iv) Executive Agency; "Certificate of Analysis" means the certificate of analysis to accompany each delivery of Product Delivered to the Authority or Authorised Agent, which certifies that the Product has been Manufactured, tested and released in compliance with its Specification, Applicable Standards and Applicable Laws. "cGCP" or "GCP" means current good clinical practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of human clinical trials, including as described in the Medicines for Human Use (Clinical Trials) Regulations 2004 (as amended), Directive 2001/20/EC and the standards required under Directive 2005/28/EC; "cGLP" or "cGLP" means current good laboratory practices generally accepted within the pharmaceutical industry to promote the quality and integrity of data generated in laboratory testing and to prevent misleading or fraudulent practices, including those practices described in the Good Laboratory Practices Regulations 1999 and Directive 2004/10/EC; "cGMP", "GMP" or "Good Manufacturing Practice" means the then-current principles and guidelines of good manufacturing practice and general biologics products standards contained in Applicable Laws and guidance including: (i) Directive 2003/94/EC laying down the principles and guidelines of good manufacturing practice in respect of medicinal products for human use and investigational medicinal products for human use; (ii) Directive 2001/83/EC laying down the principles and guidelines of good manufacturing practice for medicinal products; (iii) further guidance as published by the European Commission in Volume 4 of "The Rules Governing Medical Products in the European Community"; and (iv) ICH Q7 Guideline, "The Rules Governing Medicinal Products in the European Union", Volume 4, Part II, in each case as may be amended from time to time; "cGVP" or "GVP" means current principles and guidelines of good pharmacovigilance practice for medicinal products for human use, as set forth in UK Human Medicines Regulation 2012, Directive 2001/83/EC, Commission Implementing Regulation No 520/2012 and the EMA's Guideline on Good Pharmacovigilance Practice; "cGxP" or "GxP" means cGMP, cGCP, cGLP and cGVP; "Clinical Trials" means the clinical trials required to be undertaken for the purposes of securing a Marketing Authorisation for the Product in the Territory for the indication in the Field; "Commercially Reasonable Efforts" means [***]; [***]; "Confidential Information" means any business, commercial or technical information (in whatever form or media) of either Party that is marked or otherwise indicated as


 
254681-3-31828-v16.0 - 6 - 70-40746871 confidential when disclosed or would otherwise be regarded as confidential by a reasonable business person relating to the business, affairs, technologies, products, customers, clients or suppliers of that Party or its Affiliates which is provided by or on behalf of one Party to the other Party pursuant to this Agreement or to which a Party obtains access as a consequence of entering into or performing this Agreement (in each case whether before, on, or after the Effective Date). For the avoidance of doubt, Confidential Information includes: (i) any information or materials possessed or developed by either Party or their respective Affiliates, whether possessed or developed before, on, or after the Effective Date, in relation to the Product and/or services provided hereunder (including know-how, processes, techniques, specifications, reports, analyses, sources of supply, marketing plans, sales strategies and pricing information), except for such information that is demonstrably non- confidential in nature; and (ii) any confidential information disclosed by a Party pursuant to the confidentiality agreement dated 1 June 2020, which shall be deemed Confidential Information of that Party disclosed under this Agreement. The terms of this Agreement (but not its existence) will be regarded as the Confidential Information of both Parties; "Conforming Product" means Product that has been Manufactured in accordance with, and meets the requirements of, clause 5.15; "Control" means: (i) to possess, directly or indirectly, the power to direct the management or policies of a Person, whether through ownership of voting securities or by contract relating to voting rights or corporate governance; (ii) to own, directly or indirectly, fifty per cent. (50%) or more of the outstanding voting securities or other ownership interest of such Person; or (iii) in the case of a partnership, control of the general partner, and "Controls" and "Controlled" shall be construed accordingly; "Crown" means the government of the UK (including the Northern Ireland Assembly and Executive Committee, the Scottish Government and the Welsh Assembly Government), including, but not limited to, government ministers, government departments, government and particular bodies, and government agencies; "Cure Period" has the meaning given in clause 25.3.1; “Data Protection Act” means the Data Protection Act 2018 implementing the GDPR; "Defect" or "Defective" means, in respect of a Product, that it is not compliant with the Specification, Marketing Authorisation (or Emergency Use Authorisation as applicable), Applicable Standards, Minimum Remaining Shelf Life at the time of Delivery, or Applicable Laws, Documentation, batch records, or Applicable Laws; "Delivery" means delivery (by or on behalf of Novavax) of Conforming Product pursuant to an Order to the Delivery Location in accordance with clause 8.4.1 (and "Delivered" and "Deliver" shall be construed accordingly); "Delivery Location" means the cold chain storage facility within the Territory, as such facility may be notified in writing to Novavax [***] in advance;


 
254681-3-31828-v16.0 - 7 - 70-40746871 "Delivery Schedule" means : (i) for the Priority Order, subject to the Product Delivery Baselines, the quantities and dates for delivery of such quantities at Schedule 6, as further refined by the Parties pursuant to clause 8.5; and (ii) for each Additional Order the schedule for delivery by certain dates of the applicable quantities of Product agreed between the Parties pursuant to clause 7.4.2; in each case as may be updated by agreement between the Parties via the Overview Committee in accordance with in clause 8.2; "Development" means all activities necessary to develop the Product and support and maintain the grant of a Marketing Authorisation (and, if applicable, Emergency Use Authorisation) for the Product in the Territory in the Field; "Development Activities" means the development activities to be undertaken by or on behalf of Novavax in respect of the Product as set out in the Development and Manufacturing Plan; "Development and Manufacturing Plan" means the plan and estimated timeline setting out in reasonable and appropriate detail the activities to be undertaken by or on behalf of Novavax in relation to the Development and Manufacture of Product as initially set out in Schedule 4 and as may be periodically updated from time to time in accordance with clause 4.2.2 and 5.2.2 in each case to meet the objectives of this Agreement to deliver a safe and effective vaccine in the Field for the population in the Territory, including: (a) [***]; (b) [***]; (c) [***]; and (d) [***] "Devolved Administrations" means the devolved administrations of Scotland, Wales and Northern Ireland (the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly); "Documentation" has the meaning given in clause 8.10; "Dose" means a single individual dose of Product; "DOTAS" means the Disclosure of Tax Avoidance Schemes rules which require a promoter of tax schemes to tell HM Revenue and Customs of any specified notifiable arrangements or proposals and to provide prescribed information on those arrangements or proposals within set time limits as contained in Part 7 of the Finance Act 2004 and in secondary legislation made under vires contained in Part 7 of the Finance Act 2004 and as extended to National Insurance Contributions by the National Insurance Contributions (Application of Part 7 of the Finance Act 2004) Regulations 2012, SI 2012/1868 made under s.132A Social Security Administration Act 1992; "Effective Date" means the date on which this Agreement is signed by both Parties;


 
254681-3-31828-v16.0 - 8 - 70-40746871 “Emergency Use Authorisation” means any emergency use approval issued pursuant to Regulation 174 of the Human Medicines Regulations 2012 (or any replacement or superseding legislation); "Facilities" means each and all of the facilities used in respect of the Manufacturing of the Product, including those identified in Schedule 2; "Field" means the vaccination against SARS-CoV-2; "Force Majeure" means any events beyond a Party's reasonable control, subject to that Party having taken all reasonable steps (both anticipatory and reactionary) to avoid or mitigate such risks, such as labour disturbances or labour disputes of any kind, accidents, failure of any governmental approval required for full performance, civil disorders or commotions, war, acts of terrorism, acts of God, pandemics other than the SARS-CoV- 2 Pandemic, energy or other conservation measures, explosions, failure of utilities, mechanical breakdowns, material shortages, default of suppliers or subcontractors, theft, or other occurrences. For the avoidance of doubt, (i) the withdrawal of the UK from the European Union and any related circumstances, events, changes or requirements; and (ii) the pandemic declared in respect of SARS-CoV-2; shall not be deemed an event of Force Majeure (the "SARS-CoV-2 Pandemic"); "Fraud" any offence under Applicable Laws creating offences in respect of fraudulent acts, including any fraudulent acts in relation to this Agreement, or defrauding, attempting to defraud or conspiring to defraud the Crown; "Fujifilm" means Fujifilm Diosynth Biotechnologies UK Limited having its facilities at Billingham, Teesside, UK; "Funding Entity(ies)" means each of (i) The Coalition for Epidemic Preparedness Innovations and (ii) the U.S. Government; "GDPR" means the General Data Protection Regulation (Regulation (EU) 2016/679); "General Anti-Abuse Rule" means: (i) the legislation in Part 5 of the Finance Act 2013; and (ii) any future legislation introduced into Parliament to counteract tax advantages arising from abusive arrangements to avoid national insurance contributions; "Governmental Authority" means any government, supra-national, regional, regulatory or administrative body, authority, board, commission or agency, including any corresponding foreign agency or any instrumentality or officer acting in an official capacity of any of the foregoing, including any court, tribunal or judicial or arbitral body, or any committee exercising any executive, legislative, regulatory or administrative functions of government, whether local or national, including the Regulatory Authorities; "Government Intervention" has the meaning given in clause 8.8; "Halifax Abuse Principle" means the principle explained in the CJEU Case C-255/02 Halifax and others;


 
254681-3-31828-v16.0 - 9 - 70-40746871 "Health Service Body" means, in so far as they are involved in the administration, distribution or handling of the Product: (a) the Department of Health and all divisions and agencies thereof and any independent NHS board or similar body that may be established including regional agencies of such board; (b) a GP (being a medical practitioner providing general medical services or personal medical services under the National Health Service Act 2006 (c.41) (whether operating in partnership with others or not)); (c) health service bodies referred to in section 9 of the National Health Service Act 2006 (c.41); (d) the Secretary of State for Health; (e) any care trust as defined in section 77 of the National Health Service Act 2006 (c.41); (f) any NHS foundation trust listed in the register of NHS foundation trusts maintained pursuant to section 39 of the National Health Service act 2006 (c.41); (g) any body replacing or providing similar or equivalent services to any of the above in any area of the UK including any bodies established pursuant to the Health and Social Care Act 2012 including but not limited to NHS England; and (h) any statutory successor to any of the above; "Indemnifying Party" has the meaning given in clause 21.7; "Indemnitee" has the meaning given in clause 21.7; "Indirect Tax" means value added, sales, consumption, goods and services taxes or other similar taxes required by Applicable Law to be disclosed as a separate item on the relevant invoice including, for the avoidance of doubt, any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (Directive 2006/112); "Initial Term" has the meaning given in clause 25.1; "Intellectual Property Rights" means all patent rights, supplemental protection certificates and patent term extensions, trademarks, copyrights, design rights, database rights, domain names, rights in inventions, confidential information, know-how, trade names, business names, get-up, logos and trade dress, and all other rights in the nature of intellectual property rights (whether registered or unregistered) and all applications and rights to apply for the above, anywhere in the world in each case for their full term and any extension thereto; "IT Media" has the meaning given in clause 20.16;


 
254681-3-31828-v16.0 - 10 - 70-40746871 "KPI" or "Key Performance Indicators" means the Key Performance Indicators set out in the Development and Manufacturing Plan, Schedule 3, Schedule 4 and Schedule 5; "Labelling" means all labels, package inserts (including patient information leaflets), carton imprints and all other markings on packaging for the Product that are defined as labels or labelling under the Specifications or otherwise required under Applicable Laws to market or commercialise the Product for use; "Licensing Authority" means: (i) the MHRA; and (ii) if it has authority under the Applicable Laws of the Territory to grant a Marketing Authorisation that has full legal force in the Territory to authorise commercial use of the Product in the Territory after its Delivery hereunder, the European Commission following assessment of the relevant Marketing Authorisation applicable by the European Medicine Agency ("EMA") or any successor agency thereto with the same authority in the Territory; "Losses" means any and all liabilities, claims, demands, causes of action, damages, losses, costs and expenses, including interest, penalties and reasonable legal and professional fees and disbursements; "Loss of Supply" has the meaning given in clause 8.8; "Manufacture", "Manufactured" or "Manufacturing" means all activities involved in or relating to, as applicable, the manufacturing, quality control testing (including in- process, release and stability testing), processing, Labelling, releasing, packaging, storage and transport of the Product immediately prior to supply to the Authority hereunder; "Marketing Authorisation" means the Regulatory Approval required under Applicable Laws in the Territory to place the Product on the market for human use outside of clinical trials but excluding any pricing or reimbursement approvals; "MHRA" means the Medicines and Healthcare products Regulatory Agency or any successor agency thereto; "Minimum Remaining Shelf Life" means the minimum period of time that the Product may be used pursuant to its Labelling, which period (i) shall be no less than three (3) months from the date of Delivery of the Product to the Authority; and (ii) is targeted, subject to ongoing stability studies, to be at least six (6) months from the date of Delivery of the Product but which, subject to (i) above, will be mutually agreed to by the Parties prior to initial Delivery of the Product to the Authority; "Novavax Facilities" means those Facilities which are operated or owned by Novavax or its Affiliates as identified in Schedule 2 under the heading "Novavax Facilities"; "Novavax Representatives" has the meaning given in clause 17.1; "Occasion of Tax Non-Compliance" means: (a) any tax return of Novavax submitted to a Relevant Tax Authority on or after 1 October 2012 is found, on or after 1 April 2013, to be incorrect as a result of:


 
254681-3-31828-v16.0 - 11 - 70-40746871 (i) a Relevant Tax Authority successfully challenging Novavax under the General Anti-Abuse Rule or the Halifax Abuse Principle or under any tax rules or legislation that have an effect equivalent or similar to the General Anti-Abuse Rule or the Halifax Abuse Principle; or (ii) the failure of an avoidance scheme which Novavax was involved in, and which was, or should have been, notified to a Relevant Tax Authority under the DOTAS or any equivalent or similar regime; or (b) any tax return of the Novavax submitted to a Relevant Tax Authority on or after 1 October 2012 gives rise, on or after 1 April 2013, to a criminal conviction in any jurisdiction for tax related offences which is not spent at the Effective Date or to a civil penalty for fraud or evasion; "Orders" means each of the Priority Order and any Additional Orders; "Oversight Committee" means the joint committee established by the Parties in accordance with clause 2; "Person" means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture, Governmental Authority, or similar entity, institution, body or organisation, including a Regulatory Authority; "Personal Data" shall have the same meaning as defined in the Data Protection Act; "Personnel" means the employees, officers, agents and contractors of a Party (or where the context requires, those of a Party's Affiliates); [***]; [***]; "Price" means: (a) [***]; and (b) for any Doses beyond [***] Doses of Conforming Product supplied pursuant to this Agreement, the Additional Order Price; “Priority Order” has the meaning given in clause 7.1; "Product" means the Candidate to be Developed, including in accordance with the Development and Manufacturing Plan, and presented in final formulated, labelled and finished form, for the prophylaxis and vaccination against SARS-CoV-2 in humans; "Product Delivery Baselines" means the delivery date of the [***] comprising [***]; "Project Manager" has the meaning given in clause 2.1; "Regulatory Approval" means all licences, registrations, authorisations and approvals (including approvals of CTAs, MAAs, supplements and amendments, labelling


 
254681-3-31828-v16.0 - 12 - 70-40746871 approvals) issued by any Regulatory Authority which are required for the use, Development, Manufacture and commercialisation of the Product; "Regulatory Authority" means any Governmental Authority that is concerned with the safety, efficacy, reliability, Manufacture, investigation, sale or marketing of the Product, including the MHRA and its successors and its equivalents and their successors in the Territory; "Relevant Tax Authority" means HM Revenue & Customs; "Representation" has the meaning given in clause 34.10; "Representatives" has the meaning given in clause 20.2; "SARS-CoV-2 Pandemic" has the meaning given in the definition of "Force Majeure"; "Specification" means the written specifications for the Manufacture, processing, packaging, labelling, testing and testing procedures, shipping, storage and supply of the Product, including characteristics, quality and processing of the Product as set out in Schedule 1, as such specifications may be amended or replaced from time to time as permitted under the Development and Manufacturing Plan or otherwise under this Agreement, and ultimately as compliant and set forth with the applicable Marketing Authorisation (and, if applicable, an Emergency Use Authorisation) for the Product granted by the Licensing Authority; "Subcontractor" has the meaning given in clause 34.7.1; "Term" has the meaning given in clause 25.1; "Terminating Party" has the meaning given in clause 25.3; "Territory" means the UK; "Third Party" means any Person other than Novavax, the Authority and their respective Affiliates and permitted successors and assigns; "UK" means the United Kingdom of Great Britain and Northern Ireland; "VAT" means: (i) any Indirect Tax chargeable under or pursuant to Council Directive 2006/112/EC of the European Union; or (ii) any value added, turnover, sales, use or distribution Indirect Tax, or Indirect Tax of a like nature in any jurisdiction outside the European Union; "Wilful Misconduct" means [***]; and [***] 1.2 In this Agreement, the following rules of interpretation shall apply: 1.2.1 the words "hereof", "herein", "hereto" and "hereunder", and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;


 
254681-3-31828-v16.0 - 13 - 70-40746871 1.2.2 when a reference is made in this Agreement to a clause or schedule, such reference is to a clause of or a schedule to this Agreement respectively, and all schedules to this Agreement form a part hereof for all purposes; 1.2.3 the table of contents and headings of this Agreement are for convenience only and shall not affect the construction of this Agreement; 1.2.4 [***]; 1.2.5 any undertaking by, or obligation on, a Party to (i) do any act or thing includes an undertaking to procure the doing of that act or thing by a Party's Affiliates; and, (ii) not do any act or thing includes an undertaking not to encourage, solicit, cause, or assist the doing of that act or thing by any Affiliate or other person; 1.2.6 the words and expressions "holding company", "parent undertaking", "subsidiary" and "subsidiary undertaking" have the meanings given to them in the Companies Act 2006; 1.2.7 any reference to a Party or the Parties is to a party or the parties (as the case may be) to this Agreement and shall include legal successors and/or any permitted assignees of a party; 1.2.8 any use of the masculine, feminine or neuter gender respectively includes the other genders and any reference to the singular includes the plural (and vice versa); 1.2.9 the words "other", "include", "including", "such as" and "in particular" (and similar expressions) do not connote limitation in any way and will be deemed to be followed by the phrase "without limitation"; 1.2.10 any reference to a "month" means a calendar month, any reference to a "day" means a calendar day; 1.2.11 any reference to GBP, Pounds Sterling or £ is to the lawful currency from time to time of the UK and to US Dollars or US$ is to the lawful currency from time to time of the USA; 1.2.12 any reference to a "statute" or "statutory provision" includes any successor legislation thereto, regulations promulgated thereunder, any consolidation or re- enactment, modification or replacement thereof, any statute or statutory provision of which it is a consolidation, re-enactment, modification or replacement and any subordinate legislation in force under any of the same from time to time except in each case to the extent that any consolidation, re- enactment, modification or replacement enacted after the date of this Agreement would extend or increase the obligations, in any manner (and whether financial obligations or otherwise), of either Party hereunder; 1.2.13 provisions that require that a Party, the Parties or any committee hereunder to "agree", "consent","approve" or the like will require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (excluding e-mail or instant messaging, but a signed PDF document being acceptable);


 
254681-3-31828-v16.0 - 14 - 70-40746871 1.2.14 the term "or" and "and/or" will be interpreted in the inclusive sense commonly associated with the term "and/or"; 1.2.15 the words "notify" and "notification" in this Agreement shall, when referring to notifications as between the Parties to this Agreement (or their representatives), mean notify or notification in writing in accordance with clause 34.1 of this Agreement; and 1.2.16 any reference to "writing" or "written" shall include any modes of reproducing words in a legible and non-transitory form (including email, but excluding SMS or temporary messages). 1.3 In case of a conflict between the provisions of any schedule and the provisions of the main body of this Agreement, the provisions of the main body of this Agreement shall prevail. 1.4 In this Agreement, the Authority is acting as part of the Crown. 2. GOVERNANCE Project Managers 2.1 From the Effective Date each Party shall appoint, and provide details to the other Party, of its project manager ("Project Manager") who shall be responsible for and represent the applicable Party in day-to-day liaison between the Parties concerning performance and progress under this Agreement against the KPIs and towards the Baselines. The Project Managers shall facilitate the relationship between the Parties under this Agreement and collate matters and issues that may be necessary for referral to the Oversight Committee. Each Party shall procure that its respective Project Manager shall: 2.1.1 make themselves reasonably available to the other Project Manager for meetings in accordance with the provisions of this clause 2; 2.1.2 co-operate fully, candidly and transparently with the other Project Manager to ensure that any actual or potential issues, difficulties or problems encountered in connection with the Product's Development, supply chain infrastructure, Manufacture or supply under this Agreement, including as measured against the KPIs and towards the Baselines, are raised and discussed between Project Managers promptly and in a timely fashion; 2.1.3 be a person of reasonable management seniority who is part of the relevant Party's team working on and has good first-hand knowledge of the project concerning the Product from that Party's perspective; and 2.1.4 ensure that they appraise themselves and keep themselves appraised of all material matters and issues concerning the project relating to the Product. 2.2 The Project Managers shall: (i) discuss and monitor progress of Development, Manufacturing and performance under this Agreement against the KPIs and towards achieving the Baselines; (ii) discuss any changes to the Development and Manufacturing Plan; (iii) discuss any issues or delays that will or might reasonably impact Novavax' Delivery of Product in compliance with the Delivery Schedule, and


 
254681-3-31828-v16.0 - 15 - 70-40746871 seek to find solutions to the same; and (iv) escalate issues or matters to the Oversight Committee as appropriate. 2.3 Each Party shall use reasonable efforts to minimise change of its Project Manager, but any change of a Project Manager shall be notified as soon as reasonably possible in writing and each Party shall use reasonable endeavours to ensure notice of any change on no less than [***] prior written notice. Project Manager Meetings 2.4 The Project Managers shall meet in accordance with the meeting schedule set forth in Schedule 3 or at such other times as they reasonably elect to do so, via a secure commercial digital platform (or physically, subject to observing then current social distancing and travel guidelines). Additionally, either Project Manager may call a special meeting at any time, provided that the requesting Party uses [***] to provide at least [***] prior notice to the other Project Manager and, to the extent practicable, such notice includes a proposed agenda for such meeting. Each Party will be [***]. As appropriate, other representatives and consultants of the Parties may attend such meetings as non-voting participants. Oversight Committee 2.5 In addition to appointment of Project Managers, the Parties shall establish a wider oversight committee ("Oversight Committee") that shall be responsible for overseeing the performance and supply contemplated by this Agreement and for making those decisions delegated to it in respect of the Delivery Schedule pursuant to this clause 2. Oversight Committee Responsibilities 2.6 The Oversight Committee shall have responsibility for: 2.6.1 monitoring of, and to encourage and facilitate, ongoing communication and cooperation between the Parties with respect to the Product and performance under this Agreement; 2.6.2 monitoring the progress of Development of the Product; 2.6.3 monitoring the progress of Novavax in respect of establishing and validating the UK and EU supply chain required for the performance of this Agreement, and the status and operation of the UK and EU supply chain required for the performance of this Agreement (including attending meetings pursuant to clauses 5.5, Error! Reference source not found., 5.8 and Error! Reference source not found.); 2.6.4 overseeing, discussing, and providing input on managing and resolving any issues, concerns or delays in the Manufacturing or Delivery of Product; 2.6.5 overseeing and reviewing any updates to the Development and Manufacturing Plan (which updates shall, subject to clause 4.2, be made by Novavax) and the Parties' obligations pursuant to clauses 5.5 to 5.10;


 
254681-3-31828-v16.0 - 16 - 70-40746871 2.6.6 agreeing on the Baselines (other than the Product Delivery Baselines) within [***] of the Effective Date (or such other period agreed by the Oversight Committee); 2.6.7 agreeing in good faith any changes to the Delivery Schedule or any change to the Baselines (other than the Product Delivery Baselines); 2.6.8 agreeing the specific quantities and dates for Delivery of Product pursuant to clause 8.5; 2.6.9 agreeing to the arrangements for and access to any support or assistance agreed to be provided by the Authority in accordance with clause 2.16; 2.6.10 resolving disputes referred to it by a Party or Project Manager; and 2.6.11 monitoring Novavax' performance against the Development and Manufacturing Plan, the KPIs and progress towards meeting the Baselines. Membership of the Oversight Committee 2.7 The Oversight Committee shall comprise [***] representatives from each of the Parties and their Affiliates (collectively, the "Members") initially set at [***], or such other number as the Parties may mutually agree. Each Party may replace any or all of its Members at any time upon written notice to the other Party provided that any replacement Members are employees, officers or personnel of that Party (or its Affiliates), have the appropriate skill and experience to perform the duties of a Member, and sufficient seniority and authorisation on behalf of the applicable Party to take decisions arising within the scope of the Oversight Committee. 2.8 Any Member may designate a suitable substitute who is an employee, officer or personnel of that Party (or its Affiliates) to temporarily attend and perform the functions of that Member. Each Party may, in its reasonable discretion, invite non-Member representatives of such Party to attend meetings of the Oversight Committee as a non- voting contributor, provided that such persons are bound by confidentiality obligations no less stringent than those of clause 20. Meetings of the Oversight Committee 2.9 The Oversight Committee shall meet [***] following the Effective Date (or, if later, until [***] or at such other times as the Members may mutually deem appropriate, provided that, the Oversight Committee shall meet within [***] of referral of a dispute or issue to the Oversight Committee by a Project Manager in order to resolve the same (or sooner if required). 2.10 The first Oversight Committee meeting shall be no later than [***] after the Effective Date. 2.11 The Oversight Committee may meet virtually via a secured commercial digital platform, or where necessary it may meet physically subject to observing then current social distancing and travel guidelines. Either Party may also call a special meeting of the Oversight Committee (via a secure commercial digital platform) upon at least [***] prior written notice to the other Party, or such shorter period as may be agreed on a


 
254681-3-31828-v16.0 - 17 - 70-40746871 meeting-by-meeting basis, if such Party reasonably believes that a significant matter must be addressed prior to the next regularly scheduled meeting, and such Party shall provide the Oversight Committee (as applicable) no later than [***] prior to the special meeting with materials reasonably adequate to enable an informed understanding to be made by its Members. [***] Project Manager shall be appointed and responsible for preparing reasonably detailed written minutes of all Oversight Committee meetings, provided that a [***] Oversight Committee member will be responsible for keeping written minutes of any matters handled in executive session, which minutes will be circulated for comment and approval by the Authority. Decision Making 2.12 Except as otherwise expressly provided in this Agreement, decisions of the Oversight Committee shall be made by [***]. The presence of at least [***] Members representing each Party (i.e. a total of at least [***] Members) shall constitute a quorum of the Oversight Committee. The Members shall endeavour in good faith to reach agreement on any and all matters to be determined or resolved by the Oversight Committee. For clarity, subject to clause 4.2.2 and 5.2.2, Novavax shall have sole and final discretion on the contents of the Development and Manufacturing Plan and any amendments thereto. 2.13 If at any time, the Oversight Committee is unable to reach a [***] decision within [***] (or sooner if required) after it has met and attempted to reach such decision, then either Party may, by written notice to the other, have such matter referred for resolution by an appropriate senior executive officer of each Party. Within [***] (or sooner if required) of such notice, the relevant senior executives and member shall meet and attempt to resolve the dispute by good faith negotiations. Information Disclosures 2.14 Through the Project Managers and Oversight Committee, [***]. Notifications 2.15 Novavax shall ensure (through its Project Manager or the Oversight Committee) that it will notify the Authority or the Authority's Project Manager within [***] upon its knowledge of: 2.15.1 [***]; 2.15.2 [***]; 2.15.3 [***]; 2.15.4 [***]; 2.15.5 [***]; 2.15.6 [***]; 2.15.7 [***];


 
254681-3-31828-v16.0 - 18 - 70-40746871 2.15.8 [***]; and 2.15.9 [***]. Authority Support and Assistance 2.16 Through the Oversight Committee or via its Project Manager, Novavax may request in writing to the Authority reasonable support or assistance from the Authority to facilitate (but not perform) Novavax' performance of its obligations under this Agreement, including requests to receive support comprising: (i) access to consultants and personnel of the Authority which have local knowledge and experience in the Manufacture and regulatory approval of vaccine products in the UK, (ii) access to the Authority's network of companies, stakeholders and other relevant subject matter experts who may help facilitate and assist Novavax in the Manufacture and Delivery of the Product, and (iii) guidance and other technical support that may be reasonably available from the Authority. 2.17 The Authority shall act in good faith and use [***] to provide or facilitate introductions to those who can provide the support or assistance reasonably requested by Novavax pursuant to this Agreement. Notwithstanding the foregoing, the Authority shall not be obliged to [***]. The Parties acknowledge and agree that, in respect of any such support or assistance: 2.17.1 [***]; 2.17.2 [***]; 2.17.3 the Authority may require Novavax to enter into a separate agreement in respect of such request at the Authority's reasonable request; and 2.17.4 [***]. 2.18 Pharmacovigilance. The Authority will cooperate with regard to the reporting of safety information involving the Product supplied under this Agreement (including any Product donated or resold pursuant to clause 9.2) in accordance with Applicable Laws and Applicable Standards on pharmacovigilance and clinical safety, including, without limitation, entering into an appropriate pharmacovigilance agreement. 3. FACILITIES Responsibility for establishing UK Supply Chain 3.1 Novavax shall be responsible [***] for securing Manufacturing Facilities for the Manufacture of Product, including those within the Territory. It is intended that such Manufacturing Facilities shall include those operated by Fujifilm (for the Antigen) and, subject to Novavax' further diligence, [***] for fill/finish activities, each in accordance with clause 5 below ("Primary Facilities"). If, despite Novavax using Commercially Reasonable Efforts, one or more of those Primary Facilities cannot be secured on commercially reasonable terms or they are not suitable for good demonstrable scientific and technical reasons, the issue shall be communicated to the Oversight Committee for discussion. In connection with the foregoing, the Authority shall provide reasonable assistance to Novavax to facilitate establishment of the Primary Facilities as part of the


 
254681-3-31828-v16.0 - 19 - 70-40746871 supply chain (or, [***], alternative Facilities to the extent that agreements with Fujifilm and/or [***] cannot be concluded). However, for the avoidance of doubt, the Authority shall have no right (on behalf of Novavax) or obligation to contract with or perform any acts for the Facilities [***] and Novavax shall have ultimate decision-making authority in regard to all matters related to the Facilities. Facilities for Manufacture of the Product 3.2 Novavax represents to the Authority that Schedule 2 comprises the complete list of all Facilities that are or will be involved or required in any aspect of the Manufacturing of the Product (including the Adjuvant and Antigen) as of the Effective Date. Novavax agrees to notify the Oversight Committee should any change be made to or new facilities need to be added to Schedule 2. Validation Commitment 3.3 Novavax shall ensure that pursuant to its (or its Affiliates') applications for the Marketing Authorisation (and, if applicable, Emergency Use Authorisation) in respect of the Product, it and its Affiliates shall use Commercially Reasonable Efforts to qualify and validate in accordance with Applicable Laws and Applicable Standards (i) the Facilities for the Manufacture of Product; and (ii) those other facilities being used by or on behalf of Novavax and its Affiliates for the Manufacture of Product based within the European Economic Area (EEA) but outside of the Territory, such that Product for the Territory could be sourced from Manufacture within those other facilities. Maintenance of Facilities 3.4 Novavax shall: 3.4.1 ensure that the Facilities have, and will throughout the Term continue to hold, all necessary Regulatory Approvals to operate and to Manufacture Conforming Product for supply and Delivery under and in accordance with this Agreement; and 3.4.2 ensure that all Facilities shall meet and operate in accordance with all necessary Applicable Standards (including GxP) and Applicable Laws for the Manufacture of Conforming Product. 4. DEVELOPMENT, REGULATORY OBLIGATIONS AND INFORMATION REQUIREMENTS. Developing the Product 4.1 Novavax shall use Commercially Reasonable Efforts to Develop the Candidate in order to secure a Marketing Authorisation (and, if applicable, an Emergency Use Authorisation) in the Territory for the Product with the indication in the Field in accordance with the Development and Manufacturing Plan, Applicable Law and Applicable Standards. Novavax shall measure its progress against the Development and Manufacturing Plan using the KPIs and Baselines to communicate such progress to the Oversight Committee.


 
254681-3-31828-v16.0 - 20 - 70-40746871 Responsibility for Development and Execution of the Development and Manufacturing Plan 4.2 The Development and Manufacturing Plan at Schedule 4 and any update thereto shall: 4.2.1 set out details and estimated timelines for the Development of the Product in accordance with this Agreement; 4.2.2 be consistent with the provisions and objectives of this Agreement to Develop and Deliver Conforming Product to the Authority pursuant to a Marketing Authorisation granted in the Territory with an indication in the Field in accordance with the Delivery Schedule and Baselines; and 4.2.3 not impose obligations on the Authority and/or Authority's Affiliates unless the Authority has agreed in writing to assume responsibility for such obligations. 4.3 Novavax shall be responsible [***] for the Development of the Product, the implementation and execution of the Development and Manufacturing Plan and for undertaking, and having undertaken, all activities to Develop and Manufacture the Product and to file for and prosecute through to grant a Marketing Authorisation (including, if applicable, an Emergency Use Authorisation) in the UK for the Product for an indication within the Field, doing so in accordance with Applicable Standards and Applicable Law. 4.4 [***] Updates to the Development and Manufacturing Plan 4.5 The Development and Manufacturing Plan (except for the Delivery Schedule and Baselines which may only be adjusted in accordance with clause 2.6.6) may be adjusted and updated by Novavax, as Development progresses, on a reasonable basis and having regard to achievement of the objective under clause 4.1 and Novavax' obligations in clause 4.2. 4.6 [***] Clinical Trials 4.7 Novavax or its Affiliate shall [***] and shall take responsibility for all obligations imposed on the sponsor of the Clinical Trials undertaken in respect of the Product. The Authority shall use Commercially Reasonable Efforts to assist Novavax' conduct of the UK-based Phase III Clinical Trial via facilitating access to the National Institute of Health Research to facilitate access to clinical trial sites in the UK, principle investigators, immunology lab testing facilities and personnel, and IRB(s), and by providing advice and Commercially Reasonable Efforts to facilitate streamlined Regulatory Approvals (via introductions to the Health Research Authority and MHRA only). [***] 4.8 Novavax shall ensure that the Clinical Trials undertaken are performed in a professional and diligent manner, and in accordance with the Applicable Standards relevant to such trials, including securing all necessary Regulatory Approvals, consents and licences required for undertaking those Clinical Trials, including those of any ethics committee.


 
254681-3-31828-v16.0 - 21 - 70-40746871 Marketing Authorisation Commitments 4.9 Novavax shall (itself or through its Affiliate) use Commercially Reasonable Efforts to secure a valid Marketing Authorisation from the Licensing Authority for the Product with the indication in the Field, and any other applicable Regulatory Approvals, each as required in the Territory for the Development, Manufacture and Delivery of the Product in the Territory. Once the Marketing Authorisation and any other applicable Regulatory Approvals are secured, Novavax shall maintain all such Regulatory Approvals until [***]. 4.10 Novavax shall ensure that the Marketing Authorisation granted for the Territory will include the Facilities as facilities qualified and validated for Manufacture of the Product to be supplied to the Authority under this Agreement. 4.11 [***] 4.12 Novavax shall, and shall procure that its Affiliates and Subcontractors shall, comply with all requests and recommendations of the Licensing Authorities and any other Regulatory Authority in connection with the Product and its Manufacture. Product Information 4.13 Where reasonably requested by the Authority, Novavax shall [***]. Emergency Use Authorisation 4.14 The Parties acknowledge and agree that Novavax or the Authority may (but shall be under no obligation to) apply for an Emergency Use Authorisation for the Product with the Licensing Authority for the Territory for use with the indication in the Field. However, securing an Emergency Use Authorisation shall not relieve Novavax from the ongoing obligation to secure a Marketing Authorisation in the Territory for the Product with the indication in the Field. Jurisdictional Limitations 4.15 If due to its legal seat of incorporation Novavax is precluded or prevented from performing any obligations required of it pursuant to this Agreement due to Applicable Laws or Applicable Standards, including fulfilling any regulatory activities, applying for, maintaining or holding any Regulatory Approval, or Manufacturing or delivery of Product, then Novavax shall notify the Authority and shall procure that one or more of its Affiliates established within the Territory (or another acceptable jurisdiction) or, with the Authority's prior written consent and solely in connection with holding a Marketing Authorisation and performing the obligations of a Marketing Authorisation holder, an approved Third Party service provider, shall fulfil those of Novavax' obligations under this Agreement that Novavax is otherwise precluded or prevented from performing. Novavax shall be responsible to the Authority for any performance, non-performance, act or omission by such Affiliate(s) or Third Party service provider in connection with the foregoing. In connection with the foregoing, no later than [***], Novavax shall notify the Authority of the identity of any Affiliate or approved Third Party service provider in whose name the Marketing Authorisation will be filed.


 
254681-3-31828-v16.0 - 22 - 70-40746871 5. MANUFACTURE AND SUPPLY OF PRODUCT Manufacturing and Supply Commitment 5.1 Novavax shall, or shall procure its Affiliates shall, Manufacture and supply the Product to the Authority, and the Authority shall purchase the Product, subject to and in accordance with the terms and conditions of this Agreement. Manufacturing Plan 5.2 Novavax shall use Commercially Reasonable Efforts to implement the Manufacturing activities described in the Development and Manufacturing Plan [***]. Novavax' progress against the Development and Manufacturing Plan shall be measured by reference to the KPIs and the Baselines, which shall be communicated to and discussed within the Oversight Committee. The Development and Manufacturing Plan at Schedule 4 and any update thereto shall: 5.2.1 set out estimated timelines for technology transfer, engineering and PPQ atches and the commercial Manufacture of the Product in accordance with this Agreement; 5.2.2 be consistent with the provisions and objectives of this Agreement to Manufacture and Deliver commercial supplies of Conforming Product to the Authority pursuant to a Marketing Authorisation granted in the Territory for an indication within the Field and in accordance with Priority Supply and the Delivery Schedule and Baselines; and 5.2.3 not impose obligations on the Authority and/or the Authority's Affiliates unless the Authority has agreed in writing to assume responsibility for such obligations. 5.3 The Manufacturing activities in the Development and Manufacturing Plan may be adjusted and updated by Novavax on a reasonable basis and having regard to achievement of the objective under clause 5.2.2. [***] Responsibility for Manufacturing and licensing obligations 5.4 Novavax shall be responsible [***] for establishing a supply chain for, and the Manufacture of, the Product, the implementation and execution of the Manufacturing under the Development and Manufacturing Plan, and for undertaking, and having undertaken, all activities required thereunder to Manufacture the Product as Conforming Product in compliance with Applicable Laws (including securing and maintaining applicable Regulatory Approvals). [***] Supply of Antigen 5.5 The Parties agree that their preferred approach is for the Antigen to be manufactured on behalf of Novavax and its Affiliates by Fujifilm in the UK, but the Authority acknowledges and agrees that the responsibility for Manufacture of the Product resides with Novavax, who shall have ultimate decision-making authority in regard to Manufacture of the Product, including sourcing of Antigen to meet the Delivery Schedule and Baselines. [***] The Authority shall provide reasonable assistance to Novavax, for Novavax to secure a timely agreement with Fujifilm in respect of the


 
254681-3-31828-v16.0 - 23 - 70-40746871 manufacture of the Antigen required to fulfil the Priority Order, but Novavax shall be [***] at [***] for securing such agreement or letter of intent or authorisation and such capacity. Novavax shall use Commercially Reasonable Efforts to conclude an agreement or letter of intent or authorisation with, and secure sufficient capacity for the Orders under this Agreement at, Fujifilm (or failing that another facility for Manufacture of Antigen) no later than [***]. 5.6 If Novavax determines [***] that Fujifilm does not have sufficient capacity or capabilities to perform the activities contemplated by this Agreement within the period contemplated by the Delivery Schedule, or that the terms offered by Fujifilm, despite having used Commercially Reasonable Efforts to negotiate the same, are not commercially reasonable, Novavax shall use Commercially Reasonable Efforts to secure Antigen manufacturing services and facilities with other CMOs in order to fulfil Orders pursuant to this Agreement. In selecting CMOs, Novavax shall [***], but the Parties acknowledge and agree that: 5.6.1 Novavax shall (subject to same being approved under the Marketing Authorisation issued for the Territory) have the ultimate decision-making authority and responsibility in regard to where the Product is Manufactured in the EEA order to meet the Delivery Schedule and Baselines; 5.6.2 any use of facilities outside the EEA are subject to [***]; and 5.6.3 [***] 5.7 If the Authority secures spare capacity at manufacturing facilities suitable for the Manufacture of the Antigen in excess of the quantity of Antigen required to fulfil the Priority Order, the Authority may (but is not obliged to) offer such capacity to Novavax, and Novavax may elect to utilise such capacity on terms to be agreed between the relevant parties. If Novavax wishes to extend the supply of Antigen from Fujifilm beyond the Antigen required to fulfil the Priority Order, the Authority shall provide reasonable assistance to Novavax to assist Novavax in securing such an agreement [***]. Fill/Finish for Product 5.8 The Product shall be supplied by Novavax (or its Affiliate) as finished, labelled and quality released drug product in accordance with the Marketing Authorisation. The Parties agree that their preferred approach is that the co-formulation, fill/finish, and labelling be undertaken by [***] in the UK at the facilities of [***], subject to capacity and further due diligence by Novavax, but the Authority acknowledges and agrees that the responsibility for Manufacture of the Product resides with Novavax, who shall have ultimate decision-making authority and responsibility in regard to Manufacture of the Product, including sourcing of fill/finish contractors, in order to meet the Delivery Schedule and Baselines. [***] The Authority shall provide reasonable assistance to Novavax to assist Novavax in securing a timely agreement or letter of intent or authorisation with [***] in respect of such activities, but Novavax shall be [***] for securing such capacity [***]. Novavax shall use Commercially Reasonable Endeavours to conclude an agreement or letter of intent or authorisation with and secure capacity at [***] (or, failing that, another fill/finish facility) no later than [***] .


 
254681-3-31828-v16.0 - 24 - 70-40746871 5.9 If Novavax determines [***] that [***] does not have sufficient capacity or capabilities to perform the activities contemplated by this Agreement within the period contemplated by the Delivery Schedule, or that the terms offered by [***], despite having used Commercially Reasonable Efforts to negotiate the same, are not commercially reasonable, Novavax shall use Commercially Reasonable Efforts to secure co-formulation, fill/finish, and labelling services and facilities with other CMOs in order to fulfil Orders pursuant to this Agreement. In selecting CMOs, Novavax shall [***], but the Parties acknowledge and agree that: 5.9.1 Novavax may use an EEA-based facility for such Manufacture and shall (subject to same being approved under the Marketing Authorisation issued for the Territory) have the ultimate decision-making authority and responsibility in regard to where the Product is Manufactured in the EEA order to meet the Delivery Schedule and Baselines; 5.9.2 any use of facilities outside the EEA are subject to [***]; and 5.9.3 [***] Novavax' Use of Excess Antigen Capacity 5.10 Notwithstanding the provisions of clause 5.11 and 5.12 below, if Novavax [***], despite its Commercially Reasonable Efforts to secure and complete technology transfer for sufficient fill/finish capacity, where Antigen is manufactured to meet [***] that [***] exceeds the fill/finish capacity secured from [***] or any alternate fill/finish provider by Novavax pursuant to clauses 5.8 and 5.9, then Novavax shall be entitled to export such excess Antigen from the UK provided, in any case, that: 5.10.1 at least [***] Doses of Conforming Product have first been Delivered to the Authority; 5.10.2 [***]; and 5.10.3 [***]. Alternative Facilities 5.11 Prior to commencement of the full-scale manufacturing of Antigen by Fujifilm (or such other CMO secured by Novavax pursuant to clause 5.5 and 5.6), Novavax and the Authority, through the Oversight Committee, shall discuss, acting in good faith, an interim supply of Conforming Product from Novavax' existing Manufacturing facilities. The Authority acknowledges that such supply is subject to Novavax' obligations to CoVax and its Funding Entities. 5.12 If Novavax is delayed from fulfilling, or otherwise limited or unable to fulfil, Orders from any of the Facilities in the UK, then Novavax shall notify the Authority and use Commercially Reasonable Efforts to secure Manufacture of Product from other facilities within its and its Affiliates' EEA-based supply chain (or, [***], facilities in its supply chain based outside of the EEA) in order to fulfil Orders in accordance with the Delivery Schedule and Baselines hereunder. Priority Supply


 
254681-3-31828-v16.0 - 25 - 70-40746871 5.13 [***]. Furthermore, Novavax shall ensure that Conforming Product shall be supplied to the Authority on a priority supply basis, meaning that: ` 5.13.1 Novavax will supply the Authority with Conforming Product in full to meet the total quantity required under the Priority Order prior to supplying any Product to any other Person in, or for use within, the Territory; 5.13.2 Novavax shall not Manufacture or supply Product for any Third Party outside of the Territory using any of the Facilities secured pursuant to Novavax' obligations under this clause 5 until the Priority Order has been satisfied in full through Delivery to the Authority of sufficient quantities of Conforming Product to meet the Priority Order (each of clause 5.13.1 and 5.13.2 being "First Priority Supply"); and 5.13.3 with respect to (i) Additional Orders; or (ii) fulfilment of any Order to be made from Facilities other than those UK-based Facilities secured pursuant to Novavax' obligations under this clause 5 (including pursuant to clause 5.12); then in either case of (i) or (ii) such supply shall be: (a) made to the Authority at a volume that is proportionately comparable on a pro-rated basis to each of the volumes being provided to each other Person being supplied Product ("Pro-Rated Formula") on or broadly around the same time from the same facilities, such proportion being calculated by [***]; and (b) notwithstanding (a) above, in the case of Additional Orders being Manufactured at the Facilities: (i) fulfilment of such Orders shall be prioritised, having regard to meeting the applicable Delivery Schedule, following any other earlier and confirmed orders to Third Parties; and (ii) supply of Product to fulfil such Additional Orders from the Facilities shall be made to the Authority based on the Pro-Rated Formula, at least as early, if not earlier, than any supply of Product being made available to any Third Party ordered at or around the same time as such Additional Orders from the same Facilities; (collectively the provisions of this clause 5.13.3 being "Equal Priority Supply"); and collectively the First Priority Supply and Equal Priority Supply being "Priority Supply"). 5.14 If Novavax proposes to supply Product to a Third Party outside, and for use outside, of the Territory before the grant or issuance of a Marketing Authorisation (and, if applicable, any Emergency Use Authorisation) for the Product in the Territory, then Novavax shall first notify the Authority of such decision and, subject to Priority Supply, Novavax shall, at Authority's election (i) supply Product to the Authority pending grant of the Marketing Authorisation (and, if applicable, an Emergency Use Authorisation)


 
254681-3-31828-v16.0 - 26 - 70-40746871 and in quantities in compliance with the outstanding volume of Orders for the Authority; or (ii) reserve and allocate for the Authority physical volumes of Product in quantities in compliance with the outstanding volume of Orders for the Authority and hold the same for Delivery to the Authority immediately upon grant of the Marketing Authorisation (and, if applicable, Emergency Use Authorisation) or earlier upon the Authority's written request; or (iii) not take any steps under (i) or (ii) above. Product Conformance 5.15 Novavax shall ensure that all Product supplied to the Authority (or its agent or designee) under this Agreement shall: 5.15.1 be Manufactured (including being quality released) and labelled in accordance with Applicable Law, Applicable Standards, all Documentation and batch records, quality standards and all Regulatory Approvals; 5.15.2 meet the Specification and shall, until expiry of the Minimum Shelf Life, continue to comply with the Specification, and meet the Marketing Authorisation and relevant Regulatory Approvals (subject to the proper storage and handling of the Product in accordance with the instructions in the SmPC by Authority or its designees or agents); 5.15.3 be free of any identifiable Defect and shall be unadulterated; 5.15.4 satisfy the Minimum Shelf Life at the time of Delivery; and 5.15.5 be new and have not (i) previously left the control of Novavax or its Affiliates; (ii) been rejected or returned by any other entity; or (iii) been reprocessed or reworked; in each case of (i), (ii) and (iii) prior to their supply to the Authority under this Agreement. No Exclusive Purchasing Arrangement 5.16 Nothing in this Agreement shall amount to an exclusive purchasing obligation on the Authority or preclude or restrict the Authority from purchasing any products whatsoever from Third Parties, including any products that are complementary to, competitive to, equivalent to, or substitutable for the Product or that are indicated for or expected to be beneficial for use in the prophylaxis, treatment or vaccination against SARS-CoV-2. Manufacturing Failures 5.17 Without excusing or limiting the obligations under clause 5.15 and 8.8, and subject to notifying the Authority of the use of such alternative facilities, if for any reason related to the Facilities, Novavax is unable to supply Conforming Product to Authority in accordance with the Delivery obligations of this Agreement, then Novavax shall instead source and supply Product from its other supply chain arrangements involved in the Manufacture of Product for countries outside the Territory and shall ensure that such Product sourced from those other facilities may be supplied hereunder as Conforming Product.


 
254681-3-31828-v16.0 - 27 - 70-40746871 6. PRODUCTION SCHEDULES AND BUSINESS CONTINUITY Production Schedules 6.1 On a [***] basis Novavax shall provide the Oversight Committee with the then most current and accurate production schedule for the Manufacture of Product that is the subject of this Agreement, which shall include the status of Facility reservations and stock levels of Antigen, Adjuvant, formulated drug substance and final (but unlabelled) Product. Business Continuity Plan 6.2 Novavax and its Affiliates currently have in place and shall, in consultation with the Authority within [***] of the Effective Date, further develop, implement and thereafter keep current, a reasonable risk management programme for the Facilities and Manufacture and Delivery of the Product, including a Business Continuity Plan. At the Authority's request, Novavax shall make a copy of the current Business Continuity Plan available to the Authority, or its representatives, for review. Novavax shall keep the Business Continuity Plan under review and shall update the same from time to time as reasonably appropriate. 6.3 Novavax shall: 6.3.1 test its Business Continuity Plan at reasonable intervals, and in any event no less than [***], and update it to address any material failures; and 6.3.2 use Commercially Reasonable Efforts to ensure that its and its Affiliates' Business Continuity Plan complies, on an ongoing basis, with any specific and reasonable business continuity requirements, as may be discussed pursuant to the Oversight Committee. 6.4 For the avoidance of doubt, having a Business Continuity Plan and its implementation does not relieve Novavax (or its Affiliates) from the Manufacturing and supply obligations under this Agreement. 7. ORDERING Priority Order 7.1 Within [***] following the Effective Date the Authority shall submit to Novavax a written order for sixty million (60,000,000) Doses of the Product (the "Priority Order"), [***]. 7.2 Novavax shall accept the Priority Order in writing, and the confirmed Priority Order shall be binding upon the Parties and subject to the terms and conditions set out in this Agreement. [***].


 
254681-3-31828-v16.0 - 28 - 70-40746871 Additional Orders 7.3 During the Term, the Authority may from time to time request additional Doses of the Product (each a "Additional Order"). 7.4 If the Authority requests an Additional Order: 7.4.1 [***]; 7.4.2 the Parties shall, acting reasonably and in good faith, agree a mutually acceptable delivery schedule for the Additional Order (which for the purposes of this Agreement shall become the Delivery Schedule applicable to such Additional Order); 7.4.3 the Authority shall submit an order for the Additional Order which reflects the quantity and delivery schedule agreed by the Parties, together with the Authority's order number, VAT number, and invoice address; and 7.4.4 Novavax shall accept such Additional Order in writing. 7.5 An Additional Order shall be binding upon the Parties in accordance with the terms and conditions set out in this Agreement. All other terms and conditions (including any terms and conditions which the Authority or Novavax purports to apply under any order, acceptance, specification or other document attached to any order or acceptance form) are hereby excluded. Reduced Volume 7.6 The Authority shall be entitled, on written notice to Novavax, to cancel or reduce (in whole or part) the Doses of the Product ordered in [***] or any Additional Order (such reduction being the "Reduced Volume"): (a) following any actual or reasonably threatened and/or reasonably anticipated material Loss of Supply (which will include for the avoidance of doubt an interruption in production which will reasonably be expected to result in a subsequent interruption in deliveries) which has not been remedied by Novavax within [***], by an amount equal to the amount subject to such Loss of Supply; (b) following any adjustment or variation of the Development and Manufacturing Plan, any adjustment or variation of Specification or Marketing Authorisation; or (c) subject to clause 8.6.2 and 8.6.3, any actual or reasonably threatened and/or anticipated failure to meet the Delivery Schedule or (notwithstanding adjustment of the Delivery Schedule) the Product Delivery Baselines. Following such adjustment the Parties shall agree in good faith a revised Delivery Schedule for the remaining volumes of Doses of Product to be Delivered, which shall be set as close in time to the original Delivery Schedule as is reasonably possible (and is compliant with principles of Priority Supply) and if agreement cannot be reasonably


 
254681-3-31828-v16.0 - 29 - 70-40746871 reached the Authority may further adjust [***] or Additional Order pursuant to this clause. 7.7 The effect of the Reduced Volume shall be automatically binding on the Parties and the total Price payable under this Agreement shall be decreased by the Reduced Volume of the Doses of the Product (a "Price Reduction") and Novavax shall have no further obligation to provide such Reduced Volume of Doses. Novavax shall promptly refund any Price Reduction (to the extent already paid by the Authority) to the Authority. 7.8 Following any change in accordance with the foregoing or pursuant to clauses 8.8 or 12, each of the Orders shall thereafter reflect the new volume of Product adjusted according to this clause. 7.9 If the Authority elects to receive a Reduced Volume, the sole and exclusive remedy of the Authority in respect of that Reduced Volume shall take the form of the Price Reduction provided that this shall not relieve Novavax for any liability in respect of any material breach (if applicable) of this Agreement, including its failure to use Commercially Reasonable Efforts where expressly required under this Agreement. 8. DELIVERY Delivery Schedule 8.1 Subject to the provisions of this clause 8, Novavax shall Deliver Conforming Product to the Authority or its Authorised Agent in the volumes and timelines set out in the applicable Delivery Schedule. 8.2 If due to events beyond Novavax' reasonable control the Product is not going to be Delivered, in any material way, in accordance with the Delivery Schedule, then Novavax shall [***] notify the Oversight Committee and, provided Novavax has used Commercially Reasonable Efforts to Deliver in accordance with the Delivery Schedule the Oversight Committee, shall discuss a reasonable and proportionate amendment to the Delivery Schedule recognising that [***] delivery of the Product is a fundamental requirement for the Authority. The Delivery Schedule may only be updated and refined during the Term with the written agreement of the Oversight Committee (such consent not to be unreasonably withheld or delayed)], subject always to (i) the Product Delivery Baselines and (ii) the Delivery Schedule conforming with Novavax' obligations to supply Product in accordance with Priority Supply. For the avoidance of doubt, if a failure of Novavax not to use Commercially Reasonable Efforts in accordance with its obligations under this Agreement directly resulted in Novavax' request for such change to the Delivery Schedule, such failure shall entitle the Authority to withhold its consent to any change to the Delivery Schedule. Authority's Authorised Agents 8.3 Where and insofar as expressly stated in writing by the Authority to Novavax, the Authority may appoint one or more Authorised Agents to act on the Authority's behalf in relation to part or all of this Agreement, including to receive one or more Deliveries of any Product (or part thereof). Novavax shall work and co-operate reasonably with each Authorised Agent appointed by the Authority upon such notification.


 
254681-3-31828-v16.0 - 30 - 70-40746871 Delivery 8.4 Novavax shall: 8.4.1 deliver the Product [***] ("Delivery") with Delivery being complete upon [***]; 8.4.2 ensure that the total volume of Doses of the Product set forth in the Orders (as may be amended) shall be Delivered; 8.4.3 ensure that Delivery of Product shall not be made earlier than: (a) subject to clause 8.6.2, the applicable dates set forth in the Delivery Schedule without the agreement of the Authority; or (b) the date of grant or issuance of a Marketing Authorisation for the Product in the Territory, unless Delivery is requested earlier by the Authority, and any Delivery (or attempted Delivery) of Product earlier than the applicable date set forth in the Delivery Schedule or before grant/issuance of a Marketing Authorisation (unless requested earlier by Authority) may be [***]. 8.5 Notwithstanding Novavax' obligation to Deliver the Priority Order (and any Additional Order) in the quantities and during the periods set forth in the Delivery Schedule, for each instalment set out in the Delivery Schedule, the Oversight Committee may agree to further refine the timing for Delivery of that specific instalment and the quantities. 8.6 Without prejudice to the Authority's rights under clause 7.6 (which may be exercised at any time), Novavax shall not be in breach of its obligation to comply with the Delivery Schedule if: 8.6.1 there is a delay in Novavax securing the Marketing Authorisation (and, if applicable, any Emergency Use Authorisation) for the Product in the Territory provided that (i) Novavax, its Affiliates and Subcontractors used Commercially Reasonable Efforts in their respective activities to file for and secure the grant or issuance of the same; and (ii) delay was not caused by the breach of this Agreement or the negligence of, Novavax, its Affiliates or Subcontractors; 8.6.2 there is any minor variance of dates of Delivery compared to the Delivery Schedule of up to [***] due to the unpredictable nature of the Manufacturing of the Products, so long as such variance is agreed with the Authority in writing at least [***] prior to the scheduled Delivery date for such Products as set out in the Delivery Schedule (a "Grace Period"); 8.6.3 there is any minor variance in quantity of Doses Delivered compared to the quantities in the Delivery Schedule of up to [***]; or 8.6.4 the Parties agree, from time to time and by mutual consent, to vary the Delivery Schedule. Delays and Loss of Supply


 
254681-3-31828-v16.0 - 31 - 70-40746871 8.7 Novavax shall [***] from the issue being identified) notify the Authority in writing of any actual or anticipated delay or change to the Delivery Schedule or any actual or anticipated delay in Delivery of Product against the Delivery Schedule. 8.8 Without prejudice to clause 7.6, if the Authority's supply is materially interrupted, delayed or deferred due to (i) any orders or directions pursuant to the US Defense Production Act, or as a consequence of any other government interventions ("Government Interventions"); (ii) demands or obligations from Funding Entities or other Third Parties; or (iii) commitments accepted by Novavax; (collectively a "Loss of Supply") and such Loss of Supply is not promptly remedied by Novavax within twenty (20) Business Days, then in either case, the Authority shall be entitled: 8.8.1 to terminate this Agreement pursuant to clause 25.4; and 8.8.2 as its sole and exclusive remedy to recoup [***] provided to Novavax, provided however, that: (a) if the Loss of Supply is caused by Government Intervention then Novavax shall only be required to refund such monies to the Authority to the extent the [***]; or (b) if the Loss of Supply is caused for reasons under (ii) or (iii) of the definition above, sub-paragraph (a) shall not relieve Novavax for any liability if the cause under (ii) or (iii) above results from any material breach (if applicable) of this Agreement, including its failure to use Commercially Reasonable Efforts where expressly required under this Agreement. Receipt following Delivery 8.9 The Authority or its Authorised Agent shall arrange for the Delivery Location to be ready for receipt of the Product in accordance with the Delivery Schedule. Delivery shall be deemed complete when the Product has been [***]. If the Delivery Location cannot receive the Product on the agreed Delivery date, then Novavax shall keep and store the same in accordance with the applicable storage guidelines and requirements for up to [***]. Following that [***] period, unless a further storage period is otherwise agreed between the Parties (at the Authority's cost and risk), Novavax shall Deliver the Product to the Delivery Location (whether or not the Delivery Location can receive the Product). 8.10 All Deliveries of the Product supplied hereunder shall, at the time of Delivery or reasonably in advance of the Delivery of the Product, be accompanied by the documentation specified in Schedule 8 (the "Documentation"). 9. DISTRIBUTION 9.1 Once Product is Delivered by Novavax in the UK, the Authority or its designees shall be responsible for and shall control and direct the onward distribution of the Product. 9.2 Novavax agrees and acknowledges that the Authority may donate or resell Product Delivered to the Authority that is in excess of its requirements to other countries, governments and charitable organisations including the ACT Accelerator, but only if


 
254681-3-31828-v16.0 - 32 - 70-40746871 (i) the intended purpose of such donation or resale is to vaccinate individuals against SARS-CoV-2; (ii) such Product can be placed on the market in such country(ies) in accordance with Applicable Law (which for the avoidance of doubt does not require Novavax to seek any Regulatory Approval in such country(ies)); (iii) the Authority is not in material breach of this Agreement; and (iv) the Authority has paid to Novavax the Price for such Product. In addition, the Authority expressly acknowledges and agrees that, in connection with any donation or resale or Product to a country(ies) outside of the Territory as aforesaid, that (A) the Authority shall be solely responsible for shipping, transporting and otherwise delivering the donated or resold Product to such country(ies) (including the cost of importing, exporting and customs clearance) and that Novavax will have no obligation to assist the Authority with the foregoing or to otherwise assist the Authority with distribution of the Product within such country(ies), (B) the Authority shall be solely responsible for initiating and implementing any Product recalls in such country(ies), (C) the Product warranties set forth in this Agreement solely apply to the sale of Product to Authority under this Agreement, (D) the donation or reselling of any Product by Authority does not reduce or remove any obligation or right of the Authority or right or obligation of Novavax under this Agreement, and (E) Novavax shall have no indemnification obligation under this Agreement with respect to such Product once it is donated or resold, and (F) no Confidential Information of Novavax shall be disclosed. 10. RISK AND TITLE 10.1 Risk of loss or damage and title to Products supplied under this Agreement shall pass to the Authority upon Delivery of the Product to the Authority pursuant to clause 8. 11. INSPECTION AND REJECTION OF PRODUCT Inspection & Rejection 11.1 Upon the [***], the Authority (or, on its behalf, its Authorised Agent) will inspect the Product and review the Documentation, and notify Novavax in writing [***] of the Delivery of the Product and receipt of the Documentation) if it rejects the Product ("Rejected Product"). [***] [***] 11.1.1 [***]; or 11.1.2 [***]; [***] Should the Authority notify Novavax pursuant to this clause 11.1, the Authority shall make available for collection by Novavax samples of the Rejected Product to Novavax (or its nominated agent) for collection and testing. Independent Laboratory 11.2 In the event of a disagreement concerning whether Product has any Defect or is Conforming Product, Novavax shall notify the Authority within [***] of its receipt of the Authority's notice of such Rejected Products. Novavax and the Authority shall use their respective reasonable endeavours to resolve such disagreement [***]. If the parties are unable to amicably resolve the disagreement, such dispute shall be resolved by having an independent, mutually acceptable, qualified third party expert (the


 
254681-3-31828-v16.0 - 33 - 70-40746871 "Independent Expert") promptly examine the Product that is the subject of the dispute. [***] The findings of the Laboratory shall be final and binding on the Parties other than in the event of manifest error. 12. REMEDIES AND MITIGATION OF LOSSES 12.1 Novavax acknowledges the critical importance that the Authority places on ensuring that Products are delivered free of Defect, in conformance with clause 5.15, and in accordance with Priority Supply and the Delivery Schedule. Rejected Product 12.2 In respect of any Rejected Product, provided that the Authority notifies Novavax of such Defect in accordance with clause 11.1, Novavax shall at the Authority's election: 12.2.1 upon such Rejected Product being made available for collection by Novavax or resolution of any disagreement as to whether or not the Rejected Product is Defective, refund the Authority's payment for such Rejected Product calculated on a pro-rated basis according to the number of Product units returned as Rejected Product; or 12.2.2 at no additional cost to the Authority, replace the Rejected Product with an identical quantity of Conforming Product, subject to the Parties agreeing on a Delivery date for such replacement Product, which Novavax shall use Commercially Reasonable Efforts to Deliver on an expedited basis, and the Rejected Product shall be made available for collection and disposal by Novavax, [***]. Without prejudice to clause 12.3, the remedies set forth in this clause 12.2 shall be the sole and exclusive remedy of the Authority in regard to Rejected Product that has not been distributed, used or administered by the Authority. Failure to Deliver Conforming Product 12.3 If Novavax does not Deliver Conforming Products in accordance with the Delivery Schedule (or, where notified, within the applicable Grace Period) other than where such failure to Deliver is due to the default of the Authority or its Authorised Agents, then the Authority shall, upon written notice to Novavax: 12.3.1 be entitled to refuse or cancel Delivery of any such Products not Delivered in accordance with the Delivery Schedule [***]; and 12.3.2 be entitled to a refund, calculated on a pro-rated basis of the Price, for those Products (i) Delivered with a Defect (where the Authority elected to receive a replacement remedy pursuant to clause 12.2.2 but that replacement was not Conforming Product); (ii) not Delivered; or (iii) which have been refused Delivery or had their Delivery cancelled in accordance with clause 12.3.1. If Authority elects to exercise its remedy in this clause 12.3, and subject to clause 12.2.1, it shall be the sole and exclusive remedy of the Authority in regard to failure to Deliver Conforming Product [***].


 
254681-3-31828-v16.0 - 34 - 70-40746871 13. PRICE [***] 13.1 [***]. 13.2 [***]. 13.3 [***]. Currency 13.4 The Price payable by the Authority under this Agreement shall be payable in US Dollars. 14. INVOICING AND PAYMENT [***] 14.1 Novavax shall invoice the Authority on or after the later of (i) Novavax' acceptance of the Priority Order; and (ii) the entry of Novavax into the supply agreements or letters of intent or authorisation with each of Fujifilm and [***] (as contemplated in clauses 5.5 and 5.8 or, if applicable, alternative CMOs for the Manufacture of the Antigen and/or fill/finish of the Product in accordance with clauses 5.6 and/or 5.9) for [***], which amount shall be off-set and credited against future payments due to Novavax in respect of [***]. 14.2 The Parties acknowledge and agree that [***] by the Authority in clause 14.1 shall be off-set one hundred per cent. (100%) against the amount payable by the Authority for the first [***] Doses of Conforming Product Delivered pursuant to [***]. [***] 14.3 [***] Invoicing 14.4 Novavax shall invoice the Authority for [***]. Payment Terms 14.5 The Authority shall pay each invoice properly submitted in accordance with this Agreement and the invoice schedule within [***] after the date of the applicable invoice. 14.6 All payments due to a Party under this Agreement: 14.6.1 are exclusive of any VAT which may be chargeable, which, if properly chargeable, the paying Party shall pay in addition at the rate and in the manner for the time being prescribed by Applicable Law and subject to the other Party providing a valid and accurate VAT invoice; 14.6.2 shall be made by transfer to such US or UK bank account as the receiving Party may from time to time notify in writing to the paying Party; and


 
254681-3-31828-v16.0 - 35 - 70-40746871 14.6.3 shall be made in full and cleared funds, subject to any deduction or withholding which must be made under Applicable Laws. Disputes and Late Payments 14.7 The Authority shall raise any queries with respect to an invoice within fifteen [***] of receipt. Where Authority raises a query with respect to an invoice, the Parties shall liaise with each other and agree a resolution to such query within [***] days of the query being raised. If the Parties are unable to agree a resolution within [***] the query being raised, the dispute shall be referred to dispute resolution in accordance with the dispute resolution procedure prescribed in this Agreement. For the avoidance of doubt, the Authority shall not be in breach of any of any of its payment obligations under this Agreement in relation to any queried or disputed invoice sums unless the process referred to in this clause 14.7 has been followed and it has been determined that the queried or disputed invoice amount is properly due to Novavax and the Authority has then failed to pay such sum within [***] following such determination. 14.8 The Authority shall pay all amounts not in dispute. If the Authority fails to pay any amount payable under this Agreement by the due date for payment, then without prejudice to any other rights or remedies that Novavax may have interest shall accrue on that amount [***]. 15. WARRANTY AND UNDERTAKINGS 15.1 Novavax warrants and undertakes to the Authority that: 15.1.1 it shall maintain a properly documented system of quality controls and processes (including quality management systems) covering all aspects of its obligations under this Agreement (including those it may subcontract to others) and shall at all times comply with such quality controls and processes and not amend them in material manner without notifying the Authority in writing at least [***] in advance of such change (such notice to include the details of the consequences which follow such change being implemented). 15.2 Novavax further represents, warrants, and undertakes to the Authority that: 15.2.1 it has the right and authority to enter into this Agreement and that it has the capability and capacity to fulfil its obligations under this Agreement; 15.2.2 it is a properly constituted limited liability company and that it is fully empowered by the terms of its constitutional documents to enter into and to carry out its obligations under this Agreement and the documents referred to therein; 15.2.3 to its knowledge there are no pending or threatened actions or proceedings before any court or administrative agency which would materially adversely affect the financial condition, business or operations of Novavax; 15.2.4 there are no material agreements existing to which Novavax is a party which prevent Novavax from entering into this Agreement, or which would prevent Novavax from fulfilling [***] on the terms of this Agreement (including any agreement with a Funding Entity);


 
254681-3-31828-v16.0 - 36 - 70-40746871 15.2.5 all necessary actions to authorise the execution of and performance of its obligations under this Agreement have been taken before such execution; and 15.2.6 it shall: (i) take reasonable steps to identify if there is any slavery or human trafficking in its supply chains accordingly to Applicable Law; (ii) notify the Authority promptly if it becomes aware of any actual or suspected incidents of slavery or human trafficking in its supply chains; and (iii) conduct its business without use of any slavery or human trafficking. 15.3 Novavax also warrants that, at the time of their delivery, title to the Product supplied under this Agreement will pass to the Authority as provided in this Agreement free and clear of any security interest, lien, charge or other encumbrance. Record Keeping 15.4 Novavax shall (and shall procure that its Affiliates shall) maintain all records and reports with respect to the Manufacture and supply of the Product (and in relation to the provision of any other services) under this Agreement as required by Applicable Laws and in any event for a minimum period of [***] following the termination or expiry of this Agreement. Product Recall 15.5 Novavax and the Authority (or its designee) shall co-operate with respect to initiating and implementing any Product recalls (i) required by controlling Regulatory Authorities; (ii) that are precautionary withdrawals implemented due to an underlying concern regarding the Product; and (iii) voluntary withdrawals requested by the Authority for reasons other than those under (i) or (ii). Novavax shall be responsible for implementing a recall required by the controlling Regulatory Authority or a precautionary recall under (ii) above, and the Authority shall be responsible for implementing any recall it voluntarily elects to make under (iii) above. Each Party, as applicable, shall (a) handle such matters in a timely, prudent and skilful manner, in compliance with all Applicable Law; and (b) keep the other Party informed in a timely manner with respect to the recalling Party's activities in regard to all such recalls and market withdrawals. 15.6 All costs incurred in responding to recalls and market withdrawals shall be borne: 15.6.1 [***]; 15.6.2 [***], or 15.6.3 [***]. 16. FUTURE PREPAREDNESS Through the Oversight Committee, the Parties shall discuss in good faith the terms and arrangements for a longer partnership with potential funding by the Authority for the development and supply of other potential pandemic preparedness vaccine products (including but not limited to Novavax' seasonal influenza vaccine or a pandemic derivative thereof).


 
254681-3-31828-v16.0 - 37 - 70-40746871 17. ANTI-BRIBERY 17.1 Each Party represents: 17.1.1 on behalf of itself, its Affiliates, and its and their respective Personnel (together with such Party, the "Party Representatives") that its Party Representatives have not in relation to this Agreement: (a) committed (directly or indirectly) any offence under any anti-bribery or anti-corruption laws (including the Bribery Act 2010 and/or the Foreign Corrupt Practices Act); (b) offered, given or agreed to give any Personnel of the other Party any gift or consideration of any kind as an inducement or reward for doing or not doing or for having done or not having done any act in relation to the obtaining or performance of this or any other agreement with the other Party; or (c) in connection with this Agreement paid or agreed to pay any commission other than a payment, except as permitted under Applicable Law, (each of (a), (b) and (c) being a "Prohibited Act"). 17.2 Each Party represents that: 17.2.1 it has in place reasonably adequate training and compliance procedures to prevent bribery and corruption as contemplated by Applicable Laws; and 17.2.2 it, its Affiliates, and their respective Personnel shall not knowingly take any action that will, or would reasonably be expected to, cause the other Party or its Affiliates to be in violation of any such laws or policies. 17.3 If a Party or its Party Representatives (or anyone acting on its or their behalf) has done or does any of the Prohibited Acts or has committed or commits any offence under any anti-bribery or anti-corruption laws in relation to this or any other agreement with the other Party: 17.3.1 such act shall be treated as a material breach of this Agreement; and 17.3.2 any termination under this clause 17.3 shall be without prejudice to any right or remedy that has already accrued, or subsequently accrues, to the non-breaching Party. 18. PRODUCT SECURITY 18.1 The Authority (or, on its behalf, its Authorised Agent) shall be responsible for destruction of all Conforming Product in its possession for which the shelf life has expired. Novavax shall be responsible for destruction of all Products that have Defects. In complying with its respective destruction obligations, the applicable Party shall undertake such destruction within mutually acceptable timelines, and prior to the destruction the applicable Party possessing the applicable Product shall hold the same securely pending destruction. Each Party shall keep a record of any destruction it undertakes and shall [***] issue certificates of destruction to the other Party upon


 
254681-3-31828-v16.0 - 38 - 70-40746871 request. Such records shall be kept for a period of the longer of [***] or the term required by Applicable Laws or Applicable Standards. 18.2 The Authority shall comply with all Applicable Laws relating to the traceability of pharmaceutical products in accordance with Novavax' specifications, standards, strategy and instructions applied by Novavax to all of its distributors of medicinal products from time to time. Any amendment to such specifications, standards, strategy or instructions shall be implied after a reasonable timeline agreed with the Authority. 18.3 The Authority warrants and undertakes that it will not alter or modify any Product in any way (including Labelling and packaging but excluding any transportation packaging) after delivery to the Delivery Locations. 18.4 After Delivery, all Products shall be: (i) stored securely by the Authority (or its Affiliate); and (ii) delivered, shipped and distributed by the Authority (or its Affiliate) in a secure manner appropriate to the transportation route and destination, in each case (i) and (ii) to guard against and deter theft, diversion, tampering or substitution (with, for example, counterfeits). 19. INTELLECTUAL PROPERTY 19.1 Neither Party will gain any rights of ownership to or use of any property or Intellectual Property Rights owned by the other (whether by virtue of this Agreement, by implication or otherwise). 19.2 Novavax warrants to the Authority that either it is the sole proprietor and legal and beneficial owner of all Intellectual Property Rights in the Product or it is licensed by the relevant owners to Manufacture and supply the Product in accordance with this Agreement. 19.3 Novavax warrants and represents to the Authority that, as of the Effective Date, it is not aware that any receipt, keeping, sale and use of the Product in the Territory in accordance with this Agreement would infringe any Intellectual Property Rights of any Third Party. 20. CONFIDENTIALITY 20.1 Each Party shall treat the Confidential Information of the other Party as strictly confidential and not disclose it to any Third Party for any purpose whatsoever without obtaining the prior written consent of the other Party and not make use of the Confidential Information of the other Party or any part thereof other than as permitted under this Agreement, in each case other than to conduct its activities under this Agreement and as expressly permitted under this clause 20. Each Party agrees to treat such Confidential Information with at least the same care and in the same manner as its own secret and valuable information. 20.2 Novavax may disclose all or any part of the Confidential Information to its Affiliates, and to its and its Affiliates' respective Personnel and suppliers ("Representatives") as necessary to enable Novavax' performance under this Agreement, provided, however, that it ensures that such Representatives comply with the provisions of this clause 20. The Authority may disclose all or any part of the Confidential Information to


 
254681-3-31828-v16.0 - 39 - 70-40746871 Authorised Agents, Central Government Bodies and the Devolved Administrations ("Representatives") as necessary to enable the Authority's performance under this Agreement, provided, however, that it ensures that such Representatives comply with the provisions of this clause 20. 20.3 The confidentiality obligations and use restrictions set forth in clause 20.1 shall not apply to: 20.3.1 information that is or becomes generally available to the public (other than as a result of its disclosure by the receiving Party in breach of this clause 20); 20.3.2 information that was available to the receiving Party or its Representatives on a non-confidential basis before disclosure by the disclosing Party; 20.3.3 information that was, is or becomes available to the receiving Party or its Representatives on a non-confidential basis from a Third Party who, to the receiving Party's or the relevant Representative's knowledge, is not bound by a confidentiality agreement with the disclosing Party or otherwise prohibited from disclosing the information to the receiving Party or the Representative; 20.3.4 information that is developed by or for the receiving Party or its Representatives independently of the information disclosed by the disclosing Party; or 20.3.5 the disclosure of which is required to ensure the compliance of the Authority with any law including, but not limited to, the Freedom of Information Act 2000 (c.36) ("FOIA"), Codes of Practice on Access to Government Information, on the Discharge of Public Authorities' Functions or on the Management of Records ("Codes of Practice") or the Environmental Information Regulations 2004 (SI 2004/3391) ("Environmental Regulations"), provided, however, that the Authority has provided reasonable advance notice of the impending disclosure to Novavax and provided further that it shall only disclose the Confidential Information to the extent strictly necessary. 20.4 Novavax agrees that: 20.4.1 without prejudice to the generality of clause 20.3.5, the provisions of this clause 20 are subject to the respective obligations and commitments of the Authority and any Authorised Agent, Central Government Body, Administering Entity and Devolved Administration (as the case may be) under the FOIA, the Codes of Practice and the Environmental Regulations; 20.4.2 the decision on whether any exemption applies to a request for disclosure of recorded information is [***]; and 20.4.3 where the Authority or an Administering Entity or Devolved Administration is managing a request as referred to in clause 20.4.2, Novavax shall co-operate with the Authority and any Authorised Agent, Central Government Body, Administering Entity or Devolved Administration making the request and shall respond within [***] of any request by it for assistance in determining how to respond to a request for disclosure. 20.5 Novavax shall:


 
254681-3-31828-v16.0 - 40 - 70-40746871 20.5.1 transfer any request for information, as defined under section 8 of the FOIA and/or the Environmental Regulations, to the Authority or an Authorised Agent, Central Government Body, Administering Entity or Devolved Administration as soon as practicable after receipt and in any event within [***] of receiving a request for information; 20.5.2 provide the Authority or an Authorised Agent, Central Government Body, Administering Entity or Devolved Administration with a copy of all information in its possession or power in the form that the Authority or an Authorised Agent, Central Government Body, Administering Entity or Devolved Administration requires within [***] of the Authority or an Authorised Agent, Central Government Body, Administering Entity or Devolved Administration requesting that information; and 20.5.3 provide all necessary assistance as reasonably requested by the Authority or an Authorised Agent, Central Government Body, Administering Entity or Devolved Administration to enable the Authority or an Authorised Agent, Central Government Body, Administering Entity or Devolved Administration to respond to a request for information within the time for compliance set out in section 10 of the FOIA. 20.6 Subject to clause 20.5 above: 20.6.1 Novavax hereby gives consent for the Authority to publish this Agreement in its entirety (but with any information which is exempt from disclosure in accordance with the provisions of the FOIA and or the Environmental Information Regulations redacted, and subject to clause 20.6.3 any other redactions agreed by the Parties), including from time to time agreed changes to this Agreement, to the general public; and 20.6.2 the Authority hereby gives consent for Novavax to publish this Agreement as required by the SEC (but with any information which is exempt from disclosure redacted unless disclosure is required by the SEC, and subject to clause 20.6.3 any other redactions agreed by the Parties); and 20.6.3 the Parties shall cooperate in good faith to agree the scope of redactions and to address each Party's concerns as regards information which the other Party intends not to redact (but subject always to each Party's obligations to disclose as set out above). 20.7 The Authority may, at its sole discretion, redact information from this Agreement prior to publishing for one or more of the following reasons: 20.7.1 national security; 20.7.2 Personal Data; 20.7.3 confidential information protected by Intellectual Property Rights; 20.7.4 Third Party confidential information; 20.7.5 IT security; or


 
254681-3-31828-v16.0 - 41 - 70-40746871 20.7.6 prevention of fraud. 20.8 The Authority may consult with Novavax to inform its decision regarding any exemptions and/or redactions but [***]. Novavax shall assist and cooperate with the Authority to enable the Authority to publish this Agreement. The Authority will follow its own internal policies together with any applicable guidelines, including any published by the Treasury, the Cabinet Office or the Information Commissioner. 20.9 The Authority or an Authorised Agent, Central Government Body, Administering Entity or Devolved Administration [***] consult Novavax in relation to any request for disclosure of Novavax' Confidential Information in accordance with all applicable guidance. 20.10 Each Party acknowledges that damages resulting from disclosure of the Confidential Information not permitted hereby would be an insufficient remedy. Novavax acknowledges and agrees that the Authority shall be [***]. 20.11 Each Party may disclose Confidential Information (including this Agreement) of the other Party to the extent that such disclosure is: 20.11.1required by Applicable Laws, such as filing with securities regulators, or by an order of a Governmental Authority; provided that the receiving Party (where it is legally permitted to do so) shall first have given notice to the disclosing Party and given the disclosing Party a reasonable opportunity to seek a protective order or other form of confidential treatment for the information, or obtain assurances that the information be used only for the purposes for which the order was issued, and the receiving Party shall thereafter disclose only that portion of the information required to be disclosed in order to comply; 20.11.2to a Regulatory Authority as reasonably necessary for the purposes of any filing, application or request for any marketing authorisation, licence or other Regulatory Approval made by or on behalf of Novavax or its Affiliates in respect of the Product; 20.11.3made by or on behalf of the receiving Party to legal, financial or other professional advisors, in each case for the purposes of advising on this Agreement and/or on the transactions contemplated hereby and thereby; provided however that, in each case, such Persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information and may only use such information for the purpose of assessing such transaction or providing such advice (as the case may be); or 20.11.4for the purposes of any legal proceedings brought pursuant to clause 34.11.2; provided that the Party making disclosures to a Third Party (other than a Governmental Authority) pursuant to clause 20.11.3 or clause 20.11.4 shall ensure that each Third Party recipient is bound by obligations of confidentiality no less restrictive than those contained in this Agreement and shall be liable to the other Party for any breach of such confidentiality obligations by the relevant recipient.


 
254681-3-31828-v16.0 - 42 - 70-40746871 20.12 Nothing in this clause 20 shall prevent the Authority from disclosing Confidential Information where it is required to do so by judicial, administrative, governmental or regulatory process in connection with any action, suit, proceedings or claim or otherwise by Applicable Law. Nothing in this Agreement shall prevent the Authority from disclosing Confidential Information: 20.12.1to any contracting authority as defined in Regulation 2 of the Public Contracts Regulations 2015 ("Contracting Authority"). All Contracting Authorities receiving such Confidential Information shall be entitled to further disclose the Confidential Information to other Contracting Authorities on the basis that the information is confidential and is not to be disclosed to a Third Party which is not part of any Contracting Authority; 20.12.2to any consultant, contractor or other person engaged by the Authority or any person conducting an Office of Government Commerce gateway review; 20.12.3for the purpose of the examination and certification of the Authority's accounts; or 20.12.4for any examination pursuant to Section 6(1) of the National Audit Act 1983 of the economy, efficiency and effectiveness with which the Authority has used its resources. 20.13 The Authority may disclose the Confidential Information of Novavax: 20.13.1 on a confidential basis to any Central Government Body for any proper purpose of the Authority or of the relevant Central Government Body; 20.13.2 to Parliament and Parliamentary Committees or if required by any Parliamentary reporting requirement; 20.13.3 [***]; 20.13.4 on a confidential basis to a professional adviser, consultant, supplier or other person engaged by any of the entities described in clause 20.13.1 (including any benchmarking organisation) for any purpose relating to or connected with this Agreement; 20.13.5 on a confidential basis for the purpose of the exercise of its rights under this Supply Agreement, including the audit rights pursuant to clause 29; or 20.13.6 on a confidential basis to a proposed successor body in connection with any assignment, novation or disposal of any of its rights, obligations or liabilities under this Agreement, and for the purposes of the foregoing, references to disclosure on a confidential basis shall mean disclosure subject to a confidentiality agreement or arrangement containing terms no less stringent than those placed on the Authority under this clause 20. 20.14 The Authority and Novavax agree not to issue any press releases or public announcements concerning this Agreement or its terms without the prior written consent of the other Party as to the form, timing and content of any such release or


 
254681-3-31828-v16.0 - 43 - 70-40746871 announcement, except as required by Applicable Laws, including disclosure required by any securities exchange. 20.15 Subject to clause 20.16, on expiry or termination of this Agreement or at any time at the disclosing Party's request, the receiving Party shall return to the disclosing Party all copies containing Confidential Information of the disclosing Party or, at the disclosing Party's option, destroy all copies of such Confidential Information. The return or destruction of the Confidential Information of the disclosing Party will not affect the receiving Party's obligation to observe the confidentiality and non-use restrictions in respect of that Confidential Information set out in this Agreement. 20.16 Each Party may keep one (1) copy of Confidential Information for evidence purposes at a secure place subject to the confidentiality and non-use obligations provided in this clause 20. The aforementioned return and destruction obligation shall not apply to electronic copies of Confidential Information which are rightfully contained in computers, word processors, communication systems and system-backup media (collectively "IT Media") which do not need to be destroyed or returned, provided that such IT Media are: (i) overwritten in the ordinary course of their reuse; or (ii) at all times maintained in confidence and not readily accessible and the receiving Party shall treat such copies as confidential in accordance with this clause 20. 20.17 This clause 20 shall remain in force without limit in time in respect of Confidential Information which comprises Personal Data or which relates to a patient, his or her treatment and/or medical records. Save as aforesaid, the obligations in this clause 20 shall last for [***]. 21. INDEMNITIES By Authority 21.1 [***]. 21.2 [***]: 21.2.1 [***]; 21.2.2 [***]; or 21.2.3 [***]. 21.3 [***]: 21.3.1 [***]; or 21.3.2 [***]. By Novavax 21.4 [***]: 21.4.1 [***];


 
254681-3-31828-v16.0 - 44 - 70-40746871 21.4.2 [***]; and 21.4.3 [***]. 21.5 [***]. 21.6 [***]. Conduct of Claims 21.7 [***]: 21.7.1 [***]; 21.7.2 [***]; 21.7.3 [***]; 21.7.4 [***]; and 21.7.5 [***]. [***]. 22. LIABILITY 22.1 [***]. 22.2 [***]: 22.2.1 [***]; or 22.2.2 [***]. 22.3 [***]: 22.3.1 [***]; 22.3.2 [***]; 22.3.3 [***]; 22.3.4 [***]; or 22.3.5 [***]. 22.4 [***]: 22.4.1 [***]; and, 22.4.2 [***]. 22.5 [***].


 
254681-3-31828-v16.0 - 45 - 70-40746871 22.6 [***]. 23. INSURANCE Novavax shall take out and maintain with a reputable commercial insurer such types and amounts of liability insurance to cover liabilities related to its activities under this Agreement for product liability claims, and for such other losses as are normal and customary in the pharmaceutical industry generally for Persons similarly situated, and shall upon request provide to the Authority evidence of its insurance coverage. Such policies shall include product liability insurance, clinical trial insurance, manufacturing insurance and general liability insurance, and shall remain in effect throughout the Territory and the [***]. 24. FORCE MAJEURE 24.1 If a Party is prevented from or delayed in performing any of its obligations under the Agreement by a Force Majeure then: 24.1.1 the relevant obligations under this Agreement shall be suspended for as long as the Force Majeure continues and the affected Party shall not be in breach of this Agreement or otherwise liable for any such failure or delay in the performance of such obligations; 24.1.2 [***] after the start of the Force Majeure, the affected Party shall notify the other Party of the nature of the Force Majeure and the likely effects of the Force Majeure on its ability to perform its obligations under this Agreement; and 24.1.3 [***] after the end of the Force Majeure, the affected Party shall notify the other Party that the Force Majeure has ended, and shall resume performance of its obligations under this Agreement. 25. DURATION AND TERMINATION 25.1 This Agreement commences and takes effect on the Effective Date and shall continue until the date falling one hundred and twenty (120) days after the last date on which the total quantity of Conforming Product equal to the volumes in the Priority Order is last Delivered in full to Authority (the "Initial Term"), unless and to the extent this Agreement is (i) extended under clause 25.2 or (ii) terminated earlier by a Party or the Parties in accordance with the provisions of this clause 25 (the "Term"). 25.2 If an Additional Order is agreed between the Parties in accordance with clause 7.4, the term of this Agreement shall automatically be extended to [***]. 25.3 Either Party (the "Terminating Party") shall be entitled to terminate this Agreement before the expiry of the Term [***] and upon written notice to that effect to the other Party, for material breach, if: 25.3.1 subject to clause 25.3.2, the other Party (the "Breaching Party") fails to materially comply with any of the obligations under this Agreement and fails to remedy the violation or breach within [***] (in each case, the "Cure Period"), after having been notified in advance in writing by the Terminating Party. In


 
254681-3-31828-v16.0 - 46 - 70-40746871 such event, the right of the Terminating Party to claim damages for breach of contract shall remain unaffected; and 25.3.2 the Breaching Party may during the Cure Period commence legal proceedings to challenge the validity of the termination, in which case, termination shall not occur until the court makes a decision (which decision is not capable of appeal or which is not appealed within the time limited allowed for appeal) that the event(s) specified in the Terminating Party's written notice does entitle the Terminating Party to terminate this Agreement. 25.4 The Authority shall be entitled to terminate this Agreement before the expiry of the Term [***] and upon [***] written notice to that effect to Novavax: 25.4.1 if the Authority, acting reasonably and in good faith, objects to any material change to the Development and Manufacturing Plan on the basis that such change will or is reasonably likely to result in (i) a material delay in securing a Marketing Authorisation for the Product in the Territory with an indication in the Field or (ii) a failure to Deliver quantities of the Confirming Product in all material respects to the Product Delivery Baselines; 25.4.2 if there is any Loss of Supply; 25.4.3 the [***] is not fulfilled with Conforming Product by the Product Delivery Baselines; or 25.4.4 the application for the Marketing Authorisation is refused or is not granted by the date in the applicable Baseline. 25.5 The Authority shall be entitled to terminate this Agreement before the expiry of the Term [***] and upon written notice to that effect to Novavax, as detailed below and to the extent permitted by Applicable Laws, if: 25.5.1 any resolution is passed, or application made, in relation to Novavax for a moratorium on the payment of its debts, or for its dissolution, liquidation, winding-up or administration; or 25.5.2 a receiver, liquidator, administrator or administrative receiver (or equivalent officer) is appointed over Novavax or its undertaking or all or a substantial part of its assets; or 25.5.3 Novavax suffers any event in any jurisdiction to which it is subject that has an effect equivalent or similar to any of the events described in this clause 25.5; and/or 25.5.4 Novavax ceases or threatens to cease to carry on business. 25.6 The Authority shall be entitled to terminate this Agreement before the expiry of the Term [***] and upon written notice: 25.6.1 if Novavax undergoes a change of control equivalent to [***] without the prior written consent of the Authority and the Authority shall be entitled to withhold such consent if, in the reasonable opinion of the Authority, the proposed change


 
254681-3-31828-v16.0 - 47 - 70-40746871 of control will have a material impact on the performance of this Agreement or the reputation of the Authority; 25.6.2 if Novavax purports to assign, subcontract, novate, create a trust in or otherwise transfer or dispose of this Agreement in breach of its terms, including those at clauses 34.5 and 34.7; 25.6.3 Novavax commits a material breach of its obligation to notify the Authority of any Occasion of Tax Non-Compliance as required by clause 30, or Novavax fails to provide details of proposed mitigating factors as required by clause 30 [***]; or 25.6.4 the Agreement should not have been awarded to Novavax in view of a serious infringement of obligations under European law declared by the Court of Justice of the European Union under Article 258 of the Treaty on the Functioning of the EU. 26. CONSEQUENCES OF TERMINATION 26.1 Upon expiry or termination of this Agreement: 26.1.1 the proportion of the Order concerning Conforming Product that has not been Delivered at the date of termination shall be cancelled; 26.1.2 Novavax shall be entitled to payment from the Authority for amounts that are due under this Agreement which have not otherwise been paid by the Authority in respect of the Price for Conforming Product that has been Delivered pursuant to this Agreement, which the Authority shall pay within [***] of the date of invoice for the same (to the extent the Authority has not already done so); 26.1.3 Novavax shall refund to the Authority [***] (in accordance with clause 14.2) against Conforming Product Delivered pursuant to this Agreement or otherwise repaid to the Authority by Novavax ("[***]") within [***] of the termination date, except that where this Agreement is terminated pursuant to clause 25.4.2, clause 8.8.1 shall apply; 26.1.4 each Party shall use Commercially Reasonable Efforts to mitigate both (i) the damages that would otherwise be recoverable from the other pursuant to this Agreement, and (ii) any costs, fees, expenses or losses that may be incurred by a Party, or for which a Party may be responsible, under this Agreement, by taking appropriate and reasonable actions to reduce or limit the amount of such damages, costs, fees, expenses or losses; and 26.1.5 any provision of this Agreement which expressly or by implication is intended to come into or continue in force, including clauses 1, 2.18, 4.9, 4.10, Error! Reference source not found., 9, 11, 12, 13, 14, 18, 20, 21, 22, 23, 26, 29 and 34 shall remain in full force and effect. 26.2 Expiry or termination of this Agreement for any reason shall be without prejudice to either Party's other rights and remedies or to any accrued rights and liabilities as the date of such expiry or termination which shall survive such termination or expiry.


 
254681-3-31828-v16.0 - 48 - 70-40746871 27. DATA PROTECTION 27.1 The following shall apply if Novavax processes any Personal Data pursuant to this Agreement: 27.1.1 Novavax shall comply with the Data Protection Act, the GDPR and any other applicable data protection legislation. In particular Novavax agrees to comply with the obligations placed on the Authority by the Principle (f) (the "Integrity Principle") set out in the Data Protection Act and the GDPR, namely: (a) to maintain technical and organisational security measures sufficient to comply at least with the obligations imposed on the Authority by the Integrity Principle; (b) only to process Personal Data for and on behalf of the Authority, in accordance with the instructions of the Authority and for the purpose of performing its obligations under this Agreement and to ensure compliance with the Data Protection Act and GDPR; and (c) to allow the Authority to audit Novavax' compliance with the requirements of this clause 27 on reasonable notice and/or to provide the Authority with evidence of its compliance with the obligations set out in this clause 27. 27.2 Both Parties agree to use all reasonable efforts to assist each other to comply with the Data Protection Act and the GDPR. For the avoidance of doubt, this includes Novavax providing the Authority with reasonable assistance in complying with subject access requests served on the Authority and Novavax consulting with the Authority prior to the disclosure by Novavax of any Personal Data in relation to such requests. 28. INDEPENDENT CONTRACTORS Novavax is acting as an independent contractor under this Agreement. Nothing in this Agreement or any circumstances associated with it or its performance give rise to any relationship of agency, partnership or employer and employee between the Authority and Novavax or between the Authority and any Novavax Representative, nor authorise either Party to make or enter into any commitments for or on behalf of the other Party. 29. RIGHT OF AUDIT, CONFLICTS OF INTEREST AND PREVENTION OF FRAUD 29.1 Novavax shall keep secure and maintain for the Term of this Agreement and [***], or such longer period as may be agreed between the Parties, full and accurate records of all matters relating to this Agreement. 29.2 Novavax shall grant to the Authority or its Authorised Agents, such access to those records as they may reasonably require in order to check Novavax' compliance with this Agreement for the purposes of: 29.2.1 the examination and certification of Novavax' accounts; or


 
254681-3-31828-v16.0 - 49 - 70-40746871 29.2.2 any examination pursuant to section 6(1) of the National Audit Act 1983 of the economic efficiency and effectiveness with which the Authority has used its resources. 29.3 The Comptroller and Auditor General may examine such documents as he may reasonably require which are owned, held or otherwise within the control of Novavax and may require Novavax to provide such oral and/or written explanations as he considers necessary. This clause does not constitute a requirement or agreement for the examination, certification or inspection of the accounts of Novavax under section 6(3)(d) and 6(5) of the National Audit Act 1983. 29.4 The Authority shall have the right to audit Novavax' compliance with this Agreement. Novavax shall permit or procure permission for the Authority or its authorised representative during normal business hours having given advance notice of no less than [***], access to [***] premises and facilities, books and records used in the performance of Novavax' obligations under this Agreement. 29.5 Should Novavax subcontract any of its obligations under this Agreement, Novavax shall use Commercially Reasonable Efforts to obtain for the Authority the right to audit (including but not limited to a financial audit and a full manufacturing audit) and inspect such Affiliate or Third Party. Novavax shall use Commercially Reasonable Efforts to procure permission for the Authority or its authorised representative during normal business hours no more than [***] having given advance notice of no less than [***], access to any premises and facilities, books and records used in the performance of Novavax' obligations under this Agreement, including any that are subcontracted to such Third Party. Novavax shall cooperate with such audit and inspection and accompany the Authority or its authorised representative if requested. 29.6 Novavax shall take appropriate steps to ensure that neither Novavax nor any staff is placed in a position where, in the reasonable opinion of the Authority, there is or may be an actual conflict, or a potential conflict, between the pecuniary or personal interests of Novavax and the duties owed to the Authority under the provisions of this Agreement. Novavax will disclose to the Authority full particulars of any such conflict of interest which may arise. 29.7 The Authority reserves the right to terminate this Agreement [***]. The actions of the Authority pursuant to this clause 29.7 shall not prejudice or affect any right of action or remedy which shall have accrued or shall thereafter accrue to the Authority. 29.8 Novavax shall take all reasonable steps to prevent Fraud by staff and Novavax (including its shareholders, members and directors) in connection with the receipt of monies from the Authority. Novavax shall notify the Authority [***] if it has [***] to suspect that any Fraud has occurred or is occurring or is likely to occur. 29.9 If Novavax or its staff commits Fraud in relation to this or any other contract with the Crown (including the Authority) the Authority may: 29.9.1 terminate this Agreement and [***]; or 29.9.2 [***].


 
254681-3-31828-v16.0 - 50 - 70-40746871 30. TAX NON-COMPLIANCE 30.1 If, at any point during the Term of this Agreement, an Occasion of Tax Non- Compliance occurs, Novavax shall: 30.1.1 notify the Authority in writing of such fact within [***] of its occurrence; and 30.1.2 [***] provide to the Authority: (a) details of the steps which Novavax is taking to address the Occasion of Tax Non-Compliance and to prevent the same from recurring, together with any mitigating factors that it considers relevant; and (b) such other information in relation to the Occasion of Tax Non- Compliance as the Authority may reasonably require. 31. ENVIRONMENTAL CONSIDERATIONS 31.1 Novavax shall comply in all material respects with applicable environmental laws and regulations in force from time to time in relation to the Product. Without prejudice to the generality of the foregoing, in respect of Product supplied in the Territory under this Agreement Novavax shall: 31.1.1 comply with any obligations imposed on it in relation to the Product by the Producer Responsibility Obligations (Packaging Waste) Regulations 2007 (SI 2007/871) (or any other equivalent legislation giving effect in any part of the European Economic Area to the Packaging and Packaging Waste Directive 94/62/EC as amended); and 31.1.2 without prejudice to the Novavax' other obligations under this Agreement, label all units of the Product, and the packaging of those units, to highlight mandatory environmental and safety information as required by Applicable Laws. 31.2 Novavax shall [***] respond to and meet all reasonable requests by the Authority for information evidencing Novavax' compliance with the provisions of this clause 31 in the Territory including the weight and type of packaging according to material types used in relation to the Product. 32. EQUALITY, NON-DISCRIMINATION AND HUMAN RIGHTS 32.1 Novavax shall not, to the extent applicable to its activities in relation to this Agreement: 32.1.1 engage in any prohibited conduct as defined in part 2 chapter 2 of the Equality Act 2010 (c.15) (the "Equality Act") in relation to any protected characteristic (as defined in section 4 of the Equality Act) where this would contravene any provisions of the Equality Act, including part 3 (goods and services) and part 5 (employment); 32.1.2 do (or omit to do) anything else that would amount to a contravention of the Equality Act including part 8 (prohibited conduct: ancillary) and chapter 3 part 5 (equality of terms); or


 
254681-3-31828-v16.0 - 51 - 70-40746871 32.1.3 do (or omit to do) anything else that would amount to a contravention of any equivalent legislation. 32.2 Novavax shall notify the Authority [***] of any investigation of or proceedings against Novavax under the Equality Act or any predecessor legislation and shall cooperate fully and [***] with any requests of the person or body conducting such investigation or proceedings, including allowing access to any documents or data required, attending any meetings and providing any information requested. 32.3 Novavax shall use Commercially Reasonable Efforts to include in any agreement with a Subcontractor entered into after the Effective Date to provide services or products solely in connection with this Agreement obligations substantially similar to those imposed on Novavax by this clause 32. 32.4 Novavax shall: (i) comply in all material respects with applicable current employment legislation with respect to its employees engaged in relation to this Agreement; and (ii) ensure that its employees are provided with appropriate employment and equality training as required by Applicable Laws. 32.5 Novavax shall, and shall use reasonable endeavours to ensure that its employees or agents and/or Subcontractors shall, at all times, act in a way which is compatible with the Convention rights within the meaning of Section 1 of the Human Rights Act 1998 (c.42). 33. SUPPLY CHAIN RIGHTS AND PROTECTION 33.1 From the Effective Date, Novavax shall implement reasonable due diligence procedures prior to contracting with any Subcontractors or any other participants in its supply chains, in order to satisfy itself that there is no slavery or human trafficking in its supply chains. 33.2 Novavax shall notify the Authority [***] it becomes aware of any actual or suspected slavery or human trafficking in a supply chain which has a connection with this Agreement, and shall promptly use [***] to remove any such slavery or human trafficking from its supply chain. 33.3 In relation to any contracts concluded by Novavax after the Effective Date with Subcontractors where the domicile of the Subcontractor is in the Territory, Novavax shall use Commercially Reasonable Efforts (i) to include payment terms that are no longer than [***] from the date of the receipt of a valid and undisputed invoice from the Subcontractor; and (ii) to agree late payment interest on the same terms as set forth herein. 34. MISCELLANEOUS 34.1 Notices 34.1.1 All communications relating to this Agreement shall be in writing and delivered by hand or sent by post to the Party concerned at the relevant address set out in this clause 34.1 below (or such other address as may be notified from time to time in accordance with this clause 34.1 by the relevant Party to the other Party). Any communication shall take effect:


 
254681-3-31828-v16.0 - 52 - 70-40746871 (a) if hand delivered, upon being handed personally to the addressee (or, where the addressee is a corporation, any one of its directors or its secretary) or being left in a letter box or other appropriate place for the receipt of letters at the relevant Party's address as set out below; (b) if sent by first class registered post, at 10 a.m. on the second (2nd) Business Day after posting or if overseas by international recorded post, at 10 a.m. on the fifth (5th) Business Day after posting. No notice served by email shall be effective. 34.1.2 A notice sent by post (or the envelope containing it) shall not be deemed to be duly posted for the purposes of this clause 34.1 unless it is put into the post properly stamped or with all postal or other charges in respect of it otherwise prepaid. For Notices to the Authority: Secretary of State, Department for Business, Energy and Industrial Strategy 1 Victoria Street Westminster London SW1H 0ET Attn: [***] With a copy to: Permanent Secretary, Department for Business, Energy & Industrial Strategy at the above address. For Notices to Novavax: Novavax, Inc. 21 Firstfield Road Gaithersburg, MD 20878 U.S.A. Attn: [***] 34.2 Variation and Waiver 34.2.1 No amendment or variation of the terms of this Agreement shall be effective unless it is made or confirmed in a written document signed by both Parties to this Agreement. 34.2.2 Any waiver of any right, obligation or remedy under, or compliance with or breach of any provision of, this Agreement must be expressly stated in writing to be such a waiver, must specify the right, remedy, obligation, provision or breach to which it applies and must be signed by an authorised signatory of each of the Parties granting the waiver. If either Party waives any right, obligation or remedy under, or compliance with or breach of any provision of, this Agreement, it can still enforce that right, obligation or provision, or claim that remedy subsequently and that waiver shall not be deemed to be a waiver of any


 
254681-3-31828-v16.0 - 53 - 70-40746871 subsequent breach of that or any other provision or of any other right, obligation or remedy. 34.2.3 The rights and remedies of either Party in respect of this Agreement shall not be diminished, waived or extinguished by the granting of any indulgence, forbearance or extension of time by either Party to the other nor by any failure to ascertain or exercise, or any delay in ascertaining or exercising, any such rights or remedies. 34.2.4 The discontinuance, abandonment or adverse determination of any proceedings taken by either Party to enforce any right or any provision of this Agreement shall not operate as a waiver of, or preclude any exercise or enforcement or (as the case may be) further or other exercise or enforcement by that Party of, that or any other right or provision. 34.2.5 Unless expressly provided otherwise in this Agreement, all references in this clause 34.2 to any right or remedy shall include any power, right or remedy conferred by this Agreement on, or provided by law or otherwise available to, the relevant Party; and any right not being exercised shall include any partial exercise of that right and any circumstances in which the relevant Party does not insist on the strict performance of any provision of this Agreement. 34.2.6 The giving by either Party of any consent to any act which by the terms of this Agreement requires that consent shall not prejudice the right of that Party to withhold or give consent to the doing of any similar act. 34.3 Counterparts 34.3.1 This Agreement may be executed in any number of counterparts, and by the Parties on separate counterparts, but shall not be effective until each Party has executed at least one (1) counterpart. Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute the one agreement. 34.3.2 Delivery of a copy of this Agreement together with an executed signature page of a counterpart in AdobeTM Portable Document Format (PDF) sent by electronic mail shall take effect (subject to clause 34.12) as delivery of an executed counterpart of this Agreement. If this method is adopted, without prejudice to the validity of this Agreement, each Party shall provide the other with a hard copy original of that executed counterpart as soon as reasonably practicable thereafter. 34.4 Invalidity Each provision of this Agreement is severable and distinct from the others. The Parties intend that each of those provisions shall be and remain valid and enforceable to the fullest extent permitted by Applicable Laws. If all or any part of any such provision is held to be, or at any time becomes to any extent invalid, illegal or unenforceable for any reason under any enactment or rule of law, it shall to that extent be deemed not to form part of this Agreement but (except to that extent in the case of that provision) it and all other provisions of this Agreement shall continue in full force and effect and


 
254681-3-31828-v16.0 - 54 - 70-40746871 their validity, legality and enforceability shall not be affected or impaired as a result, subject to the operation of this clause 34.4 not negating the commercial intent and purpose of the Parties under this Agreement. 34.5 Assignment 34.5.1 The Authority may assign or transfer, in whole or in part, this Agreement or any of its rights and obligations under this Agreement to one or more of its Affiliates; provided that if any such Affiliates fails to assume all obligations of Authority so assigned or transferred hereunder, Novavax shall have the right to terminate this Agreement by written notice with immediate effect. 34.5.2 Novavax may, but only with the Authority's prior written consent (which consent shall not be unreasonably withheld or delayed), assign or transfer, in whole or in part, this Agreement or any of its rights and obligations under this Agreement to one or more of its Affiliates. Novavax will procure that, before any assignee subsequently ceases to be a member of Novavax' Group, the assignee shall assign back to Novavax for the purposes of this clause, as much of the benefit of this Agreement as has been assigned to it. 34.5.3 Novavax may, but only with the Authority's prior written consent (which consent shall not be unreasonably withheld or delayed), assign or transfer, in whole or in part, this Agreement or any of its rights and obligations under this Agreement to any Third Party, but otherwise may not assign this Agreement, in whole or part, to any Third Party. 34.5.4 Any permitted assignment or transfer by one Party shall be effective only if the relevant assignee confirms in writing to, and upon receipt by, the other Party that it shall fully adhere to all the provisions of this Agreement as if it were an original party to this Agreement. 34.5.5 This Agreement shall be binding on and inure for the benefit of the successors and permitted assignees of the Parties. 34.6 Change of Control 34.6.1 If Novavax undergoes a change of control equivalent to or within the meaning of sections 450 and 451 of the Corporation Tax Act 2010 (other than for an intra-group change of control) without the prior written consent of the Authority then, without prejudice to clause 25.6.1, upon the Authority's request Novavax shall procure a legally binding guarantee from the parent entity of the party acquiring control of Novavax in favour of the Authority to guarantee and undertake to procure the continued performance by Novavax of this Agreement. 34.7 Subcontracting 34.7.1 Novavax may, without the need for the Authority's consent but subject to clause 34.7.2, subcontract or delegate its obligations or services to be provided under this Agreement to one or more of its Affiliates and/or to any Third Party consultant or contractor, including Fujifilm and [***] (a "Subcontractor").


 
254681-3-31828-v16.0 - 55 - 70-40746871 34.7.2 Novavax shall at all times remain responsible and liable to the Authority for the acts or omissions of Novavax' Affiliates and Subcontractors to whom Novavax subcontracts or delegates any of its obligations, as if those acts or omissions were of its own. 34.8 No Rights of Third Parties Save as provided in this Agreement, including pursuant to clause 21.4, a person who is not a Party to this Agreement shall not have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement. Notwithstanding any rights any third party may have by virtue of the foregoing, the Parties to this Agreement may vary, amend or terminate this Agreement without seeking the consent of any Third Party whose rights may be affected. 34.9 Costs Except as set forth herein, each Party will be responsible for all costs incurred by it or on its behalf in connection with this Agreement. 34.10 Entire Agreement This Agreement, and any agreement or document referred to in it, together with the schedules herein, contains the entire agreement between the Parties with respect to the subject matter of this Agreement, and supersedes all previous agreements and understandings between the Parties with respect to that subject matter including the Heads of Terms between the Parties dated 13 August 2020. Each Party acknowledges that, in entering into this Agreement and the agreements and documents referred to in it, it does not rely on any statement, representation, assurance or warranty (whether it was made negligently or innocently) of any person (whether a Party to this Agreement or not) which is not expressly set out in this Agreement or those documents (a "Representation"), and that it shall have no cause of action against the other Party arising out of any Representation except in respect of any fraudulent misrepresentation by the other Party. Each Party agrees that the confidentiality agreement dated 1 June 2020 between the Parties is unaffected by this clause, provided that confidential information disclosed under that agreement may be used and deemed disclosed pursuant to this Agreement. 34.11 Governing Law and Jurisdiction 34.11.1This Agreement and any issues, disputes or claims arising out of or in connection with it (whether contractual or non-contractual in nature, including claims in tort or for breach of any statute or Applicable Law) shall be governed by and construed in accordance with [***] law. 34.11.2If a dispute arises between the Parties in connection with or relating to this Agreement (a "Dispute"), either Party shall have the right to refer such Dispute to senior representatives (namely [***]) for attempted resolution by good faith negotiations during a period of [***]. Any final decision mutually agreed to by such senior officers in writing shall be conclusive and binding on the Parties.


 
254681-3-31828-v16.0 - 56 - 70-40746871 34.11.3Subject to clause 34.11.2, each Party irrevocably submits to the exclusive jurisdiction of the [***] courts to settle any dispute which may arise under or in connection with this Agreement or the legal relationships established by this Agreement. 34.12 Delivery of Agreement The Parties do not intend this Agreement to be delivered by, or to become legally binding on, any of them until the date of this Agreement is written at its head, notwithstanding that one or more of them may have executed this Agreement prior to that date being inserted. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in two (2) counterparts by their respective duly authorised representatives as of the date set forth at the beginning of this Agreement.


 
254681-3-31828-v16.0 - 57 - 70-40746871 SIGNED by , Authorised Signatory for and on behalf of NOVAVAX, INC. ) ) ) …/s/ [***]………. SIGNED by , Authorised Signatory for and on behalf of THE SECRETARY OF STATE FOR BUSINESS, ENERGY AND INDUSTRIAL STRATEGY ) ) ) ) ) …/s/ [***]……………. [***] [***]


 
SCHEDULE 1 CANDIDATE, PRODUCT AND SPECIFICATIONS [Pursuant to Regulation S-K, Item 601(a)(5), this Schedule setting forth the the candidate, product and specifications has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted schedules to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
SCHEDULE 2 FACILITIES [Pursuant to Regulation S-K, Item 601(a)(5), this Schedule setting forth the facilities has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted schedules to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
SCHEDULE 3 KEY PERFORMANCE INDICATORS AND MEETING SCHEDULES [Pursuant to Regulation S-K, Item 601(a)(5), this Schedule setting forth the key performance indicators and meeting schedules has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted schedules to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
SCHEDULE 4 DEVELOPMENT AND MANUFACTURING PLAN [Pursuant to Regulation S-K, Item 601(a)(5), this Schedule setting forth the development and manufacturing plan has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted schedules to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
SCHEDULE 5 BASELINES [Pursuant to Regulation S-K, Item 601(a)(5), this Schedule setting forth the baselines has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted schedules to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
SCHEDULE 6 DELIVERY SCHEDULE [Pursuant to Regulation S-K, Item 601(a)(5), this Schedule setting forth the delivery schedule has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted schedules to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
SCHEDULE 7 ADDITIONAL ORDER PRICING [Pursuant to Regulation S-K, Item 601(a)(5), this Schedule setting forth the additional order pricing has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted schedules to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
SCHEDULE 8 DOCUMENTATION TO ACCOMPANY DELIVERIES [Pursuant to Regulation S-K, Item 601(a)(5), this Schedule setting forth the documentation to accompany deliveries has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted schedules to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
Exhibit 10.36 CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL AND (ii) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. EXECUTION VERSION ADVANCED PURCHASE AGREEMENT This ADVANCED PURCHASE AGREEMENT (this “Agreement”) is made as of 31 December 2020 (the “Effective Date”), by and between NOVAVAX, INC., incorporated and registered in the State of Delaware, with a principal place of business at 21 First field Road, Gaithersburg, Maryland 20878 U.S.A. (“Novavax”), and The Commonwealth of Australia as represented by the Department of Health, with offices at Scarborough House, 1 Atlantic Street, Woden, ACT 2606, Australia (“Customer”). Novavax and Customer may individually be referred to herein as a “Party” and, collectively, as the “Parties.” RECITALS WHEREAS, Novavax is currently developing a novel NVX-CoV2373 vaccine, consisting of a stable, prefusion protein made using its proprietary nanoparticle technology and coformulated with its proprietary Matrix-M™ adjuvant (the “Vaccine”), which is intended to prevent SARS-CoV-2 (“COVID-19”) in humans; WHEREAS, Novavax intends to seek government issued licenses, registrations, authorizations and approvals necessary to commercialize the Vaccine, including without limitation, emergency exemptions, Authorisations or provisional approvals (“Regulatory Approval”) to permit use of the Vaccine in Australia (the “Territory”); WHEREAS, in advance of Regulatory Approval in the Territory, Customer wishes to pre-order an aggregate number of doses of Vaccine from Novavax designed to vaccinate [***], to be supplied subject to the terms and conditions of this Agreement; WHEREAS, in reliance on such commitment by Customer, Novavax agrees to commence commercial manufacture of the Vaccine prior to Regulatory Approval for supply to, and distribution by, Customer to individuals in the Territory; NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth below, and for other good and valuable consideration the sufficiency and receipt of which is acknowledged by each Party, the Parties agree as follows: 1. Effects of COVID-19. Novavax and Customer hereby acknowledge and agree that to make Vaccine available [***] Novavax will commence manufacture of the Vaccine in advance of Regulatory Approval in the Territory and that the use, deployment and administration of the Vaccine by Customer to individuals in the Territory will occur under COVID-19 pandemic conditions. The terms and conditions of this Agreement, including with respect to Product pricing, refund terms, indemnification and limitations of liability, reflect this understanding.


 
EXECUTION VERSION -2- 70472309_1 2. Sale of Product. 2.1. Generally. During the Term, Customer hereby commits to purchase from Novavax the Vaccine, which will be supplied in [***] (the “Product”), in an amount equal to the aggregate quantity of Vaccine doses set forth in Exhibit A (the “Aggregate Amount”). If during the Term Customer desires to purchase an additional quantity of Vaccine doses, up to the Maximum Aggregate Additional Amount identified in Exhibit A, then Customer shall notify Novavax in writing, and the Parties will negotiate, in good faith, whether Novavax has supply sufficient to provide the requested additional quantity of Vaccine doses at the time of Customer’s request. If the Parties agree on the quantity of, and Delivery Schedule for, an additional amount of Vaccine doses (“Additional Amount”), Customer shall issue a Purchase Order for the Additional Amount in accordance with Section 2.3.1. 2.2. Use, Donation and Resale. 2.2.1. Use. Novavax grants Customer the right to use any Product supplied hereunder (a) solely to vaccinate individuals in the Territory against COVID-19, subject to Section 2.2.2 and Section 2.2.3, and (b) in accordance with the terms and conditions of this Agreement. 2.2.2. Donation and Resale. Notwithstanding the territory restriction set forth in Section 2.2.1 and subject to Customer’s obligation to indemnify Novavax as set forth in Section 9, Novavax grants Customer the right to donate or resell some or all of the Product to one or more countries outside of the Territory or an organisation (including an NGO) that Customer may determine in its absolute discretion (“Regional Partners”), provided that (i) the intended purpose of such donation or resale is to vaccinate individuals against COVID-19, (ii) [***], (iii) [***] and (iv) [***]. 2.2.3. Conditions for Donation and Resale. Customer expressly acknowledges and agrees that, in connection with any donation or resale of Product to a Regional Partner: (A) [***], (B) [***], (C) [***], and (D) [***]. Customer acknowledges and agrees Customer shall be responsible for [***]. 2.3. Purchase Order. 2.3.1. Purchase Order. Within [***] of the Effective Date, Customer will deliver a purchase order (“Purchase Order”) for the Aggregate Amount to Novavax together with the Customer’s order number and invoice address. If Customer elects to purchase an Additional Amount, it will deliver a Purchase Order for the Additional Amount to Novavax together with the Customer’s order number and invoice address. 2.3.2. Confirmation. Provided the Purchase Order contains accurate quantity and pricing information in accordance with Section 2.3.1, Novavax will confirm a Purchase Order within [***] of receipt; provided, however, that Novavax


 
EXECUTION VERSION -3- 70472309_1 will be deemed to have accepted a Purchase Order if no confirmation is received prior to the expiry of such [***] period. 2.4. Delivery. Novavax intends to deliver monthly shipments of Product to Customer until the Aggregate Amount is supplied. Based upon Novavax’s projections and expectations as of the Effective Date, the anticipated quarterly delivery schedule of the Product is set forth in Exhibit B (“Delivery Schedule”). Customer acknowledges that the Delivery Schedule may change due to the impact of several variables including, but not limited to, speed of clinical trial enrollment and accrual of events, manufacturing delays and/or timing of Regulatory Approval in the Territory. Novavax will use reasonable endeavours to deliver, or ensure that the Sponsor delivers, the Product to Customer in accordance with the Delivery Schedule and will, on at least a [***] basis, communicate any anticipated changes to the Delivery Schedule to Customer including any anticipated variances permitted by Section 2.5. At least [***] in advance of each anticipated shipment under the Delivery Schedule, Novavax will confirm to the Customer in writing the date of delivery of the Product. Delivery of the first shipment of Product under the Delivery Schedule is expected to be a date as soon as practicable after receipt of Regulatory Approval in the Territory when sufficient Product is available for the first shipment in the Delivery Schedule. Novavax will [***] notify Customer in writing by email when the Product is available for Delivery and for Customer’s inspection. 2.5. Variance. Without limiting Section 2.6, Customer hereby acknowledges and agrees that the Delivery Schedule is an estimate only and that notwithstanding anything herein to the contrary, (a) the quantity of Vaccine actually delivered each Calendar Quarter may vary by [***] of the Aggregate Amount and (b) the actual date of delivery may vary within [***] of the delivery date projected by Novavax pursuant to Section 2.4; provided that Novavax first notifies Customer of such variances [***] in advance of each anticipated shipment of Product under the Delivery Schedule. 2.6. Short Supply. If Novavax receives Regulatory Approval in the Territory, but reasonably believes that it will not be able to supply Customer with quantities of Vaccine within the variances permitted by Section 2.5, then Novavax shall [***] notify Customer in writing of such circumstances, including [***] (“Remedial Plan”). Where such inability to supply results from Novavax’s inability to manufacture or source sufficient quantities of Vaccine doses to supply all of its customers, Novavax shall deliver to Customer [***] for the period of short supply. Novavax shall consider in good faith any reasonable changes to the Remedial Plan proposed by Customer. 2.6.1. If the Remedial Plan does not resolve such inability or failure to supply to within [***] of the first missed or under delivery giving rise to the Remedial Plan, the Customer may, [***], cancel delivery of the Product that was scheduled for delivery [***].


 
EXECUTION VERSION -4- 70472309_1 2.6.2. If failure to supply is still ongoing after [***] of the initial missed or under delivery giving rise to the Remedial Plan, Customer may upon written notice to Novavax cancel future deliveries of Product and terminate the Agreement. 2.6.3. If Customer elects to cancel delivery of Product pursuant to this Section 2.6, [***]. Subject to Section 7.2.2 and Section 7.5, the remedies in this Section 2.6 shall be Customer’s sole recourse and Novavax’s entire liability with respect to any failure to supply. 2.7. Inconsistent Terms. All terms and conditions contained in any prior or subsequent oral or written communication, including terms and conditions contained in the Purchase Order, that are different from or in addition to this Agreement are hereby rejected by the Parties and will neither expand nor modify either Party’s obligations under this Agreement. 2.8. Non-exclusivity of arrangements. Novavax acknowledges and agrees that the arrangement under this Agreement is non-exclusive and Customer may acquire any product comparable to the Vaccine under any process or arrangement and from any vaccine supplier as it sees fit and by entering this Agreement Customer is not restricted from entering into any international or multilateral agreements for supply of product comparable to the Vaccine. 3. Delivery and Acceptance 3.1. Delivery, Title and Risk of Loss. Product will be delivered to a point of entry in Australia mutually agreed by the Parties, acting reasonably (the “Point of Entry”). Product will not be delivered until after all import and customs clearance requirements in respect of the Products have been completed, including the batch testing and release process required by the TGA, and Novavax (or Sponsor) has provided all Delivery Documents to Customer. Novavax will [***] notify, or ensure that the Sponsor notifies, Customer in writing when Product is ready for collection by Customer (or its nominee) at the Point of Entry. Delivery of the Product will be deemed to take place [***]. Title to Product shall pass to Customer [***]. For clarity, Novavax (and Sponsor, as applicable) will be [***] for importing Product into the Territory (excluding payment of any customs duties, which shall be the [***] of the Customer), obtaining a batch release letter from the TGA (including [***]) and unloading Product from the transportation carrier at Point of Entry. [***]; if Customer fails to handle the Product with due care, maintain cold chain requirements throughout the Acceptance Period and that failure results in damage to the Product or otherwise causes such Product to be unsuitable for use, then Customer acknowledges and agrees the resultant damage will not be cause for non-Acceptance under Section 3.4. After Acceptance, Customer will be solely responsible for distributing Product in the Territory.


 
EXECUTION VERSION -5- 70472309_1 3.2. Delivery Documents. [***], Novavax will provide, or ensure that Sponsor provides, to Customer the usual documentation provided for the Product, including [***] (“Delivery Documents”). 3.3. Cooperation. Novavax agrees to cooperate, and ensure that Sponsor cooperates, with the TGA including in relation to the testing of the Product including in relation to requisite batch testing requirements. Novavax agrees that the TGA may provide Customer with information relating to the Product, including information relating to the testing contemplated by this Section 3.3 and Novavax’s manufacturing process and supply chain in respect of the Product (including details of any Special Vendors). 3.4. Acceptance. Customer (or its nominee) will, [***] after Customer is notified under Section 3.1 that the Product is ready for collection and Novavax (or Sponsor) has provided all Delivery Documents to Customer (“Acceptance Period”), visually inspect such delivery to confirm that the Product has been supplied in the correct quantity and appears, from a visual inspection only, to constitute Conforming Product. Notwithstanding the foregoing, Customer may request to extend the Acceptance Period for an additional [***] period with reasonable advance notice and a detailing of the circumstances for such extension and Novavax will reasonably and in good faith consider such extension request and provide written notice of approval to Customer if granted. Without limiting any other rights Customer may have at Law or under this Agreement, if Customer determines that any shipment of Product contains any non-Conforming Product, then Customer shall have the right to reject the portion of the applicable delivery that constitutes non-Conforming Product by providing Novavax with written notice of such rejection prior to the expiry of the Acceptance Period. Customer will be deemed to have accepted a delivery of Product if not rejected prior to expiry of the Acceptance Period. 4. Product Warranty. 4.1. Limited Product Warranty. Novavax warrants to Customer that, upon delivery of Product to the Point of Entry, Product will (a) materially conform to the specifications for such Product as set forth on Exhibit C hereto (the “Specifications”) and be free from defects (including any latent defects), (b) comply with the applicable Regulatory Approval in the Territory for such Vaccine, including shelf-life requirements and any other conditions, requirements or directions of the TGA, and (c) have been manufactured, packaged, handled, stored, transported and cold-chain maintained in accordance with the Specifications, Novavax’s relevant standard operating procedures in relation to the manufacture and delivery of the Product, and cGMP. Product satisfying clauses (a)-(c) hereof, “Conforming Product”. Any claims by Customer that the Product fails to meet this warranty must be made by the Customer within [***] of Acceptance of the Product as set forth in Section 3.4.


 
EXECUTION VERSION -6- 70472309_1 4.2. Remedies For Non-Conforming Product. If Novavax accepts Customer’s rejection of Product as set forth in Section 3.4, accepts Customer’s warranty claim in Section 4.1 or if the Independent Expert determines that any Product is non-Conforming Product as set forth in Section 4.3, then Novavax shall, at Novavax’s option and at no additional charge to Customer, either (a) replace the non-Conforming Product or (b) credit or refund the Price of such non-Conforming Products. If Novavax so requests, Customer shall, [***], return any non-Conforming Products to Novavax; otherwise, Customer shall dispose of Product in compliance with applicable Laws [***]. 4.3. Disputes. If Novavax disputes Customer’s rejection of Product pursuant to Section 3.4 or Customer’s warranty claim pursuant to Section 4.1, then Novavax will provide Customer written notice of such dispute (“Warranty Dispute Notice”) no later than [***] after the date of the notice from Customer that it does not Accept the Product or that Product is non-Conforming Product. Such dispute shall be resolved by having an independent, mutually acceptable, qualified third party expert (the “Independent Expert”) promptly examine the Product subject to the dispute. Failing agreement in writing of an Independent Expert within [***] of receipt of the Warranty Dispute Notice, the Independent Expert will be (a) [***]. If a person is nominated by [***] as the Independent Expert under this Section 4.3, the Parties agree to do all things reasonably necessary to effect that nomination (including signing the person’s engagement letter, agreeing to indemnify the person and agreeing to pay the fees and expenses of the person) [***]. The non-prevailing Party shall bear all out-of-pocket costs and expenses associated with the Independent Expert’s determination, including any reasonable out-of-pocket costs incurred by the prevailing Party in connection therewith. 4.4. Disclaimer. THE REMEDIES SET FORTH IN SECTION 4.2 AND SECTION 4.3 SHALL BE CUSTOMER’S SOLE AND EXCLUSIVE REMEDY AND NOVAVAX’S ENTIRE LIABILITY FOR NON-ACCEPTANCE OF PRODUCT UNDER SECTION 3.4 OR ANY BREACH OF THE LIMITED WARRANTY SET FORTH IN SECTION 4.1. 5. Payment Terms. 5.1. Advance Payment. Customer shall pay to Novavax an upfront payment of [***] of the Total Price as set forth on Exhibit A (the “Advance Payment”) in accordance with this Section 5. [***]. [***] of the Advance Payment is non-refundable. The remaining [***] of Advance Payment (“Refundable Portion”) is refundable only as provided in Section 2.6.3, Section 7.2.2 and Section 7.5. 5.2. Price. The Total Price, Per-Unit Price and Per-Unit Delivery Price (each excluding GST) for Product are as set forth on Exhibit A (collectively, the “Price”). The Price includes [***]. Any additional shipping charges, including charges for expedited shipping, more frequent deliveries or multiple locations, will be agreed between the Parties and charged to the Commonwealth. The Price is exclusive of any and all governmental taxes, including, without limitation, GST, value added tax, customs,


 
EXECUTION VERSION -7- 70472309_1 charges or levies of every kind that may apply upon sale, transfer, importation or shipment of Product to the Point of Entry under any applicable Laws but excluding any GST, valued added tax or similar tax payable in respect of importation of the Product into Australia to the extent that the importer is entitled to a full credit for such tax and excluding taxes on income. Subject to those exceptions, Customer will be solely responsible for all such taxes, charges and levies to the extent they relate to supply of Product to Customer. 5.3. [***]. [***]. 5.4. Invoices. Novavax shall submit invoices to Customer for (a) the Advance Payment upon [***] which invoices shall be directed to the following person and address (or to such other person or address if Customer notifies Novavax in writing pursuant to Section 13.2 that invoices should be sent to such other person or address): [***] Each invoice must include the following information: (a) Customer’s order number, as set out in the Purchase Order and (b) details of the contract point of contact (including the name of the current point of contact). Novavax must provide all invoices in a soft copy format that is a Word, Excel, JPEG, PDF, PNG, TIFF, EML, CSV or CFDI file. Invoices shall be deemed to be received when the sender receives a confirmation from [***] confirming receipt. If an invoice is found to have been rendered incorrectly after it has been paid, any underpayment or overpayment will be recoverable by or from Novavax, as the case may be, and, without limiting recourse to other available remedies, may be offset against any amount subsequently due to Novavax. Each invoice for a delivery of Product shall reflect the actual quantities of Vaccine shipped to the Point of Entry, together with the Per-Unit Delivery Price, the total Delivery Price and the total amount of GST (if any) to be paid under such invoice. All amounts set forth in each invoice (a) for the Advance Payment shall be payable within [***], and made in United States Dollars (“USD”). For clarity, Customer will not be responsible for paying any bank charges. In the event Customer disputes all or any portion of an invoice submitted to it in accordance with this Section 5, then such dispute shall be resolved in accordance with Section 13.6. Customer will not be required to pay any amount disputed in good faith, unless such amount is finally determined to be owed to Novavax in accordance with the dispute resolution procedure set forth in Section 13.6, in which case, such amount will bear interest at the rate of [***]. Except as expressly set out in this Agreement or required by Law, no offset or deduction from any invoice is permitted. 5.5. GST. 5.5.1. Unless this Agreement expressly states otherwise, all consideration to be provided under this Agreement is exclusive of GST.


 
EXECUTION VERSION -8- 70472309_1 5.5.2. If a Party (the “Supplying Party”) makes a supply under or in connection with this Agreement in respect of which GST is payable (“Taxable Supply”), the recipient of the Taxable Supply (“Recipient”) must, subject to the prior receipt of a tax invoice, pay to the Supplying Party, an additional amount equal to the GST payable on the Taxable Supply. This Section 5.5 does not apply to GST payable in respect of importations. 5.5.3. If a Party must reimburse or indemnify another party for a Loss, the amount to be reimbursed or indemnified is first reduced by any input tax credit the other Party (or the representative member of a GST group of which is other Party is a member) is entitled to for the Loss, and then increased in accordance with Section 5.5.2. 5.5.4. If an adjustment event occurs in relation to a Taxable Supply, the Supplying Party must issue an adjustment note to the Recipient in relation to that Taxable Supply within [***] after becoming aware of the adjustment. 5.5.5. A term which has a defined meaning in the GST Law has the same meaning when used in this Section 5.5, unless the contrary intention appears. 5.5.6. This Section 5.5 will survive the termination of this Agreement. 5.6. Withholdings. If a Law requires Customer to withhold or deduct an amount in respect of Taxes from a payment made to Novavax pursuant to this Agreement, then Customer agrees to pay an additional amount required to be withheld or deducted to the relevant Agency in accordance with the applicable Law and to provide evidence of payment thereof to Novavax. 6. Intellectual Property. As between Customer and Novavax, Customer hereby acknowledges and agrees that all rights, title and interests in, to and under any Intellectual Property Rights that relate to the Vaccine are and shall remain the sole and exclusive property of Novavax. Except as otherwise set out in this Agreement, Novavax does not grant Customer and right, title or interest in, to or under any such Intellectual Property Rights or any other intellectual property owned or controlled by Novavax. However, Novavax grants Customer a royalty-free, worldwide, non-exclusive license under Novavax’s Intellectual Property Rights to use the Vaccine solely for the purposes of distributing Vaccine in the Territory [***] in accordance with this Agreement. Novavax grants Customer a royalty-free, world-wide, non-exclusive license (including the right to sub-license to third parties acting on Customer’s behalf) to use, reproduce, publish, electronically transmit and distribute any Agreement Material solely for the purposes of fulfilling Customer’s purposes under this Agreement and for the Customer’s reporting and accountability requirements. For the avoidance of doubt, this does not include Intellectual Property Rights relating to the development, construction or manufacture of the Vaccine itself. To the extent Customer, directly or indirectly, creates, discovers, reduces to practice or otherwise generates Intellectual Property Rights in the Vaccine, such Intellectual Property Rights will be solely owned by, and immediately vest on creation in, Novavax. Customer shall assign, and hereby does assign, to Novavax all such Intellectual Property Rights, and will take


 
EXECUTION VERSION -9- 70472309_1 reasonable actions requested by Novavax, [***], to record and confirm Novavax’s ownership thereof, including if requested by Novavax executing formal documentation evidencing Novavax’s ownership thereof. 7. Term; Termination; Effects of Termination. 7.1. Term. This Agreement shall become effective upon the Effective Date and, unless sooner terminated as set forth in Section 7.2, shall continue in force and effect until the later of (a) the end of the Pandemic Period, (b) the date that is three (3) years from the Effective Date; (c) Novavax has delivered to Customer an amount of Product equal to the Aggregate Amount (the “Term”). 7.2. Termination. 7.2.1. Material Breach. 7.2.1.1.Customer Termination. Customer may terminate this Agreement at any time prior to expiration of the Term upon written notice to Novavax if Novavax materially breaches this Agreement and (a) such breach is not cured within [***] of written notice to Novavax describing such breach and requiring Novavax to cure the breach or (b) the breach is not capable of being cured (for the avoidance of doubt, failure to meet a deadline shall not be considered a breach not capable of being cured). 7.2.1.2.Novavax Termination. Novavax may terminate this Agreement at any time prior to expiration of the Term upon written notice to Customer if Customer (a) materially breaches Section 2.2, Section 6 or Section 12 and such breach is (i) not cured within [***] of Novavax providing written notice to the Customer requiring the Customer to cure the breach or (ii) not capable of being cured (for the avoidance of doubt, failure to meet a deadline shall not be considered a breach not capable of being cured); or (b) fails to pay an undisputed amount when due and such breach is not cured within [***] of Novavax providing written notice to the Customer requiring the Customer to cure the breach. The Parties agree that Novavax may only terminate this Agreement pursuant to this Section 7.2.1.2. 7.2.2. Regulatory Approval. If Novavax fails to receive Regulatory Approval of the Vaccine in the Territory on or before [***] then Customer may terminate this Agreement [***] upon written notice to Novavax. Customer’s sole and exclusive remedy for Novavax’s failure to receive Regulatory Approval of the Vaccine in the Territory are those set out in this Section 7.2.2 and Section 7.5. 7.3. Customer Termination. Without prejudice to its rights under this Agreement and at Law, Customer may terminate this Agreement, by notice in writing to Novavax,


 
EXECUTION VERSION -10- 70472309_1 [***] if Novavax (a) suffers an Insolvency Event and fails to emerge within [***] of initiation of such Insolvency Event; (b) ceases to carry on its business; (c) suffers a change in Control or assigns or novates its rights otherwise than in accordance with the requirements of this Agreement; or (d) disposes of the whole or any material part of its assets or business (whether in a single transaction or a series of related or unrelated transactions), other than to carry out a reconstruction or amalgamation of the corporate group constituting Novavax and its Related Bodies Corporate and which has a material adverse effect on Novavax’s ability to supply the Vaccine as contemplated under this Agreement. 7.4. ARTG registration. Without prejudice to its rights at Law, Customer may terminate this Agreement by notice in writing to Novavax, [***] if, [***]. 7.5. Effects of Expiration or Termination. Upon expiry of the Term or any early termination of this Agreement, (a) neither Party shall be relieved of any obligation that accrued prior to such effective date of termination, (b) except as otherwise expressly provided herein, all rights and obligations of each Party hereunder will cease and (c) each Party shall return or destroy all Confidential Information of the other Party that is in its possession pursuant to the requirements of Section 12.5. If this Agreement is terminated under Section 7.2.1.1 (provided such termination is related to Novavax’s failure to deliver Product), 7.2.2 or 7.4, Novavax must refund to Customer the Refundable Portion of the Advance Payment attributable to the undelivered Product as at the date of termination within [***] of receipt of a termination notice under that Section. In the event Novavax terminates this Agreement pursuant to Section 7.2.1.2, Customer must pay all amounts due and payable to Novavax pursuant to Agreement as at the date of termination. 8. Development and Regulatory Matters. 8.1. Development of Vaccine. The Parties acknowledge and agree that Novavax will use reasonable endeavours to develop the Vaccine, but the successful development of the Vaccine is not guaranteed. 8.2. Labelling. Novavax must ensure that all Product is labelled and packaged in accordance with the applicable Regulatory Approval, Specifications and GMP standards, and otherwise in compliance with TGA labelling requirements unless an Exemption applies. 8.3. Approach to Regulatory Approval. Novavax shall use commercially reasonable efforts to obtain, and ensure that Sponsor obtains, Regulatory Approval of the Vaccine in the Territory from the TGA, including (a) Authorisation, (b) GMP clearance from the TGA or equivalent regulator to manufacture the Vaccine overseas, in order to meet the requirements of the TG Act with regard to manufacture of the Vaccine (“GMP Clearance”) and (c) to the extent the Vaccine is required to be registered on the ARTG under the TG Act and is not Exempt, registration of the Vaccine on the ARTG, [***]. Novavax will notify Customer in writing (email being sufficient) when the Vaccine is granted any Regulatory


 
EXECUTION VERSION -11- 70472309_1 Approval in the Territory and provide to Customer evidence of any Authorisations, GMP Clearance and registration of the Vaccine on the ARTG for the purposes of this Section 8.3. Customer and Novavax both acknowledge that regulatory harmonization and streamlined logistics requirements, including packaging, labelling, and post-marketing requirements across all participating high income countries (HICs), is of the utmost importance to the timely approval and delivery of a COVID-19 vaccine during the pandemic. Customer acknowledges that any country-specific requirements in the Territory regarding packaging, labelling, or release logistics may delay delivery of Product. 8.4. Documentation. Novavax shall prepare and maintain, and ensure that the Sponsor prepares and maintains, all documentation required by the TGA in relation to the safety, manufacture, delivery and storage of Product, including batch records and file samples, properly stored, from each lot or batch of Product manufactured and shipped under this Agreement as well as shipping records for each batch shipped (including records of cold-chain compliance). Upon request, such documentation will [***] be made available to Customer (in English) for review. In addition, Novavax will maintain appropriate records and supporting documentation to confirm that each invoice is limited to the actual quantities of Product shipped to the Point of Entry, which records and documentation will be maintained by Novavax for [***], following Acceptance of the relevant batch of Product by Customer pursuant to Section 3.4. Customer will have the right, [***], to inspect any such records. Customer may appoint an independent person to assist in inspections during normal business hours at the place such records are normally kept. In the event any such inspection reveals an overpayment by Customer, Novavax will [***] credit Customer the amount of such overpayment against future deliveries of Product, unless there are no such future deliveries, in which case, Novavax will [***] refund Customer for the amount of such overpayment. 8.5. Regulatory Assistance. Customer will, within the framework of its competencies, reasonably support Novavax in obtaining Regulatory Approval for the Vaccine in the Territory, including accelerated Regulatory Approval processes. The Parties acknowledge, and Customer represents to Novavax, that TGA is part of Customer but operates independently in accordance with the TG Act and that, in entering into this Agreement, Customer is not acting as, or influencing the TGA or in any regulatory capacity. 8.6. Recalls. Novavax must [***] notify Customer of any issues that could potentially lead to a recall of the Product and provide all relevant information to Customer [***]. As distributor of the Product in the Territory, Customer (or its nominee) shall use reasonable endeavours to assist Novavax in implementing any Product recalls (a) required by controlling regulatory agencies and (b) voluntary withdrawals requested by Novavax, with respect to each, in the Territory. Novavax shall initiate and handle, or ensure that Sponsor initiates and handles, any recalls in a timely, prudent and skillful manner, in compliance with all applicable Laws. Novavax will, at the [***] of Customer, [***] (a) replace any recalled and unexpired Product if it has supply of Product that can be made available or (b)


 
EXECUTION VERSION -12- 70472309_1 refund or credit the Price attributable to the recalled and unexpired Product (and in any case within [***] unless otherwise agreed by Novavax and Customer). All costs incurred in responding to recalls and market withdrawals shall be borne by [***]. 8.7. Summary reports. Until delivery of the Aggregate Amount, Novavax will provide Customer with a written report, on a minimum [***] basis or other period agreed between the Parties (“Summary Report”) that details: [***]. The Parties acknowledge that the Summary Report is intended to be a high-level update regarding the progress of the Vaccine development and supply, and may include Confidential Information. Novavax will, at the request of Customer, provide a brief verbal discussion of each Summary Report. Novavax or third party confidential information contained in a Summary Report will be treated as Novavax’s Confidential Information for the purposes of Section 12. 8.8. Notifications. Novavax must [***] notify Customer in writing if (a) [***]. Novavax must [***] and fully inform the TGA in respect of any information required to be supplied to the TGA under the TG Act in respect of the Vaccine, and, if requested by Customer, it will supply such information upon request to Customer. 8.9. Manufacturing Facilities. Novavax may not supply Product under this Agreement from facilities other than the Manufacturing Facilities without first obtaining approval from the TGA for an alternative manufacturing site and obtaining Customer’s prior written consent. If Novavax seeks consent to supply Product from facilities other than the Manufacturing Facilities, and has obtained approval from the TGA to use an alternative manufacturing site, Customer’s consent may not be unreasonably withheld and will be deemed to have been provided if (a) the request is made in writing and complies with the requirements set out in Section 13.2 and (b) Customer fails to provide consent or notify Novavax that it does not provide consent within [***] after receipt of the request. 8.10. Specifications. Novavax will provide to Customer on a confidential basis (a) the draft Specifications provided to the TGA with the application for Regulatory Approval, within [***] of submitting that application to the TGA; and (b) the final Specifications which are the specifications for the Product determined by Novavax and approved by the TGA, reflecting data arising from the trials (including safety and efficacy requirements) and the Regulatory Approval, within [***] of the granting of the Regulatory Approval by the TGA. 9. Indemnification. 9.1. By Customer. Notwithstanding any contrary provision of this Agreement and to the fullest extent not prohibited by applicable Laws Customer (“Indemnifying Party” for the purposes of this Section 9.1) will release and indemnify Novavax and its affiliates, Sponsor and its or their respective officers, directors, employees, agents and contractors (each an “Indemnified Party” for the purposes of this Section 9.1) from and against any and all claims, demands, causes of action, damages,


 
EXECUTION VERSION -13- 70472309_1 losses, liabilities, costs, expenses (including legal fees and litigation expenses), penalties, fines, settlements and judgments (collectively, “Losses”) resulting from a Claim to the extent that Claim is arising out of or in connection with any one or more of [***]. Notwithstanding any provision of this Agreement to the contrary, the provisions of this indemnity shall apply and be binding on Indemnifying Party regardless of whether any defect in Product causing any Losses originates from the testing, development, manufacture, delivery, export, import, distribution, sale, offer for sale, administration, use or deployment of Product. [***]. Indemnifying Party’s liability for any Losses under this Section shall be reduced proportionally to the extent the relevant Losses would have been avoided or mitigated but for the Indemnified Party’s failure to take reasonable steps to mitigate those Losses. 9.2. Deed Poll. The rights under Section 9.1 are for the benefit of, and may be exercised by, the Sponsor. This document takes effect as a deed poll in favour of the Sponsor and is enforceable by the Sponsor. 9.3. Procedure. Any Indemnified Party shall [***] notify Indemnifying Party in writing of any Claim made against an Indemnified Party, specifying the basis given for such Claim; provided that [***]. Indemnifying Party shall, within [***] after receiving notice of a Claim from the Indemnified Party, notify the Indemnified Party whether Indemnifying Party elects to undertake the defense of or, [***]. The election by Indemnifying Party to undertake the defense of a Claim shall not preclude the Indemnified Party from participating or continuing to participate in such defense, so long as the Indemnified Party [***]. If Indemnifying Party elects not to defend or settle the Claim itself, the Indemnified Party may assume the defense of the Claim, in which case Indemnifying Party shall, [***]. Novavax acknowledges that the Commonwealth must comply with government policy in the conduct of litigation (including the Legal Services Directions 2017 made under section 55ZF of the Judiciary Act 1903 (Cth)). 9.4. Third Party Intellectual Property Infringement. In the event that Product is found to infringe any third party Intellectual Property Rights, the Parties will discuss in good faith potential solutions to permit the ongoing supply of Product by Novavax and use by Customer. 10. Representations and Covenants. 10.1. Mutual Representations. Each Party hereby represents and warrants to the other Party, as of the Effective Date, that: 10.1.1. it has all requisite power and authority, corporate or otherwise, to execute, deliver and perform this Agreement; 10.1.2. this Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms; 10.1.3. the execution, delivery and performance of this Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or


 
EXECUTION VERSION -14- 70472309_1 written, to which such Party is bound, nor violate any applicable Law or any order, writ, judgment, injunction, decree, determination or award of any court or governmental body or administrative or other agency presently in effect and applicable to such Party; and 10.1.4. in the performance of this Agreement, it shall comply with all applicable Laws. 10.2. Novavax’s Covenant. Novavax hereby covenants to Customer that, at the time of delivery to the Point of Entry, Customer will have good title to the delivered Products, free and clear of all liens, encumbrances and security interests. 10.3. Disclaimer. EXCEPT FOR THOSE REPRESENTATIONS, WARRANTIES AND COVENANTS EXPRESSLY SET FORTH IN SECTION 4.1 OR THIS SECTION 10, TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW, NOVAVAX EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, BY FACT OR LAW, INCLUDING ANY IMPLIED REPRESENTATIONS, WARRANTIES AND COVENANTS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, SATISFACTORY QUALITY, NON-INFRINGEMENT AND ANY REPRESENTATIONS OR WARRANTIES OR CONDITIONS OR GUARANTEES ARISING FROM STATUTE, COURSE OF DEALING OR USAGE OF TRADE. EACH PARTY ACKNOWLEDGES THAT IT HAS NOT ENTERED INTO THIS AGREEMENT IN RELIANCE UPON ANY WARRANTY OR REPRESENTATION. FURTHER, THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THAT NOTHING CONTAINED IN THIS AGREEMENT SHALL BE CONSTRUED AS A WARRANTY, EITHER EXPRESS OR IMPLIED, THAT NOVAVAX WILL OBTAIN A POSITIVE CLINICAL OUTCOME OR THAT THE PRODUCT WILL RECEIVE REGULATORY APPROVAL IN THE TERRITORY. 11. Limitation of Liability. 11.1. [***]. [***]. 12. Confidential Information. 12.1. Definition. “Confidential Information” means any and all non-public or proprietary information provided by or on behalf of a Party to the other Party in connection with this Agreement or to which a Party obtains access as a consequence of entering into or performing this Agreement (in each case whether before, on or after the Effective Date), whether or not marked as “CONFIDENTIAL” or “PROPRIETARY,” and whether provided prior to, on or after the Effective Date, including all technical, scientific, business, commercial and other know-how, information, trade secrets, methods, processes, practices, formulae, instructions, techniques, designs, drawings, data or results, but expressly excluding any


 
EXECUTION VERSION -15- 70472309_1 information that (a) at the time of disclosure, is in the public domain, (b) after disclosure, becomes part of the public domain by publication or otherwise, through no fault of the receiving Party or its affiliates, (c) at the time of disclosure, is already in the receiving Party’s or its affiliates’ possession, except through prior disclosure by the disclosing Party, without any obligation of confidentiality or any restriction on its use, and such possession can be properly documented by the receiving Party or its affiliates in its written records, and was not made available to the receiving Party or its affiliates by any person or party owing an obligation of confidentiality to the disclosing Party, (d) is rightfully made available to the receiving Party or its affiliates from sources independent of the disclosing Party and (e) is independently discovered or developed by or on behalf of the receiving Party or its affiliates without the aid, use of, access to or application of any Confidential Information of the disclosing Party. For clarity, specific aspects or details of Confidential Information will not be deemed to be within the public domain or in the possession of the receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the receiving Party. 12.2. Obligation to Maintain in Confidence; Permitted Disclosure. Each Party agrees to (a) protect and maintain in confidence the disclosing Party’s Confidential Information using the same degree of care that it employs to protect the confidentiality of its own confidential information (but never less than a reasonable standard of care), (b) not disclose to any person or entity any of the disclosing Party’s Confidential Information without prior written approval from the disclosing Party; provided that the receiving Party may disclose such Confidential Information to its affiliates, and to its and their officers, directors, employees, contractors, agents, Australian, State and Territory government entities as necessary, Ministers, Ministerial advisers, professional advisors or consultants who are bound by confidentiality obligations at least as restrictive as those set forth in this Section 12 and who reasonably need to know such Confidential Information in the performance of the receiving Party’s obligations under this Agreement, or for the purpose of governmental reporting including requests for information by the responsible Minister, a House of the Parliament of the Commonwealth of Australia or Parliamentary Committee and provided such information is designated as ‘Confidential’ (c) ensure the full compliance of each of its affiliates and its and their officers, directors, employees, contractors or agents who have access to the disclosing Party’s Confidential Information with the confidentiality and non-use obligations in this Section 12 and (d) not use such Confidential Information for any purpose other than performing its obligations under this Agreement. The Customer may disclose all or any part of the Confidential Information to the extent necessary to enable Customer’s performance under this Agreement and its distribution, administration, and use of Product, provided, however, that it ensures that any receiving party are bound by confidentiality obligations at least as restrictive as those set forth in this Section 12. Each Party acknowledges and agrees that its failure to comply with the provisions of this Section 12 may cause irreparable harm to the other Party that cannot be adequately compensated for in damages and, accordingly, that each Party will be entitled to claim, in addition to any other


 
EXECUTION VERSION -16- 70472309_1 remedies available to it, interlocutory and permanent injunctive relief to restrain any anticipated, present or continuing breach of this Section 12 without the need to post bond or other security. The terms of this Agreement will be the Confidential Information of both Parties. 12.3. Disclosures Required by Law. Subject to the remainder of this Section 12.3, each Party may disclose the Confidential Information of the other Party to the extent that such disclosure is, in the reasonable opinion of the receiving Party’s legal counsel, required to be disclosed pursuant to applicable Law (including the rules of any stock exchange) or a valid order of a court of competent jurisdiction or a supra-national, national, regional, state, provincial or local governmental body of competent jurisdiction. Prior to making any such disclosure, the receiving Party shall promptly advise the disclosing Party of the requirement to disclose as soon as the receiving Party becomes aware that such a requirement might become effective in order that, where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall reasonably cooperate with the disclosing Party (at the disclosing Party’s cost) in seeking a protective order or other relief. The receiving Party shall disclose only that portion of the disclosing Party’s Confidential Information that it is required to disclose. 12.4. Survival. The provisions of this Section 12 shall survive for a period of [***] from the date of any expiration or termination of this Agreement, but shall survive [***] with respect to any Confidential Information that is a trade secret for as long as such information remains a trade secret. 12.5. Return or Destruction. A Party may request that the other Party return or destroy any of its Confidential Information that is in the other Party’s possession at any time upon written notice to the other Party. Upon expiration or termination of this Agreement, each Party shall return or destroy, at the other Party’s written election, all Confidential Information of the other Party that is in its possession as of the date of expiration or termination. Notwithstanding the foregoing, each Party may retain [***] of the other Party’s Confidential Information including to ensure its compliance with this Agreement, and no Party will be required to destroy copies of the other Party’s Confidential Information that are included on disaster recover/backup tapes that are maintained by a Party pursuant to a bona fide disaster recovery plan. If requested by a Party, the returning or destroying Party will certify in writing to the other Party that such return or destruction has occurred. 13. Miscellaneous. 13.1. Force Majeure. Each Party’s obligations of performance under this Agreement will be temporarily suspended and excused for the period of interruption to the extent any failure of performance is caused by (a) fire, earthquake, storm (including hurricanes, snow storms, blizzards or ice storms), hail, flood, act of war or terrorism, riot, civil commotion, pandemic, epidemic or embargo, (b) any other event or omission beyond the reasonable control of such Party (collectively, a


 
EXECUTION VERSION -17- 70472309_1 “Force Majeure”); provided that the non-performing Party is without fault in causing the failure or delay, and the failure or delay could not have been prevented by reasonable precautions and cannot reasonably be circumvented by the non-performing Party at its reasonable expense through the use of alternate sources, work around plans or other means. The onus of establishing a Force Majeure event rests on the Party asserting that a Force Majeure event exists. The non-performing Party will [***] notify the other Party of the anticipated period of interruption due to a Force Majeure, and describe at a reasonable level of detail the circumstances causing the delay, and will take all reasonable measures to forthwith remedy the interruption and recommence performance whenever and to whatever extent possible without delay. Each Party acknowledges and agrees that the effects of COVID-19 may be considered a Force Majeure to the extent it satisfies the requirements of this Section 13.1. If a delay or failure of Novavax to perform its obligations due to an event of Force Majeure exceeds [***]. 13.2. Notices. Any notice given under this Agreement must be in writing and delivered either to the addresses set forth below in person or via overnight courier (or to such other addresses of which the Parties may from time to time be notified in writing), with a PDF copy sent by email: If to Novavax: Novavax, Inc. 20 Firstfield Road Gaithersburg, MD 20878 U.S.A. Attn: [***] Email: [***] If to Customer: Scarborough House 1 Atlantic Street Woden ACT 2606 Australia Attn: [***] Email: [***] Copy: [***] Such notice will be deemed to have been given: (a) if delivered by post, on the second (2nd) business day (at the place of delivery) after posting with an internationally recognized overnight delivery service or (b) if sent by email, upon written acknowledgement of the receiving Party. 13.3. Entire Agreement. This Agreement, including any schedules or exhibits hereto, contains the entire and exclusive agreement between the Parties in connection with


 
EXECUTION VERSION -18- 70472309_1 the subject matter thereof and supersede all prior and collateral agreements, understandings, communications, representations and warranties between the Parties in relation thereto, including without limitation, the Heads of Terms between the Parties dated 4 November 2020. 13.4. Amendment. No amendment or modification or supplement of this Agreement, including this provision, will be valid unless made in a writing signed by an authorized representative of each Party specifically referring to this Agreement. 13.5. Public Announcements. Novavax agrees not to issue any press release or other public statement relating to this Agreement or otherwise disclosing the discussions in relation to this Agreement, entry into, existence and/or contents of this Agreement or the transactions contemplated hereby without the prior written consent of the Customer, except to the extent required by applicable Laws or stock exchange rules, in which case the Customer shall be given advance written notice of such disclosure. Novavax will consult the Customer prior to issuing any press release or other public announcement with respect to this Agreement. Subject to compliance with Section 12, Customer is not restricted from making a public announcement and other public statements as to the entry into, existence and/or general contents of this Agreement or the transactions contemplated hereby and, where reasonably practicable, agrees to provide Novavax advance written notice of any such public announcement. 13.6. Dispute Resolution; Equitable Relief. 13.6.1. With respect to any, dispute or controversy (“Dispute”) between the Parties and arising in whole or in part in connection with this Agreement, including whether a breach has occurred or been appropriate cured, the Parties shall first use good faith efforts to resolve such Dispute and, if such Dispute is not resolved within [***] from the date such Dispute arose, then either Party may submit the Dispute to binding arbitration in [***]. All matters so submitted to arbitration will be settled by three (3) arbitrators in accordance with the [***]. In the event of a conflict between [***] and this Agreement, this Agreement shall govern. Each Party will designate an arbitrator and the Parties will cause the designated arbitrators to mutually agree upon and to designate a third arbitrator who will serve as chairperson. The Parties shall arrange for a hearing to occur and be completed within [***] after the appointment of the third (3rd) arbitrator, which hearing shall last no longer than [***], unless the arbitral panel believes a longer period is required, in which case the hearing may last [***]. The Parties will cause the arbitrators to decide the matter to be arbitrated within [***] after the close of evidence unless the chairperson arbitrator determines, at the request of any Party or on his or her own initiative, that such time period should be extended, in which case such time period may not be extended beyond an additional [***]. The final decision of the majority of the arbitrators shall be in writing, in all events follow governing law and will be furnished to all the


 
EXECUTION VERSION -19- 70472309_1 Parties in such dispute. Judgment on such decision may be entered in any court having jurisdiction. 13.6.2. Notwithstanding any other terms of this Agreement, either Party may seek a preliminary injunction or other provisional equitable relief in any court of competent jurisdiction if, in its reasonable judgment, such action is necessary to avoid irreparable harm as permitted by applicable Law. 13.7. Governing Law. This Agreement is made subject to the laws of [***]. The United Nations Convention on Contracts for the International Sale of Goods and the United Nations Convention on the Limitation Period in the International Sale of Goods, if otherwise applicable, each as the same may be amended or superseded, are hereby expressly excluded and will not be applicable to this Agreement. 13.8. Assignment. Neither Party will assign (including by change of Control) all or any portion of this Agreement or any right or obligation under this Agreement without the other Party’s prior written consent, which consent will not be unreasonably withheld or delayed. Any unauthorized assignment by a Party will be null and void of no force or effect. This Agreement will bind and inure to the benefit of the successors and permitted assigns of the respective Parties. 13.9. Survival. In order that the Parties may fully exercise their rights and perform their obligations in connection with this Agreement, any provisions of this Agreement that are required to ensure such exercise or performance (including any obligations accrued as of the termination date) or which are intended by their terms or by necessary implication to survive will survive the expiration or termination of this Agreement, including Sections 5 (with respect to accrued but unpaid amounts and Section 5.5), 6, 7.5, 8, 9, 11, 12, 13.2, 13.3, 13.5, 13.6, 13.7, 13.9, 13.11, 13.12, 13.13, 13.17 and 16. 13.10. Waiver. Failure of either Party to exercise any right it has under this Agreement on one or more occasions will not operate or be construed as a waiver by such Party of its right to exercise the same right on another occasion. Any waiver must be in a writing signed by the waiving Party. 13.11. Severability. If any provision of this Agreement will be adjudicated to be invalid or unenforceable by a court of competent jurisdiction, it is the Parties’ intent that the remaining provisions of this Agreement will remain in full force and effect and the affected provision or portion thereof will be deemed modified so that it is enforceable to the maximum extent permissible to reflect as closely as possible the intentions of the Parties as evidenced from the provisions of this Agreement. 13.12. Independent Relationship of Parties; No Third-Party Beneficiary. The relationship of Novavax and Customer is that of independent contractors and under no circumstances will a Party, its agents or employees be partners, agents or representatives of another Party. Except as otherwise expressly provided in this Agreement, including Section 9.2 and any indemnification or limitation of liability


 
EXECUTION VERSION -20- 70472309_1 provision, nothing in this Agreement will be construed as creating any direct or beneficial right in or on behalf of any third party. 13.13. Interpretation; Section Headings. For purposes of this Agreement, (a) the plural will include the singular and the singular the plural, (b) any gender will include any other gender, (c) the terms “included” or “including” or any variation are not words of exclusion and will be read to include “without limitation,” (d) the terms “hereof” or “herein” or any variation are intended to apply to this Agreement as a whole, (e) the word “or” is not exclusive and will be interpreted to have the meaning commonly associated with the phrase “and/or,” (f) references to any applicable law, rule or regulation, or article, section or other division thereof, will be deemed to include the then-current amendments thereto or any replacement or successor applicable law, rule or regulation thereof and (g) the word the word “will” shall be construed to have the same meaning and effect as the word “shall.” The section headings used herein are intended for convenience of reference only and will not be considered in interpreting this Agreement. This Agreement shall be deemed to be the joint work product of the Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable. 13.14. English Language. This Agreement shall be written and executed in, and all other communications under or in connection with this Agreement shall be in, the English language. Any translation into any other language shall not be an official version thereof, and in the event of any conflict in interpretation between the English version and such translation, the English version shall control. 13.15. Counterparts. This Agreement and all exhibits and schedules hereto may be executed and delivered by the Parties in one or more counterparts, each of which will be an original, and each of which may be delivered by facsimile, e-mail or other functionally equivalent electronic means of transmission and those counterparts will together constitute one and the same instrument. 13.16. Manufacturing in the Territory. In the event that onshore manufacturing capacity becomes available in the Territory, Customer will notify Novavax, and the Parties will discuss, in good faith, the terms on which Novavax could manufacture Product in the Territory, for the purposes of supplying Product to Customer under this Agreement. 13.17. Liability for Sponsor. The acts or omissions of the Sponsor will be deemed to be the acts or omissions of Novavax, and Novavax will be responsible and liable for those acts and omissions in all circumstances, irrespective of whether (a) Novavax authorised the acts or omissions; (b) the acts or omission were willful, deliberate, illegal or fraudulent; or (c) the acts or omissions were in contravention of instructions. 14. Insurance.


 
EXECUTION VERSION -21- 70472309_1 14.1. Insurance Requirements. On or before [***], Novavax must take out and maintain such types and amounts of liability insurance to cover liabilities relating to its activities under this Agreement as is normal and customary in the pharmaceutical industry generally, including the following insurance cover: (a) general products liability insurance, covering legal liability to pay for personal injury arising out of or in any way connected with the Vaccine, having a limit of indemnity of not less than USD[***] per occurrence and in annual aggregate; and (b) to the extent required by Law, workers’ compensation insurance in respect of Novavax’s liability for any Loss or Claim by a person employed or otherwise engaged, or deemed to be employed or otherwise engaged, by Novavax in connection with the performance of the terms of this Agreement. 14.2. Insurance Terms. The policy or policies of insurance arranged in accordance with this Section 14 must be maintained for a period of [***] after the expiration of the Term. 14.3. Evidence of Insurance. Novavax will upon request by Customer [***] provide certificates of insurance evidencing the insurances required to be effected or maintained by Novavax pursuant to this Agreement and such certificates must record the name of the insurer or the insurers, the insured, the type of policy, the policy number, the policy expiry date and the amount of cover and deductible. 15. Subcontracting. Novavax may subcontract the whole, or any part, of its obligations under this Agreement without the prior written consent of Customer, provided that (a) Novavax notifies Customer of any subcontract of the whole or any part of its obligations under this Agreement [***]; (b) Novavax shall remain responsible and liable for the acts or omissions of its subcontractors, as if they were acts or omissions of Novavax. 16. Privacy. 16.1. Privacy Obligations. Novavax does not intend to collect Personal Information in performance of its obligations under this Agreement. To the extent Novavax collects, uses or discloses Personal Information in performance of this Agreement, Novavax agrees (a) to use or disclose Personal Information only in accordance with applicable Laws, (b) not to do any act or engage in any practice which, if done or engaged in by Customer, would be in breach of the requirements of Division 2 of Part III of the Privacy Act, (c) not to use or disclose Personal Information or engage in an act or practice that would breach Australian Privacy Principle 7 (direct marketing) of Schedule 1 of the Privacy Act unless the use or disclosure is authorised by this Agreement or is necessary, directly or indirectly, to discharge an obligation under this Agreement, (d) to [***] notify Customer if Novavax becomes aware of a breach of any of the obligations contained in, or referred to in, this Section 16, whether by Novavax or any subcontractor, (e) to comply with


 
EXECUTION VERSION -22- 70472309_1 applicable Law, or (f) any directions, guidelines determinations or recommendations referred to in, or relating to the matters set out in applicable government policy as provided within this Agreement, to the extent that they are not inconsistent with the requirements of this Section 16, and (g) to ensure that any employee of Novavax who is required to deal with Personal Information for the purposes of this Agreement is made aware of the obligations of Novavax set out in this Section 16. 16.2. Subcontracts. Novavax agrees to ensure that any subcontract entered into for the purpose of processing Personal Information under this Agreement contains provisions to ensure that the subcontractor has the same awareness and obligations as Novavax has under this Section 16, including the requirement in relation to subcontracts. 16.3. Data Breaches. Novavax must notify Customer within [***] after it becomes aware, and keep Customer informed (a) of an obligation under the Privacy Act to report a breach (including an eligible data breach) in respect of its handling of Personal Information to the Information Commissioner or any third party; (b) that the Information Commissioner has started any action under the Privacy Act relevant to Novavax and the Agreement including (i) that the Information Commissioner is investigating a complaint against Novavax, (ii) an audit by the Information Commissioner, (iii) a request by the Information Commissioner to be given access to Novavax’s premises, or (iv) an injunction or other order against Novavax being sought by the Information Commissioner, in each case, to the extent relevant to the supply of the Vaccines under this Agreement. Novavax shall (A) act in accordance with any with Customer’s reasonable instructions in any related correspondence with the Information Commissioner or the relevant third party and keep Customer informed of the conduct, progress and outcome of any above outlined action including any determination made by the Information Commissioner, (B) ensure that Customer is kept informed of any assessment (or requirement to make an assessment) of a suspected eligible data breach, (C) take all reasonable measures, promptly and in accordance with the timeframes in the Privacy Act, including assisting Customer in any investigations to determine whether an eligible data breach has occurred, or if there are reasonable grounds to suspect and eligible data breach has occurred, and the requirements to notify the Information Commissioner and any third parties in respect of such eligible data breach, and (D) work with Customer to agree, who will issue notification of the eligible data breach to the Information Commissioner and relevant third parties if the eligible data breach is relevant to both Novavax and Customer. 16.4. Survival. The provisions of this Section 16 shall survive expiration or termination of this Agreement. 17. Commonwealth requirements 17.1. Freedom of Information. Novavax must comply with, and must do such things as may be reasonably necessary to assist Customer to comply with, the Freedom of


 
EXECUTION VERSION -23- 70472309_1 Information Act 1982 (Cth) and Freedom of Information Amendment (Reform) Act 2010 (Cth) (together the “FOI Act”). If required under the FOI Act, Customer will provide Novavax with a reasonable opportunity to avail itself of any applicable protections that are available to Novavax under the FOI Act, including the an opportunity to consult and make submissions in relation to Novavax’s trade secrets and other commercially valuable information contained in any Customer response to a request under the FOI Act. For the avoidance of doubt, Customer Confidential Information, Health Data and Customer documentation or other material will, to the extent applicable, be deemed to be documents of, and in the possession of, Customer for the purposes of the application of the FOI Act. 17.2. Anti-terrorism 17.2.1. Novavax must comply with its obligations (if any) under Part 4 of the Charter of United Nations Act 1945 (Cth) and the Charter of United Nations (Dealing with Assets) Regulations 2008 (Cth). 17.2.2. Novavax must comply with all applicable Laws dealing with the supply of goods, services and information to foreign nationals or institutions, including under the Customs Act 1901 (Cth) and the Weapons of Mass Destruction (Prevention of Proliferation) Act 1995 (Cth). 17.2.3. Novavax acknowledges that it is an offence to knowingly make any funds or assets available to a person or organisation on the list of all persons and entities who are subject to targeted financial sanctions under Australian sanctions law, available at https://www.dfat.gov.au/international-relations/security/sanctions/Pages/c onsolidated-list. 17.2.4. If Novavax holds assets or funds belonging to a person or organisation on the list of persons and entities designated as terrorists, Novavax must immediately freeze those assets in accordance with all applicable Law. 17.3. Anti-money laundering. Novavax must comply with its obligations (if any) under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) or similar applicable Laws. 17.4. Commonwealth policies: In so far as is reasonably practicable, Novavax must use its [***] to comply with any other Commonwealth policies or codes of conduct as notified to Novavax in writing by Customer from time to time to the extent such policies are applicable to Novavax’s obligations under this Agreement. 17.5. Work health and safety. Novavax must ensure that Novavax personnel carry out work under this Agreement in a manner which: 17.5.1. does not pose any avoidable health or physical safety risk to Customer personnel, Novavax personnel, or any other person;


 
EXECUTION VERSION -24- 70472309_1 17.5.2. complies at all times with all applicable work health and safety and workplace diversity legislation and any other applicable Laws where such personnel are located; and 17.5.3. when using or accessing facilities of Customer complies with Australian Government policies on work health and safety. For more information see: https://info.australia.gov.au/information-and-services/jobs-and-workplace/ whs-workplace-health-and-safety. 18. Definitions 18.1. Acceptance has the meaning given in Section 3.4 and Accept has the same meaning. 18.2. Acceptance Period has the meaning given in Section 3.4. 18.3. Additional Amount has the meaning given in Section 2.1. 18.4. Advance Payment has the meaning given in Section 5.1. 18.5. Agency means (a) government or government department or other body; (b) a governmental, semi-governmental or judicial person; or (c) a person (whether autonomous or not) who is charged with the administration of a Law, and unless stated otherwise, includes Commonwealth, State and Territory Agencies. 18.6. Aggregate Amount has the meaning given in Section 2.1. 18.7. Agreement Material means non-confidential documents, information, data or other material owned by Novavax or a third party (a) which are delivered to Customer in accordance with this Agreement, including any reports; or (b) copied or derived by Customer from documents referred to in clause (a) of this definition, but excludes all Intellectual Property Rights in the Vaccine. 18.8. ARTG means Australian Register of Therapeutic Goods. 18.9. Australian Disputes Centre has the meaning given in Section 4.3. 18.10. Authorisation means the approvals from the TGA for the Vaccine, which may initially be granted under an expedited marketing authorisation process but which may include additional requirements or directions of the TGA including requirements under the TG Act or other conditions on which the TGA grants the Authorisation (unless an Exemption applies) and Authorised has the corresponding meaning. 18.11. Calendar Quarter means the calendar quarters specified in the Delivery Schedule set forth in Exhibit B.


 
EXECUTION VERSION -25- 70472309_1 18.12. Certificate of Analysis means the certificate of analysis to accompany the Product delivered to the Customer, which certifies that the Product has been manufactured and tested in compliance with its Specification. 18.13. Claim means any claim, suit, proceeding, cause of action or demand of any kind, including those which are prospective or contingent and those the amount of which is not ascertained or ascertainable. 18.14. Commonwealth means the Commonwealth of Australia. 18.15. Commonwealth Record means a Commonwealth record as defined in the Archives Act 1983 (Cth). 18.16. Confidential Information has the meaning given in Section 12.1. 18.17. Conforming Product has the meaning given in Section 4.1. 18.18. Control means (a) to possess, directly or indirectly, the power to direct the management or policies of a person, whether through ownership of voting securities or by contract relating to voting rights or corporate governance, or (b) to own, directly or indirectly, fifty percent (50%) or more of the outstanding voting securities or other ownership interest of such person, or (c) in the case of a partnership, control of the general partner, and “Controls” and “Controlled” shall be construed accordingly. 18.19. Controller has the meaning it has in the Corporations Act. 18.20. Corporations Act means the Corporations Act 2001 (Cth). 18.21. COVID-19 as the meaning given in the Recitals. 18.22. Delivery Documents has the meaning given in Section 3.2. 18.23. Delivery Price means the Per Unit Delivery Price multiplied by the number of Vaccine doses delivered. 18.24. Delivery Schedule has the meaning given in Section 2.4. 18.25. Effective Date means the date of this Agreement. 18.26. Exemption means an exemption under the TG Act. Exempt and Exempting have a corresponding meaning. 18.27. GMP Clearance has the meaning given in clause 8.3. 18.28. Good Manufacturing Practice or GMP or cGMP means the current good manufacturing practice determined under section 36 of the TG Act.


 
EXECUTION VERSION -26- 70472309_1 18.29. Gross Negligence means an act or omission done with reckless disregard for a legal duty, whether consciously or not, for the consequences of the act or omission. 18.30. GST has the same meaning as in the GST Law. 18.31. GST Act means the A New Tax System (Goods and Services Tax) Act 1999 (Cth). 18.32. GST Law has the same meaning as in the GST Act and any regulations made pursuant to that Act. 18.33. Health Data means all data and information relating to Customer and its respective operations, facilities, customers, personnel, assets or programs, in connection with the Agreement in whatever form that data or information may exist and whether or not it was generated by or processed by or on behalf of Customer, or is stored in any Commonwealth Record. 18.34. Indemnified Party has the meaning given in Section 9. 18.35. Indemnifying Party has the meaning given in Section 9. 18.36. Independent Expert has the meaning given in Section 4.3. 18.37. Information Commissioner has the meaning given in section 3A of the Australian Information Commissioner Act 2010 (Cth). 18.38. Insolvency Event means, in respect of a person, any of the following events (a) it is (or states that it is) an insolvent under administration or insolvent (each as defined in the Corporations Act); or (b) it is in liquidation, in provisional liquidation, under administration or wound up or has had a Controller appointed to its property; or (c) it is subject to any arrangement (including a deed of company arrangement or scheme of arrangement), assignment, moratorium, compromise or composition, protected from creditors under any statute, or dissolved (in each case, other than to carry out a reconstruction or amalgamation while solvent on terms approved by the financier); or (d) an application or order has been made, resolution passed, proposal put forward or any other action taken, in each case in connection with that person, in respect of any of the above clauses; or (e) it is taken (under section 459F(1) of the Corporations Act) to have failed to comply with a statutory demand; or (f) it is the subject of an event described in section 459C(2)(b) or section 585 of the Corporations Act (or it makes a statement from which the Financier reasonably deduces it is so subject); or (g) it is otherwise unable to pay its debts when they fall due; or (h) something having a substantially similar effect to any of the things described in the above clauses happens in connection with that person under the law of any jurisdiction. 18.39. Intellectual Property Rights means copyrights, and all rights in relation to inventions, patents, registered and unregistered trade marks (including service marks), registered designs, circuit layouts, and all other rights resulting from


 
EXECUTION VERSION -27- 70472309_1 intellectual activity in the industrial, scientific, literary or artistic fields and includes the right to apply for registration of any such rights. 18.40. Law means any applicable statute, regulation, by-law, ordinance or subordinate legislation in force from time to time anywhere including in Australia and overseas, whether made by a State, Territory, the Commonwealth, or a local government, and includes the common law and equity as applicable from time to time. 18.41. Loss has the meaning given in Section 9.1. 18.42. Manufacturing Facilities means the drug substance, adjuvant and fill finish manufacturing facilities used to manufacture the Vaccine supplied to Customer under this Agreement as listed in Exhibit D and approved by the TGA or which have otherwise received GMP Clearance acceptable to the TGA, and updated in accordance with Section 8.9. 18.43. Maximum Aggregate Additional Amount means the maximum amount of additional Vaccine doses that Customer is permitted to order under this Agreement in addition to the Aggregate Amount. 18.44. Pandemic Period means the COVID-19 pandemic period as declared by the World Health Organization. 18.45. Personal Information means information or an opinion (including information or an opinion forming part of a database), whether true or not, and whether recorded in a material form or not, about a natural person whose identity is apparent, or can reasonably be ascertained from the information or opinion. 18.46. Per Unit Delivery Price means, after the Advance Payment is made, the remainder of the Per Unit Price that is payable in respect of each Vaccine dose delivered as set forth in Exhibit A. 18.47. Per Unit Price means the purchase price per Vaccine dose as set forth in Exhibit A. 18.48. Point of Entry has the meaning given in Section 3.1. 18.49. Price has the meaning given in Section 5.2. 18.50. Privacy Act means the Privacy Act 1988 (Cth). 18.51. Product has the meaning given in Section 2.1 and includes any Additional Amount. 18.52. Purchase Order means an order submitted by Customer in accordance Section 2.3 to purchase Product. 18.53. Refundable Portion has the meaning given in Section 5.1.


 
EXECUTION VERSION -28- 70472309_1 18.54. Regional Partner has the meaning given in Section 2.2.2. 18.55. Regulatory Approval has the meaning given in the Recitals. 18.56. Related Body Corporate has the meaning it has in the Corporations Act. 18.57. Remedial Plan has the meaning given in Section 2.7. 18.58. Special Vendor means a supplier of raw material that is key to the manufacture of Vaccine (including vial manufacturers), as listed in Exhibit D and updated in accordance with Section 13.4. 18.59. Specifications has the meaning given in Section 4.1. 18.60. Sponsor means the person or company appointed by Novavax to import the Vaccine in Australia and perform the duties of a Sponsor under the TG Act. 18.61. Sponsor Agreement means a legally binding term sheet or agreement between Novavax and Sponsor relation to the importation of the Vaccine in the Territory. 18.62. Taxes means taxes, levies, imposts, charges and duties (including stamp and transaction duties) imposed by any Agency together with any related interest, penalties, fines and expenses in connection with them, except if imposed on, or calculated having regard to, the net income of Customer. 18.63. Term has the meaning given in Section 7.1. 18.64. Territory has the meaning given in the Recitals. 18.65. TGA means the Therapeutic Goods Administration. 18.66. TG Act means the Therapeutic Goods Act 1989 (Cth). 18.67. Total Price means the total amount payable by Customer to Novavax for the Product purchased as set forth in Exhibit A. 18.68. USD has the meaning given in Section 5.4. 18.69. Vaccine has the meaning given in the Recitals. 18.70. Warranty Dispute Notice has the meaning given in Section 4.3. 18.71. Willful Misconduct has the meaning given in Section 9.1. EXECUTED as an agreement and, in respect of Section 9.1 only, as a deed poll in favour of the Sponsor. [Remainder of page intentionally blank.]


 
EXECUTION VERSION -29- 70472309_1


 
[Signature Page to Advanced Purchase Agreement] IN WITNESS WHEREOF, the Parties hereto by their duly authorized officers have executed this Agreement as of the Effective Date. NOVAVAX, INC. By: /s/ John A. Herrmann III John A. Herrmann III Printed Name EVP, CLO Title: SIGNED by an authorised representative for The Commonwealth of Australia acting through and represented by the Department of Health (ABN 83 605 426 759) in the presence of: /s/ Mark Nelson /s/ Caroline Edwards Signature of witness Signature of authorised signatory Mark Nelson Caroline Edwards Name of Witness (block letters) Name of authorised signatory (block letters) Date: 31/12/2020 Acting Secretary Position of authorised signatory


 
70472309_1 EXHIBIT A PRODUCT Price Aggregate Amount: 51 million doses of the Vaccine Product Name Total Price (= [***] (excluding GST) Per-Unit Price (excluding GST) Per Unit Delivery Price (= [***] (excluding GST) NVX-CoV2373 USD [***] USD [***] USD [***] Advance Payment for Aggregate Amount: USD [***] (excluding GST) Maximum Aggregate Additional Amount: Up to 10 million doses Product Name Total Price (=[***] (excluding GST) Per-Unit Price (excluding GST) Per Unit Delivery Price (= [***] (excluding GST) NVX-CoV2373 USD [TBD based on order] USD [***] USD [***] Advance Payment for Additional Amount: [***]% of Total Price of Additional Amount


 
70472309_1 EXHIBIT B DELIVERY SCHEDULE [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the delivery schedule has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
70472309_1 EXHIBIT C SPECIFICATIONS [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the specifications has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
70472309_1 EXHIBIT D NOVAVAX [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the manufacturing facilities and special vendors has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
Exhibit 10.37 CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL AND (ii) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. -1- 91837512_5 ADVANCED PURCHASE AGREEMENT This ADVANCED PURCHASE AGREEMENT (this “Agreement”) is made as of 01/19/2021 (the “Effective Date”), by and between NOVAVAX, INC., incorporated and registered in the State of Delaware, with a principal place of business at 21 First field Road, Gaithersburg, Maryland 20878 U.S.A. (“Novavax”), and Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works and Government Services, with offices at 10 Wellington St., 4th Floor, Gatineau, QC, K1A0S5, Canada (collectively, “Customer”). Novavax and Customer may individually be referred to herein as a “Party” and, collectively, as the “Parties.” RECITALS WHEREAS, Novavax is currently developing a novel NVX-CoV2373 vaccine, consisting of a stable, prefusion protein made using its proprietary nanoparticle technology and coformulated with its proprietary Matrix-M™ adjuvant (the “Product”), which is intended to prevent SARS- CoV-2 (“COVID-19”) in humans; WHEREAS, if development of the vaccine is successful and Novavax receives Regulatory Approval (as defined below) to commercialize the Product in Canada, Novavax intends to commence commercial manufacture of the Product for supply to, and distribution by, Customer to individuals in Canada and to Canadian personnel who have been deployed offshore (e.g. members of the Canadian Armed Forces, Governmental foreign missions, Canadian consulates or embassies and their respective families) and locally engaged staff and their dependents (collectively, the “Territory”); a WHEREAS, in anticipation of Novavax receiving the government issued licenses, registrations, authorizations and approvals necessary to commercialize the Product in Canada including Expedited Authorization (as defined below) or any other conditional marketing approval (“Regulatory Approval”), Customer hereby orders an aggregate number of doses of Product from Novavax, to be supplied subject to the terms and conditions of this Agreement; WHEREAS, in reliance on such commitment by Customer, Novavax agrees to commence commercial manufacture of the Vaccine prior to Regulatory Approval for supply to, and distribution by, Customer to individuals in the Territory; NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth below, and for other good and valuable consideration the sufficiency and receipt of which is acknowledged by each Party, the Parties agree as follows: 1. Effects of COVID-19. Novavax and Customer hereby acknowledge and agree that to make Vaccine available [***] Novavax will commence manufacture of the Vaccine in advance of Regulatory Approval and the use, deployment and administration of the Product to individuals in the Territory will occur under epidemic conditions requiring such use,


 
-2- 91837512_5 deployment and administration, and that Customer will be solely responsible for the use, deployment and administration of Product to individuals in the Territory. The terms and conditions of this Agreement, including with respect to Product pricing, refund terms, indemnification and limitations of liability, reflect this understanding. 2. Sale of Product. 2.1. Generally. As of the Effective Date of this Agreement, Customer hereby commits to purchase from Novavax Fifty-Two Million (52,000,000) doses (the “Aggregate Amount”) of Product, which pending Regulatory Approval will be supplied in [***]. Such vials will be labelled in compliance with the applicable portions of the Food and Drugs Act, any applicable regulations or orders made under it and Health Canada interpretive guidance thereof. 2.2. Right to Additional Amounts. Prior to the end of the Term of the Agreement, subject to the terms of this Agreement, Customer has the irrevocable right, but not obligation, to purchase at multiple times, additional amount of Product from Novavax up to the additional amount of Product identified in Exhibit A. If Customer desires to exercise its right under this Section 2.2, Customer will notify Novavax in writing of the amount of Product Customer desires to procure, and the Parties will discuss, in good faith, the amount of Product Novavax can provide Customer based on its current supply. Likewise, if at any time during the Term of this Agreement, Novavax desires to sell any of the available Product identified in Exhibit A to a third party, Novavax shall notify Customer of the amount of Product in question (“Call Amount”). This notification will include relevant information for Customer to make a decision, including but not limited to, the delivery schedule. Within [***] of receipt of such notice, Customer will either place an order to purchase the portion of the Call Amount it desires to procure or notify Novavax it does not desire to purchase the Call Amount. If Customer fails to place an order or provide notice to Novavax within such [***], Customer’s additional amount of doses in the Call amount can be offered to other customer by Novavax and the amount of doses in the Call Amount will be available to Customer at a later date based on availabilities. Any amount of Product purchased by Customer under this Section 2.2. is the “Additional Amount”. The Parties acknowledge that if the Additional Amount is to be derived from a different manufacturing site than the one listed in the regulatory authorization, Novavax will need to obtain additional regulatory approval prior to shipment of the Additional Amount. 2.3. Customer will use the Product supplied hereunder solely (a) to vaccinate individuals in the Territory against COVID-19, subject to the immediately following sentences and (b) all in accordance with the terms and conditions of this Agreement. 2.3.1. Sale or Donations. Notwithstanding the territory restriction set forth in subclause 2.3 (a) hereof, subject to Customer’s obligation to indemnify Novavax as set forth in Section 9.3, Customer may donate or re-sell Product


 
-3- 91837512_5 supplied under this Agreement to one or more countries outside of the Territory, but only if (i) the intended purpose of such donation or resale is to vaccinate individual in such country(ies) against COVID-19, (ii) [***], (iii) [***] and (iv) [***]. 2.4. Delivery. Novavax intends to deliver monthly shipments of Product to Customer until the Aggregate Amount (and if applicable, Additional Amount) is supplied. Based upon Novavax’ projections and expectations as of the Effective Date, the anticipated quarterly delivery schedule of the Product is set forth in Exhibit B (“Delivery Schedule”). Customer acknowledges that the Delivery Schedule may change due to the impact of several variables including, but not limited to, speed of clinical trial enrollment and accrual of events, manufacturing delays and/or timing of Regulatory Approval. Novavax will use commercially reasonable efforts to deliver the Product to Customer in accordance with the Delivery Schedule and will, on at least on a [***] basis, communicate any anticipated changes to the Delivery Schedule to Customer. At least [***] in advance of the anticipated initial shipment under the Delivery Schedule, Novavax will inform Customer in writing of the date of the initial delivery of Product (“Delivery Start Date”) and provide Customer an updated Delivery Schedule detailing anticipated amounts and dates of each of monthly delivery of Product to meet the quarterly amounts identified in the Delivery Schedule. The Delivery Start Date is expected to be within [***] of the date the Product receives Regulatory Approval and there is sufficient Conforming Product in inventory for the complete first quarterly allotment in the Delivery Schedule, or a lower amount of Confirming Product than planned for the first quarterly allotment if it is deemed acceptable by Customer. 2.5. Expedited Authorization. If an Expedited Authorization is granted before [***], then Novavax will use commercially reasonable efforts to revise the Delivery Schedule to deliver Product to Customer earlier than indicated in the Delivery Schedule ("Adjusted Delivery Schedule"). “Expedited Authorization” means an expedited authorization for the Product granted by Health Canada that allows the Product to be placed on the market in Canada under the authority of the September 16, 2020 Interim Order Respecting the Importation, Sale and Advertising of Drugs in Relation to COVID-19 or other relevant interim order or regulation or authority. 2.5.1. Novavax Seeking Regulatory Approval. Novavax shall submit its application for Regulatory Approval in Canada no later than [***] of its first submission for Regulatory Approval in another priority market (such as the United States of America or the European Union). In the event that Novavax fails to submit as stated, then Customer’s sole and exclusive remedy shall be that it may terminate this Agreement [***] upon written notice to Novavax and [***] of the paid Advance Payment [***] will become due and refundable to Customer. 2.6. Variance. Customer hereby acknowledges and agrees that the Delivery Schedule is an estimate only and that notwithstanding anything herein to the contrary, (a) the quantity of Product actually delivered [***] may vary within [***] of the


 
-4- 91837512_5 Aggregate Amount and (b) the actual date of delivery may vary within [***] of the delivery date projected by Novavax pursuant to the updated Delivery Schedule provided to Customer pursuant to Section 2.44. Novavax will use commercially reasonable efforts to inform Customer of any variance in a quarterly allotment at least [***] prior to the expected first monthly delivery for doses from the impacted quarterly allotment. 2.7. Failure to Supply. If Novavax receives Regulatory Approval for the Product and thereafter fails to supply Customer with the quantity of Product units specified for a particular calendar quarter as set out in the Delivery Schedule, or, if applicable, the Adjusted Delivery Schedule, within the timeframe permitted by Section 2.6, then Novavax will [***] to Customer, in writing, the cause of the inability to supply and present Novavax’s good faith remedial plan, which should include [***] (“Remedial Plan”). Where such inability to supply results from Novavax’s inability to manufacture or source sufficient quantities of Product to supply all of its customers, Novavax shall allocate to Customer [***] for the period of short supply. 2.7.1. If the Remedial Plan does not resolve such inability or failure to supply to within [***] of the first missed monthly delivery giving rise to the plan, the Customer may [***], cancel delivery of any Product scheduled for delivery [***]. 2.7.2. If failure to supply is still ongoing after [***] of the initial missed monthly delivery giving rise to the plan, Customer may upon written notice to Novavax cancel future deliveries and terminate the Agreement. 2.7.3. [***]. 2.7.4. The remedies in this Section 2.7 shall be Customer’s sole recourse and Novavax’s entire liability with respect to any failure to supply. 2.8. Inconsistent Terms. All terms and conditions contained in any prior or subsequent oral or written communication or order, that are different from or in addition to this Agreement are hereby rejected by the Parties and will neither expand nor modify either Party’s obligations under this Agreement. 2.9. Regulatory. Notwithstanding Section 2.8 (Inconsistent Terms) in the event of any conflict between this Agreement and any applicable provision of the Food and Drugs Act (including any provision made under it), the Food and Drugs Act will prevail; provided, that in the event that a conflict between the terms of this Agreement and any applicable provision of the Food and Drugs Act exists or arises, (i) the Party determining that such conflict exists or arises will give [***] written notice (and in any event, within [***] of such determination) to the other Party, (ii) the Parties will cooperate in good faith to resolve any such conflict, including altering any resulting delivery schedules or remedies, and (iii) will negotiate a replacement provision that complies with the applicable Food and Drugs Act but preserves the intent of the Parties as provided hereunder (if necessary).


 
-5- 91837512_5 2.10. Support Obligations. During the Term of the Agreement, Novavax agrees to provide the Product Support obligations specified in Exhibit D. 3. Delivery and Inspection 3.1. Delivery, Title and Risk of Loss. Product will be delivered [***] to the delivery destinations in Canada set forth on Exhibit B hereto (the “Points of Entry”). Risk of loss and title to Product shall pass to Customer [***]. For clarity, Customer will be solely responsible for ensuring it has the necessary approvals for importing Product into the Territory and for distributing Product in the Territory. 3.2. Inspection. Customer (or its designee) shall, [***] (the “Inspection Period”) following Novavax’s delivery of Product to the Point of Entry, visually inspect such delivery to confirm that the Product has been supplied in the correct quantity and constitutes Conforming Product (as defined below). Notwithstanding the foregoing, Customer may request to extend the Inspection Period for an additional [***] and Novavax will reasonably and in good faith consider such extension request and provide written notice of approval to Customer if granted. If Customer determines that any shipment of Product contains missing or non-Conforming Product, then Customer must notify Novavax of the missing Product or reject the portion of the applicable delivery that constitutes non-Conforming Product, as applicable, by providing Novavax with written notice of such rejection during the Inspection Period. If a delivery of Product has not been rejected by Customer prior to expiry of the Inspection Period, Customer agrees that its remedies are limited to the warranty process set out in this paragraph if a Latent Defect (as defined below) is subsequently discovered. Notwithstanding the acceptance process established herein, in the event the failure of Product to constitute Conforming Product is not reasonably discoverable through customary visual inspection during the Inspection Period (each, a “Latent Defect”), Customer will have [***] following the discovery of the Latent Defect to make a warranty claim on the non-Conforming Products pursuant to Section 4.1 by providing Novavax with written notice of such Latent Defect; provided that Product may not be rejected for a Latent Defect beginning [***] prior to expiry of the shelf-life for the applicable Product. 4. Product Warranty. 4.1. Limited Product Warranty. Novavax warrants to Customer that, [***], such Product will (a) conform to the specifications for such Product as set out in the Regulatory Approval; (b) conform to the specifications set forth on Exhibit C hereto (the “Specifications”) and (c) have been manufactured in accordance with current good manufacturing practice (cGMP) as defined under applicable laws (Product satisfying clauses (a)-(c) hereof, “Conforming Product”). In case of a conflict between (a) and (b), (a) will take priority. Any claims by Customer that Product fails to meet this warranty set forth in this Section 4.1 must be made by Customer within [***] of its discovery of such deficiency, but in no event later than [***] prior to expiry of the shelf-life for the applicable Product.


 
-6- 91837512_5 4.2. Remedies for Non-Conforming Product. If Novavax accepts Customer’s rejection of Product as set forth in Section 3.2, accepts Customer’s warranty claim in Section 4.1 or if the Independent Expert determines that any Product is non-Conforming Product as set forth in Section 4.3, then Novavax shall, at Customer’s option and at no additional charge to Customer, either (a) replace the non-Conforming Product [***] or (b) credit or refund the pro-rated amount paid of the Total Price of such non-Conforming Product. If Novavax so requests, Customer shall, [***], return any non-Conforming Product to Novavax; otherwise, Customer shall dispose of Product in compliance with applicable laws and regulations. 4.3. Disputes. If Novavax disputes Customer’s rejection of Product as set forth in Section 3.2 or Section 4.1, then Novavax will provide Customer written notice of such dispute no later than [***] after the date of the notice from Customer that a Product is non-Conforming Product. Such dispute shall be resolved by having an independent, qualified third party expert (the “Independent Expert”), as selected by Novavax and acceptable to Customer (such acceptance not to be reasonably withheld or delayed) promptly test, analyze or otherwise evaluate the Product subject to the dispute to determine whether the Product in question meets the criteria specified in the warranty set forth in Section 4.1. The non-prevailing Party shall bear all out-of-pocket costs and expenses associated with the Independent Expert’s determination, including any reasonable out-of-pocket costs incurred by the prevailing Party in connection therewith. 4.4. Disclaimer. THE REMEDIES SET FORTH IN SECTION 4.2 SHALL BE CUSTOMER’S SOLE AND EXCLUSIVE REMEDY AND NOVAVAX’S ENTIRE LIABILITY FOR NON-ACCEPTANCE OF PRODUCT UNDER SECTION 3.2 OR ANY BREACH OF THE LIMITED WARRANTY SET FORTH IN SECTION 4.1. 5. Payment Terms. 5.1. Advance Payment. Customer shall pay to Novavax a total upfront payment of USD [***] (the “Advance Payment”). Customer acknowledges that in consideration of Novavax’s commitment to manufacture Product in advance of Regulatory Approval, [***] of the Advance Payment is non-refundable. The remaining [***] of the Advance Payment is refundable only as provided in Sections 2.7.3, 8.2.2, 8.2.3, and 8.3.1. 5.2. Price. Customer shall purchase the Product from Novavax at the Per-Unit Price for Product as set forth on Exhibit A (the “Price”). The Price shall be firm for the Term. The Price is exclusive of any and all governmental taxes, including without limitation, VAT, customs, charges or levies of every kind (“Taxes”) that Novavax may be required to collect or pay upon sale, transfer or shipment of Product to the Point of Entry under any applicable laws or regulations, but inclusive of [***]. Customer will be solely responsible for all such taxes, charges and levies, including any interest and penalties. If Customer is required under the law of any jurisdiction to deduct or withhold any sum of Taxes imposed on or in respect of any amount


 
-7- 91837512_5 due or payable to Novavax, the Taxes shall be paid and borne by Customer for Customer’s own account. “Total Price” means the Per-Unit Price multiplied by the Aggregate Amount and includes the Additional Amount if the Right for Additional Amount is exercised by Customer. 5.3. [***]. [***]. 5.4. Invoices. Novavax shall submit invoices to Customer for the Total Price as follows (a) the Advance Payment shall be invoiced [***] and (b) the Delivery Price shall be invoiced [***], which invoices shall be directed to the Contracting Authority and Technical Authority as defined in Section 6.1 and 6.2 of this Agreement (or to such other person or address if Customer notifies Novavax in writing pursuant to Section 14.2 that invoices should be sent to such other person or address). Further, the original and email copy of all invoices must also forwarded to the Public Health Agency of Canada for certification and payment at: Public Health Agency of Canada P2P Invoices 200 Eglantine Driveway Jeanne Mance Building 18th floor, RM 1855C Ottawa Ontario K1A OK9 Email: [***] 5.5. Each invoice for the Delivery Price shall reflect the actual quantities of Product shipped to the Point of Entry, together with the per-unit Delivery Price [***] and the total Delivery Price [***] to be paid under such invoice. 5.5.1. All amounts set forth in each invoice for Product not rejected pursuant to Section 3.2 shall be payable by Customer within [***] of the date of Customer’s acceptance pursuant to Section 3.2, which will be made to Novavax, addressed as indicated on the applicable invoice, and made in United States Dollars. In the event Customer disputes all or any portion of an invoice submitted to it in accordance with this Section 5, then such dispute shall be resolved in accordance with Section 14.6. Customer will not be required to pay any amount disputed in good faith, unless and until such amount is finally determined to be owed to Novavax in accordance with the dispute resolution procedure set forth in Section 14.6. No interest shall be accrued on amounts disputed in good faith. 5.5.2. A payment is considered overdue on [***] following the date of Customer’s acceptance of Product pursuant to Section 3.2 and interest will be paid automatically in accordance with section 5.5.3. If the content of the invoice and its substantiating documentation are not materially in compliance of any the applicable invoicing requirements communicated to Novavax,


 
-8- 91837512_5 Customer will notify Novavax within [***] of receipt of the applicable invoice. The [***] payment period begins again upon acceptance of the revised invoice or the replacement or corrected Product if Product is rejected pursuant to Section 3.2. Failure by Customer to notify Novavax within [***] will only result in the date specified to apply for the sole purpose of calculating interest on overdue accounts. 5.5.3. For the purpose of this section: 5.5.3.1. "Average Rate" means the simple arithmetic mean of the Bank Rates in effect at 4:00 p.m. Eastern Time each day during the calendar month immediately before the calendar month in which payment is made; 5.5.3.2. "Bank Rate" means the rate of interest established from time to time by the Bank of Canada as the minimum rate at which the Bank of Canada makes short term advances to members of the Canadian Payments Association; 5.5.3.3. "date of payment" means the date of the negotiable instrument drawn by the Receiver General for Customer to pay any amount under the Agreement; 5.5.3.4. an amount becomes "overdue" when it is unpaid on [***] following the day on which it is due and payable according to the Agreement. 5.5.3.5. Customer will pay to Novavax simple interest at the Average Rate plus [***] per year on any amount that is overdue, from the date that amount becomes overdue until the day before the date of payment, inclusive. Novavax is not required to provide notice to Customer for interest to be payable. 5.5.4. Customer will pay interest in accordance with this section only if Customer is responsible for the delay in paying Novavax. Customer will not pay interest on overdue advance payments; however, Novavax shall be entitled to withhold shipments until overdue advance payments are received. 5.5.5. Novavax will maintain appropriate records and supporting documentation regarding sales of Product hereunder, that includes but is not limited to all invoices, receipts and vouchers. Novavax must retain records, including bills of lading and other evidence of transportation or delivery, for all deliveries made under the Agreement, to confirm that each invoice is limited to the actual quantities of Product shipped to the Point of Entry, which will be records and documentation will be maintained by Novavax for [***] following shipment of the relevant Product. Customer will have the right, upon reasonable advanced notice to Novavax, during normal business hours, to inspect any such records at the place such records are


 
-9- 91837512_5 normally kept. Novavax must provide all reasonably required facilities for any audit and inspection and must furnish information as the representatives of Customer may reasonably request from time to time require to perform a complete audit of the Agreement. In the event any such inspection reveals an overpayment by Customer, Novavax will [***] credit Customer the amount of such overpayment against future orders for Product, unless there are no such future orders, in which case, Novavax will [***] refund Customer for the amount of such overpayment. 6. Authorities and Representatives. 6.1. Contracting Authority (a) The Contracting Authority for this Agreement is: Name: [***] Telephone: [***] Email address: [***] (b) The Contracting Authority is responsible for the management of the Agreement on behalf of Customer and the Contracting Authority must authorize any changes to the Agreement in writing. Novavax must not perform, and shall not be obligated to perform, work in excess of or outside the scope of the Agreement based on verbal or written requests or instructions from anybody other than the Contracting Authority. 6.2. Technical Authority (a) The Technical Authority for this Agreement is: Name: [***] Telephone: [***] Email address: [***] (b) The Technical Authority is the representative of the department or agency for whom the Product is being carried out under the Agreement and is responsible for all matters concerning the technical content of the Product under the Agreement. Technical matters may be discussed with the Technical Authority, however the Technical Authority has no authority to authorize changes to the scope of the Product. Changes to the scope of the Product can only be made through a mutually agreed written contract amendment issued by the Contracting Authority and signed by both Parties.


 
-10- 91837512_5 6.3. Novavax Representatives (a) General enquiries: Name: [***] Telephone No.: [***] E-mail address: [***] (b) Delivery follow-up: Name: [***] Telephone No.: [***] E-mail address: [***] 7. Intellectual Property. As between Customer and Novavax, Customer hereby acknowledges and agrees that all rights, title and interests in, to and under any intellectual property that relate to the Product are and shall remain the sole and exclusive property of Novavax. This Agreement does not grant Customer and right, title or interest in, to or under any such intellectual property or any other intellectual property owned or controlled by Novavax. To the extent Customer, directly or indirectly, creates, discovers, reduces to practice or otherwise generates intellectual property relating to Product in connection with the activities contemplated by this Agreement, such intellectual property will be solely owned by Novavax. Customer shall assign, and hereby does assign, to Novavax all such intellectual property, and will take reasonable actions requested by Novavax, [***], to record and confirm Novavax’s ownership thereof, including executing formal documentation evidencing Novavax’s ownership thereof. 8. Term; Termination; Effects of Termination. 8.1. Term. This Agreement shall become effective upon the Effective Date and, unless sooner terminated as set forth in Section 8.2, shall continue in force and effect until Novavax has delivered to the Points of Entry and Customer has accepted an amount of Product equal to the Aggregate Amount (the “Term”). In the event that Customer exercises its right as per Section 2.2 (Right for Additional Amounts), the Term will automatically be extended to the end of the last delivery and acceptance under the revised Delivery Schedule provided by Novavax for the Additional Amount ordered. 8.2. Termination.


 
-11- 91837512_5 8.2.1. Material Breach. A Party may terminate this Agreement at any time prior to expiration of the Term upon written notice to the other Party if the other Party materially breaches this Agreement and such breach is not cured within [***] of written notice to the breaching Party describing such breach (excluding a failure by Customer to pay an undisputed amount when due, which must be cured within [***] of Novavax’s notice that Customer has failed to pay); provided, however, that if such breach (excluding a failure by Customer to pay an undisputed amount when due) is not reasonably curable within such [***] period and the breaching Party is using good faith efforts to cure such breach during such [***] period, then the breaching Party will have an additional [***] to cure such breach. Notwithstanding the foregoing, if the breaching Party has a bona fide dispute as to whether such breach has occurred or has been cured, it will so notify the non- breaching Party in writing and the cure period will be tolled until such dispute is resolved pursuant to Section 14.6. Upon a final determination of breach or failure to cure, the breaching Party will have the remainder of the cure period to cure such breach. 8.2.2. Regulatory Approval. On or before [***], if Novavax fails to receive Regulatory Approval of the Vaccine in the Territory or Novavax abandons the development of the Product or Novavax withdraws its application for Regulatory Approval in Canada, then Customer’s sole and exclusive remedy shall be that it may terminate this Agreement [***] upon written notice to Novavax and [***] of the paid Advance Payment will become due and refundable to Customer. Novavax will refund such amount within [***] of receipt of such termination notice. 8.2.3. Product Seizure. To the extent that Novavax fails to deliver Product Doses to Customer as a result of Product seizure by another country, Novavax shall, to the extent that replacement Product is not available in a timeframe acceptable to Customer, in Customer’s sole and absolute discretion and as Customer’s sole recourse and Novavax’s entire liability, return to Customer a minimum of [***] up to [***] of the paid Advance Payment for the Product that was not delivered to Customer. 8.3. Effects of Expiration or Termination. As of the effective date of expiration or any early termination of this Agreement, (a) neither Party shall be relieved of any obligation that accrued prior to such effective date of termination, (b) except as otherwise expressly provided herein, all rights and obligations of each Party hereunder will cease and (c) each Party shall return or destroy all Confidential Information of the other Party that is in its possession pursuant to the requirements of Section 13.6. 8.3.1. Breach by Novavax. In the event this Agreement is terminated pursuant to Section 8.2.1 after the first delivery due to a breach by Novavax, the Delivery Price for Conforming Product delivered to Customer in addition to the Advance Payment, shall become [***] due and payable to Novavax,


 
-12- 91837512_5 if not already paid by the Customer. Payment for quantities of Product not delivered to Customer as of the effective date of any such termination will not be paid by Customer. [***] of the paid Advance Payment for such Product units not delivered will be reimbursed at the discretion of Customer. 8.3.2. Breach by Customer. In the event this Agreement is terminated by Novavax pursuant to Section 8.2.1 due to a breachby Customer, [***], shall become [***] due and payable to Novavax. 9. Regulatory Matters. 9.1. Regulatory Assistance. Customer agrees to provide reasonable assistance to Novavax in obtaining Regulatory Approval for the Product in the Territory. The progress and outcome of the Regulatory Approval is wholly dependent on Novavax and the data it supplies to the Regulatory Approval authorities. Novavax acknowledges and agrees, and Customer represents to Novavax, that Customer will not influence decisions from the regulatory authorities to avoid conflict of interests regarding Novavax obtaining Regulatory Approval for the Product. 9.2. Product Recall or Withdrawal 9.2.1. This section is subject to section 21.3 of the Food and Drugs Act. In the event of a recall or a withdrawal of the Product, Novavax must notify Customer [***] from such recall or withdrawal, as the case may be, and must collect and destroy the delivered, recalled, or withdrawn Product [***], unless otherwise agreed to by the Parties. 9.2.2. Novavax must, upon the request of Customer, replace [***] any recalled or withdrawn Product [***], subject to Product availability as procured by Customer from Novavax. 9.2.3. If full replacement is not available in a timeframe acceptable to Customer, then Customer may, in addition to and without prejudice to any other remedy available, choose from one of the following options for the quantity of the Product affected: 9.2.3.1. full reimbursement of the Delivery Price, determined pro-rata for doses not replaced; or 9.2.3.2. partial replacement and partial reimbursement or partial credit under the Agreement of Delivery Price, determined pro-rata for those doses not replaced. Reimbursement and/or credit under this clause shall be made or applied, as applicable, by Novavax within [***] of Customer’s written notice of which option it selects. 9.3. Indemnification.


 
-13- 91837512_5 9.3.1. By Customer. Notwithstanding any contrary provision of this Agreement and to the fullest extent not prohibited by applicable laws, Customer will defend, indemnify and hold harmless Novavax and its affiliates and its or their respective officers, directors, employees, agents and contractors (each a “Novavax Indemnitee”) from and against any and all claims, demands, causes of action, damages, losses, liabilities, costs, expenses (including legal fees and litigation expenses), penalties, fines, settlements and judgments (collectively, “Losses”) resulting from a claim (each, a “Claim”) arising out of or in connection with any one or more of [***]. Notwithstanding any provision of this Agreement to the contrary, the provisions of this Section 9.3.1 shall apply and be binding on Customer regardless of whether any defect in the Product causing any Losses originates from the testing, development, manufacture, delivery, export, import, distribution, sale, offer for sale, administration, use or deployment of the Product. [***]. 9.3.2. Procedure. Any Novavax Indemnitee shall [***] notify Customer in writing of any Claim made against the Indemnified Party, specifying the basis given for such Claim; provided that [***]. Customer shall, upon giving written notice to a Novavax Indemnitee within [***] after its receipt of any notice of a Claim from the Novavax Indemnitee, undertake the defense of or, [***]. The election by Customer, pursuant to this Section to undertake the defense of a Claim shall not preclude the Novavax Indemnitee from participating or continuing to participate in such defense, so long as [***]. 10. Third Party Intellectual Property Infringement. IN THE EVENT THAT THE PRODUCTS INFRINGE ANY THIRD PARTY’S INTELLECTUAL PROPERTY RIGHTS, NOVAVAX’S SOLE OBLIGATION AND LIABILITY AND BUYER’S SOLE REMEDY IS EXPRESSLY LIMITED TO NOVAVAX REFUNDING TO CUSTOMER ANY AMOUNTS PAID FOR THE INFRINGING PRODUCT. IN THE EVENT OF SUCH INFRINGEMENT, CUSTOMER WILL, AT NOVAVAX’S REQUEST, RETURN THE INFRINGING PRODUCT TO NOVAVAX, AT NOVAVAX’S COST. 11. Representations and Covenants. 11.1. Mutual Representations. Each Party hereby represents and warrants to the other Party, as of the Effective Date, that: 11.1.1. it has all requisite power and authority, corporate or otherwise, to execute, deliver and perform this Agreement; 11.1.2. this Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms; 11.1.3. the execution, delivery and performance of this Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which such Party is bound, nor violate any applicable law or any order, writ, judgment, injunction, decree, determination or award of any


 
-14- 91837512_5 court or governmental body or administrative or other agency presently in effect and applicable to such Party; and 11.1.4. in the performance of this Agreement, it shall comply with all applicable laws. 11.2. Novavax’s Covenant. Novavax hereby covenants to Customer that, at the time of delivery to the Points of Entry, Customer will have good title to the delivered Products, free and clear of all liens, encumbrances and security interests. 11.3. Disclaimer. EXCEPT FOR THOSE REPRESENTATIONS, WARRANTIES AND COVENANTS EXPRESSLY SET FORTH IN SECTION 4.1 OR THIS SECTION 11, TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW, NOVAVAX EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, BY FACT OR LAW, INCLUDING ANY IMPLIED REPRESENTATIONS, WARRANTIES AND COVENANTS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, SATISFACTORY QUALITY, NON-INFRINGEMENT AND ANY REPRESENTATIONS OR WARRANTIES OR CONDITIONS OR GUARANTEES ARISING FROM STATUTE, COURSE OF DEALING OR USAGE OF TRADE. EACH PARTY ACKNOWLEDGES THAT IT HAS NOT ENTERED INTO THIS AGREEMENT IN RELIANCE UPON ANY WARRANTY OR REPRESENTATION. FURTHER, THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THAT NOTHING CONTAINED IN THIS AGREEMENT SHALL BE CONSTRUED AS A WARRANTY, EITHER EXPRESS OR IMPLIED, THAT NOVAVAX WILL OBTAIN A POSITIVE CLINICAL OUTCOME OR THAT THE PRODUCT WILL RECEIVE REGULATORY APPROVAL FOR COMMERCIAL USE 12. Limitation of Liability. 12.1. [***]. [***]. 12.2. Cap On Damages. EXCEPT WITH RESPECT TO CLAIMS FOR, UNDER OR ARISING OUT OF (A) A PARTY’S BREACH OF SECTION 1312, (B) A PARTY’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD OR (C) CLAIMS FOR WHICH A PARTY HAS AN INDEMNIFICATION OBLIGATION PURSUANT TO SECTION 9.3, IN NO EVENT WILL NOVAVAX’ LIABILITY TO CUSTOMER EXCEED [***]. 13. Confidential Information. 13.1. Definition. “Confidential Information” means any and all non-public or proprietary information provided by or on behalf of a Party to the other Party in connection with this Agreement, whether or not marked as “CONFIDENTIAL” or “PROPRIETARY,” and whether provided prior to, on or after the Effective Date, including all technical, scientific, business and other know-how, information, trade


 
-15- 91837512_5 secrets, methods, processes, practices, formulae, instructions, techniques, designs, drawings, data or results, but expressly excluding any information that (a) at the time of disclosure, is in the public domain, (b) after disclosure, becomes part of the public domain by publication or otherwise, through no fault of the receiving Party or its affiliates, (c) at the time of disclosure, is already in the receiving Party’s or its affiliates’ possession, except through prior disclosure by the disclosing Party, without any obligation of confidentiality or any restriction on its use, and such possession can be properly documented by the receiving Party or its affiliates in its written records, and was not made available to the receiving Party or its affiliates by any person or party owing an obligation of confidentiality to the disclosing Party, (d) is rightfully made available to the receiving Party or its affiliates from sources independent of the disclosing Party and (e) is independently discovered or developed by or on behalf of the receiving Party or its affiliates without the aid, use of, access to or application of any Confidential Information of the disclosing Party. For clarity, specific aspects or details of Confidential Information will not be deemed to be within the public domain or in the possession of the receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the receiving Party. 13.2. Obligation to Maintain in Confidence; Permitted Disclosure. Each Party agrees to (a) protect and maintain in confidence the disclosing Party’s Confidential Information using the same degree of care that it employs to protect the confidentiality of its own confidential information (but never less than a reasonable standard of care), (b) not disclose to any person or entity any the disclosing Party’s Confidential Information; provided that the receiving Party may disclose such Confidential Information to its affiliates and to its and their officers, directors, employees, contractors or agents who are bound by confidentiality obligations at least as restrictive as those set forth in this Section 13 and who reasonably need to know such Confidential Information in the performance of the receiving Party’s obligations under this Agreement, (c) ensure the full compliance of each of its affiliates and its and their officers, directors, employees, contractors or agents who have access to the disclosing Party’s Confidential Information with the confidentiality and non-use obligations in this Section 13 and (d) not use such Confidential Information for any purpose other than performing its obligations under this Agreement. Each Party acknowledges and agrees that its failure to comply with the provisions of this Section 13 may cause irreparable harm to the other Party that cannot be adequately compensated for in damages and, accordingly, that each Party will be entitled to claim, in addition to any other remedies available to it, interlocutory and permanent injunctive relief to restrain any anticipated, present or continuing breach of this Section 13 without the need to post bond or other security. The terms of this Agreement will be the Confidential Information of both Parties. 13.3. Notwithstanding Section 13.2, Customer will be permitted to disclose Confidential Information of Novavax for the purposes of government administration and operations, including for the purposes of vaccination program planning and vaccination program administration in collaboration with the Provinces and


 
-16- 91837512_5 Territories of Canada and its vaccine logistics provider, and in the exercise of Crown privileges. For greater clarity, this includes reporting to the Parliament of Canada, for public safety and national security purposes and for proactive disclosure required or permitted by applicable law. Any such disclosure of Confidential Information under this Section 13.3 will be limited to only that Confidential Information that is required to be disclosed under applicable law, and under and in compliance with the privacy, confidentiality and proactive disclosure policy regimes of the Government of Canada and in accordance with the Health Products and Food Branch of Health Canada practices. For the avoidance of doubt, the protections afforded to Novavax pursuant to Section 13.4 shall apply to disclosures of Confidential Information made by Customer pursuant to this Section in event Customer is compelled by law to disclose such Confidential Information. 13.4. Disclosures Required by Law. Each Party may disclose the Confidential Information of the other Party to the extent that such disclosure is required to be disclosed pursuant to applicable law (including the rules of any stock exchange) or a valid order of a court of competent jurisdiction or a supra-national, national, regional, state, provincial or local governmental body of competent jurisdiction. Prior to making any such disclosure, the receiving Party shall promptly advise the disclosing Party of the requirement to disclose as soon as the receiving Party becomes aware that such a requirement might become effective in order that, where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall reasonably cooperate with the disclosing Party (at the disclosing Party’s cost) to the extent allowed by the applicable law in seeking a protective order or other relief. The receiving Party shall disclose only that portion of the disclosing Party’s Confidential Information that it is required to disclose. 13.5. Survival. The provisions of this Section 13 shall survive for a period of [***] from the date of any expiration or termination of this Agreement, but shall survive [***] with respect to any Confidential Information that is a trade secret for as long as such information remains a trade secret. 13.6. Return or Destruction. A Party may request that the other Party return or destroy any of its Confidential Information that is in the other Party’s possession at any time upon written notice to the other Party except for information submitted to Health Canada for regulatory purposes and subject to the Health Products and Food Branch of Health Canada practices. Upon expiration or termination of this Agreement, each Party shall return or destroy, at the other Party’s written election, all Confidential Information of the other Party that is in its possession as of the date of expiration or termination. Notwithstanding the foregoing, each Party may retain [***] of the other Party’s Confidential Information to ensure its compliance with this Agreement, and no Party will be required to destroy copies of the other Party’s Confidential Information that are included on disaster recover/backup tapes that are maintained by a Party pursuant to a bona fide disaster recovery plan. If requested by a Party, the returning or destroying Party will certify in writing to the other Party that such return or destruction has occurred.


 
-17- 91837512_5 14. Miscellaneous. 14.1. Force Majeure. Each Party’s obligations of performance under this Agreement will be temporarily suspended and excused for the period of interruption to the extent any failure of performance is due to (a) fire, earthquake, storm (including hurricanes, snow storms, blizzards or ice storms), hail, flood, act of war or terrorism, riot, civil commotion, pandemic (other than COVID-19, except to the extent that the effects of COVID-19 causes a material change on the resources such Party will use to perform its obligations under the Agreement materially adversely change following the Effective Date), epidemic (other than COVID-19, except to the extent that the effects of COVID-19 causes a material change on the resources such Party will use to perform its obligations under the Agreement materially adversely change following the Effective Date) or embargo, (b) changes to applicable law or (c) any other cause or event beyond the reasonable control of such Party (collectively, a “Force Majeure”). The affected Party will [***] notify the other Party of the anticipated period of interruption due to a Force Majeure and will take all reasonable measures to forthwith remedy the interruption. 14.2. Notices. Any notice given under this Agreement must be in writing and delivered either to the addresses set forth below in person or via overnight courier (or to such other addresses of which the Parties may from time to time be notified in writing), with a PDF copy sent by email: If to Novavax: Novavax, Inc. 20 Firstfield Road Gaithersburg, MD 20878 U.S.A. Attn: [***] Email: [***] If to Customer: As per Section 6.1 Contracting Authority of this Agreement. Such notice will be deemed to have been given as of the date delivered by hand, on the second (2nd) Business Day (at the place of delivery) after deposit with an internationally recognized overnight delivery service or upon written acknowledgement of the receiving Party. 14.3. Entire Agreement. This Agreement, including any schedules or exhibits hereto, contains the entire and exclusive agreement between the Parties in connection with the subject matter thereof and supersede all prior and collateral agreements, understandings, communications, representations and warranties between the Parties in relation thereto, including without limitation, the Memorandum of Understanding between the Parties dated August 27, 2020.


 
-18- 91837512_5 14.4. Amendment. No amendment or modification or supplement of this Agreement, including this provision, will be valid unless made in a writing signed by an authorized representative of each Party specifically referring to this Agreement. 14.5. Public Announcements. The Parties agree to determine jointly the contents of any public announcement informing the public about the existence of this Agreement between the Parties and, except as may be required by law or the rules of any national securities exchange, neither Party shall issue or cause the issuance of any such public announcement without the express prior approval of an executive officer of each Party. 14.6. Dispute Resolution; Equitable Relief. 14.6.1. With respect to any, dispute or controversy (“Dispute”) between the Parties and arising in whole or in part in connection with this Agreement, including whether a breach has occurred or been appropriate cured, the Parties shall first use good faith efforts to resolve such Dispute and, if such Dispute is not resolved within [***] from the date such Dispute arose, then Customer may submit the Dispute to binding arbitration in [***] or Novavax may submit the Dispute to binding arbitration in [***]. All matters so submitted to arbitration will be settled by three (3) arbitrators in accordance with the [***]. In the event of a conflict between [***] and this Agreement, this Agreement shall govern. Each Party will designate an arbitrator and the Parties will cause the designated arbitrators to mutually agree upon and to designate a third arbitrator who will serve as chairperson. The Parties shall arrange for a hearing to occur and be completed within [***] after the appointment of the third (3rd) arbitrator, which hearing shall last no longer than [***], unless the arbitral panel believes a longer period is required, in which case the hearing may last [***]. The Parties will cause the arbitrators to decide the matter to be arbitrated within [***] after the close of evidence unless the chairperson arbitrator determines, at the request of any Party or on his or her own initiative, that such time period should be extended, in which case such time period may not be extended beyond an additional [***] period. The final decision of the majority of the arbitrators shall be in writing, in all events follow governing law and will be furnished to all the Parties in such dispute. Judgment on such decision may be entered in any court having jurisdiction. 14.6.2. Notwithstanding any other terms of this Agreement, either Party may seek a preliminary injunction or other provisional equitable relief in any court of competent jurisdiction if, in its reasonable judgment, such action is necessary to avoid irreparable harm as permitted by applicable law. 14.7. Governing Law. This Agreement is made subject to the laws of [***], without regard to any conflict of laws principles. The United Nations Convention on Contracts for the International Sale of Goods and the United Nations Convention on the Limitation Period in the International Sale of Goods, if otherwise applicable,


 
-19- 91837512_5 each as the same may be amended or superseded, are hereby expressly excluded and will not be applicable to this Agreement. 14.8. Assignment. Neither Party will assign all or any portion of this Agreement or any right or obligation under this Agreement without the other Party’s prior written consent, which consent will not be unreasonably withheld or delayed. Any unauthorized assignment by a Party will be null and void of no force or effect. This Agreement will bind and inure to the benefit of the successors and permitted assigns of the respective Parties. 14.9. Survival. In order that the Parties may fully exercise their rights and perform their obligations in connection with this Agreement, any provisions of this Agreement that are required to ensure such exercise or performance (including any obligations accrued as of the termination date) or which are intended by their terms or by necessary implication to survive will survive the expiration or termination of this Agreement, including Sections 5 (with respect to accrued but unpaid amounts), 2.3, 7, 9.3, 9.3, 10, 13, 13, 14.2, 14.3, 14.6, 14.7, 14.9, 14.11, 14.12 and 14.13. 14.10. Waiver. Failure of either Party to exercise any right it has under this Agreement on one or more occasions will not operate or be construed as a waiver by such Party of its right to exercise the same right on another occasion. Any waiver must be in a writing signed by the waiving Party. 14.11. Severability. If any provision of this Agreement will be adjudicated to be invalid or unenforceable by a court of competent jurisdiction, it is the Parties’ intent that the remaining provisions of this Agreement will remain in full force and effect and the affected provision or portion thereof will be deemed modified so that it is enforceable to the maximum extent permissible to reflect as closely as possible the intentions of the Parties as evidenced from the provisions of this Agreement. 14.12. Independent Relationship of Parties; No Third-Party Beneficiary. The relationship of Novavax and Customer is that of independent contractors and under no circumstances will a Party, its agents or employees be partners, agents or representatives of another Party. Except as otherwise expressly provided in this Agreement, including any indemnification or limitation of liability provision, nothing in this Agreement will be construed as creating any direct or beneficial right in or on behalf of any third party. 14.13. Interpretation; Section Headings. For purposes of this Agreement, (a) the plural will include the singular and the singular the plural, (b) any gender will include any other gender, (c) the terms “included” or “including” or any variation are not words of exclusion and will be read to include “without limitation,” (d) the terms “hereof” or “herein” or any variation are intended to apply to this Agreement as a whole, (e) the word “or” is not exclusive and will be interpreted to have the meaning commonly associated with the phrase “and/or,” (f) references to any applicable law, rule or regulation, or article, section or other division thereof, will be deemed to include the then-current amendments thereto or any replacement or successor


 
-20- 91837512_5 applicable law, rule or regulation thereof and (g) the word the word “will” shall be construed to have the same meaning and effect as the word “shall.” The section headings used herein are intended for convenience of reference only and will not be considered in interpreting this Agreement. This Agreement shall be deemed to be the joint work product of the Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable. 14.14. English Language. This Agreement shall be written and executed in, and all other communications under or in connection with this Agreement shall be in, the English language. Any translation into any other language shall not be an official version thereof, and in the event of any conflict in interpretation between the English version and such translation, the English version shall control. 14.15. Counterparts. This Agreement and all exhibits and schedules hereto may be executed and delivered by the Parties in one or more counterparts, each of which will be an original, and each of which may be delivered by facsimile, e-mail or other functionally equivalent electronic means of transmission and those counterparts will together constitute one and the same instrument. 15. Bio-Manufacturing. 15.1. Definitions: 15.2. Bio-Manufacturing consists of: 15.2.1. “Drug Substance Manufacturing” means the manufacture of Novavax adjuvant or nanoparticle bulk drug substance via [***]; and 15.2.2. “Final Formulation, Filling and Finishing” means the formulation of the drug substance with adjuvant and the subsequent filling, inspection, labelling and packaging of the final drug product. 15.3. Novavax acknowledges the potential benefits of Bio-Manufacturing in Canada and agrees to work in good faith with the Government and/or the private sector of Canada to establish a mutually beneficial contract manufacturing relationship(s) in Canada for one or more Novavax vaccines, including for Drug Substance Manufacturing and/or Final Formulation, Filling and Finishing. 16. Logistic Provider For Canada. 16.1. Customer has appointed [***] as the subcontractor with respect to the performance of importation into Canada, storage and transportation within Canada of the Products. [***] holds a Drug Establishment Licence authorizing it to import the drug. To ensure full compliance with Good Distribution Practice throughout the supply chain, Novavax and [***] will need to enter into a Quality Agreement prior to first delivery of Product.


 
-21- 91837512_5 [Remainder of page intentionally blank.]


 
[Signature Page to Advanced Purchase Agreement] 91837512_5 IN WITNESS WHEREOF, the parties hereto by their duly authorized officers have executed this Agreement as of the Effective Date. CUSTOMER By:/s/ Anita Anand Minister Anita Anand Printed Name Title: Minister of Public Works and Government Services NOVAVAX, INC. By:/s/ John A Herrmann III John A. Herrmann III Printed Name EVP, CLO Title: 01/19/2021


 
91837512_5 EXHIBIT A PRODUCTS Aggregate Amount: 52 million doses Product Name Total Price (= [***]) Per-Unit Price per unit Delivery Price (= [***]) NVX-CoV2373 USD$ [***] USD[***] USD[***] Additional Amount: 24 million doses Product Name Total Price (= [***]) Per-Unit Price per-unit Delivery Price (= [***]) NVX-CoV2373 USD[***] USD[***] USD[***]


 
91837512_5 EXHIBIT B DELIVERY SCHEDULE [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the delivery schedule has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
91837512_5 EXHIBIT C SPECIFICATIONS [Pursuant to Regulation S-K, Item 601(a)(5), this Exhibit setting forth the specifications has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
91837512_5 EXHIBIT D SUPPORT OBLIGATIONS 1. Distribution in Canada Novavax must deliver the Product to, as a minimum, the destinations specified in Exhibit B in accordance with the directions of Customer. 2. Packaging Novavax must properly label and package the Product in compliance with the Food and Drugs Act (Canada) and any regulations, orders or instruments made thereunder, for the approved Product authorized for sale in Canada. To the extent a waiver of serialization is not available from Health Canada, Novavax will include bar codes on shipping package, secondary and primary package which includes variable data and which complies with GS1 standards that will enable tracking and tracing of Product from shipment to administration or other requirements specified by Health Canada. Unless otherwise agreed to in writing, smallest available package must not contain more than [***] doses 3. Maintenance of the Cold Chain During Transportation and the Use of Cold Chain Monitors The Product is a refrigerator-stable product, i.e. stored at 2-8 degrees Celsius, which permits leveraging standard vaccine distribution and delivery infrastructure. 4. Adverse Event Following Immunization (AEFI) Reporting Requirement Novavax must comply with all AEFI reporting requirements. 5. Customer Service (a) Novavax must identify a bilingual (English and French) Customer Support Contact, and maintain a bilingual customer support desk (reached via a toll free telephone number and an e-mail account) throughout a declared pandemic period to provide [***] customer support to Customer and to health care providers (“Requestors”). (b) The Customer Support Contact or Support Desk must, as a minimum:


 
91837512_5 (i) Be reachable Monday through Friday from [***] Newfoundland Standard Time to [***] Newfoundland Standard Time, with adjustments as necessary for daylight savings time (ii) Respond to general enquiries on product information concerning the use of the vaccine, its indications, contraindications, dosage and administration, drug interactions, storage and handling requirements; (iii) Provide scientific and technical advice and guidance in response to detailed technical and scientific questions; (i) Provide up-to-date information on product holds or suspensions and on product recalls and withdrawals; (ii) Provide technical advice concerning the continued ability to use vaccine which has experienced a cold chain excursion; (iii) Provide order status including real-time tracking of shipments; and (iv) Log reports received on adverse events following immunization. (c) For general enquiries, such as those regarding order tracking and status, product information, storage and administration, etc., a response must be communicated to the Requestor [***]. Enquiries of a scientific or technical nature that require more detailed review and investigation by Novavax may take longer; however, Novavax must inform the Requestor of the steps being taken to respond to the enquiry and of the expected timeline for a complete response. (d) Where requested, responses should be provided in writing. (e) Novavax must provide the Customer with an emergency contact and telephone number for any urgent enquiries that occur outside the regular business hours listed above, such as for urgent scientific or technical information or to report an adverse event. Novavax representative must call-back the Requestor within [***]. 6. Logistics Support Novavax must, as a minimum: (a) Provide to the Contracting Authority and the Technical Authority advance notice of production and delivery schedules (e.g. expected availability, timely updates on status of announced schedules, immediate notification of interruptions or delays in production and delivery schedules, etc.); and (b) Initiate and coordinate product holds, recalls or withdrawals, if necessary including coordinating trace back through the automated identification of vaccine products (AIVP);


 
91837512_5 provide clear and concise instructions on the activities necessary to implement the hold, recall or withdrawal; and provide regular updates on the status of same; 7. Support in the Management of Cold Chain Excursions As a minimum, Novavax must: (a) provide all published information on the stability of the product including continued stability if subject to temperature fluctuations (outside of recommended storage conditions); (b) clearly state all of the information required on a specific cold chain excursion to allow Novavax to properly assess the excursion; (c) provide clear and consistent written responses on the question of continued use of vaccine following an excursion; and (d) provide a written assessment on the viability of continued use of vaccine following an excursion within [***] of receipt of a request for assistance. 8. Technical Information and Data (a) During the Term, Novavax will upon written request, make available to the Technical Authority, who may in confidence make copies and take extracts therefrom, those reports, communications, etc. received from Health Canada which are exchanged for purposes of Regulatory Approval of the Vaccine. If requested, Novavax will make available to the Technical Authority on a confidential basis, where available, data and technical information concerning the Product being delivered under the Agreement, including such information as: (i) Clinical trial data – Canadian and International; (ii) Product safety data – Canadian and International; and (iii) Product quality and stability data. The Parties shall mutually agree on the scope of such data and information exchange in advance, taking into consideration the Technical Authority’s need to understand the clinical, safety, quality and stability profile of the Product and Novavax’ desire to provide such data and information in a manner that minimizes administrative burden and disruption to its operations. (b) Unless specifically prohibited by Novavax in writing, the information and data provided will be shared, on a confidential and need to know basis, within the Public Health Agency of Canada and Health Canada, as well as with Provincial and Territorial public health officials and experts in the field who provide public health advice to these officials, including but not limited to the National Advisory Committee on Immunization (NACI), to inform recommendations regarding the use of vaccine. Any information or data shared


 
91837512_5 in this manner will contain the notices provided by Novavax concerning the confidential or proprietary nature of the material submitted and the restrictions with respect to publication or further dissemination. If Customer wishes to present some aspect of the information or data in a scientific forum it will obtain the prior permission of Novavax in writing. 9. Timely Lot Release, Novavax’s Responsibility Novavax must submit all vaccine lots to Health Canada and such other information as required by Health Canada so as to ensure that the release of lots by Health Canada will occur early enough to allow Novavax to meet the delivery requirements of the Agreement. 10. Novavax Reporting on Production and Delivery Novavax must provide both the Contracting Authority and the Technical Authority with [***] written updates on the status of production and delivery. The Parties will cooperate to determine what details the Contracting Authority requires and what details Novavax has the capability on which to report. The information provided must be sufficiently detailed so as to allow Customer time to plan for vaccine availability. Without limiting the generality of the foregoing, Novavax will make commercially reasonable efforts to provide information on: (i) [***]; (ii) [***]; (iii) [***]; (iv) [***]; and (v) [***]. Where multiple lot numbers apply, all applicable lot numbers should be provided.


 
Exhibit 10.41

Certain information identified with [***] has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Applied Technologies Center
315 Sigma Drive
Summerville, SC 29486
www.ati.org
September 10, 2020
Novavax, Inc.
21 Firstfield Road
Gaithersburg, MD 20878
Attention:    [***]
Subject:        Modification No. 02 to Project Agreement No. 01; MCDC2011001
Reference:    MCDC Base Agreement No. 2020530
Dear [***]:
THIS MODIFICATION NO. 02 TO UNDEFINITIZED PROJECT AGREEMENT (UPA) NO. 01 (“Modification”) is made effective as of the later date of signature below (the “Modification Effective Date”) by and between Novavax, Inc. (“Project Agreement Holder”) and Advanced Technology International (“MCDC CMF”).
WHEREAS, Project Agreement Holder and MCDC CMF are parties to that certain Undefinitized Project Agreement No. 01 (“UPA”) under MCDC Base Agreement No: 2020-530 (“Base Agreement”); and
WHEREAS, Project Agreement Holder and MCDC CMF desire to modify and clarify certain provisions of the UPA.
NOW THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth and other good and valuable consideration, the receipt of which is hereby acknowledged by the parties, the parties hereto agree that the UPA is amended by this Modification as follows:
DESCRIPTION OF MODIFICATION
1)    The Project Title section of the Project Agreement is amended to reflect the correct project identifier as indicated in bold below:
PROJECT TITLE: MCDC2011-001; Rapid Advanced Development to Large Scale Manufacturing of NVX-CoV-2373
2)    The Attachments clause of the Project Agreement is hereby amended to read as indicated in bold below:
12. ATTACHMENTS
Attachments listed herein are hereby incorporated by reference into this Undefinitized Project Agreement.
A. Statement of Work, “Adjuvanted Recombinant COVID-19 Vaccine Development”
B. Report Requirements
C. FAR Clause 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment (AUG 2020)
92634972_5


3)     The Health Resource Priority and Allocations Systems (HRPAS) clause of the Project Agreement is hereby incorporated as indicated below:
18. Health Resource Priority and Allocations Systems (HRPAS)

92634972_5


In order to ensure the success of the Project Agreement Holder’s efforts, a priority rating is incorporated into the project agreement for the procurement of raw materials, consumables, repair parts, and major end item assemblies by the Project Agreement Holder under Title I of the HRPAS.
Priority Rating: Defense Production Act (DPA) Title I - “DO-HR”
Each rated order executed by the Project Agreement Holder must include the following:
(a) The priority rating: DPA Title I - “DO-HR”;
(b) A required delivery date or dates. The words “immediately” or “as soon as possible” do not constitute a delivery date;
(c) The written signature on a manually placed order, or the digital signature or name on an electronically placed order, of an individual authorized to sign rated orders for the person placing the order; and
(d) A statement that reads in substance:
(1) This is a rated order certified for national defense use, and you are required to follow all the provisions of the Health Resources Priorities and Allocations System regulation at 45 CFR part 101.

(2) If the rated order is placed in support of emergency preparedness requirements and expedited action is necessary and appropriate to meet these requirements, the following sentences should be added following the statement set forth in paragraph (d)(1) of this section:
i. This rated order is placed for the purpose of emergency preparedness. It must be accepted or rejected within two (2) days after receipt of the order if:
A. The order is issued in response to a hazard that has occurred; or
B. If the order is issued to prepare for an imminent hazard, as specified in HRPAS § 101.33(e).
Except as provided herein, all Terms and Conditions of the referenced MCDC Base Agreement, Project Agreement, and preceding modifications remain unchanged and in full force and effect.
The Project Agreement Holder is required to sign this document and return to Advanced Technology International to finalize this action.
Novavax, Inc. Advanced Technology International
By: /s/ John Herrmann III By: [***]
Name: John Herrmann III Name: [***]
Title: EVP, CLO Title: Contracts Administrator
Date: 09/11/2020 Date: 11 Sep 2020 4:28 PM



92634972_5


Attachment C
FAR Clause 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment (AUG 2020)
This page is intentionally left blank. Please see separate Attachment C.
[Pursuant to Regulation S-K, Item 601(a)(5), this attachment setting forth FAR Clause 52.204-25 has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]



Exhibit 10.42 CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL AND (ii) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. Applied Technologies Center 315 Sigma Drive Summerville, SC 29486 www.ati.org 92635035_6 September 18, 2020 Novavax, Inc. 21 Firstfield Road Gaithersburg, MD 20878 Attention: Mr. [***] Subject: Modification No. 03 to Project Agreement No. 01; MCDC2011-001 Reference: MCDC Base Agreement No. 2020-530 Dear [***]: THIS MODIFICATION NO. 03 TO UNDEFINITIZED PROJECT AGREEMENT (UPA) NO. 01 (“Modification”) is made effective as of the later date of signature below (the “Modification Effective Date”) by and between Novavax, Inc. (“Project Agreement Holder”) and Advanced Technology International (“MCDC CMF”). WHEREAS, Project Agreement Holder and MCDC CMF are parties to that certain Undefinitized Project Agreement No. 01 (“UPA”) under MCDC Base Agreement No: 2020-530 (“Base Agreement”); and WHEREAS, Project Agreement Holder and MCDC CMF desire to modify and clarify certain provisions of the UPA. NOW THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth and other good and valuable consideration, the receipt of which is hereby acknowledged by the parties, the parties hereto agree that the UPA is amended by this Modification as follows: DESCRIPTION OF MODIFICATION 1) Attachment A, Statement of Work, is hereby amended to read as attached herein. 2) Attachment D, Clause for MCDC Consortium Other Transaction Authority Agreements Standard Language OWS for Consortium OTA, is hereby incorporated into the Project Agreement as attached herein. Except as provided herein, all Terms and Conditions of the referenced MCDC Base Agreement, Project Agreement, and preceding modifications remain unchanged and in full force and effect. The Project Agreement Holder is required to sign this document and return to Advanced Technology International to finalize this action.


 
92635035_6 Novavax, Inc. Advanced Technology International By: /s/ John Herrmann III By: /s/ [***] Name: John Herrmann III Name: [***] Title: EVP, CLO Title: Contracts Administrator Date: 09/21/2020 Date: 22 Sep 2020 1:39 PM


 
92635035_6 Attachment A Statement of Work This page is intentionally left blank. Please see separate Attachment A.


 
1 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 Attachment A Statement of Work (Incorporated as of Modification No. 03; changes to Sections 4, 5, and 11 are indicated in bold italics.) For Rapid (WF10) Advanced Research & Development to Large Scale Manufacturing of NVX-CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus RPP #: 20-11 Project Identifier: MCDC2011-001 Consortium Member: Novavax, Inc. Title of Proposal: Rapid (WF10) Advanced Research & Development to Large Scale Manufacturing of NVX-CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus Requiring Activity: Joint Mission between the Department of Health and Human Services and Department of Defense to Combat COVID-19 1.0 INTRODUCTION, SCOPE, AND OBJECTIVES 1.1 Introduction To meet the needs of the Coronavirus Disease 2019 (COVID-19) pandemic, the United States Government (USG) is identifying and will support development and at-scale manufacturing of selected vaccine candidates, to ensure timely availability to the US population when needed. This is the primary focus of the mission being executed by the Department of Health and Human Services (HHS) and Department of Defense (DoD), in support of Operation Warp Speed (OWS). The USG is interested in pursuing prototype vaccines that are in an advanced stage of development, and will support companies that can, in parallel with nonclinical, clinical and regulatory development, rapidly establish the manufacturing capacity required to meet the USG’s objective of supplying a safe and effective Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2) vaccine to the entire US population. The USG is tasked with marshaling the efforts of the US biotechnology industry to achieve this goal. 1.2 Definition of the Prototype Project Consistent with USG objectives, the “prototype project” under this agreement is defined as the manufacture and delivery of 100M doses of a SARS-CoV-2 vaccine, NVX-CoV2373, which is suitable for use in humans under a sufficiently informed deployment strategy, and the advanced positioning of a stockpile of critical long lead raw materials for the Matrix-M adjuvant. As such, the “prototype project” will effectively demonstrate Novavax’s ability to rapidly stand up large scale manufacturing and seamlessly transition into ongoing production. The NVX-CoV-2373 vaccine is comprised of the Matrix-M™ adjuvant, and antigen (SARS-CoV-2 spike protein). The vaccine is filled into a multi-dose vial [***] and is stored at refrigerated temperature (2-8°C). Successful development of the prototype will demonstrate Novavax’s ability to rapidly stand up large scale manufacturing and seamlessly transition into ongoing production capability, in order to rapidly manufacture to meet surge requirements with little advance notification, and demonstrate capability to stockpile and distribute large quantities of the vaccine to respond when needed, including in order to supply use in clinical studies, under an Emergency Use Authorization (EUA), or pursuant to other clearance from the U.S. Food and Drug Administration (FDA).


 
2 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 Successful completion of the prototype will require three coordinated and integrated lines of effort: a) Large scale manufacturing, compliant with 21 CFR Parts 210 and 211, and the Drug Supply Chain Security Act (DSCA), to the extent applicable at the time of manufacturing by statute and FDA interpretive guidance thereof. b) Parallel nonclinical and clinical studies required to determine if the vaccine is safe and effective. c) Compliance with all applicable U.S. regulatory requirements. It is important to note that while results of nonclinical and clinical studies are critical to develop use case scenarios and, in turn, inform the USG’s deployment strategy as it relates to product manufactured under this agreement, successful development of the prototype is dependent only on the validity of data from these studies. The degree to which the data are “positive” or “negative” is not a factor in demonstration of the prototype. 1.3 Follow-on Activity This prototype project includes unpriced options for follow-on production/procurement. During the performance of the prototype, the USG and Novavax will negotiate the scope and price of production/procurement. If the prototype project is successful, the USG may then enter into follow-on production/procurement by executing these options through a separate stand-alone production/procurement agreement, to be negotiated in terms of scope and price as described in the following paragraph. In accordance with 10.U.S.C. 2371b(f), and upon demonstration of the prototype, or at the accomplishment of particularly favorable or unexpected results that would justify transitioning to production/procurement, EUA, or Biologics License Application (BLA) approved by the FDA, the USG and Novavax may enter into a non-competitive production/procurement follow-on agreement or contract for additional production/procurement, to partially or completely meet the USG objective of supplying a safe and effective SARS-CoV-2 vaccine to vaccinate up to 300M people in the targeted population (≈560M additional doses). 1.4 Scope Novavax has defined a scope of activities in order to successfully develop the prototype, as defined above. The scope is based on the following assumptions regarding manufacturing and clinical dose: o Manufacturing Assumptions and Clinical Dose  The NVX-CoV-2373 vaccine is comprised of the Matrix-M™ adjuvant, and antigen (SARS-CoV-2 spike protein).  A dose range of 5-25 µg of antigen is under clinical study. The anticipated dose based on clinical data obtained to date is [***]µg of antigen with [***]µg of Matrix-M adjuvant.  For planning purposes, the [***] ([***]µg antigen/dose) has been used and the calculations in this scope of work have been based on this dose.  The antigen production is the rate-limiting step in vaccine production. The Matrix-M adjuvant will be available prior to antigen production. Dose production has been calculated


 
3 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 based on the availability of antigen. Novavax is planning on a batch-by-batch rapid fill/finish once antigen is manufactured and available.  The estimated production schedule based on the [***]µg antigen/dose (base case) and [***] µg antigen/dose (anticipated case) is in the table below: Estimated Schedule of Cumulative Doses Manufactured by Month Dosage Oct 2020 Nov 2020 Dec 2020 Jan 2021 Feb 2021 [***] µg/dose (base case) [***] [***] [***] [***] [***]** [***]µg/dose (anticipated case) [***] [***] 100,000,000* *Actual cumulative projected production at [***] µg/dose is [***] in December 2020. Some doses may be in progress at the end of December 2020. **Actual cumulative projected production at [***] µg/dose is [***] in February 2021. The scope includes the following activities: o Manufacturing  Manufacturing of 100M doses (at [***]µg/dose, ~[***]) of NVX-CoV-2373 vaccine in 2020 for distribution to the Government upon EUA under section 564 of the Food, Drug, and Cosmetic (FD&C) Act or a biologics licensure granted under Section 351(a) of the Public Health Service Act by the U.S. FDA.  Establishment of large-scale current Good Manufacturing Practice (cGMP) manufacturing capacity compliant with 21 CFR Parts 210 and 211, and the DSCA to the extent applicable at the time of manufacturing by statute and FDA interpretive guidance thereof.  Comparability among clinical vaccine lots and commercial lots using a comparability protocol linked to the product associated with the Phase 1 clinical study. For adjuvant components, the same raw material lot(s) will be used for the current and new Contract Manufacturing Organization (CMO) processes for the comparability protocol, and the same test lab will be used to ensure only process differences are being evaluated.  Validation of manufacturing processes will be performed to cGMP standards. o Clinical  Phase 3 pivotal clinical trial harmonized with USG clinical strategies.  A Phase 3 clinical trial in pediatric populations (<18 years).  Phase 2 studies in at-risk subpopulations (co-morbidities, [***], immunocompromised), as well as studies to support manufacturing site comparability.


 
4 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 o Non-clinical  Studies to support EUA and regulatory approval (BLA). o Regulatory  EUA submission when data supports it, while maintaining progress toward eventual BLA submission.  BLA submission when appropriate.  Regulatory support activities (Investigational New Drug (IND) submissions) for manufacturing, clinical, non-clinical studies.  Meetings as-needed with regulators. o Project Management  Mandatory reporting requirements, as described in the Base Agreement.  Submission of Monthly Progress Reports. Format will be agreed on by the contractor and Agreements Officer’s Representative (AOR), and will include both technical and financial status and expenditure forecast.  Facilitation of biweekly teleconferences with Novavax and USG Subject Matter Experts.  Final prototype project report and applicable patents report(s).  Work Breakdown Structure (WBS) and Integrated Master Schedule (IMS).  All Regulatory correspondence relevant to the scope of work proposed, including communications with the FDA, and all submissions. 1.4.1 Novavax Project Plan This is Novavax’s plan as of the date of the submission. Novavax desires to move quickly to large scale development as rapidly as possible, in order to meet the objectives of this proposal. As the COVID-19 pandemic is an evolving situation, Novavax may need to adapt its plan in response to FDA guidance, opportunities for manufacturing efficiencies, and clinical trial data. 1.5 Resolution of Conflicting Language If there is a conflict between the Project Agreement (of which this Statement of Work is part) and the Base Agreement (Medical CBRN Consortium (MCDC) Base Agreement No.: 2020-530), the Project Agreement language will supersede and control the relationship of the parties. 2.0 APPLICABLE REFERENCES N/A 3.0 REQUIREMENTS 3.1 Major Task: cGMP Manufacturing of NVX-CoV-2373 compliant with 21 CFR 210 and 211


 
5 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 3.1.1 Subtask: Raw Materials - Obtain Critical Starting Materials for Adjuvant Manufacturing Sufficient Saponin to manufacture up to 100M vaccine doses will be purchased (Desert King), headquartered in San Diego, CA, facilities in Chile). Long-lead, critical, and limited-supply materials ([***]) will be purchased for the additional 560M vaccine doses to meet the contact requirement, in order to ensure capability to rapidly manufacture to meet surge requirements with little advance notification and demonstrate capability to stockpile and distribute large quantities of the vaccine to respond when needed. 3.1.2 Subtask: Raw Materials - Obtain Critical Starting Materials for Antigen and Fill/Finish Manufacturing Sufficient materials (vials, stoppers, other consumables) to manufacture up to 100M vaccine doses will be purchased (sources TBD). 3.1.3 Subtask: Raw Materials – [***] Intermediates to Produce Matrix-M Adjuvant Matrix-M Adjuvant [***] to supply large-scale manufacturing of vaccine doses will be manufactured at [***] and PolyPeptide (Torrance, CA & Malmö, Sweden). Technology transfer and start-up of the PolyPeptide facility in Torrance, CA will be completed. Long lead, critical, and limited supply materials will be purchased in order to achieve the goal of large-scale production. 3.1.4 Subtask: Matrix-M Adjuvant Manufacturing to Supply 100M Vaccine Doses Matrix-M Adjuvant bulk components will be manufactured at ACG Biologics (Seattle, WA) to supply 100M vaccine doses. Technology transfer and start-up of the AGC Bio facility in Seattle will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site. 3.1.5 Subtask: Antigen Manufacturing to Supply 100M Vaccine Doses Antigen will be manufactured at Fuji (2 sites - College Station, TX and Research Triangle Park, NC) to supply 100M vaccine doses. Technology transfer and scale-up activities will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site. 3.1.6 Subtask: Fill/Finish of 100M Vaccine Doses 100M doses of finished vaccine in [***] vials will be manufactured at Baxter (Bloomington, IN, USA). This will include secondary packaging. Technology transfer and scale-up activities will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site. 3.1.7 Subtask: Shipping and Storage Novavax assumes that it will maintain a Vendor Managed Inventory (VMI) system for a period of 12 months, with shipments to 10 geographic zones in the USA. Novavax will perform activities to establish compliance with DSCA to the extent applicable at the time of manufacturing, by statute and FDA interpretive guidance thereof. 3.2 Major Task: Clinical Studies


 
6 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 Novavax will perform these clinical trials and deliver the results in an interim Clinical Study Report (CSR) at the completion of enrollment, and the final CSR when available. These trials will be conducted using a Clinical Research Organization (CRO) that is to be determined. 3.2.1 Subtask: Phase 3 Global Efficacy Study, Adults ≥ 18 and < 75 years Study: Phase 3 - Global Efficacy Study (to be harmonized with other USG studies), 2019nCoV-301. Population: Adults ≥ 18 years, inclusive of subjects with more severe co-morbid conditions. Locations: North America, Europe; may include Africa, Asia, Oceania, South America. Primary Objectives: Clinical efficacy, safety, immunogenicity. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M1 - dose determined by Phase 2 dose confirmation study, Placebo; ⁓0.5 mL dose Intramuscular (IM) injection, up to 2 doses at Day 0 and Day 21. Enrollment: TOTAL N: ⁓30,000 (adjusted for expected endpoint incidence). [***]. 3.2.2 Subtask: Phase 2 Efficacy Expansion (US), Adults ≥ 18 and < 75 years Study: Phase 2 - Part 3 efficacy expansion (US), 2019nCoV-204. Population: Adults ≥ 18 and < 75 years. Locations: USA. Primary Objectives: Clinical efficacy, safety, immunogenicity. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M1 – [***]; not greater than 25 µg antigen + 50 µg adjuvant, [***] to allow for rapid initiation. Placebo. ~ 0.5 mL dose IM injection, up to 2 doses at Day 0 and Day 21. Enrollment: TOTAL: [***]. [***] Adjusted for expected event occurrence. Event driven analysis. Initiation of study gated on completion of Phase 1 study, dose-selection and regulatory approval. 3.2.3 Subtask: Phase 2 Study in Immunocompromised Persons (HIV-positive adult subjects) (Africa) Study: Phase 2 study in immunocompromised persons (HIV-positive adult subjects) (Africa). Population: Adults ≥ 18 and < 65 years. Locations: Republic of South Africa (RSA) Primary Objectives: Safety, immunogenicity (serum and cellular). Design: Randomized, observer-blinded, placebo-controlled.


 
7 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M1; Placebo, 0.5 mL dose IM injection, up to 2 doses at Day 0 and Day 21. Enrollment: Total N = 2,640 - 2,880 (with n=240 - 480 HIV+); 1:1 Vaccine to placebo. Initiation gated on completion of Phase 1 study, dose selection, and regulatory approval. 3.2.4 Subtask: [***] Study: [***]. Population: [***]. Locations: [***]. Primary Objectives: [***]. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M1 [***]. Enrollment: [***]. Initiation gated on benefit:risk assessment (derived from Task 2.3.1 and/or 2.3.2 and/or other Phase 2 studies) and regulatory approval to conduct studies in this vulnerable population. 3.2.5 Subtask: Phase 2 Manufacturing Site Lot Consistency/Comparability Study (US or other) Study: Phase 2 manufacturing site lot consistency/comparability study (US or other), 2019nCoV-201. Population: Adults ≥ 18 to < 50 years. Locations: USA. Primary Objectives: Safety, immunogenicity. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M1; [***]. Enrollment: ⁓600 per cohort, each cohort having [***]. Study size may be adjusted to allow non-inferiority testing. 3.2.6 Subtask: [***] Study: [***] Population: [***] Locations: [***] Primary Objectives: [***] Design: Randomized, observer-blinded, placebo-controlled.


 
8 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M1; [***] Enrollment: Total = 800 mothers + baby. Initiation gated on benefit:risk assessment (derived from Task 2.3.1 and/or 2.3.2 and/or other Phase 2 studies) and regulatory approval to conduct studies in this vulnerable population. 3.2.7 Subtask: Pharmacovigilance; Establishment of Registration Safety Database A registration safety database will be established to comply with FDA requirements for product safety and licensure. 3.2.8 Subtask: [***] Study: [***]. Population: [***]. Location: [***]. Primary Objective: [***]. Design: Randomized, observer-blinded, placebo (or active vaccine) control. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M1 – [***]. Enrollment: TOTAL: N ⁓12,500 (based on agreed VE, power, and LBCI). [***]. Adjusted for expected event occurrence if robust demonstration of clinical efficacy is required by the FDA. Event driven analysis for study termination. 3.3 Major Task: Non-Clinical Studies Novavax will perform these non-clinical studies and deliver the results in a study report at completion. 3.3.1 Mouse Study, Immunogenicity Study 702-100. [***] in mice for vaccine efficacy profile to comply with FDA guidelines. 3.3.2 Rhesus Study, Immunogenicity Study 702-099. [***] in rhesus monkeys for vaccine efficacy profile to comply with FDA guidelines. 3.3.3 Hamster Study, Immunogenicity Study 702-102. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines. 3.3.4 Mouse Study, T-Cell Immunogenicity Study 702-103. T-cell immunogenicity/challenge study in mice [***] for vaccine efficacy profile to comply with FDA guidelines. 3.3.5 Hamster Study, T-Cell Immunogenicity


 
9 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 Study 702-105. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines. 3.3.6 Mouse Study, T-Cell Immunogenicity Study 702-104. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines. 3.3.7 Non-Clinical Studies: Collaboration with Univ. of Maryland School of Medicine Three studies to study enhancement/inhibition and neutralization, and virus challenge of vaccinated mice: 1. Validation of Spike nanoparticles in cell inhibition studies: In vitro inhibition studies on cell line permissive to r2019-nCoV, readout TBD. 2. Neutralization studies with virus against bleeds from mice, In vitro microneutralization studies on cell line permissive to r2019-nCoV, TCID50 or fluorescence readout (TBD). 3. Virus challenge of vaccinated mice (mice vaccinated outside and shipped to UM for challenge), Challenge of vaccinated mice (shipped in for infection from Novavax), Lung pathology, Titer, viral Ribonucleic Acid (RNA) quantitation, pathology scoring and reports. 3.3.8 Structural Study of COVID-19 Spike Protein and its Complex with Host Receptor (cooperation with Baylor College of Medicine) Study to determine the structures of recombinant COVID-19. Spike protein in nanoparticles used in Novavax’s human vaccine and in complex with its host receptor ACE2. Will obtain a high-resolution cryoEM structure of full-length COVID-19 Spike protein and a high-resolution cryoEM structure of full-length COVID-19 Spike protein in complex with human receptor ACE2. 3.3.9 Neutralizing Assay Histopathology for On-going [***] Histopathology readings for current neutralization studies in [***]. This will support the safety profile of the vaccine for FDA approval. 3.3.10 Mouse Study, Immunogenicity [***] Studies Individual immunogenicity studies [***] in mice for vaccine efficacy profile in different sub-populations to comply with FDA guidelines. 3.4 Major Task: Regulatory Affairs Novavax will conduct the regulatory activities below, including BLA prep and submission, and provide the meeting minutes and applications to the USG. 3.4.1 Subtask: EUA Submission and Supporting Meetings and Regulatory Filings An EUA will be submitted to the FDA upon obtaining sufficient clinical data. EUA, FDA meetings to support EUA, submission planning support for the Chemistry, Manufacturing, and Controls (CMC) team, EUA strategy and meeting support, and submission preparation support activities, will all be completed.


 
10 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 3.4.2 Subtask: IND Submission Updates and FDA Meetings This task will include submissions to the IND and possible FDA meetings that will be required prior to the BLA submission. 3.4.3 Subtask: BLA Submission A BLA will be submitted to the FDA upon obtaining sufficient clinical data, FDA meetings to support BLA, submission planning support for the CMC team, BLA strategy and meeting support, and submission preparation support activities, will all be completed. 3.5 Major Task: Project Management and Reporting 3.5.1 Subtask: Kick-Off Meeting and Initial Baseline Review of IMS Novavax shall conduct a Kick-Off Meeting and an initial review with the USG of the IMS, upon initiation of the program. 3.5.2 Subtask: Biweekly Meetings with OWS Novavax shall submit the agenda in advance. Any technical updates shall be provided in advance for the Government team to review. Minutes shall be submitted after the biweekly meeting to the USG. 3.5.3 Subtask: Written Quarterly Reports Novavax shall submit quarterly reports to the USG. 3.5.4 Subtask: Written Annual Reports Novavax shall submit the annual reports to the USG. 3.5.5 Subtask: Written Final Report Novavax shall submit the final report to the USG. 3.6 Optional Task: Follow-On Production Follow-on production of finished doses of vaccine up to 560M doses. 4.0 DELIVERABLES Del. # Deliverable Description Due Date Milestone Reference SOW Reference Government Role Data Type/Data Rights Manufacturing 4.1 [***] [***] 5.1 3.1.1 Reviewer [***] 4.2 [***] [***] 5.2 3.1.2 Reviewer [***] 4.3 [***] [***] 5.3 3.1.3 Reviewer [***] 4.4 [***] [***] 5.4 3.1.4 Reviewer [***] 4.5 [***] [***] 5.5 3.1.5 Reviewer [***]


 
11 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 Del. # Deliverable Description Due Date Milestone Reference SOW Reference Government Role Data Type/Data Rights 4.6 [***] [***] 5.6 3.1.6 Reviewer [***] 4.7 [***] [***] 5.7 3.1.7 Reviewer [***] Clinical 4.8 [***] [***] 5.8 3.2.1 Reviewer [***] 4.9 [***] [***] 5.9 3.2.2 Reviewer [***] 4.10 [***] [***] 5.10 3.2.3 Reviewer [***] 4.11 [***] [***] 5.11 3.2.4 Reviewer [***] 4.12 [***] [***] 5.12 3.2.5 Reviewer [***] 4.13 [***] [***] 5.13 3.2.6 Reviewer [***] 4.14 [***] [***] 5.14 3.2.7 Reviewer [***] 4.15 [***] [***] 5.15 3.2.8 Reviewer [***] Non-Clinical 4.16 [***] [***] 5.16 3.3.1 Reviewer [***] 4.17 [***] [***] 5.17 3.3.2 Reviewer [***] 4.18 [***] [***] 5.18 3.3.3 Reviewer [***] 4.19 [***] [***] 5.19 3.3.4 Reviewer [***] 4.20 [***] [***] 5.20 3.3.5 Reviewer [***] 4.21 [***] [***] 5.21 3.3.6 Reviewer [***] 4.22 [***] [***] 5.22 3.3.7 Reviewer [***] 4.23 [***] [***] 5.23 3.3.8 Reviewer [***] 4.24 [***] [***] 5.24 3.3.9 Reviewer [***] 4.25 [***] [***] 5.25 3.3.10 Reviewer [***] Regulatory Affairs 4.26 [***] [***] 5.26 3.4.1 Reviewer [***] 4.27 [***] [***] 5.27 3.4.2 Reviewer [***] 4.28 [***] [***] 5.28 3.4.3 Reviewer [***] Project Management 4.29 [***] [***] 5.29 3.5.1 Reviewer [***] 4.30 [***] [***] 5.30 3.5.2 Reviewer [***] 4.31 [***] [***] 5.31 3.5.3 Reviewer [***] 4.32 [***] [***] 5.32 3.5.4 Reviewer [***] 4.33 [***] [***] 5.33 3.5.4 Reviewer [***] 4.34 [***] [***] 5.34 3.5.5 Reviewer [***] 4.35 [***] [***] 5.35 N/A Reviewer [***] TBD [***] [***] Option 1 3.6 Reviewer [***] Note: Attachment D of the Project Agreement shall be referenced for supplemental security requirements associated with deliverables under this project.


 
12 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 5.0 MILESTONE PAYMENT SCHEDULE Milestone # Milestone Description (Deliverable Reference) Due Date Total Program Funds Manufacturing [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Clinical [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Non-Clinical [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Regulatory Affairs $10,362,788 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Project Management $8,303,163 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]


 
13 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 Milestone # Milestone Description (Deliverable Reference) Due Date Total Program Funds [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Advanced Material Purchases [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Reservation Fees [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Acceleration Fees [***] [***] [***] [***] Total (Cost Plus Fixed Fee) $1,600,434,522 Period of Performance (July 6, 2020 - December 31, 2021) 18 Months (Base) Option 1: Follow-On Production Cost: [***] Simplified Table: Estimated Cost by Project Areas Area Cost Manufacturing (100M doses) $418,151,118 Non-Clinical $5,092,957 Clinical $1,158,524,498 Regulatory $10,362,788 Project Management $8,303,163 Total Project Cost $1,600,434,523 Simplified Table: Selected Estimated Costs for Key Deliverables* Area Milestone/Deliverable Start Finish Cost [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]


 
14 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 Area Milestone/Deliverable Start Finish Cost [***] [***] [***] [***] [***] [***] [***] [***] [***] * For key deliverables only; does not encompass total project costs. ** Time to obtaining vaccine efficacy data. 6.0 SHIPPING PROVISIONS The shipment of physical deliverables shall be coordinated with the AOR. Data deliverables shall be provided in accordance with the agreement, and in coordination with the AOR. 7.0 INTELLECTUAL PROPERTY, DATA RIGHTS, AND COPYRIGHTS 7.1 BACKGROUND IP (a) Ownership. Prior to June 8, 2020, Novavax had funded the development of NVX-CoV2373, and other antecedent vaccine programs relevant to Novavax’ proprietary position in the development of NVX-CoV2373, as well as its sf9/baculovirus manufacturing platform, (all “Background IP”) through private funding or in collaboration with a funding partner other than the U.S. Government. Such private and non-governmental funding has continued since June 8, 2020 and is expected to continue during the performance of the Project Agreement. A list of all patents and patent applications included in the Background IP is provided below as Enclosure 4. Background IP also consists of (a) manufacturing know-how, including, without limitation, the NVAX-Cov2373 manufacturing process definitions, process development/characterization reports, laboratory scale process procedures, manufacturing records, analytical test methods, product quality target ranges/specifications, quality target product profile, critical quality attributes (collectively “Background Know-How”), (b) data from pre-clinical and clinical research studies, analytical and process development research, and data related to, or generated using, the Background Know-How (collectively, “Background Data”), and (c) proprietary manufacturing materials, including, without limitation, sf9 cell banks (master and working), baculovirus virus stock (master and working), product standards, reference standards, and critical reagents (“Background Materials”). On June 8, 2020, Novavax and the U.S. Department of Defense entered into a Letter Contract for specified U.S.-based clinical and manufacturing development of NVX-CoV2373 which acknowledged Background IP and made no explicit U.S. Government claims to Background IP or subsequent data arising therefrom. The U.S. Government hereby acknowledges such Background IP in full and further acknowledges that it has no ownership rights to Novavax Background IP under this Project Agreement. (b) Background IP Limited License to Government. Subject to the terms of the Project Agreement, Novavax grants the U.S. Government a nonexclusive, worldwide, nontransferable, non-sublicenseable license to use the Background IP to the limited extent necessary for the U.S. Government to review and use the Deliverables tendered by Novavax under this Agreement identified in Section 4.0 above, and for no other purpose; provided that the U.S. Government agrees that it may not disclose the Background IP to third parties, or allow third parties to have access to, use, practice or have practiced the Background IP, without Novavax’s prior written consent. To the extent that a Deliverable with Foreground IP incorporates or uses Background IP,


 
15 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 the Deliverable shall be deemed and considered to comprise Background IP and shall be used by the U.S. Government in accordance with this Background IP Limited License. (c) Background IP License to Novavax. Subject to the terms of the Project Agreement, the U.S. Government grants to Novavax a nonexclusive, worldwide, nontransferable, irrevocable, paid-up license to any intellectual property (including patents and patent applications) to which the U.S. Government has rights thereto, provided that such license is limited to such intellectual property rights necessary to perform Novavax’s obligations under the Project Agreement. 7.2 FOREGROUND IP (a) Ownership. Notwithstanding anything in the Base Agreement to the contrary, Novavax owns all rights, title and interest in and to any development, modification, discovery, invention or improvement, whether or not patentable, conceived, made, reduced to practice, or created in connection with activities funded under the Project Agreement, including, without limitation, all data and inventions, and intellectual property rights in any of the foregoing (“Foreground IP”). (b) Foreground IP Special License. Subject to the terms of the Project Agreement, Novavax grants the U.S. Government a nonexclusive, worldwide, nontransferable, irrevocable, paid-up license to practice or have practiced the Foreground IP for or on behalf of the U.S. Government (“Foreground IP Special License”). 8.0 DATA RIGHTS Article XI, §11.03 of the Base Agreement is hereby amended, consistent with the “Specifically Negotiated License Rights” capability at Article XI, §§11.01(12) and 11.03(4), as follows: 8.1 Data Ownership. Novavax owns all rights, title and interest to all Data (as defined in Article XI, Section 11.01(7) of the Base Agreement) generated as a result of the work performed under this Project Agreement, including Subject Data. 8.2 Rights to Data. (a) Subject Data. Subject to the terms of the Project Agreement, Novavax grants to the U.S. Government a Government purpose rights license to Subject Data that will convert to an unlimited rights license (as the term is defined in Article XI, Section 11.01(14) of the Base Agreement)1 after three (3) years from the date of delivery. As used herein, “Subject Data” shall mean Technical Data under Article XI, §11.01(13) of the Base Agreement Deliverables that are considered Subject Data are identified in the Deliverable Table set forth in Section 4.0 above. (b) Transfer of Data. Each party, upon written request to the other party, shall have the right to review and to request delivery of Subject Data, and delivery of such Data shall be made to the 1 As used herein, “Government Use” as used “Purpose Rights” has the meaning set forth in this Section 4.0 means Government purpose rights as defined in the Base Agreement, Article XI, Section 11.01(9).) of the Base Agreement, as modified by Section 8.2(b) below.


 
16 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 requesting party within two weeks of the request, except to the extent that such Data are subject to a claim of confidentiality or privilege by a third party. (c) Background IP Limited License. To the extent that Subject Data incorporates or uses Background IP, the data shall be deemed and considered to comprise Background IP and shall be used by the U.S. Government in accordance with the Background IP Limited License set forth in Section 7.3 above. 8.3 Background Technical Data Rights Assertions. Novavax asserts background technical data rights as follows: The Background Data, as defined in Section 7.1 above, was developed through private funding or in collaboration with a funding partner other than the U.S. Government. Such funding is expected to continue; accordingly, Novavax asserts Background Data as Category A Data pursuant to section 11.02(1) of the Base Agreement and the U.S. Government shall have no rights therein. 9.0 REGULATORY RIGHTS This agreement includes research with an investigational drug, biologic or medical device that is regulated by the U.S. Food and Drug Administration (FDA) and requires FDA pre-market approval or clearance before commercial marketing may begin. It is expected that this agreement will result in the FDA authorization, clearance and commercialization of NVX-CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus (the “Technology”). Novavax is the Sponsor of the Regulatory Application (an investigational new drug application (IND), investigational device exemption (IDE), emergency use authorization (EUA), new drug application (NDA), biologics license application (BLA), premarket approval application (PMA), or 510(k) pre-market notification filing (510(k)) or another regulatory filing submitted to the FDA) that controls research under this contract. As the Sponsor of the Regulatory Application to the FDA (as the terms “sponsor” and “applicant” are defined or used in at 21 CFR §§3.2(c), 312.5, 600.3(t), 812.2(b), 812 Subpart C, or 814.20), Novavax has certain standing before the FDA that entitles it to exclusive communications related to the Regulatory Application. This clause protects the return on research and development investment made by the U.S. Government in the event of certain regulatory product development failures related to the Technology. Novavax agrees to the following: a. Communications. Novavax will provide the U.S. Government with all communications and summaries thereof, both formal and informal, to or from FDA regarding the Technology and ensure that the U.S. Government representatives are invited to participate in any formal or informal Sponsor meetings with FDA; b. Rights of Reference. The U.S. Government is hereby granted a right of reference as that term is defined in 21 C.F.R. § 314.3(b) (or any successor rule or analogous applicable law recognized outside of the U.S.) to any Regulatory Application submitted in support of the statement of work for the Project Agreement. When it desires to exercise this right, the U.S. Government agrees to notify Novavax in writing describing the request along with sufficient details for Novavax to generate a letter of cross-reference for the U.S. Government to file with the appropriate FDA office. The U.S. Government agrees that such letters of cross-reference may contain reporting requirements to enable Novavax to comply with its own pharmacovigilance reporting obligations to the FDA and other regulatory agencies. Nothing in this paragraph reduces the U.S. Government’s data rights as articulated in other provisions of the Project Agreement.


 
17 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 c. DoD Medical Product Priority. PL-115-92 allows the DoD to request, and FDA to provide, assistance to expedite development and the FDA’s review of products to diagnose, treat, or prevent serious or life-threatening diseases or conditions facing American military personnel. Novavax recognizes that only the DoD can utilize PL 115-92. As such, Novavax will work proactively with the DoD to leverage this law to its maximal potential under this Project Agreement. Novavax shall submit a mutually agreed upon Public Law 115-92 Sponsor Authorization Letter to the U.S. Government within 30 days of award. 10.0 ENSURING SUFFICIENT SUPPLY OF THE PRODUCT a. In recognition of the Government’s significant funding for the development and manufacturing of the product in this Project Agreement and the Government’s need to provide sufficient quantities of a safe and effective COVID-19 vaccine to protect the United States population, the Government shall have the remedy described in this section to ensure sufficient supply of the product to meet the needs of the public health or national security. This remedy is not available to the Government unless and until both of the following conditions are met: i. Novavax gives written notice, required to be submitted to the Government no later than 15 business days, of: a. any formal management decision to terminate manufacturing of the NVX-CoV-2373 vaccine prior to delivery of 100 million doses to USG; b. any formal management decision to discontinue sale of the NVX-CoV-2373 vaccine to the Government prior to delivery of 100 million doses to USG; or c. any filing that anticipates Federal bankruptcy protection; and ii. Novavax has submitted an Emergency Use Authorization under §564 of the FD&C Act or a biologics license application provisions of §351(a) of the Public Health Service Act (PHSA). b. If both conditions listed in section (a) occur, Novavax, upon the request of the Government, shall provide the following items necessary for the Government to pursue manufacturing of the NVX-CoV-2373 vaccine with a third party for exclusive sale to the U.S. Government: i. a writing evidencing a non-exclusive, nontransferable, irrevocable (except for cause), royalty-free paid-up license to practice or have practiced for or on behalf of the U.S. Government any Background IP as defined in clause 7.1 necessary to manufacture or have manufactured the NVX-CoV2373 vaccine; ii. necessary FDA regulatory filings or authorizations owned or controlled by Novavax related to NVX-Cov2373 and any confirmatory instrument pertaining thereto; and iii. any outstanding Deliverables contemplated or materials purchased under this Project Agreement. c. This Article shall be incorporated into any contract for follow-on activities for the Government to acquire and use additional doses of the product. Per section 1.3, the estimated quantity for follow-on production/procurement is approximately 560 million doses.


 
18 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 d. This Article will survive the acquisition or merger of the Contractor by or with a third party. This Article will survive the expiration of this agreement. 11.0 SECURITY The security classification level for this effort is UNCLASSIFIED. Attachment D of the Project Agreement shall be referenced for supplemental security requirements associated with the execution of this project. 12.0 MISCELLANEOUS REQUIREMENTS (SAFETY, ENVIRONMENTAL, ETC.) N/A 13.0 GOVERNMENT FURNISHED PROPERTY/MATERIAL/INFORMATION 14.0 AGREEMENTS OFFICER’S REPRESENTATIVE (AOR) AND ALTERNATE AOR CONTACT INFORMATION AOR NAME: [***] EMAIL: [***] PHONE: [***] AGENCY NAME/DIVISION/SECTION: Joint Program Executive Office, Joint Program Lead-Enabling Biotechnologies Alternate AOR NAME: TBD MAILING ADDRESS: EMAIL: PHONE: AGENCY NAME/DIVISION/SECTION: HHS/ASPR/BARDA


 
19 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 ENCLOSURE 3: PAYMENT REQUEST INFORMATION Novavax, Inc. is requesting a payment upon incurring costs, for a total of [***] to support the development of NVX-CoV2373 as a vaccine for SARS-CoV-2 Coronavirus. The costs, as outlined below, are incorporated into estimates from subcontractors under milestones associated with manufacture. Novavax will work with subcontractors to ensure the appropriate accounting for pre-award costs during subcontract finalization and subsequent billing. Projected Expenditures Cost Element Task/Purpose Amount Materials Antigen [***] [***] Adjuvant [***] [***] Adjuvant [***] [***] Reservations Fees AGC Bio Seattle [***] [***] PolyPeptide [***] [***] Fuji RTP [***] [***] Fuji Texas [***] [***] Acceleration Fee Fuji [***] [***] Subtotal [***] Indirect + Fee Burden [***] Total Requested Amount [***] I. Financial Institution Information Novavax, Inc. 21 Firstfield Road Gaithersburg, MD 20878 Name of Bank: [***] Address: [***] [***] ABA #: [***], Checking Account #: [***] Swift: [***] II. Justification for Requesting the Payment  Materials Costs: - [***] Direct Costs Procurement and qualification of critical long lead raw materials needed to produce 100M doses of NVX-CoV-2373 in 2020 and to ensure availability of 100M additional doses of NVX-CoV-2373 in 2021. This also includes materials for the purchase of a stockpile of certain critical long lead raw materials for the Matrix-M Adjuvant, necessary to rapidly


 
20 FOR OFFICIAL USE ONLY/ PROCUREMENT SENSITIVE 92635035_6 initiate large-scale manufacturing without a delay. This will ensure timely availability of the vaccine candidate to the US population when needed, a primary mission of HHS in support of OWS.  Reservation and Acceleration Fees: - [***] Direct Costs To quickly address the urgent need presented by the COVID-19 pandemic, Novavax will rely on the reservation of dedicated capacity from manufacturing service provides to be able to produce NVX-CoV-2373. This will ensure timely availability of the vaccine candidate to the US population when needed, a primary mission of HHS in support of OWS.


 
92635035_6 ENCLOSURE 4: PATENT LISTING [Pursuant to Regulation S-K, Item 601(a)(5), this enclosure setting forth the patent listing has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
92635035_6 Attachment D Clause for MCDC Consortium Other Transaction Authority Agreements Standard Language OWS for Consortium OTA This page is intentionally left blank. Please see separate Attachment D.


 
92635035_6 Attachment D Clause for MCDC Consortium Other Transaction Authority Agreements Standard Language OWS for Consortium OTA (Incorporated as of Modification No. 03) Required MCDC Base Agreement Modifications The Medical CBRN Consortium (MCDC) Base Agreement, Article XVII, SECURITY & OPSEC shall apply to this Project Agreement. In addition, the below language shall replace Paragraph 6 of Article XVII of the MCDC Base Agreement, in regard to this Project Agreement. (6) Access and General Protection/Security Policy and Procedures. This standard language text is applicable to ALL PAH employees working on critical program information or covered defense information related to Operation Warp Speed (OWS), and to those with an area of performance within an Army controlled installation, facility or area. PAH employees shall comply with applicable installation, facility and area commander installation/facility access and local security policies and procedures (provided by government representative). The PAH also shall provide all information required for background checks necessary to access critical program information or covered defense information related to OWS, and to meet installation access requirements to be accomplished by installation Provost Marshal Office, Director of Emergency Services or Security Office. The PAH workforce must comply with all personal identity verification requirements as directed by DOD, HQDA and/or local policy. In addition to the changes otherwise authorized by the changes clause of this agreement, should the Force Protection Condition (FPCON) at any individual facility or installation change, the Government may require changes in PAH security matters or processes. Required SOW Language for Deliverables (in body of SOW or Deliverables Section) Information Security Classification guidance for Operation Warp Speed - The security level for this agreement is UNCLASSIFIED. “Controlled technical information,” “covered contractor information system,” “covered defense information,” “cyber incident,” “information system,” and “technical information” are defined in DFARS Clause 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting. Personnel Security In addition to the industry standards for employment background checks, Novavax must be willing to have key individuals, in exceptionally sensitive positions, identified for additional vetting by the United States Government. Supply Chain Resiliency Plan Novavax shall develop and submit within [***] after execution of this Modification [#3], a comprehensive Supply Chain Resiliency Program that provides identification and reporting of critical components associated with the secure supply of drug substance, drug product, and work-in-process through to finished goods. a) A critical component is defined as any material that is essential to the product or the manufacturing process associated with that product. Included in the definition are


 
92635035_6 consumables and disposables associated with manufacturing. NOT included in the definition are facility and capital equipment. Consideration of critical components includes the evaluation and potential impact of raw materials, excipients, active ingredients, substances, pieces, parts, software, firmware, labeling, assembly, testing, analytical and environmental componentry, reagents, or utility materials which are used in the manufacturing of a drug, cell banks, seed stocks, devices and key processing components and equipment. A clear example of a critical component is one where a sole supplier is utilized. Novavax shall identify key equipment suppliers, their locations, local resources, and the associated control processes at the time of award. This document shall address planning and scheduling for active pharmaceutical ingredients, upstream, downstream, component assembly, finished drug product and delivery events as necessary for the delivery of product. a) Communication for these requirements shall be updated as part of an annual review, or as necessary, as part of regular contractual communications. b) For upstream and downstream processing, both single-use and re-usable in-place processing equipment, and manufacturing disposables also shall be addressed. For finished goods, the inspection, labeling, packaging, and associated machinery shall be addressed taking into account capacity capabilities. c) The focus on the aspects of resiliency shall be on critical components and aspects of complying with the contractual delivery schedule. Delivery methods shall be addressed, inclusive of items that are foreign-sourced, both high and low volume, which would significantly affect throughput and adherence to the contractually agreed deliveries. Novavax shall articulate in the plan, the methodology for inventory control, production planning, scheduling processes and ordering mechanisms, as part of those agreed deliveries. a) Production rates and lead times shall be understood and communicated to the Contracting/Agreement Officer or the Contracting/Agreement Officer’s Representative as necessary. b) Production throughput critical constraints should be well understood by activity and by design, and communicated to contractual personnel. As necessary, communication should focus on identification, exploitation, elevation, and secondary constraints of throughput, as appropriate. Reports for critical items should include the following information: a) Critical Material b) Vendor c) Supplier, Manufacturing / Distribution Location d) Supplier Lead Time e) Shelf Life f) Transportation / Shipping restrictions The CO and COR reserve the right to request un-redacted copies of technical documents, during the period of performance, for distribution within the Government. Documents shall be provided within [***] after CO issues the request in writing. Novavax may arrange for additional time if deemed necessary, and agreed to by the CO.


 
92635035_6 Manufacturing Data Requirements: Novavax shall submit within [***] after execution of this Modification [#3], detailed data regarding project materials, sources, and manufacturing sites, including but not limited to: physical locations of sources of raw and processed material by type of material; location and nature of work performed at manufacturing, processing, and fill/finish sites; and location and nature of non-clinical and clinical studies sites. The Government may provide a table in tabular format for Novavax, to be used to submit such data which would include but not be limited to the following:  Storage/inventory of ancillary materials (vials, needles, syringes, etc.)  Shipment of ancillary materials (vials, needles, syringes, etc.)  Disposal of ancillary materials (vials, needles, syringes, etc.)  Seed development or other starting material manufacturing  Bulk drug substance and/or adjuvant production  Fill, finish, and release of product or adjuvant  Storage/inventory of starting materials, bulk substance, or filled/final product or adjuvant  Stability information of bulk substance and/or finished product  Shipment of bulk substance of final product  Disposal of bulk substance or final product Product Development Source Material and Manufacturing Reports and Projections: Novavax shall submit a detailed spreadsheet regarding critical project materials that are sourced from a location other than the United States, sources, and manufacturing sites, including but not limited to: physical locations of sources of raw and processed material by type of material; location and nature of work performed at manufacturing sites; and location and nature of non-clinical and clinical study sites. Novavax will provide manufacturing reports and manufacturing dose tracking projections/actuals utilizing the “COVID-19 Dose Tracking Templates”, on any contract/agreement that is manufacturing product  Novavax will submit Product Development Source Material Report o Within [***] of execution of this Modification [#3] o Within [***] of substantive changes are made to sources and/or materials o Or on the [***] contract anniversary.  Novavax will update the Dose Tracking Template [***] during manufacturing campaigns and daily during response operations (where a Public Health Emergency has been declared) and COVID-19 response, with the first deliverable submission within [***] of this Modification [#3]. Updates to be provided weekly in advance of commercial-scale manufacturing and daily once material for use in response operations begins manufacture  The Government will provide written comments to the Product Development Source Material and Manufacturing Report within [***] after the submission  If corrective action is recommended, Novavax must address all concerns raised by the Government in writing Novavax Locations: Novavax shall submit detailed data regarding locations where work will be performed under this contract, including addresses, points of contact, and work performed per location, to include sub-contractors. Contractor will submit Work Locations Report:  Within [***] of execution of this Modification [#3]


 
92635035_6  Within [***] after a substantive location or capabilities change  Within [***] of a substantive change if the work performed supports medical countermeasure development that addresses a threat that has been declared a Public Health Emergency by the HHS Secretary or a Public Health Emergency of International Concern (PHEIC) by the WHO Required SOW Language for Security Section This project requires an OPSEC Plan and a Security Plan. Novavax shall develop a comprehensive security program that provides overall protection of personnel, information, data, and facilities associated with fulfilling the Government requirement. This plan shall establish security practices and procedures that demonstrate how Novavax will meet and adhere to the security requirements outlined below prior to the commencement of product manufacturing, and shall be delivered to the Government within [***] of execution of this Modification [#3]. Novavax shall provide a Risk Assessment to evaluate which subcontractors, consultants, researchers, etc. performing work on behalf of this effort, are required to comply with all Operation Warp Speed and Project Agreement security requirements and prime contractor security plans. a) The Government will review the plan and Risk Assessment in detail and submit comments within [***] to the Contracting Officer (CO) to be forwarded to Novavax. Novavax shall review the Draft Security Plan comments, and, submit a Final Security Plan to the U.S. Government within [***] after receipt of the comments. b) The Security Plan shall include a timeline for compliance of all the required security measures outlined by the Government. c) Upon completion of initiating all security measures, Novavax shall supply to the Contracting Officer a letter certifying compliance to the elements outlined in the Final Security Plan. d) The OPSEC plan will include identifying the critical information related to this contract, why it needs to be protected, where it is located, who is responsible for it, and how to protect it. At a minimum, the Final Security Plan shall address the following items: Security Requirements: 1. Facility Security Plan Description: As part of the partner facility’s overall security program, Novavax shall submit a written security plan with their proposal to the Agreement Officer for review and approval by Operation Warp Speed security subject matter experts. The performance of work under the Project Agreement will be in accordance with the approved security plan. The security plan will include the following processes and procedures at a minimum: Security Administration  organization chart and responsibilities  written security risk assessment for site  threat levels with identification matrix (High, Medium, or Low)  enhanced security procedures during elevated threats  liaison procedures with law enforcement  annual employee security education and training program


 
92635035_6 Personnel Security  policies and procedures  candidate recruitment process  background investigations process  employment suitability policy  employee access determination  rules of behavior/ conduct  termination procedures  non-disclosure agreements Physical Security Policies and Procedures  internal/external access control  protective services  identification/badging  employee and visitor access controls  parking areas and access control  perimeter fencing/barriers  product shipping, receiving and transport security procedures  facility security lighting  restricted areas  signage  intrusion detection systems  alarm monitoring/response  closed circuit television  product storage security  other control measures as identified Information Security  identification and marking of sensitive information  access control  storage of information  document control procedures  retention/ destruction requirements Information Technology/Cyber Security Policies and Procedures  intrusion detection and prevention systems  threat identification  employee training (initial and annual)  encryption systems  identification of sensitive information/media  password policy (max days 90)  lock screen time out policy (minimum time 20 minutes)  removable media policy  laptop policy  removal of IT assets for domestic/foreign travel


 
92635035_6  access control and determination  VPN procedures  WiFi and Bluetooth disabled when not in use  system document control  system backup  system disaster recovery  incident response  system audit procedures  property accountability 2. Site Security Master Plan Description: The partner facility shall provide a site schematic for security systems which includes: main access points; security cameras; electronic access points; IT Server Room; Product Storage Freezer/Room; and bio-containment laboratories. 3. Site Threat / Vulnerability / Risk Assessment Description: The partner facility shall provide a written risk assessment for the facility addressing: criminal threat, including crime data; foreign/domestic terrorist threat; industrial espionage; insider threats; natural disasters; and potential loss of critical infrastructure (power/water/natural gas, etc.) This assessment shall include recent data obtained from local law enforcement agencies. The assessment should be updated annually. 4. Physical Security Description: Closed Circuit Television (CCTV) Monitoring a) Layered (internal/external) CCTV coverage with time-lapse video recording for buildings and areas where critical assets are processed or stored. b) CCTV coverage must include entry and exits to critical facilities, perimeters, and areas within the facility deemed critical to the execution of the contract. c) Video recordings must be maintained for a minimum of 30 days. d) CCTV surveillance system must be on emergency power backup. e) CCTV coverage must include entry and exits to critical facilities, perimeters, and areas within the facility deemed critical to the execution of the contract. f) Video recordings must be maintained for a minimum of 30 days. g) CCTV surveillance system must be on emergency power backup. Facility Lighting a) Lighting must cover facility perimeter, parking areas, critical infrastructure, and entrances and exits to buildings. b) Lighting must have emergency power backup.


 
92635035_6 c) Lighting must be sufficient for the effective operation of the CCTV surveillance system during hours of darkness. Shipping and Receiving a) Must have CCTV coverage and an electronic access control system. b) Must have procedures in place to control access and movement of drivers picking up or delivering shipments. c) Must identify drivers picking up Government products by government issued photo identification. Access Control a) Must have an electronic intrusion detection system with centralized monitoring. b) Responses to alarms must be immediate and documented in writing. c) Employ an electronic system (i.e., card key) to control access to areas where assets critical to the contract are located (facilities, laboratories, clean rooms, production facilities, warehouses, server rooms, records storage, etc.). d) The electronic access control should signal an alarm notification of unauthorized attempts to access restricted areas. e) Must have a system that provides a historical log of all key access transactions and kept on record for a minimum of 12 months. f) Must have procedures in place to track issuance of access cards to employees and the ability to deactivate cards when they are lost or an employee leaves the company. g) Response to electronic access control alarms must be immediate and documented in writing and kept on record for a minimum of 12 months. h) Should have written procedures to prevent employee piggybacking access i) to critical infrastructure (generators, air handlers, fuel storage, etc.) should be controlled and limited to those with a legitimate need for access. j) Must have a written manual key accountability and inventory process. k) Physical access controls should present a layered approach to critical assets within the facility. Employee/Visitor Identification a) Should issue company photo identification to all employees. b) Photo identification should be displayed above the waist anytime the employee is on company property. c) Visitors should be sponsored by an employee and must present government issued photo identification to enter the property. d) Visitors should be logged in and out of the facility and should be escorted by an employee while on the premises at all times.


 
92635035_6 Security Fencing Requirements for security fencing will be determined by the criticality of the program, review of the security plan, threat assessment, and onsite security assessment. Protective Security Forces Requirements for security officers will be determined by the criticality of the program, review of the security plan, threat assessment, and onsite security assessment. Protective Security Forces Operations a) Must have in-service training program. b) Must have Use of Force Continuum. c) Must have communication systems available (i.e., landline on post, cell phones, handheld radio, and desktop computer). d) Must have Standing Post Orders. e) Must wear distinct uniform identifying them as security officers. 5. Security Operations Description: Information Sharing a) Establish formal liaison with law enforcement. b) Meet in person at a minimum annually. Document meeting notes and keep them on file for a, minimum of 12 months. POC information for LE Officer that attended the meeting must be documented. c) Implement procedures for receiving and disseminating threat information. Training a) Conduct new employee security awareness training. b) Conduct and maintain records of annual security awareness training. Security Management a) Designate a knowledgeable security professional to manage the security of the facility. b) Ensure subcontractor compliance with all Government security requirements. 6. Personnel Security Description: Records Checks Verification of social security number, date of birth, citizenship, education credentials, five-year previous employment history, five-year previous residence history, FDA disbarment, sex offender registry, credit check based upon position within the company; motor vehicle records check as appropriate; and local/national criminal history search. Hiring and Retention Standards a) Detailed policies and procedures concerning hiring and retention of employees, employee conduct, and off boarding procedures. b) Off Boarding procedures should be accomplished within 24 hour of employee leaving the company. This includes termination of all network access.


 
92635035_6 7. Information Security Description: Physical Document Control a) Applicable documents shall be identified and marked as procurement sensitive, proprietary, or with appropriate government markings. b) Sensitive, proprietary, and government documents should be maintained in a lockable filing cabinet/desk or other storage device and not be left unattended. c) Access to sensitive information should be restricted to those with a need to know. Document Destruction Documents must be destroyed using approved destruction measures (i.e., shredders/approved third party vendors / pulverizing / incinerating). 8. Information Technology & Cybersecurity Description: Identity Management a) Physical devices and systems within the organization are inventoried and accounted for annually. b) Organizational cybersecurity policy is established and communicated. c) Asset vulnerabilities are identified and documented. d) Cyber threat intelligence is received from information sharing forums and sources. e) Threats, vulnerabilities, likelihoods, and impacts are used to determine risk. f) Identities and credentials are issued, managed, verified, revoked, and audited for authorized devices, users and processes. g) Users, devices, and other assets are authenticated (e.g., single-factor, multifactor) commensurate with the risk of the transaction (e.g., individuals’ security and privacy risks and other organizational risks) Access Control a) Limit information system access to authorized users. b) Identify information system users, processes acting on behalf of users, or devices and authenticate identities before allowing access. c) Limit physical access to information systems, equipment, and server rooms with electronic access controls. d) Limit access to/ verify access to use of external information systems. Training a) Ensure that personnel are trained and are made aware of the security risks associated with their activities and of the applicable laws, policies, standards, regulations, or procedures related to information technology systems. Audit and Accountability a) Create, protect, and retain information system audit records to the extent needed to enable the monitoring, analysis, investigation, and reporting of unlawful, unauthorized, or


 
92635035_6 inappropriate system activity. Records must be kept for minimum must be kept for 12 months. b) Ensure the actions of individual information system users can be uniquely traced to those users. c) Update malicious code mechanisms when new releases are available. d) Perform periodic scans of the information system and real time scans of files from external sources as files are downloaded, opened, or executed. Configuration Management a) Establish and enforce security configuration settings. b) Implement sub networks for publically accessible system components that are physically or logically separated from internal networks. Contingency Planning a) Establish, implement, and maintain plans for emergency response, backup operations, and post-disaster recovery for information systems to ensure the availability of critical information resources at all times. Incident Response a) Establish an operational incident handling capability for information systems that includes adequate preparation, detection, analysis, containment, and recovery of cybersecurity incidents. Exercise this capability annually. Media and Information Protection a) Protect information system media, both paper and digital. b) Limit access to information on information systems media to authorized users. c) Sanitize and destroy media no longer in use. d) Control the use of removable media through technology or policy. Physical and Environmental Protection a) Limit access to information systems, equipment, and the respective operating environments to authorized individuals. b) Intrusion detection and prevention system employed on IT networks. c) Protect the physical and support infrastructure for all information systems. d) Protect information systems against environmental hazards. e) Escort visitors and monitor visitor activity. Network Protection Employ intrusion prevention and detection technology with immediate analysis capabilities. 9. Transportation Security Description: Adequate security controls must be implemented to protect materials while in transit from theft, destruction, manipulation, or damage. Drivers a) Drivers must be vetted in accordance with the Government Personnel Security Requirements. b) Drivers must be trained on specific security and emergency procedures. c) Drivers must be equipped with backup communications.


 
92635035_6 d) Driver identity must be 100 percent confirmed before the pick-up of any Government product. e) Drivers must never leave Government products unattended, and two drivers may be required for longer transport routes or critical products during times of emergency. f) Truck pickup and deliveries must be logged and kept on record for a minimum of 12 months. Transport Routes a) Transport routes should be pre-planned and never deviated from except when approved or in the event of an emergency. b) Transport routes should be continuously evaluated based upon new threats, significant planned events, weather, and other situations that may delay or disrupt transport. Product Security a) Government products must be secured with tamper resistant seals during transport, and the transport trailer must be locked and sealed.  Tamper resistant seals must be verified as “secure” after the product is placed in the transport vehicle. b) Government products should be continually monitored by GPS technology while in transport, and any deviations from planned routes should be investigated and documented. c) Contingency plans should be in place to keep the product secure during emergencies such as accidents and transport vehicle breakdowns. 10. Security Reporting Requirements Description: The partner facility shall notify the Agreement Officer within 24 hours of any activity or incident that is in violation of established security standards or indicates the loss or theft of government products. The facts and circumstances associated with these incidents will be documented in writing for government review. 11. Security Audits Description: The partner facility agrees to formal security audits conducted at the discretion of the government. Security audits may include both prime and subcontractor.


 
Exhibit 10.43 CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL AND (ii) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. Applied Technologies Center 315 Sigma Drive Summerville, SC 29486 www.ati.org 92634891_7 PROJECT AGREEMENT NO.: 01 Modification No. 04 to Project Agreement No. 01; MCDC2011-001 serves to definitize Project Agreement No. 01 as indicated below. MCDC BASE AGREEMENT NO.: 2020-530 PROJECT TITLE: MCDC2011-001; Rapid Advanced Development to Large Scale Manufacturing of NVX-CoV-2373 PARTIES: Advanced Technology International (“MCDC CMF”) and Novavax, Inc. (“Project Agreement Holder”) This Project Agreement is awarded under the authority of MCDC Base Agreement No. 2020-530, and herein incorporates all the terms and conditions thereof. 1. PAYMENT METHOD The Payment Method for this Project Agreement is Cost Plus Fixed Fee with a not to exceed ceiling. In accordance with 10 U.S.C. 2306(a) and 41 U.S. Code 3905(a), the usage of a cost-plus- percentage-of-cost contract is prohibited. 2. TERM OF THE PROJECT AGREEMENT The period of performance for this Project Agreement is from July 06, 2020 through December 31, 2021. 3. OBLIGATION The MCDC CMF’s liability to make payments to the Project Agreement Holder is limited to only those funds obligated under this Project Agreement or by modification to the Project Agreement. MCDC CMF may incrementally fund this Project Agreement. 4. ESTIMATED COST AND FIXED FEE The total estimated cost and fixed fee for the services to be provided by the Project Agreement Holder is as follows: ESTIMATED COST Estimated Cost $1,618,230,860 Fixed Fee $ 129,458,468 Total Cost $1,747,689,328 5. INCREMENTAL FUNDING


 
92634891_7 The total amount of funding currently available for payment and allotted to this Project Agreement is $1,600,339,523. The amount specified, or as such amount may be increased from time to time, shall apply irrespective of any other provisions of this Project Agreement and any work performed in excess thereof shall be at the Project Agreement Holder’s risk. This amount covers all allowable direct and indirect costs as well as the associated fixed fee. If at any time the Project Agreement Holder has reason to believe that the Total Estimated Cost which will accrue in the performance of this Project Agreement in the next succeeding [***], when added to all other payments previously accrued, will exceed [***] of the then current total authorized funding, the Project Agreement Holder shall notify the MCDC CMF to that effect, advising the estimate of additional funds required for the period specified. The Project Agreement Holder is not obligated to continue performance under this Project Agreement (including actions under the Termination clause of the MCDC Base Agreement) or otherwise incur costs in excess of the amount allotted to the Project Agreement by the MCDC CMF. 6. MILESTONE PAYMENT SCHEDULE The Project Agreement Holder shall segregate and track all Project Agreement costs separately and shall document the accomplishments of each Project Payable Milestone under each Project Agreement. Acceptance of Milestones shall be contingent upon approval from the Government Agreements Officer Representative (AOR) detailed in Clause No. 10, Technical and Administrative Representatives. Milestone payments will be paid in the amount indicated in the attached Milestone Payment Schedule (Attachment A) and are adjustable based on actual expenditures. Indirect costs shall be represented in the form of rates, which shall be applied to their appropriate allocation bases. Provisional rates shall be used for interim billing purposes to estimate the amount of indirect costs to be paid. At the conclusion of the award, the Project Agreement Holder shall recalculate final indirect cost rates for each respective fiscal period and invoice MCDC CMF the difference between actual indirect costs incurred and billed. 7. PAYMENT OF FIXED FEE The fixed fee amount specified herein is established by the mutual acceptance of this agreement and, subject to any adjustments required by other provisions of this Project Agreement, will be paid in installments at the time of each provisional payment on account of the allowable costs. The amount of fixed fee paid for interim billings will be based upon the ratio that the Project Agreement Holder’s incurred allowable costs bear to the total estimated cost, up to the fixed fee ceiling. In the event the work cannot be completed within the estimated cost, the MCDC CMF may increase the estimated cost without increasing the fixed fee. Upon completion of the award, the Project Agreement Holder shall invoice MCDC CMF the balance of any unpaid portion of the fixed fee amount. 8. APPROACH TO MEETING THE OTHER TRANSACTION AUTHORITY In accordance with provision contained in 10 U.S.C. 2371(b) governing the use Other Transaction Agreements each MCDC Member Organization must meet at least one of the following conditions: have at least one nontraditional defense contractor or nonprofit research institution participating to a significant extent in the performance of an awarded Project Agreement; all significant participants in the Project Agreement other than the Federal Government are small businesses (including small businesses participating in a program described under section 9 of the Small Business Act (15 U.S.C. 638)) or nontraditional defense contractors; or provide a cost share of no less than one third of the value of the Project Agreement awarded to the Member Organization. The Project Agreement Holder’s approach to meeting the Other Transaction Authority requirement is identified below. Throughout the period of performance of any Project Agreement, the CMF and the Government will actively monitor the award to ensure compliance with this provision in accordance with implementation guidance from Headquarters - Department of the Army (HQDA) and/or Office of the Secretary of Defense (OSD). The Project Agreement Holder will be given the opportunity to


 
92634891_7 become compliant with the guidance should they be found non-compliant. Failure to comply may result in termination. The signed certifications submitted as part of the proposal are hereby incorporated into this Project Agreement. The Project Agreement Holder was proposed as a nontraditional defense contractor and determined to be providing a significant contribution. 9. STATEMENT OF WORK The Statement of Work, Attachment A, provides a detailed description of the work to be accomplished and reports and deliverables required by this Project Agreement. All changes to Attachment A must be incorporated via written modification to this Project Agreement. Additional guidance on report requirements is in Attachment B, Report Requirements. 10. TECHNICAL AND ADMINISTRATIVE REPRESENTATIVES The following technical and contractual representatives of the Parties are hereby designated for this Project Agreement. Either party may change their designated representatives by written notification to the other. MCDC CMF Contractual Representative: MCDC Contracts Advanced Technology International 315 Sigma Drive Summerville, SC 29486 Email: [***] Phone: [***] Government Technical Representatives: Agreements Officer Representative (AOR): [***] Email: [***] Phone: [***] Project Agreement Holder’s Representatives Technical Representative: Contractual Representative: [***] [***] 21 Firstfield Road 21 Firstfield Road Gaithersburg, MD 20878 Gaithersburg, MD 20878 Email: [***] Email: [***] Phone: [***] Phone: [***] 11. MARKING OF DELIVERABLES Any Data delivered under this Project Agreement, by the Project Agreement Holder, shall be marked with a suitable notice or legend.


 
92634891_7 12. SECURITY ADMINISTRATION The security level for this project is UNCLASSIFIED. 13. ATTACHMENTS Attachments listed herein are hereby incorporated by reference into this Project Agreement. A. Statement of Work, “Rapid Advanced Development to Large Scale Manufacturing of NVX- CoV-2373” B. Report Requirements C. Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment D. Clause for MCDC Consortium Other Transaction Authority Agreements Standard Language OWS for Consortium OTA 14. GOVERNMENT FURNISHED PROPERTY At this time, Government Furnished Property is not provided for use under this Project Agreement. 15. DATA RIGHTS Please reference Section 8 of Attachment A, Statement of Work. 16. FOLLOW-ON PRODUCTION PROVISION In accordance with 10.U.S.C. 2371b(f), and upon a determination that this competitively awarded prototype project has been successfully completed, this prototype project may result in the award of a follow-on production contract or transaction without the use of competitive procedures. 17. SECURITY & OPSEC The below language shall be used as Paragraph 6 of Article XVII in the Project Agreement Holder’s Base Agreement: Access and General Protection/Security Policy and Procedures. This standard language text is applicable to ALL Project Agreement Holder employees working on critical program information or covered defense information related to Operation Warp Speed (OWS), and to those with an area of performance within an Army controlled installation, facility or area. Project Agreement Holder employees shall comply with applicable installation, facility and area commander installation/facility access and local security policies and procedures (provided by government representative). The Project Agreement Holder also shall provide all information required for background checks necessary to access critical program information or covered defense information related to OWS, and to meet installation access requirements to be accomplished by installation Provost Marshal Office, Director of Emergency Services or Security Office. The Project Agreement Holder workforce must comply with all personal identity verification requirements as directed by DOD, HQDA and/or local policy. In addition to the changes otherwise authorized by the changes clause of this agreement, should the Force Protection Condition (FPCON) at any individual facility or installation change, the Government may require changes in Project Agreement Holder security matters or processes. 18. ENTIRE AGREEMENT This Project Agreement and the MCDC Base Agreement under which it is issued constitute the entire understanding and agreement between the parties with respect to the subject matter hereof.


 
92634891_7 Except as provided herein, all Terms and Conditions of the MCDC Base Agreement and its modifications remain unchanged and in full force and effect. The Project Agreement Holder is required to sign this document and return to Advanced Technology International to finalize this action. Novavax, Inc. Advanced Technology International By: /s/ John A. Herrmann III By: /s/ [***] Name: John A. Herrmann III Name: [***] Title: EVP, Chief Legal Officer Title: Director – Contracts & Procurement Date: 22 December 2020 Date: Dec 23 2020


 
92634891_7 Attachment A Statement of Work This page intentionally left blank. See separate document for Attachment A.


 
92634891_7 Attachment A Statement of Work (Incorporated as of Modification No. 04; changes to Sections 1, 3, 4, and 5 are indicated in bold italics. Enclosure 3 has been superseded.) For Rapid (WF10) Advanced Research & Development to Large Scale Manufacturing of NVX-CoV- 2373 as a Vaccine for SARS-CoV-2 Coronavirus RPP #: 20-11 Project Identifier: MCDC2011-001 Consortium Member: Novavax, Inc. Title of Proposal: Rapid (WF10) Advanced Research & Development to Large Scale Manufacturing of NVX-CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus Requiring Activity: Joint Mission between the Department of Health and Human Services and Department of Defense to Combat COVID-19 1.0 INTRODUCTION, SCOPE, AND OBJECTIVES 1.1 Introduction To meet the needs of the Coronavirus Disease 2019 (COVID-19) pandemic, the United States Government (USG) is identifying and will support development and at-scale manufacturing of selected vaccine candidates, to ensure timely availability to the US population when needed. This is the primary focus of the mission being executed by the Department of Health and Human Services (HHS) and Department of Defense (DoD), in support of Operation Warp Speed (OWS). The USG is interested in pursuing prototype vaccines that are in an advanced stage of development, and will support companies that can, in parallel with nonclinical, clinical and regulatory development, rapidly establish the manufacturing capacity required to meet the USG’s objective of supplying a safe and effective Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2) vaccine to the entire US population. The USG is tasked with marshaling the efforts of the US biotechnology industry to achieve this goal. 1.2 Definition of the Prototype Project Consistent with USG objectives, the “prototype project” under this agreement is defined as the manufacture and delivery of 100M doses of a SARS-CoV-2 vaccine, NVX-CoV2373, which is suitable for use in humans under a sufficiently informed deployment strategy, and the advanced positioning of a stockpile of critical long lead raw materials for the Matrix-M adjuvant. As such, the “prototype project” will effectively demonstrate Novavax’s ability to rapidly stand up large scale manufacturing and seamlessly transition into ongoing production. The NVX-CoV-2373 vaccine is comprised of the Matrix-M™ adjuvant, and antigen (SARS-CoV-2 spike protein). The vaccine is filled into a multi-dose vial ([***]) and is stored at refrigerated temperature (2-8oC). Successful development of the prototype will demonstrate Novavax’s ability to rapidly stand up large scale manufacturing and seamlessly transition into ongoing production capability, in order to rapidly manufacture


 
92634891_7 to meet surge requirements with little advance notification, and demonstrate capability to stockpile and distribute large quantities of the vaccine to respond when needed, including in order to supply use in clinical studies, under an Emergency Use Authorization (EUA), or pursuant to other clearance from the U.S. Food and Drug Administration (FDA). Successful completion of the prototype will require three coordinated and integrated lines of effort: a) Large scale manufacturing, compliant with 21 CFR Parts 210 and 211, and the Drug Supply Chain Security Act (DSCA), to the extent applicable at the time of manufacturing by statute and FDA interpretive guidance thereof. b) Parallel nonclinical and clinical studies required to determine if the vaccine is safe and effective. c) Compliance with all applicable U.S. regulatory requirements. It is important to note that while results of nonclinical and clinical studies are critical to develop use case scenarios and, in turn, inform the USG’s deployment strategy as it relates to product manufactured under this agreement, successful development of the prototype is dependent only on the validity of data from these studies. The degree to which the data are “positive” or “negative” is not a factor in demonstration of the prototype. 1.3 Follow-on Activity This prototype project includes unpriced options for follow-on production/procurement. During the performance of the prototype, the USG and Novavax will negotiate the scope and price of production/procurement. If the prototype project is successful, the USG may then enter into follow-on production/procurement by executing these options through a separate stand-alone production/procurement agreement, to be negotiated in terms of scope and price as described in the following paragraph. In accordance with 10.U.S.C. 2371b(f), and upon demonstration of the prototype, or at the accomplishment of particularly favorable or unexpected results that would justify transitioning to production/procurement, EUA, or Biologics License Application (BLA) approved by the FDA, the USG and Novavax may enter into a non-competitive production/procurement follow-on agreement or contract for additional production/procurement, to partially or completely meet the USG objective of supplying a safe and effective SARS-CoV-2 vaccine to vaccinate up to 300M people in the targeted population (≈560M additional doses). 1.4 Scope Novavax has defined a scope of activities in order to successfully develop the prototype, as defined above. The scope is based on the following assumptions regarding manufacturing and clinical dose: o Manufacturing Assumptions and Clinical Dose  The NVX-CoV-2373 vaccine is comprised of the Matrix-M™ adjuvant, and antigen (SARS- CoV-2 spike protein).  A dose range of 5-25 µg of antigen is under clinical study. The anticipated dose based on clinical data obtained to date is [***]µg of antigen with [***]µg of Matrix-M adjuvant.  For planning purposes, the [***] ([***]µg antigen/dose) has been used and the calculations in this scope of work have been based on this dose.  The antigen production is the rate-limiting step in vaccine production. The Matrix-M adjuvant will be available prior to antigen production. Dose production has been calculated based on the


 
92634891_7 availability of antigen. Novavax is planning on a batch-by-batch rapid fill/finish once antigen is manufactured and available.  The estimated production schedule based on the [***]µg antigen/dose (base case) and [***] µg antigen /dose (anticipated case) is in the table below: Estimated Schedule of Cumulative Doses Manufactured by Month Dosage Oct 2020 Nov 2020 Dec 2020 Jan 2021 Feb 2021 [***] µg/dose (base case) [***] [***] [***] [***] [***]** [***] µg/dose (anticipated case) [***] [***] 100,000,000* *Actual cumulative projected production at [***] µg/dose is [***] in December 2020. Some doses may be in progress at the end of December 2020. **Actual cumulative projected production at [***] µg/dose is [***] in February 2021. The scope includes the following activities: o Manufacturing  Manufacturing of 100M doses (at [***]µg/dose, ≈[***]) of NVX-CoV-2373 vaccine in 2020 for distribution to the Government upon EUA under section 564 of the Food, Drug, and Cosmetic (FD&C) Act or a biologics licensure granted under Section 351(a) of the Public Health Service Act by the U.S. FDA.  Establishment of large-scale current Good Manufacturing Practice (cGMP) manufacturing capacity compliant with 21 CFR Parts 210 and 211, and the DSCA to the extent applicable at the time of manufacturing by statute and FDA interpretive guidance thereof.  Comparability among clinical vaccine lots and commercial lots using a comparability protocol linked to the product associated with the Phase 1 clinical study. For adjuvant components, the same raw material lot(s) will be used for the current and new Contract Manufacturing Organization (CMO) processes for the comparability protocol, and the same test lab will be used to ensure only process differences are being evaluated.  Validation of manufacturing processes will be performed to cGMP standards. o Clinical  Phase 3 pivotal clinical trial harmonized with USG clinical strategies.  A Phase 3 clinical trial in pediatric populations (<18 years).  Phase 2 studies in at-risk subpopulations (co-morbidities, [***], immunocompromised), as well as studies to support manufacturing site comparability. o Non-clinical  Studies to support EUA and regulatory approval (BLA). o Regulatory  EUA submission when data supports it, while maintaining progress toward eventual BLA submission.


 
92634891_7  BLA submission when appropriate.  Regulatory support activities (Investigational New Drug (IND) submissions) for manufacturing, clinical, non-clinical studies.  Meetings as-needed with regulators. o Project Management  Mandatory reporting requirements, as described in the Base Agreement.  Submission of Quarterly Progress Reports. Format will be agreed on by the contractor and Agreements Officer’s Representative (AOR), and will include both technical and financial status and expenditure forecast.  Facilitation of biweekly teleconferences with Novavax and USG Subject Matter Experts.  Final prototype project report and applicable patents report(s).  Work Breakdown Structure (WBS) and Integrated Master Schedule (IMS).  All Regulatory correspondence relevant to the scope of work proposed, including communications with the FDA, and all submissions. 1.4.1 Novavax Project Plan This is Novavax’s plan as of the date of the submission. Novavax desires to move quickly to large scale development as rapidly as possible, in order to meet the objectives of this proposal. As the COVID-19 pandemic is an evolving situation, Novavax may need to adapt its plan in response to FDA guidance, opportunities for manufacturing efficiencies, and clinical trial data. 1.5 Resolution of Conflicting Language If there is a conflict between the Project Agreement (of which this Statement of Work is part) and the Base Agreement (Medical CBRN Consortium (MCDC) Base Agreement No.: 2020-530), the Project Agreement language will supersede and control the relationship of the parties. 2.0 APPLICABLE REFERENCES N/A 3.0 REQUIREMENTS 3.1 Major Task: cGMP Manufacturing of NVX-CoV-2373 compliant with 21 CFR 210 and 211 3.1.1 Subtask: Raw Materials – Obtain Critical Starting Materials for Adjuvant Manufacturing Sufficient Saponin to manufacture up to 100M vaccine doses will be purchased (Desert King, headquartered in San Diego, CA, facilities in Chile). Long-lead, critical, and limited-supply materials ([***]) will be purchased for the additional 560M vaccine doses to meet the contact requirement, in order to ensure capability to rapidly manufacture to meet surge requirements with little advance notification and demonstrate capability to stockpile and distribute large quantities of the vaccine to respond when needed.


 
92634891_7 3.1.2 Subtask: Raw Materials – Obtain Critical Starting Materials for Antigen and Fill/Finish Manufacturing Sufficient materials (vials, stoppers, other consumables) to manufacture up to 100M vaccine doses will be purchased (sources TBD). 3.1.3 Subtask: Raw Materials – [***] Intermediates to Produce Matrix-M Adjuvant Matrix-M Adjuvant [***] to supply large-scale manufacturing of vaccine doses will be manufactured at [***] and PolyPeptide (Torrance, CA & Malmö, Sweden). Technology transfer and start-up of the PolyPeptide facility in Torrance, CA will be completed. Long lead, critical, and limited supply materials will be purchased in order to achieve the goal of large-scale production. 3.1.4 Subtask: Matrix-M Adjuvant Manufacturing to Supply 100M Vaccine Doses Matrix-M Adjuvant bulk components will be manufactured at ACG Biologics (Seattle, WA) to supply 100M vaccine doses. Technology transfer and start-up of the AGC Bio facility in Seattle will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site. 3.1.5 Subtask: Antigen Manufacturing to Supply 100M Vaccine Doses Antigen will be manufactured at Fuji (2 sites – College Station, TX and Research Triangle Park, NC) to supply 100M vaccine doses. Technology transfer and scale-up activities will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site. 3.1.6 Subtask: Fill/Finish of 100M Vaccine Doses 100M doses of finished vaccine in [***] vials will be manufactured at Baxter (Bloomington, IN, USA). This will include secondary packaging. Technology transfer and scale-up activities will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site. 3.1.7 Subtask: Shipping and Storage Novavax assumes that it will maintain a Vendor Managed Inventory (VMI) system for a period of 12 months, with shipments to 10 geographic zones in the USA. Novavax will perform activities to establish compliance with DSCA to the extent applicable at the time of manufacturing, by statute and FDA interpretive guidance thereof. 3.2 Major Task: Clinical Studies Novavax will perform these clinical trials and deliver the results in an interim Clinical Study Report (CSR) at the completion of enrollment, and the final CSR when available. These trials will be conducted using a Clinical Research Organization (CRO) that is to be determined. 3.2.1 Subtask: Phase 3 Global Efficacy Study, Adults ≥ 18 and < 75 years Study: Phase 3 – Global Efficacy Study (to be harmonized with other USG studies), 2019nCoV-301. Population: Adults ≥ 18 years, inclusive of subjects with more severe co-morbid conditions. Locations: North America, Europe; may include Africa, Asia, Oceania, South America. Primary Objectives: Clinical efficacy, safety, immunogenicity. Design: Randomized, observer-blinded, placebo-controlled.


 
92634891_7 Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M – dose determined by Phase 2 dose confirmation study, Placebo; ~0.5 mL dose Intramuscular (IM) injection, up to 2 doses at Day 0 and Day 21. Enrollment: TOTAL N: ~30,000 (adjusted for expected endpoint incidence). [***] 3.2.2 Subtask: Phase 2 Efficacy Expansion (US), Adults ≥ 18 and < 75 years Study: Phase 2 - Part 3 efficacy expansion (US), 2019nCoV-204. Population: Adults ≥ 18 and < 75 years. Locations: USA. Primary Objectives: Clinical efficacy, safety, immunogenicity. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M – [***]; not greater than 25 µg antigen + 50 µg adjuvant, [***] to allow for rapid initiation. Placebo. ~0.5 mL dose IM injection, up to 2 doses at Day 0 and Day 21. Enrollment: TOTAL: [***]. [***]. Adjusted for expected event occurrence. Event driven analysis. Initiation of study gated on completion of Phase 1 study, dose-selection and regulatory approval. 3.2.3 Subtask: Phase 2 Study in Immunocompromised Persons (HIV-positive adult subjects) (Africa) Study: Phase 2 study in immunocompromised persons (HIV-positive adult subjects) (Africa). Population: Adults ≥ 18 and < 65 years. Locations: Republic of South Africa (RSA) Primary Objectives: Safety, immunogenicity (serum and cellular). Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M; Placebo, 0.5 mL dose IM injection, up to 2 doses at Day 0 and Day 21. Enrollment: Total N = 2,640 – 2,880 (with n=240 - 480 HIV+); 1:1 Vaccine to placebo. Initiation gated on completion of Phase 1 study, dose selection, and regulatory approval. 3.2.4 Subtask: [***] Study: [***]. Population: [***] Locations: [***]. Primary Objectives: [***]. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M [***]. Enrollment: [***]. Initiation gated on benefit:risk assessment (derived from Task 2.3.1 and/or 2.3.2 and/or other Phase 2 studies) and regulatory approval to conduct studies in this vulnerable population. 3.2.5 Subtask: Phase 2 Manufacturing Site Lot Consistency/Comparability Study (US or other) Study: Phase 2 manufacturing site lot consistency/comparability study (US or other), 2019nCoV-201. Population: Adults ≥ 18 to < 50 years. Locations: USA.


 
92634891_7 Primary Objectives: Safety, immunogenicity. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M; [***]. Enrollment: ~600 per cohort, each cohort having [***]. Study size may be adjusted to allow non-inferiority testing. 3.2.6 Subtask: [***] Study: [***]. Population: [***]. Locations: [***]. Primary Objectives: [***]. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M; [***]. Enrollment: Total = 800 mothers + baby. Initiation gated on benefit:risk assessment (derived from Task 2.3.1 and/or 2.3.2 and/or other Phase 2 studies) and regulatory approval to conduct studies in this vulnerable population. 3.2.7 Subtask: Pharmacovigilance; Establishment of Registration Safety Database A registration safety database will be established to comply with FDA requirements for product safety and licensure. 3.2.8 Subtask: [***] Study: [***]. Population: [***]. Location: [***]. Primary Objective: [***]. Design: Randomized, observer-blinded, placebo (or active vaccine) control. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M – [***]. Enrollment: TOTAL: N ~12,500 (based on agreed VE, power, and LBCI). [***]. Adjusted for expected event occurrence if robust demonstration of clinical efficacy is required by the FDA. Event driven analysis for study termination. 3.3 Major Task: Non-Clinical Studies Novavax will perform these non-clinical studies and deliver the results in a study report at completion. 3.3.1 Mouse Study, Immunogenicity Study 702-100. [***] in mice for vaccine efficacy profile to comply with FDA guidelines. 3.3.2 Rhesus Study, Immunogenicity Study 702-099. [***] in rhesus monkeys for vaccine efficacy profile to comply with FDA guidelines. 3.3.3 Hamster Study, Immunogenicity Study 702-102. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines.


 
92634891_7 3.3.4 Mouse Study, T-Cell Immunogenicity Study 702-103. T-cell immunogenicity/challenge study in mice [***] for vaccine efficacy profile to comply with FDA guidelines. 3.3.5 Hamster Study, T-Cell Immunogenicity Study 702-105. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines. 3.3.6 Mouse Study, T-Cell Immunogenicity Study 702-104. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines. 3.3.7 Non-Clinical Studies: Collaboration with Univ. of Maryland School of Medicine Three studies to study enhancement/inhibition and neutralization, and virus challenge of vaccinated mice: 1. Validation of Spike nanoparticles in cell inhibition studies: In vitro inhibition studies on cell line permissive to r2019-nCoV, readout TBD. 2. Neutralization studies with virus against bleeds from mice, In vitro microneutralization studies on cell line permissive to r2019-nCoV, TCID50 or fluorescence readout (TBD). 3. Virus challenge of vaccinated mice (mice vaccinated outside and shipped to UM for challenge), Challenge of vaccinated mice (shipped in for infection from Novavax), Lung pathology, Titer, viral Ribonucleic Acid (RNA) quantitation, pathology scoring and reports. 3.3.8 Structural Study of COVID-19 Spike Protein and its Complex with Host Receptor (cooperation with Baylor College of Medicine) Study to determine the structures of recombinant COVID-19. Spike protein in nanoparticles used in Novavax’s human vaccine and in complex with its host receptor ACE2. Will obtain a high-resolution cryoEM structure of full-length COVID-19 Spike protein and a high-resolution cryoEM structure of full- length COVID-19 Spike protein in complex with human receptor ACE2. 3.3.9 Neutralizing Assay Histopathology for On-going [***] Histopathology readings for current neutralization studies in [***]. This will support the safety profile of the vaccine for FDA approval. 3.3.10 Mouse Study, Immunogenicity [***] Studies Individual immunogenicity studies [***] in mice for vaccine efficacy profile in different sub-populations to comply with FDA guidelines. 3.3.11 Durability of NVX-CoV2373 Vaccine Immunity and SARS-CoV-2 Protection at [***] in Rhesus Macaques Study 702-110. This study is designed to evaluate the long-term immunogenicity and protective efficacy of NVX-CoV2373 nanoparticle vaccine when administered with Matrix-MTM by IM injections on Study Days 0 and 21, to Non-Human Primates (NHP). Each study group will contain [***] NHPs ([***] per sex). Blood samples will be collected prior to vaccination and at multiple time points following vaccination as outlined below. Samples will be shipped to Novavax Inc. for performance of assays to determine the vaccine immunogenicity. Animals from placebo and active treatment groups will be challenged with SARS-CoV-2 virus at [***] following last treatment and monitored for clinical illness, viral RNA and sgRNA (nasal swabs, BAL) to assess the protective efficacy of the vaccine. 3.3.12 Immunogenicity and Protective Efficacy of Sub-Protective Doses of NVX-CoV2373 in Rhesus Macaques Study 702-111. This study is designed to evaluate the immunogenicity and protective efficacy of sub- optimal doses of NVX-CoV2373 nanoparticle vaccine administered with a fixed dose of Matrix-MTM by


 
92634891_7 IM injections on Study Days 0 and 21, to NHPs. Each study group will contain [***] NHPs ([***] per sex). Blood samples will be collected prior to vaccination and at various time points following vaccination as outlined below. Samples will be shipped to Novavax Inc. for performance of assays to determine the vaccine immunogenicity. Animals from placebo and active treatment groups will be challenged with SARS-CoV-2 virus at [***] following last treatment and monitored for clinical illness, viral RNA and sgRNA (nasal swabs, BAL) to assess the protective efficacy of the vaccine. 3.4 Major Task: Regulatory Affairs Novavax will conduct the regulatory activities below, including BLA prep and submission, and provide the meeting minutes and applications to the USG. 3.4.1 Subtask: EUA Submission and Supporting Meetings and Regulatory Filings An EUA will be submitted to the FDA upon obtaining sufficient clinical data. EUA, FDA meetings to support EUA, submission planning support for the Chemistry, Manufacturing, and Controls (CMC) team, EUA strategy and meeting support, and submission preparation support activities, will all be completed. 3.4.2 Subtask: IND Submission Updates and FDA Meetings This task will include submissions to the IND and possible FDA meetings that will be required prior to the BLA submission. 3.4.3 Subtask: BLA Submission A BLA will be submitted to the FDA upon obtaining sufficient clinical data, FDA meetings to support BLA, submission planning support for the CMC team, BLA strategy and meeting support, and submission preparation support activities, will all be completed. 3.5 Major Task: Project Management and Reporting 3.5.1 Subtask: Kick-Off Meeting and Initial Baseline Review of IMS Novavax shall conduct a Kick-Off Meeting and an initial review with the USG of the IMS, upon initiation of the program. 3.5.2 Subtask: Biweekly Meetings with OWS Novavax shall submit the agenda in advance. Any technical updates shall be provided in advance for the Government team to review. Minutes shall be submitted after the biweekly meeting to the USG. 3.5.3 Subtask: Written Quarterly Reports Novavax shall submit quarterly reports to the USG. 3.5.4 Subtask: Written Annual Reports Novavax shall submit the annual reports to the USG. 3.5.5 Subtask: Written Final Report Novavax shall submit the final report to the USG. 3.6 Optional Task: Follow-On Production Follow-on production of finished doses of vaccine up to 560M doses. 4.0 DELIVERABLES Del. # Deliverable Description Due Date Milestone Reference SOW Reference Government Role Data Type/Data Rights Manufacturing


 
92634891_7 Del. # Deliverable Description Due Date Milestone Reference SOW Reference Government Role Data Type/Data Rights 4.1 [***] [***] 5.1 3.1.1 Reviewer [***] 4.2 [***] [***] 5.2 3.1.2 Reviewer [***] 4.3 [***] [***] 5.3 3.1.3 Reviewer [***] 4.4 [***] [***] 5.4 3.1.4 Reviewer [***] 4.5 [***] [***] 5.5 3.1.5 Reviewer [***] 4.6 [***] [***] 5.6 3.1.6 Reviewer [***] 4.7 [***] [***] 5.7 3.1.7 Reviewer [***] Clinical 4.8 [***] [***] 5.8 3.2.1 Reviewer [***] 4.9 [***] [***] 5.9 3.2.2 Reviewer [***] 4.10 [***] [***] 5.10 3.2.3 Reviewer [***] 4.11 [***] [***] 5.11 3.2.4 Reviewer [***] 4.12 [***] [***] 5.12 3.2.5 Reviewer [***] 4.13 [***] [***] 5.13 3.2.6 Reviewer [***] 4.14 [***] [***] 5.14 3.2.7 Reviewer [***] 4.15 [***] [***] 5.15 3.2.8 Reviewer [***] Non- Clinical 4.16 [***] [***] 5.16 3.3.1 Reviewer [***] 4.17 [***] [***] 5.17 3.3.2 Reviewer [***] 4.18 [***] [***] 5.18 3.3.3 Reviewer [***] 4.19 [***] [***] 5.19 3.3.4 Reviewer [***] 4.20 [***] [***] 5.20 3.3.5 Reviewer [***] 4.21 [***] [***] 5.21 3.3.6 Reviewer [***] 4.22 [***] [***] 5.22 3.3.7 Reviewer [***] 4.23 [***] [***] 5.23 3.3.8 Reviewer [***] 4.24 [***] [***] 5.24 3.3.9 Reviewer [***] 4.25 [***] [***] 5.25 3.3.10 Reviewer [***] 4.26 [***] [***] 5.26 3.3.11 Reviewer [***] 4.27 [***] [***] 5.27 3.3.12 Reviewer [***] Regulatory Affairs 4.28 [***] [***] 5.28 3.4.1 Reviewer [***] 4.29 [***] [***] 5.29 3.4.2 Reviewer [***] 4.30 [***] [***] 5.30 3.4.3 Reviewer [***] Project Management 4.31 [***] [***] 5.31 3.5 Reviewer [***] 4.32 [***] [***] 5.32 3.5.1 Reviewer [***] 4.33 [***] [***] 5.33 3.5.2 Reviewer [***] 4.34 [***] [***] 5.34 3.5.3 Reviewer [***]


 
92634891_7 Del. # Deliverable Description Due Date Milestone Reference SOW Reference Government Role Data Type/Data Rights 4.35 [***] [***] 5.35 3.5.4 Reviewer [***] 4.36 [***] [***] 5.36 3.5.4 Reviewer [***] 4.37 [***] [***] 5.37 3.5.5 Reviewer [***] 4.38 [***] [***] 5.35 N/A Reviewer [***] TBD [***] [***] Option 1 3.6 Reviewer [***] Note: Attachment D of the Project Agreement shall be referenced for supplemental security requirements associated with deliverables under this project. 5.0 MILESTONE PAYMENT SCHEDULE The milestones below are for reference and costs for the project will be invoiced monthly on a cost reimbursable basis as the work progresses. Milestone # Milestone Description (Deliverable Reference) Due Date Total Program Funds Manufacturing [***] 5.1 [***] [***] [***] 5.2 [***] [***] [***] 5.3 [***] [***] [***] 5.4 [***] [***] [***] 5.5 [***] [***] [***] 5.6 [***] [***] [***] 5.7 [***] [***] [***] Clinical [***] 5.8 [***] [***] [***] 5.9 [***] [***] [***] 5.10 [***] [***] [***] 5.11 [***] [***] [***] 5.12 [***] [***] [***] 5.13 [***] [***] [***] 5.14 [***] [***] [***] 5.15 [***] [***] [***] Non- Clinical [***] 5.16 [***] [***] [***] 5.17 [***] [***] [***] 5.18 [***] [***] [***] 5.19 [***] [***] [***] 5.20 [***] [***] [***] 5.21 [***] [***] [***]


 
92634891_7 Milestone # Milestone Description (Deliverable Reference) Due Date Total Program Funds 5.22 [***] [***] [***] 5.23 [***] [***] [***] 5.24 [***] [***] [***] 5.25 [***] [***] [***] 5.26 [***] [***] [***] 5.27 [***] [***] [***] Regulatory Affairs [***] 5.28 [***] [***] [***] 5.29 [***] [***] [***] 5.30 [***] [***] [***] Project Management [***] 5.31 [***] [***] [***] 5.32 [***] [***] [***] 5.33 [***] [***] [***] 5.34 [***] [***] [***] 5.35 [***] [***] [***] 5.36 [***] [***] [***] 5.37 [***] [***] [***] 5.38 [***] [***] [***] Reservation Fees 5.39 [***] [***] [***] 5.40 [***] [***] [***] 5.41 [***] [***] [***] Total (Cost Plus Fixed Fee) $1,747,689,328 Period of Performance (July 6, 2020 – December 31, 2021) 18 Months (Base) Option 1: Follow-On Production Cost: [***] 6.0 SHIPPING PROVISIONS The shipment of physical deliverables shall be coordinated with the AOR. Data deliverables shall be provided in accordance with the agreement, and in coordination with the AOR. 7.0 INTELLECTUAL PROPERTY, DATA RIGHTS, AND COPYRIGHTS 7.1 BACKGROUND IP (a) Ownership. Prior to June 8, 2020, Novavax had funded the development of NVX-CoV2373, and other antecedent vaccine programs relevant to Novavax’ proprietary position in the development of NVX- CoV2373, as well as its sf9/baculovirus manufacturing platform, (all “Background IP”) through private


 
92634891_7 funding or in collaboration with a funding partner other than the U.S. Government. Such private and non- governmental funding has continued since June 8, 2020 and is expected to continue during the performance of the Project Agreement. A list of all patents and patent applications included in the Background IP is provided below as Enclosure 4. Background IP also consists of (a) manufacturing know-how, including, without limitation, the NVAX-Cov2373 manufacturing process definitions, process development/characterization reports, laboratory scale process procedures, manufacturing records, analytical test methods, product quality target ranges/specifications, quality target product profile, critical quality attributes (collectively “Background Know-How”), (b) data from pre-clinical and clinical research studies, analytical and process development research, and data related to, or generated using, the Background Know-How (collectively, “Background Data”), and (c) proprietary manufacturing materials, including, without limitation, sf9 cell banks (master and working), baculovirus virus stock (master and working), product standards, reference standards, and critical reagents (“Background Materials”). On June 8, 2020, Novavax and the U.S. Department of Defense entered into a Letter Contract for specified U.S.-based clinical and manufacturing development of NVX-CoV2373 which acknowledged Background IP and made no explicit U.S. Government claims to Background IP or subsequent data arising therefrom. The U.S. Government hereby acknowledges such Background IP in full and further acknowledges that it has no ownership rights to Novavax Background IP under this Project Agreement. (b) Background IP Limited License to Government. Subject to the terms of the Project Agreement, Novavax grants the U.S. Government a nonexclusive, worldwide, nontransferable, non-sublicenseable license to use the Background IP to the limited extent necessary for the U.S. Government to review and use the Deliverables tendered by Novavax under this Agreement identified in Section 4.0 above, and for no other purpose; provided that the U.S. Government agrees that it may not disclose the Background IP to third parties, or allow third parties to have access to, use, practice or have practiced the Background IP, without Novavax’s prior written consent. To the extent that a Deliverable with Foreground IP incorporates or uses Background IP, the Deliverable shall be deemed and considered to comprise Background IP and shall be used by the U.S. Government in accordance with this Background IP Limited License. (c) Background IP License to Novavax. Subject to the terms of the Project Agreement, the U.S. Government grants to Novavax a nonexclusive, worldwide, nontransferable, irrevocable, paid-up license to any intellectual property (including patents and patent applications) to which the U.S. Government has rights thereto, provided that such license is limited to such intellectual property rights necessary to perform Novavax’s obligations under the Project Agreement. 7.2 FOREGROUND IP (a) Ownership. Notwithstanding anything in the Base Agreement to the contrary, Novavax owns all rights, title and interest in and to any development, modification, discovery, invention or improvement, whether or not patentable, conceived, made, reduced to practice, or created in connection with activities funded under the Project Agreement, including, without limitation, all data and inventions, and intellectual property rights in any of the foregoing (“Foreground IP”). (b) Foreground IP Special License. Subject to the terms of the Project Agreement, Novavax grants the U.S. Government a nonexclusive, worldwide, nontransferable, irrevocable, paid-up license to practice or have practiced the Foreground IP for or on behalf of the U.S. Government (“Foreground IP Special License”). 8.0 DATA RIGHTS


 
92634891_7 Article XI, §11.03 of the Base Agreement is hereby amended, consistent with the “Specifically Negotiated License Rights” capability at Article XI, §§11.01(12) and 11.03(4), as follows: 8.1 Data Ownership. Novavax owns all rights, title and interest to all Data (as defined in Article XI, Section 11.01(7) of the Base Agreement) generated as a result of the work performed under this Project Agreement, including Subject Data. 8.2 Rights to Data. (a) Subject Data. Subject to the terms of the Project Agreement, Novavax grants to the U.S. Government a Government purpose rights license to Subject Data that will convert to an unlimited rights license (as the term is defined in Article XI, Section 11.01(14) of the Base Agreement)1 after three (3) years from the date of delivery. As used herein, “Subject Data” shall mean Technical Data under Article XI, §11.01(13) of the Base Agreement Deliverables that are considered Subject Data are identified in the Deliverable Table set forth in Section 4.0 above. (b) Transfer of Data. Each party, upon written request to the other party, shall have the right to review and to request delivery of Subject Data, and delivery of such Data shall be made to the requesting party within two weeks of the request, except to the extent that such Data are subject to a claim of confidentiality or privilege by a third party. (c) Background IP Limited License. To the extent that Subject Data incorporates or uses Background IP, the data shall be deemed and considered to comprise Background IP and shall be used by the U.S. Government in accordance with the Background IP Limited License set forth in Section 7.3 above. 8.3 Background Technical Data Rights Assertions. Novavax asserts background technical data rights as follows: The Background Data, as defined in Section 7.1 above, was developed through private funding or in collaboration with a funding partner other than the U.S. Government. Such funding is expected to continue; accordingly, Novavax asserts Background Data as Category A Data pursuant to section 11.02(1) of the Base Agreement and the U.S. Government shall have no rights therein. 9.0 REGULATORY RIGHTS This agreement includes research with an investigational drug, biologic or medical device that is regulated by the U.S. Food and Drug Administration (FDA) and requires FDA pre-market approval or clearance before commercial marketing may begin. It is expected that this agreement will result in the FDA authorization, clearance and commercialization of NVX-CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus (the “Technology”). Novavax is the Sponsor of the Regulatory Application (an investigational new drug application (IND), investigational device exemption (IDE), emergency use authorization (EUA), new drug application (NDA), biologics license application (BLA), premarket approval application (PMA), or 510(k) 1 As used herein, “Government Use” as used “Purpose Rights“ has the meaning set forth in this Section 4.0 means Government purpose rights as defined in the Base Agreement, Article XI, Section 11.01(9).) of the Base Agreement, as modified by Section 8.2(b) below.


 
92634891_7 pre-market notification filing (510(k)) or another regulatory filing submitted to the FDA) that controls research under this contract. As the Sponsor of the Regulatory Application to the FDA (as the terms “sponsor” and “applicant” are defined or used in at 21 CFR §§3.2(c), 312.5, 600.3(t), 812.2(b), 812 Subpart C, or 814.20), Novavax has certain standing before the FDA that entitles it to exclusive communications related to the Regulatory Application. This clause protects the return on research and development investment made by the U.S. Government in the event of certain regulatory product development failures related to the Technology. Novavax agrees to the following: a. Communications. Novavax will provide the U.S. Government with all communications and summaries thereof, both formal and informal, to or from FDA regarding the Technology and ensure that the U.S. Government representatives are invited to participate in any formal or informal Sponsor meetings with FDA; b. Rights of Reference. The U.S. Government is hereby granted a right of reference as that term is defined in 21 C.F.R. § 314.3(b) (or any successor rule or analogous applicable law recognized outside of the U.S.) to any Regulatory Application submitted in support of the statement of work for the Project Agreement. When it desires to exercise this right, the U.S. Government agrees to notify Novavax in writing describing the request along with sufficient details for Novavax to generate a letter of cross-reference for the U.S. Government to file with the appropriate FDA office. The U.S. Government agrees that such letters of cross- reference may contain reporting requirements to enable Novavax to comply with its own pharmacovigilance reporting obligations to the FDA and other regulatory agencies. Nothing in this paragraph reduces the U.S. Government’s data rights as articulated in other provisions of the Project Agreement. c. DoD Medical Product Priority. PL-115-92 allows the DoD to request, and FDA to provide, assistance to expedite development and the FDA’s review of products to diagnose, treat, or prevent serious or life- threatening diseases or conditions facing American military personnel. Novavax recognizes that only the DoD can utilize PL 115-92. As such, Novavax will work proactively with the DoD to leverage this this law to its maximal potential under this Project Agreement. Novavax shall submit a mutually agreed upon Public Law 115-92 Sponsor Authorization Letter to the U.S. Government within 30 days of award. 10.0 ENSURING SUFFICIENT SUPPLY OF THE PRODUCT a. In recognition of the Government’s significant funding for the development and manufacturing of the product in this Project Agreement and the Government’s need to provide sufficient quantities of a safe and effective COVID-19 vaccine to protect the United States population, the Government shall have the remedy described in this section to ensure sufficient supply of the product to meet the needs of the public health or national security. This remedy is not available to the Government unless and until both of the following conditions are met: i. Novavax gives written notice, required to be submitted to the Government no later than 15 business days, of: a. any formal management decision to terminate manufacturing of the NVX-CoV- 2373 vaccine prior to delivery of 100 million doses to USG; b. any formal management decision to discontinue sale of the NVX-CoV-2373 vaccine to the Government prior to delivery of 100 million doses to USG; or c. any filing that anticipates Federal bankruptcy protection; and


 
92634891_7 ii. Novavax has submitted an Emergency Use Authorization under §564 of the FD&C Act or a biologics license application provisions of §351(a) of the Public Health Service Act (PHSA). b. If both conditions listed in section (a) occur, Novavax, upon the request of the Government, shall provide the following items necessary for the Government to pursue manufacturing of the NVX-CoV-2373 vaccine with a third party for exclusive sale to the U.S. Government: i. a writing evidencing a non-exclusive, nontransferable, irrevocable (except for cause), royalty-free paid-up license to practice or have practiced for or on behalf of the U.S. Government any Background IP as defined in clause 7.1 necessary to manufacture or have manufactured the NVX-CoV2373 vaccine; ii. necessary FDA regulatory filings or authorizations owned or controlled by Novavax related to NVX-Cov2373 and any confirmatory instrument pertaining thereto; and iii. any outstanding Deliverables contemplated or materials purchased under this Project Agreement. c. This Article shall be incorporated into any contract for follow-on activities for the Government to acquire and use additional doses of the product. Per section 1.3, the estimated quantity for follow-on production/procurement is approximately 560 million doses. d. This Article will survive the acquisition or merger of the Contractor by or with a third party. This Article will survive the expiration of this agreement. 11. SECURITY The security classification level for this effort is UNCLASSIFIED. Attachment D of the Project Agreement shall be referenced for supplemental security requirements associated with the execution of this project. 12.0 MISCELLANEOUS REQUIREMENTS (SAFETY, ENVIRONMENTAL, ETC.) N/A 13.0 GOVERNMENT FURNISHED PROPERTY/MATERIAL/INFORMATION 14.0 AGREEMENTS OFFICER’S REPRESENTATIVE (AOR) AND ALTERNATE AOR CONTACT INFORMATION AOR NAME: [***] EMAIL: [***] PHONE: [***] AGENCY NAME/DIVISION/SECTION: Joint Program Executive Office, Joint Program Lead-Enabling Biotechnologies Alternate AOR


 
92634891_7 NAME: TBD MAILING ADDRESS: EMAIL: PHONE: AGENCY NAME/DIVISION/SECTION: HHS/ASPR/BARDA


 
92634891_7 ENCLOSURE 3: (SUPERSEDED) N/A – this enclosure has been superseded from the original and is no longer applicable.


 
92634891_7 ENCLOSURE 4: PATENT LISTING [Pursuant to Regulation S-K, Item 601(a)(5), this enclosure setting forth the patent listing has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
92634891_7 Attachment B Report Requirements This page intentionally left blank. See separate document for Attachment B.


 
92634891_7 REPORT REQUIREMENTS If classified information is required to be submitted under this Agreement, it must be submitted to the addresses specified in the SOW or DD254. No classified information should be submitted directly to ATI. Any applicable Contract Data Requirements Lists (CDRLs), Data Item Descriptions (DIDs) or other report guidance for this Project may be included at the end of this attachment. ATI, in addition to the AOR, must receive a copy of the Quarterly Status Reports and the Final Status Report. Quarterly Status Reports, Annual Status Reports, and Final Status Reports should be submitted to [***]. All other deliverables shall be submitted to the AOR only, but ATI must be notified that the deliverable has been submitted to the AOR. The AOR will provide ATI a completed Sign- off Memorandum as evidence the milestone deliverable was received and deemed acceptable. If you would like a copy of the Report Requirements template in MS Word, please email [***] A. QUARTERLY STATUS REPORT The Recipient shall submit or otherwise provide a Quarterly Status Report in the format as shown in this attachment on the last day of the month of the calendar quarter (i.e., March 31, June 30, and December 31). A sample template is provided. I. The Recipient’s Technical Status Report will, at a minimum, address the following: Comments on Technical/Cost/Schedule Performance, Project Quad Chart, Milestone Status, Non-Traditional Defense Contractor Participation and Plans for the Next Quarter. B. PAYABLE MILESTONES/DELIVERABLES The Recipient shall submit to the Agreements Officer Representative and MCDC CMF Representative documentation describing the extent of accomplishment of Payable Milestones and Deliverables. I. Submission of Payable Milestones/Deliverables. The Recipient is required to submit all deliverables identified as Payable Milestones, as shown in the Payable Milestone Schedule, as well as any other deliverables/reports listed in the Statement of Work. II. Sign-off Memorandum. The Sign-off Memorandum as shown in this attachment shall accompany all submissions indicated in section B.I. The Agreements Officer Representative shall provide written approval using the Sign-off Memorandum to the MCDC Consortium Management Firm. The Sign-off Memorandum will be used to verify that all submissions are technically acceptable. It will also be used to substantiate invoice payment for firm fixed price agreements. C. ANNUAL STATUS REPORTING I. The Project Agreement Holder shall submit an Annual Status Report on September 30 each year (same format as Quarterly Status Report for one year period) for all projects whose periods of performances are greater than


 
92634891_7 one year in accordance with the terms and conditions of the MCDC Base Agreement. The Annual Status Report must also include the following: i. [***]. ii. [***]. iii. [***]. iv. [***]. v. [***]. vi. [***].


 
92634891_7 Quarterly Status Report for <Project Agreement Holder Name> Project No. MCDC-XX-XX-XXX Reporting Period: DATE - DATE Project Agreement Holder <Project Lead> <Other Project Team Member(s)> Project Team Technical POC Name Company Street Address City, State Zip Code Phone Number Email address Submitted: <date>


 
92634891_7 1. Comments on Technical/Cost/Schedule Performance The purpose of this section is to bring project stakeholders up to speed on current project status. It is not intended to be a line-by-line account of the quarter’s activities; details of that nature are reserved for the latter section of this report. Rather, this section should highlight technical, cost, and schedule performance for the quarter, and report overall progress towards successful technology transition and implementation – an executive summary-like synopsis. This section should also be used to cite project- related concerns. Properly crafted, this section is typically about one-half page in length. 2. Project Quad Chart Quad charts are used for many purposes, including high level briefings. Therefore, it is imperative that information be current and accurate, especially in regards to the lower quadrants. The text - where populated - in the quad chart below is for sample purposes only. < Project Agreement Title> Goals & Objectives Project Information Briefly describe the goals of the project; include the technical objectives and the implementation targets. Project Lead: Team Members: Period of Performance: Funding: Cumulative Amt Invoiced: Total Cost Share Reported: Milestones & Technical Achievements Implementation & Payoff Apr 16: Kickoff Meeting Schedule: Target date for implementation. Status: Current status towards implementation event. Jun 16: Design Analysis complete Jul 16: Materials/Equipment Rec’d Oct 16: Prototype construction complete Briefly describe what benefits will accrue from this project’s successful completion and implementation. Be quantitative to the greatest extent possible. May 17: Initial testing complete Oct 17: Production units implemented in shipyard processes Current Status: Technical = Green/Yellow/Red (delta) Schedule = Green/Yellow/Red (delta) Cost = Green/Yellow/Red (delta) Current Status Legend: Green = Good/On Budget Yellow = Minor Weakness/Known Risk Red = Major Weakness/Critical Delta:  = upgrade from last assessment;  = downgrade from last assessment;  = no change


 
92634891_7 3. Supplemental Information In order to improve the usefulness of the quad charts and provide sufficient project information, the Quarterly Status Report must be supplemented with data described below. 3.1 Milestone Status: No. Milestone Due Date Percent Complete This Period Cumulative Percent Complete 1 2 3 3.2 Non-Traditional Defense Contractor Participation Name of Nontraditional* Planned Start Date Actual Start Date Reason for Deviation from Plan 3.3 Plans for Next Quarter  Major achievements planned for the next quarter MEMORANDUM: Agreements Officer Representative Sign-Off To: Agreements Officer Representative (AOR) From: Date: Reference: (a) MCDC Base Agreement between ATI and Agreement No. (b) Project Agreement No. Subject: Milestone Approval The following deliverable(s) associated with the Milestone(s) listed below have been completed: MS# Deliverable XX It is requested that verification of these accomplishments be provided to the MCDC Consortium Management Firm. To: MCDC Consortium Management Firm


 
92634891_7 CERTIFICATION BY AGREEMENTS OFFICER REPRESENTATIVE: The Project Agreement Holder has made satisfactory progress and provided the required deliverables associated with this milestone. I certify the work performed is in accordance with the approved Statement of Work (SOW) included in the agreement. Other comments or concerns regarding this or future milestones: [Note: For any non-satisfactory areas include a discussion of what was not acceptable, references to previous correspondence on the issue, and what corrective actions are needed to effect payment.] Agreements Officer Representative Date:


 
92634891_7 Attachment C Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment This page intentionally left blank. See separate document for Attachment C.


 
92634891_7 Attachment C Prohibition on the Use of Certain Telecommunications and Video Surveillance Services or Equipment. This Article is to ensure compliance with Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232). Based on the information provided below, the Government may be unable to enter into a new project agreement, exercise an option under an existing project, bilaterally modify a project agreement to extend the term of a project, execute an additional phase, or incrementally fund an existing project with the Member. A. Definitions Backhaul means intermediate links between the core network, or backbone network, and the small subnetworks at the edge of the network (e.g., connecting cell phones/towers to the core telephone network). Backhaul can be wireless (e.g., microwave) or wired (e.g., fiber optic, coaxial cable, Ethernet). Covered foreign country means The People’s Republic of China. Covered telecommunications equipment or services means– (1) Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities); (2) For the purpose of public safety, security of Government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities); (3) Telecommunications or video surveillance services provided by such entities or using such equipment; or (4) Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the Government of a covered foreign country. Critical technology means– (1) Defense articles or defense services included on the United States Munitions List set forth in the International Traffic in Arms Regulations under subchapter M of chapter I of title 22, Code of Federal Regulations; (2) Items included on the Commerce Control List set forth in Supplement No. 1 to part 774 of the Export Administration Regulations under subchapter C of chapter VII of title 15, Code of Federal Regulations, and controlled- (i) Pursuant to multilateral regimes, including for reasons relating to national security, chemical and biological weapons proliferation, nuclear nonproliferation, or missile technology; or (ii) For reasons relating to regional stability or surreptitious listening; (3) Specially designed and prepared nuclear equipment, parts and components, materials, software, and technology covered by part 810 of title 10, Code of Federal Regulations (relating to assistance to foreign atomic energy activities); (4) Nuclear facilities, equipment, and material covered by part 110 of title 10, Code of Federal Regulations (relating to export and import of nuclear equipment and material); (5) Select agents and toxins covered by part 331 of title 7, Code of Federal Regulations, part 121 of title 9 of such Code, or part 73 of title 42 of such Code; or


 
92634891_7 (6) Emerging and foundational technologies controlled pursuant to section 1758 of the Export Control Reform Act of 2018 (50 U.S.C. 4817). Interconnection arrangements means arrangements governing the physical connection of two or more networks to allow the use of another's network to hand off traffic where it is ultimately delivered (e.g., connection of a customer of telephone provider A to a customer of telephone company B) or sharing data and other information resources. Reasonable inquiry means an inquiry designed to uncover any information in the entity's possession about the identity of the producer or provider of covered telecommunications equipment or services used by the entity that excludes the need to include an internal or third-party audit. Roaming means cellular communications services (e.g., voice, video, data) received from a visited network when unable to connect to the facilities of the home network either because signal coverage is too weak or because traffic is too high. Substantial or essential component means any component necessary for the proper function or performance of a piece of equipment, system, or service. B. Prohibition (1) The Member is prohibited from providing to the Government any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, unless the Member is providing (i) a service that connects to the facilities of a third-party, such as backhaul, roaming, or interconnection arrangements; or (ii) telecommunications equipment that cannot route or redirect user data traffic or permit visibility into any user data or packets that such equipment transmits or otherwise handles, or the covered telecommunication equipment or services. A waiver, for a period not exceeding August 13, 2021, may be requested. (2) The Member acknowledges and accepts that the Government is prohibited from entering into a new project agreement, exercising an option under an existing project, bilaterally modifying the project agreement to extend the term of a project, executing an additional phase, incrementally funding an existing project with the member or with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, unless an exception at paragraph (b)(1) of this article applies, regardless of whether that use is in performance of work under a Federal contract or agreement. C. Certification (to be completed upon Agreements Officer Request) The Member shall review the list of excluded parties in the System for Award Management (SAM) (https://www.sam.gov) for entities excluded from receiving federal awards for “covered telecommunications equipment or services.” Based on that review: (1) □ The Member certifies that it does □ does not □ provide covered telecommunications equipment or services as a part of its offered products or services to the Government in the performance of any contract, subcontract, other transaction agreement, or other contractual instrument. (2) If the Member does provide covered telecommunications equipment or services as a part of its offered products or services to the Government in the performance of any contract, subcontract, other transaction agreement, or other contractual instrument as described in paragraph (c)(1), the Member certifies that it will □ will not □ provide covered telecommunications equipment or services to the Government in the performance of any contract, subcontract, other transaction agreement, or other contractual instrument resulting from this solicitation. If the Member will provide covered telecommunications equipment or services to the Government in the performance of any contract, subcontract, other transaction agreement, or other contractual instrument resulting from this solicitation (C)(2), the Member shall provide the additional disclosure information required at paragraph (D)(1) of this Article. (3) The Member certifies, after conducting a reasonable inquiry, for purposes of this certification, that it does □ does not □ use covered telecommunications equipment or services, or use any equipment, system, or service that uses covered telecommunications equipment or services. If the Member does use covered telecommunications equipment or services, or use any equipment, system, or service that uses covered telecommunications equipment or services as


 
92634891_7 described under this paragraph (C)(3), the Member shall provide the additional disclosure information required at paragraph (D)(2) of this Article. D. Disclosures (1) Disclosure for the certification in paragraph (C)(2) of this Article. If the Member does provide covered telecommunications equipment or services to the Government in the performance of any contract, subcontract, other transaction agreement, or other contractual instrument in in paragraph (C)(2) of this provision, the Member shall provide the following information: (i) For covered equipment— a) The entity that produced the covered telecommunications equipment (include entity name, unique entity identifier, Commercial and Government Entity (CAGE) code, and whether the entity was the Original Equipment Manufacturer (OEM) or a distributor, if known); b) A description of all covered telecommunications equipment offered (include brand; model number, such as OEM number, manufacturer part number, or wholesaler number; and item description, as applicable); and c) Explanation of the proposed use of covered telecommunications equipment and any factors relevant to determining if such use would be permissible under the prohibition in paragraph (B)(1) of this Article. (ii) For covered services— a) If the service is related to item maintenance: A description of all covered telecommunications services offered (include on the item being maintained: Brand; model number, such as OEM number, manufacturer part number, or wholesaler number; and item description, as applicable); or b) If not associated with maintenance, the Product Service Code (PSC) of the service being provided; and explanation of the proposed use of covered telecommunications services and any factors relevant to determining if such use would be permissible under the prohibition in paragraph (B)(1) of this Article. (2) If the Member does use covered telecommunications equipment or services, or use any equipment, system, or service that uses covered telecommunications equipment or services in in paragraph (C)(3) of this Article, the Member shall provide the following information: (i) For covered equipment— a) The entity that produced the covered telecommunications equipment (include entity name, unique entity identifier, CAGE code, and whether the entity was the OEM or a distributor, if known); b) A description of all covered telecommunications equipment offered (include brand; model number, such as OEM number, manufacturer part number, or wholesaler number; and item description, as applicable); and c) Explanation of the proposed use of covered telecommunications equipment and any factors relevant to determining if such use would be permissible under the prohibition in paragraph (B)(2) of this Article. (ii) For covered services— a) If the service is related to item maintenance: A description of all covered telecommunications services offered (include on the item being maintained: Brand; model number, such as OEM number, manufacturer part number, or wholesaler number; and item description, as applicable); or b) If not associated with maintenance, the PSC of the service being provided; and explanation of the proposed use of covered telecommunications services and any factors relevant to determining if such use would be permissible under the prohibition in paragraph (B)(2) of this Article. E. Reporting Requirement (1) In the event the Member identifies covered telecommunications equipment or services used as a substantial or essential component of any system, or as critical technology as part of any system, during agreement performance, or the Member is notified of such by a subcontractor at any tier or by any other source, the Member shall report the information in paragraph (E)(2) of this Article to the Agreements Officer and to the Department of Defense website at https://dibnet.dod.mil. The Member must notify the CMF that a report has been made. (2) The Member shall report the following information pursuant to paragraph (E)(1) of this clause:


 
92634891_7 (i) Within one (1) business day from the date of such identification or notification: the agreement number; the order number(s), if applicable; supplier name; supplier unique entity identifier (if known); supplier CAGE code (if known); brand; model number (original equipment manufacturer number, manufacturer part number, or wholesaler number); item description; and any readily available information about mitigation actions undertaken or recommended. (ii) Within ten (10) business days of submitting the information in paragraph (E)(2)(i) of this clause: any further available information about mitigation actions undertaken or recommended. In addition, the Member shall describe the efforts it undertook to prevent use or submission of covered telecommunications equipment or services, and any additional efforts that will be incorporated to prevent future use or submission of covered telecommunications equipment or services. F. Subcontracts The Member shall insert the substance of this article, including this paragraph (F) and excluding paragraph (B)(2), in all subcontracts and other contractual instruments, including subcontracts for the acquisition of commercial items.


 
92634891_7 Attachment D Clause for MCDC Consortium Other Transaction Authority Agreements Standard Language OWS for Consortium OTA This page intentionally left blank. See separate document for Attachment D.


 
92634891_7 Attachment D Clause for MCDC Consortium Other Transaction Authority Agreements Standard Language OWS for Consortium OTA (Incorporated as of Modification No. 04) Required MCDC Base Agreement Modifications The Medical CBRN Consortium (MCDC) Base Agreement, Article XVII, SECURITY & OPSEC shall apply to this Project Agreement. In addition, the below language shall replace Paragraph 6 of Article XVII of the MCDC Base Agreement, in regard to this Project Agreement. (6) Access and General Protection/Security Policy and Procedures. This standard language text is applicable to ALL PAH employees working on critical program information or covered defense information related to Operation Warp Speed (OWS), and to those with an area of performance within an Army controlled installation, facility or area. PAH employees shall comply with applicable installation, facility and area commander installation/facility access and local security policies and procedures (provided by government representative). The PAH also shall provide all information required for background checks necessary to access critical program information or covered defense information related to OWS, and to meet installation access requirements to be accomplished by installation Provost Marshal Office, Director of Emergency Services or Security Office. The PAH workforce must comply with all personal identity verification requirements as directed by DOD, HQDA and/or local policy. In addition to the changes otherwise authorized by the changes clause of this agreement, should the Force Protection Condition (FPCON) at any individual facility or installation change, the Government may require changes in PAH security matters or processes. Required SOW Language for Deliverables (in body of SOW or Deliverables Section) Information Security Classification guidance for Operation Warp Speed - The security level for this agreement is UNCLASSIFIED. “Controlled technical information,” “covered contractor information system,” “covered defense information,” “cyber incident,” “information system,” and “technical information” are defined in DFARS Clause 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting. Personnel Security In addition to the industry standards for employment background checks, Novavax must be willing to have key individuals, in exceptionally sensitive positions, identified for additional vetting by the United States Government. Supply Chain Resiliency Plan Novavax shall develop and submit within [***] after execution of Modification [#3], a comprehensive Supply Chain Resiliency Program that provides identification and reporting of critical components associated with the secure supply of drug substance, drug product, and work-in-process through to finished goods. a) A critical component is defined as any material that is essential to the product or the manufacturing process associated with that product. Included in the definition are consumables and disposables associated with manufacturing. NOT included in the definition are facility and capital equipment. Consideration of critical components includes the evaluation and potential impact of raw materials, excipients, active ingredients, substances, pieces, parts, software, firmware, labeling, assembly, testing, analytical and environmental componentry, reagents, or utility materials which are used in the manufacturing of a drug, cell banks, seed stocks, devices and key processing components and equipment. A clear example of a critical component is one where a sole supplier is utilized. Novavax shall identify key equipment suppliers, their locations, local resources, and the associated control processes at the time of award. This document shall address planning and scheduling for active pharmaceutical ingredients, upstream, downstream, component assembly, finished drug product and delivery events as necessary for the delivery of product.


 
92634891_7 a) Communication for these requirements shall be updated as part of an annual review, or as necessary, as part of regular contractual communications. b) For upstream and downstream processing, both single-use and re-usable in-place processing equipment, and manufacturing disposables also shall be addressed. For finished goods, the inspection, labeling, packaging, and associated machinery shall be addressed taking into account capacity capabilities. c) The focus on the aspects of resiliency shall be on critical components and aspects of complying with the contractual delivery schedule. Delivery methods shall be addressed, inclusive of items that are foreign-sourced, both high and low volume, which would significantly affect throughput and adherence to the contractually agreed deliveries. Novavax shall articulate in the plan, the methodology for inventory control, production planning, scheduling processes and ordering mechanisms, as part of those agreed deliveries. a) Production rates and lead times shall be understood and communicated to the Contracting/Agreement Officer or the Contracting/Agreement Officer's Representative as necessary. b) Production throughput critical constraints should be well understood by activity and by design, and communicated to contractual personnel. As necessary, communication should focus on identification, exploitation, elevation, and secondary constraints of throughput, as appropriate. Reports for critical items should include the following information: a) Critical Material b) Vendor c) Supplier, Manufacturing / Distribution Location d) Supplier Lead Time e) Shelf Life f) Transportation / Shipping restrictions The CO and COR reserve the right to request un-redacted copies of technical documents, during the period of performance, for distribution within the Government. Documents shall be provided within [***] after CO issues the request in writing. Novavax may arrange for additional time if deemed necessary, and agreed to by the CO. Manufacturing Data Requirements: Novavax shall submit within [***] after execution of Modification [#3], detailed data regarding project materials, sources, and manufacturing sites, including but not limited to: physical locations of sources of raw and processed material by type of material; location and nature of work performed at manufacturing, processing, and fill/finish sites; and location and nature of non-clinical and clinical studies sites. The Government may provide a table in tabular format for Novavax, to be used to submit such data which would include but not be limited to the following:  Storage/inventory of ancillary materials (vials, needles, syringes, etc.)  Shipment of ancillary materials (vials, needles, syringes, etc.)  Disposal of ancillary materials (vials, needles, syringes, etc.)  Seed development or other starting material manufacturing  Bulk drug substance and/or adjuvant production  Fill, finish, and release of product or adjuvant  Storage/inventory of starting materials, bulk substance, or filled/final product or adjuvant  Stability information of bulk substance and/or finished product  Shipment of bulk substance of final product  Disposal of bulk substance or final product Product Development Source Material and Manufacturing Reports and Projections: Novavax shall submit a detailed spreadsheet regarding critical project materials that are sourced from a location other than the United States, sources, and manufacturing sites, including but not limited to: physical locations of sources of raw and processed material by type of material; location and nature of work performed at manufacturing sites; and location and nature of non-clinical and clinical study sites. Novavax will provide manufacturing reports and manufacturing dose tracking projections/actuals utilizing the “COVID-19 Dose Tracking Templates”, on any contract/agreement that is manufacturing product  Novavax will submit Product Development Source Material Report


 
92634891_7 o Within [***] of execution of Modification [#3] o Within [***] of substantive changes are made to sources and/or materials o Or on the [***] contract anniversary.  Novavax will update the Dose Tracking Template [***] during manufacturing campaigns and daily during response operations (where a Public Health Emergency has been declared) and COVID-19 response, with the first deliverable submission within [***] of Modification [#3]. Updates to be provided weekly in advance of commercial-scale manufacturing and daily once material for use in response operations begins manufacture  The Government will provide written comments to the Product Development Source Material and Manufacturing Report within [***] after the submission  If corrective action is recommended, Novavax must address all concerns raised by the Government in writing Novavax Locations: Novavax shall submit detailed data regarding locations where work will be performed under this contract, including addresses, points of contact, and work performed per location, to include sub-contractors. Contractor will submit Work Locations Report:  Within [***] of execution of Modification [#3]  Within [***] after a substantive location or capabilities change  Within [***] of a substantive change if the work performed supports medical countermeasure development that addresses a threat that has been declared a Public Health Emergency by the HHS Secretary or a Public Health Emergency of International Concern (PHEIC) by the WHO Required SOW Language for Security Section This project requires an OPSEC Plan and a Security Plan. Novavax shall develop a comprehensive security program that provides overall protection of personnel, information, data, and facilities associated with fulfilling the Government requirement. This plan shall establish security practices and procedures that demonstrate how Novavax will meet and adhere to the security requirements outlined below prior to the commencement of product manufacturing, and shall be delivered to the Government within [***] of execution of Modification[#3]. Novavax shall provide a Risk Assessment to evaluate which subcontractors, consultants, researchers, etc. performing work on behalf of this effort, are required to comply with all Operation Warp Speed and Project Agreement security requirements and prime contractor security plans. a) The Government will review the plan and Risk Assessment in detail and submit comments within [***] to the Contracting Officer (CO) to be forwarded to Novavax. Novavax shall review the Draft Security Plan comments, and, submit a Final Security Plan to the U.S. Government within [***] after receipt of the comments. b) The Security Plan shall include a timeline for compliance of all the required security measures outlined by the Government. c) Upon completion of initiating all security measures, Novavax shall supply to the Contracting Officer a letter certifying compliance to the elements outlined in the Final Security Plan. d) The OPSEC plan will include identifying the critical information related to this contract, why it needs to be protected, where it is located, who is responsible for it, and how to protect it. At a minimum, the Final Security Plan shall address the following items: Security Requirements: 1. Facility Security Plan Description: As part of the partner facility’s overall security program, Novavax shall submit a written security plan with their proposal to the Agreement Officer for review and approval by Operation Warp Speed security subject matter experts. The performance of work under the Project Agreement will be in accordance with the approved security plan. The security plan will include the following processes and procedures at a minimum: Security Administration  organization chart and responsibilities  written security risk assessment for site


 
92634891_7  threat levels with identification matrix (High, Medium, or Low)  enhanced security procedures during elevated threats  liaison procedures with law enforcement  annual employee security education and training program Personnel Security  policies and procedures  candidate recruitment process  background investigations process  employment suitability policy  employee access determination  rules of behavior/ conduct  termination procedures  non-disclosure agreements Physical Security Policies and Procedures  internal/external access control  protective services  identification/badging  employee and visitor access controls  parking areas and access control  perimeter fencing/barriers  product shipping, receiving and transport security procedures  facility security lighting  restricted areas  signage  intrusion detection systems  alarm monitoring/response  closed circuit television  product storage security  other control measures as identified Information Security  identification and marking of sensitive information  access control  storage of information  document control procedures  retention/ destruction requirements Information Technology/Cyber Security Policies and Procedures  intrusion detection and prevention systems  threat identification  employee training (initial and annual)  encryption systems  identification of sensitive information/media  password policy (max days 90)  lock screen time out policy (minimum time 20 minutes)  removable media policy  laptop policy  removal of IT assets for domestic/foreign travel  access control and determination  VPN procedures  WiFi and Bluetooth disabled when not in use  system document control  system backup  system disaster recovery  incident response  system audit procedures  property accountability 2. Site Security Master Plan Description: The partner facility shall provide a site schematic for security systems which includes: main access points; security cameras; electronic access points; IT Server Room; Product Storage Freezer/Room; and bio- containment laboratories.


 
92634891_7 3. Site Threat / Vulnerability / Risk Assessment Description: The partner facility shall provide a written risk assessment for the facility addressing: criminal threat, including crime data; foreign/domestic terrorist threat; industrial espionage; insider threats; natural disasters; and potential loss of critical infrastructure (power/water/natural gas, etc.) This assessment shall include recent data obtained from local law enforcement agencies. The assessment should be updated annually. 4. Physical Security Description: Closed Circuit Television (CCTV) Monitoring a) Layered (internal/external) CCTV coverage with time-lapse video recording for buildings and areas where critical assets are processed or stored. b) CCTV coverage must include entry and exits to critical facilities, perimeters, and areas within the facility deemed critical to the execution of the contract. c) Video recordings must be maintained for a minimum of 30 days. d) CCTV surveillance system must be on emergency power backup. e) CCTV coverage must include entry and exits to critical facilities, perimeters, and areas within the facility deemed critical to the execution of the contract. f) Video recordings must be maintained for a minimum of 30 days. g) CCTV surveillance system must be on emergency power backup. Facility Lighting a) Lighting must cover facility perimeter, parking areas, critical infrastructure, and entrances and exits to buildings. b) Lighting must have emergency power backup. c) Lighting must be sufficient for the effective operation of the CCTV surveillance system during hours of darkness. Shipping and Receiving a) Must have CCTV coverage and an electronic access control system. b) Must have procedures in place to control access and movement of drivers picking up or delivering shipments. c) Must identify drivers picking up Government products by government issued photo identification. Access Control a) Must have an electronic intrusion detection system with centralized monitoring. b) Responses to alarms must be immediate and documented in writing. c) Employ an electronic system (i.e., card key) to control access to areas where assets critical to the contract are located (facilities, laboratories, clean rooms, production facilities, warehouses, server rooms, records storage, etc.). d) The electronic access control should signal an alarm notification of unauthorized attempts to access restricted areas. e) Must have a system that provides a historical log of all key access transactions and kept on record for a minimum of12 months. f) Must have procedures in place to track issuance of access cards to employees and the ability to deactivate cards when they are lost or an employee leaves the company. g) Response to electronic access control alarms must be immediate and documented in writing and kept on record for a minimum of 12 months. h) Should have written procedures to prevent employee piggybacking access i) to critical infrastructure (generators, air handlers, fuel storage, etc.) should be controlled and limited to those with a legitimate need for access. j) Must have a written manual key accountability and inventory process. k) Physical access controls should present a layered approach to critical assets within the facility. Employee/Visitor Identification a) Should issue company photo identification to all employees. b) Photo identification should be displayed above the waist anytime the employee is on company property.


 
92634891_7 c) Visitors should be sponsored by an employee and must present government issued photo identification to enter the property. d) Visitors should be logged in and out of the facility and should be escorted by an employee while on the premises at all times. Security Fencing Requirements for security fencing will be determined by the criticality of the program, review of the security plan, threat assessment, and onsite security assessment. Protective Security Forces Requirements for security officers will be determined by the criticality of the program, review of the security plan, threat assessment, and onsite security assessment. Protective Security Forces Operations a) Must have in-service training program. b) Must have Use of Force Continuum. c) Must have communication systems available (i.e., landline on post, cell phones, handheld radio, and desktop computer). d) Must have Standing Post Orders. e) Must wear distinct uniform identifying them as security officers. 5. Security Operations Description: Information Sharing a) Establish formal liaison with law enforcement. b) Meet in person at a minimum annually. Document meeting notes and keep them on file for a, minimum of 12 months. POC information for LE Officer that attended the meeting must be documented. c) Implement procedures for receiving and disseminating threat information. Training a) Conduct new employee security awareness training. b) Conduct and maintain records of annual security awareness training. Security Management a) Designate a knowledgeable security professional to manage the security of the facility. b) Ensure subcontractor compliance with all Government security requirements. 6. Personnel Security Description: Records Checks Verification of social security number, date of birth, citizenship, education credentials, five-year previous employment history, five-year previous residence history, FDA disbarment, sex offender registry, credit check based upon position within the company; motor vehicle records check as appropriate; and local/national criminal history search. Hiring and Retention Standards a) Detailed policies and procedures concerning hiring and retention of employees, employee conduct, and off boarding procedures. b) Off Boarding procedures should be accomplished within 24 hour of employee leaving the company. This includes termination of all network access. 7. Information Security Description: Physical Document Control a) Applicable documents shall be identified and marked as procurement sensitive, proprietary, or with appropriate government markings. b) Sensitive, proprietary, and government documents should be maintained in a lockable filing cabinet/desk or other storage device and not be left unattended. c) Access to sensitive information should be restricted to those with a need to know. Document Destruction Documents must be destroyed using approved destruction measures (i.e, shredders/approved third party vendors / pulverizing / incinerating). 8. Information Technology & Cybersecurity Description: Identity Management a) Physical devices and systems within the organization are inventoried and accounted for annually. b) Organizational cybersecurity policy is established and communicated.


 
92634891_7 c) Asset vulnerabilities are identified and documented. d) Cyber threat intelligence is received from information sharing forums and sources. e) Threats, vulnerabilities, likelihoods, and impacts are used to determine risk. f) Identities and credentials are issued, managed, verified, revoked, and audited for authorized devices, users and processes. g) Users, devices, and other assets are authenticated (e.g., single-factor, multifactor) commensurate with the risk of the transaction (e.g., individuals’ security and privacy risks and other organizational risks) Access Control a) Limit information system access to authorized users. b) Identify information system users, processes acting on behalf of users, or devices and authenticate identities before allowing access. c) Limit physical access to information systems, equipment, and server rooms with electronic access controls. d) Limit access to/ verify access to use of external information systems. Training a) Ensure that personnel are trained and are made aware of the security risks associated with their activities and of the applicable laws, policies, standards, regulations, or procedures related to information technology systems. Audit and Accountability a) Create, protect, and retain information system audit records to the extent needed to enable the monitoring, analysis, investigation, and reporting of unlawful, unauthorized, or inappropriate system activity. Records must be kept for minimum must be kept for 12 months. b) Ensure the actions of individual information system users can be uniquely traced to those users. c) Update malicious code mechanisms when new releases are available. d) Perform periodic scans of the information system and real time scans of files from external sources as files are downloaded, opened, or executed. Configuration Management a) Establish and enforce security configuration settings. b) Implement sub networks for publically accessible system components that are physically or logically separated from internal networks. Contingency Planning a) Establish, implement, and maintain plans for emergency response, backup operations, and post-disaster recovery for information systems to ensure the availability of critical information resources at all times. Incident Response a) Establish an operational incident handling capability for information systems that includes adequate preparation, detection, analysis, containment, and recovery of cybersecurity incidents. Exercise this capability annually. Media and Information Protection a) Protect information system media, both paper and digital. b) Limit access to information on information systems media to authorized users. c) Sanitize and destroy media no longer in use. d) Control the use of removable media through technology or policy. Physical and Environmental Protection a) Limit access to information systems, equipment, and the respective operating environments to authorized individuals. b) Intrusion detection and prevention system employed on IT networks. c) Protect the physical and support infrastructure for all information systems. d) Protect information systems against environmental hazards. e) Escort visitors and monitor visitor activity. Network Protection Employ intrusion prevention and detection technology with immediate analysis capabilities. 9. Transportation Security Description: Adequate security controls must be implemented to protect materials while in transit from theft, destruction, manipulation, or damage.


 
92634891_7 Drivers a) Drivers must be vetted in accordance with the Government Personnel Security Requirements. b) Drivers must be trained on specific security and emergency procedures. c) Drivers must be equipped with backup communications. d) Driver identity must be 100 percent confirmed before the pick-up of any Government product. e) Drivers must never leave Government products unattended, and two drivers may be required for longer transport routes or critical products during times of emergency. f) Truck pickup and deliveries must be logged and kept on record for a minimum of 12 months. Transport Routes a) Transport routes should be pre-planned and never deviated from except when approved or in the event of an emergency. b) Transport routes should be continuously evaluated based upon new threats, significant planned events, weather, and other situations that may delay or disrupt transport. Product Security a) Government products must be secured with tamper resistant seals during transport, and the transport trailer must be locked and sealed.  Tamper resistant seals must be verified as “secure” after the product is placed in the transport vehicle. b) Government products should be continually monitored by GPS technology while in transport, and any deviations from planned routes should be investigated and documented. c) Contingency plans should be in place to keep the product secure during emergencies such as accidents and transport vehicle breakdowns. 10. Security Reporting Requirements Description: The partner facility shall notify the Agreement Officer within 24 hours of any activity or incident that is in violation of established security standards or indicates the loss or theft of government products. The facts and circumstances associated with these incidents will be documented in writing for government review. 11. Security Audits Description: The partner facility agrees to formal security audits conducted at the discretion of the government. Security audits may include both prime and subcontractor.


 
Exhibit 10.44 CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL AND (ii) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. Applied Technologies Center 315 Sigma Drive Summerville, SC 29486 www.ati.org 92634904_5 January 12, 2021 Novavax, Inc. 21 Firstfield Road Gaithersburg, MD 20878 Attention: Mr. [***] Subject: Modification No. 05 to Project Agreement No. 01; MCDC2011-001 Reference: MCDC Base Agreement No. 2020-530 Dear [***]: In accordance with the terms and conditions of the referenced MCDC Base Agreement, Modification No. 05 hereby amends the Project Agreement No. 01 as follows: DESCRIPTION OF MODIFICATION 1) The Health Resource Priority and Allocations Systems (HRPAS) clause of the Project Agreement is hereby incorporated into the definitized agreement as indicated below: 18. Health Resource Priority and Allocations Systems (HRPAS) In order to ensure the success of the Project Agreement Holder’s efforts, a priority rating is incorporated into the project agreement for the procurement of raw materials, consumables, repair parts, and major end item assemblies by the Project Agreement Holder under Title I of the HRPAS. Priority Rating: Defense Production Act (DPA) Title I – “DO-HR” Each rated order executed by the Project Agreement Holder must include the following: (a) The priority rating: DPA Title I – “DO-HR”; (b) A required delivery date or dates. The words “immediately” or “as soon as possible” do not constitute a delivery date; (c) The written signature on a manually placed order, or the digital signature or name on an electronically placed order, of an individual authorized to sign rated orders for the person placing the order; and (d) A statement that reads in substance: (1) This is a rated order certified for national defense use, and you are required to follow all the provisions of the Health Resources Priorities and Allocations System regulation at 45 CFR part 101. (2) If the rated order is placed in support of emergency preparedness requirements and expedited action is necessary and appropriate to meet these requirements, the following sentences should be added following the statement set forth in paragraph (d)(1) of this section: i. This rated order is placed for the purpose of emergency preparedness. It must be accepted or rejected within two (2) days after receipt of the order if: A. The order is issued in response to a hazard that has occurred; or


 
92634904_5 B. If the order is issued to prepare for an imminent hazard, as specified in HRPAS § 101.33(e). Except as provided herein, all Terms and Conditions of the referenced MCDC Base Agreement, Project Agreement and preceding modifications remain unchanged and in full force and effect. This modification is issued unilaterally. The Project Agreement Holder is not required to sign to finalize this action. Advanced Technology International By: /s/ [***] Name: [***] Title: Contracts Administrator Date: Jan 12 2021


 
Exhibit 10.45 CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL AND (ii) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. Applied Technologies Center 315 Sigma Drive Summerville, SC 29486 www.ati.org 92962494_6 January 19, 2021 Novavax, Inc. 21 Firstfield Road Gaithersburg, MD 20878 Attention: [***] Subject: Modification No. 06 to Project Agreement No. 01; MCDC2011-001 Reference: MCDC Base Agreement No. 2020-530 Dear [***]: In accordance with the terms and conditions of the referenced MCDC Base Agreement, Modification No. 06 hereby amends the Project Agreement No. 01 as follows: DESCRIPTION OF MODIFICATION 1) Attachment A, Statement of Work, of the Project Agreement is hereby amended as attached herein. Except as provided herein, all Terms and Conditions of the referenced MCDC Base Agreement, Project Agreement, and preceding modifications remain unchanged and in full force and effect. The Project Agreement Holder is required to sign this document and return to Advanced Technology International to finalize this action. Novavax, Inc. Advanced Technology International By: /s/ John A. Herrmann III By: /s/ [***] Name: John A. Herrmann III Name: [***] Title: EVP, Chief Legal Officer Title: Contracts Administrator Date: 01/21/2021 Date: Jan 22 2021


 
92962494_6 Attachment A Statement of Work This page intentionally left blank. See separate document for Attachment A.


 
-3- 92962494_6 Attachment A Statement of Work (Incorporated as of Modification No. 06; changes to Section 4 are indicated in bold italics.) For Rapid (WF10) Advanced Research & Development to Large Scale Manufacturing of NVX- CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus RPP #: 20-11 Project Identifier: MCDC2011-001 Consortium Member: Novavax, Inc. Title of Proposal: Rapid (WF10) Advanced Research & Development to Large Scale Manufacturing of NVX-CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus Requiring Activity: Joint Mission between the Department of Health and Human Services and Department of Defense to Combat COVID-19 1.0 INTRODUCTION, SCOPE, AND OBJECTIVES 1.1 Introduction To meet the needs of the Coronavirus Disease 2019 (COVID-19) pandemic, the United States Government (USG) is identifying and will support development and at-scale manufacturing of selected vaccine candidates, to ensure timely availability to the US population when needed. This is the primary focus of the mission being executed by the Department of Health and Human Services (HHS) and Department of Defense (DoD), in support of Operation Warp Speed (OWS). The USG is interested in pursuing prototype vaccines that are in an advanced stage of development, and will support companies that can, in parallel with nonclinical, clinical and regulatory development, rapidly establish the manufacturing capacity required to meet the USG’s objective of supplying a safe and effective Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV- 2) vaccine to the entire US population. The USG is tasked with marshaling the efforts of the US biotechnology industry to achieve this goal. 1.2 Definition of the Prototype Project Consistent with USG objectives, the “prototype project” under this agreement is defined as the manufacture and delivery of 100M doses of a SARS-CoV-2 vaccine, NVX-CoV2373, which is suitable for use in humans under a sufficiently informed deployment strategy, and the advanced positioning of a stockpile of critical long lead raw materials for the Matrix-M adjuvant. As such, the “prototype project” will effectively demonstrate Novavax’s ability to rapidly stand up large scale manufacturing and seamlessly transition into ongoing production. The NVX-CoV-2373 vaccine is comprised of the Matrix-M™ adjuvant, and antigen (SARS-CoV- 2 spike protein). The vaccine is filled into a multi-dose vial ([***]) and is stored at refrigerated temperature (2-8oC).


 
-4- 92962494_6 Successful development of the prototype will demonstrate Novavax’s ability to rapidly stand up large scale manufacturing and seamlessly transition into ongoing production capability, in order to rapidly manufacture to meet surge requirements with little advance notification, and demonstrate capability to stockpile and distribute large quantities of the vaccine to respond when needed, including in order to supply use in clinical studies, under an Emergency Use Authorization (EUA), or pursuant to other clearance from the U.S. Food and Drug Administration (FDA). Successful completion of the prototype will require three coordinated and integrated lines of effort: (a) Large scale manufacturing, compliant with 21 CFR Parts 210 and 211, and the Drug Supply Chain Security Act (DSCA), to the extent applicable at the time of manufacturing by statute and FDA interpretive guidance thereof. (b) Parallel nonclinical and clinical studies required to determine if the vaccine is safe and effective. (c) Compliance with all applicable U.S. regulatory requirements. It is important to note that while results of nonclinical and clinical studies are critical to develop use case scenarios and, in turn, inform the USG’s deployment strategy as it relates to product manufactured under this agreement, successful development of the prototype is dependent only on the validity of data from these studies. The degree to which the data are “positive” or “negative” is not a factor in demonstration of the prototype. 1.3 Follow-on Activity This prototype project includes unpriced options for follow-on production/ procurement. During the performance of the prototype, the USG and Novavax will negotiate the scope and price of production/procurement. If the prototype project is successful, the USG may then enter into follow-on production/procurement by executing these options through a separate stand-alone production/procurement agreement, to be negotiated in terms of scope and price as described in the following paragraph. In accordance with 10.U.S.C. 2371b(f), and upon demonstration of the prototype, or at the accomplishment of particularly favorable or unexpected results that would justify transitioning to production/procurement, EUA, or Biologics License Application (BLA) approved by the FDA, the USG and Novavax may enter into a non-competitive production/procurement follow-on agreement or contract for additional production/procurement, to partially or completely meet the USG objective of supplying a safe and effective SARS-CoV-2 vaccine to vaccinate up to 300M people in the targeted population (≈560M additional doses). 1.4 Scope Novavax has defined a scope of activities in order to successfully develop the prototype, as defined above. The scope is based on the following assumptions regarding manufacturing and clinical dose:


 
-5- 92962494_6 o Manufacturing Assumptions and Clinical Dose  The NVX-CoV-2373 vaccine is comprised of the Matrix-M™ adjuvant, and antigen (SARS-CoV-2 spike protein).  A dose range of 5-25 µg of antigen is under clinical study. The anticipated dose based on clinical data obtained to date is [***]µg of antigen with [***]µg of Matrix-M adjuvant.  For planning purposes, the [***] ([***]µg antigen/dose) has been used and the calculations in this scope of work have been based on this dose.  The antigen production is the rate-limiting step in vaccine production. The Matrix-M adjuvant will be available prior to antigen production. Dose production has been calculated based on the availability of antigen. Novavax is planning on a batch-by-batch rapid fill/finish once antigen is manufactured and available.  The estimated production schedule based on the [***]µg antigen/dose (base case) and [***] µg antigen /dose (anticipated case) is in the table below: Estimated Schedule of Cumulative Doses Manufactured by Month Dosage Oct 2020 Nov 2020 Dec 2020 Jan 2021 Feb 2021 [***] µg/dose (base case) [***] [***] [***] [***] [***]** [***] µg/dose (anticipated case) [***] [***] 100,000,000* *Actual cumulative projected production at [***] µg/dose is [***] in December 2020. Some doses may be in progress at the end of December 2020. **Actual cumulative projected production at [***] µg/dose is [***] in February 2021. The scope includes the following activities: o Manufacturing  Manufacturing of 100M doses (at [***]µg/dose, ≈[***]) of NVX-CoV-2373 vaccine in 2020 for distribution to the Government upon EUA under section 564 of the Food, Drug, and Cosmetic (FD&C) Act or a biologics licensure granted under Section 351(a) of the Public Health Service Act by the U.S. FDA.  Establishment of large-scale current Good Manufacturing Practice (cGMP) manufacturing capacity compliant with 21 CFR Parts 210 and 211, and the


 
-6- 92962494_6 DSCA to the extent applicable at the time of manufacturing by statute and FDA interpretive guidance thereof.  Comparability among clinical vaccine lots and commercial lots using a comparability protocol linked to the product associated with the Phase 1 clinical study. For adjuvant components, the same raw material lot(s) will be used for the current and new Contract Manufacturing Organization (CMO) processes for the comparability protocol, and the same test lab will be used to ensure only process differences are being evaluated.  Validation of manufacturing processes will be performed to cGMP standards. o Clinical  Phase 3 pivotal clinical trial harmonized with USG clinical strategies.  A Phase 3 clinical trial in pediatric populations (<18 years).  Phase 2 studies in at-risk subpopulations (co-morbidities, [***], immunocompromised), as well as studies to support manufacturing site comparability. o Non-clinical  Studies to support EUA and regulatory approval (BLA). o Regulatory  EUA submission when data supports it, while maintaining progress toward eventual BLA submission.  BLA submission when appropriate.  Regulatory support activities (Investigational New Drug (IND) submissions) for manufacturing, clinical, non-clinical studies.  Meetings as-needed with regulators. o Project Management  Mandatory reporting requirements, as described in the Base Agreement.  Submission of Quarterly Progress Reports. Format will be agreed on by the contractor and Agreements Officer’s Representative (AOR), and will include both technical and financial status and expenditure forecast.  Facilitation of biweekly teleconferences with Novavax and USG Subject Matter Experts.


 
-7- 92962494_6  Final prototype project report and applicable patents report(s).  Work Breakdown Structure (WBS) and Integrated Master Schedule (IMS).  All Regulatory correspondence relevant to the scope of work proposed, including communications with the FDA, and all submissions. 1.4.1 Novavax Project Plan This is Novavax’s plan as of the date of the submission. Novavax desires to move quickly to large scale development as rapidly as possible, in order to meet the objectives of this proposal. As the COVID-19 pandemic is an evolving situation, Novavax may need to adapt its plan in response to FDA guidance, opportunities for manufacturing efficiencies, and clinical trial data. 1.5 Resolution of Conflicting Language If there is a conflict between the Project Agreement (of which this Statement of Work is part) and the Base Agreement (Medical CBRN Consortium (MCDC) Base Agreement No.: 2020-530), the Project Agreement language will supersede and control the relationship of the parties. 2.0 APPLICABLE REFERENCES N/A 3.0 REQUIREMENTS 3.1 Major Task: cGMP Manufacturing of NVX-CoV-2373 compliant with 21 CFR 210 and 211 3.1.1 Subtask: Raw Materials – Obtain Critical Starting Materials for Adjuvant Manufacturing Sufficient Saponin to manufacture up to 100M vaccine doses will be purchased (Desert King, headquartered in San Diego, CA, facilities in Chile). Long-lead, critical, and limited-supply materials ([***]) will be purchased for the additional 560M vaccine doses to meet the contact requirement, in order to ensure capability to rapidly manufacture to meet surge requirements with little advance notification and demonstrate capability to stockpile and distribute large quantities of the vaccine to respond when needed. 3.1.2 Subtask: Raw Materials – Obtain Critical Starting Materials for Antigen and Fill/Finish Manufacturing Sufficient materials (vials, stoppers, other consumables) to manufacture up to 100M vaccine doses will be purchased (sources TBD).


 
-8- 92962494_6 3.1.3 Subtask: Raw Materials – [***] Intermediates to Produce Matrix-M Adjuvant Matrix-M Adjuvant [***] to supply large-scale manufacturing of vaccine doses will be manufactured at [***] and PolyPeptide (Torrance, CA & Malmö, Sweden). Technology transfer and start-up of the PolyPeptide facility in Torrance, CA will be completed. Long lead, critical, and limited supply materials will be purchased in order to achieve the goal of large-scale production. 3.1.4 Subtask: Matrix-M Adjuvant Manufacturing to Supply 100M Vaccine Doses Matrix-M Adjuvant bulk components will be manufactured at ACG Biologics (Seattle, WA) to supply 100M vaccine doses. Technology transfer and start-up of the AGC Bio facility in Seattle will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site. 3.1.5 Subtask: Antigen Manufacturing to Supply 100M Vaccine Doses Antigen will be manufactured at Fuji (2 sites – College Station, TX and Research Triangle Park, NC) to supply 100M vaccine doses. Technology transfer and scale-up activities will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site. 3.1.6 Subtask: Fill/Finish of 100M Vaccine Doses 100M doses of finished vaccine in [***] vials will be manufactured at Baxter (Bloomington, IN, USA). This will include secondary packaging. Technology transfer and scale-up activities will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site. 3.1.7 Subtask: Shipping and Storage Novavax assumes that it will maintain a Vendor Managed Inventory (VMI) system for a period of 12 months, with shipments to 10 geographic zones in the USA. Novavax will perform activities to establish compliance with DSCA to the extent applicable at the time of manufacturing, by statute and FDA interpretive guidance thereof. 3.2 Major Task: Clinical Studies Novavax will perform these clinical trials and deliver the results in an interim Clinical Study Report (CSR) at the completion of enrollment, and the final CSR when available. These trials will be conducted using a Clinical Research Organization (CRO) that is to be determined. 3.2.1 Subtask: Phase 3 Global Efficacy Study, Adults ≥ 18 and < 75 years Study: Phase 3 – Global Efficacy Study (to be harmonized with other USG studies), 2019nCoV- 301. Population: Adults ≥ 18 years, inclusive of subjects with more severe co-morbid conditions.


 
-9- 92962494_6 Locations: North America, Europe; may include Africa, Asia, Oceania, South America. Primary Objectives: Clinical efficacy, safety, immunogenicity. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M – dose determined by Phase 2 dose confirmation study, Placebo; ~0.5 mL dose Intramuscular (IM) injection, up to 2 doses at Day 0 and Day 21. Enrollment: TOTAL N: ~30,000 (adjusted for expected endpoint incidence). [***]. 3.2.2 Subtask: Phase 2 Efficacy Expansion (US), Adults ≥ 18 and < 75 years Study: Phase 2 -Part 3 efficacy expansion (US), 2019nCoV-204. Population: Adults ≥ 18 and < 75 years. Locations: USA. Primary Objectives: Clinical efficacy, safety, immunogenicity. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M – [***]; not greater than 25 µg antigen + 50 µg adjuvant, [***] to allow for rapid initiation. Placebo. ~0.5 mL dose IM injection, up to 2 doses at Day 0 and Day 21. Enrollment: TOTAL: [***]. [***]. Adjusted for expected event occurrence. Event driven analysis. Initiation of study gated on completion of Phase 1 study, dose-selection and regulatory approval. 3.2.3 Subtask: Phase 2 Study in Immunocompromised Persons (HIV-positive adult subjects) (Africa) Study: Phase 2 study in immunocompromised persons (HIV-positive adult subjects) (Africa). Population: Adults ≥ 18 and < 65 years. Locations: Republic of South Africa (RSA) Primary Objectives: Safety, immunogenicity (serum and cellular). Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M; Placebo, 0.5 mL dose IM injection, up to 2 doses at Day 0 and Day 21.


 
-10- 92962494_6 Enrollment: Total N = 2,640 – 2,880 (with n=240 -480 HIV+); 1:1 Vaccine to placebo. Initiation gated on completion of Phase 1 study, dose selection, and regulatory approval. 3.2.4 Subtask: [***] Study: [***]. Population: [***]. Locations: [***]. Primary Objectives: [***]. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M [***]. Enrollment: [***]. Initiation gated on benefit:risk assessment (derived from Task 2.3.1 and/or 2.3.2 and/or other Phase 2 studies) and regulatory approval to conduct studies in this vulnerable population. 3.2.5 Subtask: Phase 2 Manufacturing Site Lot Consistency/Comparability Study (US or other) Study: Phase 2 manufacturing site lot consistency/comparability study (US or other), 2019nCoV- 201. Population: Adults ≥ 18 to < 50 years. Locations: USA. Primary Objectives: Safety, immunogenicity. Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M; [***]. Enrollment: ~600 per cohort, each cohort having [***]. Study size may be adjusted to allow non- inferiority testing. 3.2.6 Subtask: [***] Study: [***]. Population: [***]. Locations: [***]. Primary Objectives: [***].


 
-11- 92962494_6 Design: Randomized, observer-blinded, placebo-controlled. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M; [***]. Enrollment: Total = 800 mothers + baby. Initiation gated on benefit:risk assessment (derived from Task 2.3.1 and/or 2.3.2 and/or other Phase 2 studies) and regulatory approval to conduct studies in this vulnerable population. 3.2.7 Subtask: Pharmacovigilance; Establishment of Registration Safety Database A registration safety database will be established to comply with FDA requirements for product safety and licensure. 3.2.8 Subtask: [***] Study: [***]. Population: [***]. Location: [***]. Primary Objective: [***]. Design: Randomized, observer-blinded, placebo (or active vaccine) control. Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M – [***]. Enrollment: TOTAL: N ~12,500 (based on agreed VE, power, and LBCI). [***]. Adjusted for expected event occurrence if robust demonstration of clinical efficacy is required by the FDA. Event driven analysis for study termination. 3.3 Major Task: Non-Clinical Studies Novavax will perform these non-clinical studies and deliver the results in a study report at completion. 3.3.1 Mouse Study, Immunogenicity Study 702-100. [***] in mice for vaccine efficacy profile to comply with FDA guidelines. 3.3.2 Rhesus Study, Immunogenicity Study 702-099. [***] in rhesus monkeys for vaccine efficacy profile to comply with FDA guidelines. 3.3.3 Hamster Study, Immunogenicity Study 702-102. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines.


 
-12- 92962494_6 3.3.4 Mouse Study, T-Cell Immunogenicity Study 702-103. T-cell immunogenicity/challenge study in mice [***] for vaccine efficacy profile to comply with FDA guidelines. 3.3.5 Hamster Study, T-Cell Immunogenicity Study 702-105. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines. 3.3.6 Mouse Study, T-Cell Immunogenicity Study 702-104. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines. 3.3.7 Non-Clinical Studies: Collaboration with Univ. of Maryland School of Medicine Three studies to study enhancement/inhibition and neutralization, and virus challenge of vaccinated mice: 1. Validation of Spike nanoparticles in cell inhibition studies: In vitro inhibition studies on cell line permissive to r2019-nCoV, readout TBD. 2. Neutralization studies with virus against bleeds from mice, In vitro microneutralization studies on cell line permissive to r2019-nCoV, TCID50 or fluorescence readout (TBD). 3. Virus challenge of vaccinated mice (mice vaccinated outside and shipped to UM for challenge), Challenge of vaccinated mice (shipped in for infection from Novavax), Lung pathology, Titer, viral Ribonucleic Acid (RNA) quantitation, pathology scoring and reports. 3.3.8 Structural Study of COVID-19 Spike Protein and its Complex with Host Receptor (cooperation with Baylor College of Medicine) Study to determine the structures of recombinant COVID-19. Spike protein in nanoparticles used in Novavax’s human vaccine and in complex with its host receptor ACE2. Will obtain a high- resolution cryoEM structure of full-length COVID-19 Spike protein and a high-resolution cryoEM structure of full-length COVID-19 Spike protein in complex with human receptor ACE2. 3.3.9 Neutralizing Assay Histopathology for On-going [***] Histopathology readings for current neutralization studies in [***]. This will support the safety profile of the vaccine for FDA approval. 3.3.10 Mouse Study, Immunogenicity [***] Studies Individual immunogenicity studies [***] in mice for vaccine efficacy profile in different sub- populations to comply with FDA guidelines.


 
-13- 92962494_6 3.3.11 Durability of NVX-CoV2373 Vaccine Immunity and SARS-CoV-2 Protection at [***]] in Rhesus Macaques Study 702-110. This study is designed to evaluate the long-term immunogenicity and protective efficacy of NVX-CoV2373 nanoparticle vaccine when administered with Matrix-MTM by IM injections on Study Days 0 and 21, to Non-Human Primates (NHP). Each study group will contain [***] NHPs ([***] per sex). Blood samples will be collected prior to vaccination and at multiple time points following vaccination as outlined below. Samples will be shipped to Novavax Inc. for performance of assays to determine the vaccine immunogenicity. Animals from placebo and active treatment groups will be challenged with SARS-CoV-2 virus at [***] following last treatment and monitored for clinical illness, viral RNA and sgRNA (nasal swabs, BAL) to assess the protective efficacy of the vaccine. 3.3.12 Immunogenicity and Protective Efficacy of Sub-Protective Doses of NVX- CoV2373 in Rhesus Macaques Study 702-111. This study is designed to evaluate the immunogenicity and protective efficacy of sub-optimal doses of NVX-CoV2373 nanoparticle vaccine administered with a fixed dose of Matrix-MTM by IM injections on Study Days 0 and 21, to NHPs. Each study group will contain [***] NHPs ([***] per sex). Blood samples will be collected prior to vaccination and at various time points following vaccination as outlined below. Samples will be shipped to Novavax Inc. for performance of assays to determine the vaccine immunogenicity. Animals from placebo and active treatment groups will be challenged with SARS-CoV-2 virus at [***] following last treatment and monitored for clinical illness, viral RNA and sgRNA (nasal swabs, BAL) to assess the protective efficacy of the vaccine. 3.4 Major Task: Regulatory Affairs Novavax will conduct the regulatory activities below, including BLA prep and submission, and provide the meeting minutes and applications to the USG. 3.4.1 Subtask: EUA Submission and Supporting Meetings and Regulatory Filings An EUA will be submitted to the FDA upon obtaining sufficient clinical data. EUA, FDA meetings to support EUA, submission planning support for the Chemistry, Manufacturing, and Controls (CMC) team, EUA strategy and meeting support, and submission preparation support activities, will all be completed. 3.4.2 Subtask: IND Submission Updates and FDA Meetings This task will include submissions to the IND and possible FDA meetings that will be required prior to the BLA submission. 3.4.3 Subtask: BLA Submission A BLA will be submitted to the FDA upon obtaining sufficient clinical data, FDA meetings to support BLA, submission planning support for the CMC team, BLA strategy and meeting support, and submission preparation support activities, will all be completed.


 
-14- 92962494_6 3.5 Major Task: Project Management and Reporting 3.5.1 Subtask: Kick-Off Meeting and Initial Baseline Review of IMS Novavax shall conduct a Kick-Off Meeting and an initial review with the USG of the IMS, upon initiation of the program. 3.5.2 Subtask: Biweekly Meetings with OWS Novavax shall submit the agenda in advance. Any technical updates shall be provided in advance for the Government team to review. Minutes shall be submitted after the biweekly meeting to the USG. 3.5.3 Subtask: Written Quarterly Reports Novavax shall submit quarterly reports to the USG. 3.5.4 Subtask: Written Annual Reports Novavax shall submit the annual reports to the USG. 3.5.5 Subtask: Written Final Report Novavax shall submit the final report to the USG. 3.6 Optional Task: Follow-On Production Follow-on production of finished doses of vaccine up to 560M doses. 4.0 DELIVERABLES Del. # Deliverable Description Due Date Mileston e Referenc e SOW Reference Government Role Data Type/Data Rights Manufacturing 4.1 [***] [***] 5.1 3.1.1 Reviewer [***] 4.2 [***] [***] 5.2 3.1.2 Reviewer [***] 4.3 [***] [***] 5.3 3.1.3 Reviewer [***] 4.4 [***] [***] 5.4 3.1.4 Reviewer [***] 4.5 [***] [***] 5.5 3.1.5 Reviewer [***] 4.6 [***] [***] 5.6 3.1.6 Reviewer [***] 4.7 [***] [***] 5.7 3.1.7 Reviewer [***] Clinical 4.8 [***] [***] 5.8 3.2.1 Reviewer [***] 4.9 [***] [***] 5.9 3.2.2 Reviewer [***] 4.10 [***] [***] 5.10 3.2.3 Reviewer [***] 4.11 [***] [***] 5.11 3.2.4 Reviewer [***]


 
-15- 92962494_6 Del. # Deliverable Description Due Date Mileston e Referenc e SOW Reference Government Role Data Type/Data Rights 4.12 [***] [***] 5.12 3.2.5 Reviewer [***] 4.13 [***] [***] 5.13 3.2.6 Reviewer [***] 4.14 [***] [***] 5.14 3.2.7 Reviewer [***] 4.15 [***] [***] 5.15 3.2.8 Reviewer [***] Non-Clinical 4.16 [***] [***] 5.16 3.3.1 Reviewer [***] 4.17 [***] [***] 5.17 3.3.2 Reviewer [***] 4.18 [***] [***] 5.18 3.3.3 Reviewer [***] 4.19 [***] [***] 5.19 3.3.4 Reviewer [***] 4.20 [***] [***] 5.20 3.3.5 Reviewer [***] 4.21 [***] [***] 5.21 3.3.6 Reviewer [***] 4.22 [***] [***] 5.22 3.3.7 Reviewer [***] 4.23 [***] [***] 5.23 3.3.8 Reviewer [***] 4.24 [***] [***] 5.24 3.3.9 Reviewer [***] 4.25 [***] [***] 5.25 3.3.10 Reviewer [***] 4.26 [***] [***] 5.26 3.3.11 Reviewer [***] 4.27 [***] [***] 5.27 3.3.12 Reviewer [***] Regulatory Affairs 4.28 [***] [***] 5.28 3.4.1 Reviewer [***] 4.29 [***] [***] 5.29 3.4.2 Reviewer [***] 4.30 [***] [***] 5.30 3.4.3 Reviewer [***] Project Management 4.31 [***] [***] 5.31 3.5 Reviewer [***] 4.32 [***] [***] 5.32 3.5.1 Reviewer [***] 4.33 [***] [***] 5.33 3.5.2 Reviewer [***] 4.34 [***] [***] 5.34 3.5.3 Reviewer [***] 4.35 [***] [***] 5.35 3.5.4 Reviewer [***] 4.36 [***] [***] 5.36 3.5.4 Reviewer [***] 4.37 [***] [***] 5.37 3.5.5 Reviewer [***] 4.38 [***] [***] 5.35 N/A Reviewer [***] TBD [***] [***] Option 1 3.6 Reviewer [***] Note 1: Attachment D of the Project Agreement shall be referenced for supplemental security requirements associated with deliverables under this project. Note 2: The USG agrees to permanently transfer USG material, in the form of mutually agreed upon quantities of Clinical Drug Substance/Product, to Novavax for its own use in related drug trials. To enable the foregoing, the USG transfers all its right, title and interest in and to the Clinical Drug Substance/Product to Novavax. In consideration of such right, Novavax agrees (a) that Novavax shall [***]; (b) that Novavax agrees to [***]; and, (c)


 
-16- 92962494_6 Novavax will, upon reasonable request from the USG, obtain and share data from the use of the Clinical Drug Substance/Product, in a mutually agreed upon format. All transfers of material produced under the project, shall obtain prior written approval by the Government, with material quantities, destinations, applications, and USG benefits clearly delineated in a mutually agreed upon format. 5.0 MILESTONE PAYMENT SCHEDULE The milestones below are for reference and costs for the project will be invoiced monthly on a cost reimbursable basis as the work progresses. Milestone # Milestone Description (Deliverable Reference) Due Date Total Program Funds Manufacturing [***] 5.1 [***] [***] [***] 5.2 [***] [***] [***] 5.3 [***] [***] [***] 5.4 [***] [***] [***] 5.5 [***] [***] [***] 5.6 [***] [***] [***] 5.7 [***] [***] [***] Clinical [***] 5.8 [***] [***] [***] 5.9 [***] [***] [***] 5.10 [***] [***] [***] 5.11 [***] [***] [***] 5.12 [***] [***] [***] 5.13 [***] [***] [***] 5.14 [***] [***] [***] 5.15 [***] [***] [***] Non-Clinical [***] 5.16 [***] [***] [***] 5.17 [***] [***] [***] 5.18 [***] [***] [***] 5.19 [***] [***] [***] 5.20 [***] [***] [***] 5.21 [***] [***] [***] 5.22 [***] [***] [***] 5.23 [***] [***] [***] 5.24 [***] [***] [***] 5.25 [***] [***] [***] 5.26 [***] [***] [***] 5.27 [***] [***] [***] Regulatory Affairs [***] 5.28 [***] [***] [***] 5.29 [***] [***] [***]


 
-17- 92962494_6 Milestone # Milestone Description (Deliverable Reference) Due Date Total Program Funds 5.30 [***] [***] [***] Project Management [***] 5.31 [***] [***] [***] 5.32 [***] [***] [***] 5.33 [***] [***] [***] 5.34 [***] [***] [***] 5.35 [***] [***] [***] 5.36 [***] [***] [***] 5.37 [***] [***] [***] 5.38 [***] [***] [***] Reservation Fees 5.39 [***] [***] [***] 5.40 [***] [***] [***] 5.41 [***] [***] [***] Total (Cost Plus Fixed Fee) $1,747,689,328 Period of Performance (July 6, 2020 – December 31, 2021) 18 Months (Base) Option 1: Follow-On Production Cost: [***] 6.0 SHIPPING PROVISIONS The shipment of physical deliverables shall be coordinated with the AOR. Data deliverables shall be provided in accordance with the agreement, and in coordination with the AOR. 7.0 INTELLECTUAL PROPERTY, DATA RIGHTS, AND COPYRIGHTS 7.1 BACKGROUND IP (a) Ownership. Prior to June 8, 2020, Novavax had funded the development of NVX- CoV2373, and other antecedent vaccine programs relevant to Novavax’ proprietary position in the development of NVX-CoV2373, as well as its sf9/baculovirus manufacturing platform, (all “Background IP”) through private funding or in collaboration with a funding partner other than the U.S. Government. Such private and non-governmental funding has continued since June 8, 2020 and is expected to continue during the performance of the Project Agreement. A list of all patents and patent applications included in the Background IP is provided below as Enclosure 4. Background IP also consists of (a) manufacturing know-how, including, without limitation, the NVAX-Cov2373 manufacturing process definitions, process development/characterization reports, laboratory scale process procedures, manufacturing records, analytical test methods, product quality target ranges/specifications, quality target product profile, critical quality attributes (collectively “Background Know-How”), (b) data from pre-clinical and clinical research studies, analytical and process development research, and data related to, or generated using, the Background Know-How (collectively, “Background Data”), and (c) proprietary manufacturing materials, including, without limitation, sf9 cell banks (master and working), baculovirus virus


 
-18- 92962494_6 stock (master and working), product standards, reference standards, and critical reagents (“Background Materials”). On June 8, 2020, Novavax and the U.S. Department of Defense entered into a Letter Contract for specified U.S.-based clinical and manufacturing development of NVX- CoV2373 which acknowledged Background IP and made no explicit U.S. Government claims to Background IP or subsequent data arising therefrom. The U.S. Government hereby acknowledges such Background IP in full and further acknowledges that it has no ownership rights to Novavax Background IP under this Project Agreement. (b) Background IP Limited License to Government. Subject to the terms of the Project Agreement, Novavax grants the U.S. Government a nonexclusive, worldwide, nontransferable, non-sublicenseable license to use the Background IP to the limited extent necessary for the U.S. Government to review and use the Deliverables tendered by Novavax under this Agreement identified in Section 4.0 above, and for no other purpose; provided that the U.S. Government agrees that it may not disclose the Background IP to third parties, or allow third parties to have access to, use, practice or have practiced the Background IP, without Novavax’s prior written consent. To the extent that a Deliverable with Foreground IP incorporates or uses Background IP, the Deliverable shall be deemed and considered to comprise Background IP and shall be used by the U.S. Government in accordance with this Background IP Limited License. (c) Background IP License to Novavax. Subject to the terms of the Project Agreement, the U.S. Government grants to Novavax a nonexclusive, worldwide, nontransferable, irrevocable, paid-up license to any intellectual property (including patents and patent applications) to which the U.S. Government has rights thereto, provided that such license is limited to such intellectual property rights necessary to perform Novavax’s obligations under the Project Agreement. 7.2 FOREGROUND IP (a) Ownership. Notwithstanding anything in the Base Agreement to the contrary, Novavax owns all rights, title and interest in and to any development, modification, discovery, invention or improvement, whether or not patentable, conceived, made, reduced to practice, or created in connection with activities funded under the Project Agreement, including, without limitation, all data and inventions, and intellectual property rights in any of the foregoing (“Foreground IP”). (b) Foreground IP Special License. Subject to the terms of the Project Agreement, Novavax grants the U.S. Government a nonexclusive, worldwide, nontransferable, irrevocable, paid-up license to practice or have practiced the Foreground IP for or on behalf of the U.S. Government (“Foreground IP Special License”). 8.0 DATA RIGHTS Article XI, §11.03 of the Base Agreement is hereby amended, consistent with the “Specifically Negotiated License Rights” capability at Article XI, §§11.01(12) and 11.03(4), as follows:


 
-19- 92962494_6 8.1 Data Ownership. Novavax owns all rights, title and interest to all Data (as defined in Article XI, Section 11.01(7) of the Base Agreement) generated as a result of the work performed under this Project Agreement, including Subject Data. 8.2 Rights to Data. (a) Subject Data. Subject to the terms of the Project Agreement, Novavax grants to the U.S. Government a Government purpose rights license to Subject Data that will convert to an unlimited rights license (as the term is defined in Article XI, Section 11.01(14) of the Base Agreement)1 after three (3) years from the date of delivery. As used herein, “Subject Data” shall mean Technical Data under Article XI, §11.01(13) of the Base Agreement Deliverables that are considered Subject Data are identified in the Deliverable Table set forth in Section 4.0 above. (b) Transfer of Data. Each party, upon written request to the other party, shall have the right to review and to request delivery of Subject Data, and delivery of such Data shall be made to the requesting party within two weeks of the request, except to the extent that such Data are subject to a claim of confidentiality or privilege by a third party. (c) Background IP Limited License. To the extent that Subject Data incorporates or uses Background IP, the data shall be deemed and considered to comprise Background IP and shall be used by the U.S. Government in accordance with the Background IP Limited License set forth in Section 7.3 above. 8.3 Background Technical Data Rights Assertions. Novavax asserts background technical data rights as follows: The Background Data, as defined in Section 7.1 above, was developed through private funding or in collaboration with a funding partner other than the U.S. Government. Such funding is expected to continue; accordingly, Novavax asserts Background Data as Category A Data pursuant to section 11.02(1) of the Base Agreement and the U.S. Government shall have no rights therein. 9.0 REGULATORY RIGHTS This agreement includes research with an investigational drug, biologic or medical device that is regulated by the U.S. Food and Drug Administration (FDA) and requires FDA pre-market approval or clearance before commercial marketing may begin. It is expected that this agreement will result in the FDA authorization, clearance and commercialization of NVX-CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus (the “Technology”). Novavax is the Sponsor of the Regulatory Application (an investigational new drug application (IND), investigational device exemption (IDE), emergency use authorization (EUA), new drug application (NDA), biologics license 1 As used herein, “Government Use” as used “Purpose Rights” has the meaning set forth in this Section 4.0 means Government purpose rights as defined in the Base Agreement, Article XI, Section 11.01(9).) of the Base Agreement, as modified by Section 8.2(b) below.


 
-20- 92962494_6 application (BLA), premarket approval application (PMA), or 510(k) pre-market notification filing (510(k)) or another regulatory filing submitted to the FDA) that controls research under this contract. As the Sponsor of the Regulatory Application to the FDA (as the terms “sponsor” and “applicant” are defined or used in at 21 CFR §§3.2(c), 312.5, 600.3(t), 812.2(b), 812 Subpart C, or 814.20), Novavax has certain standing before the FDA that entitles it to exclusive communications related to the Regulatory Application. This clause protects the return on research and development investment made by the U.S. Government in the event of certain regulatory product development failures related to the Technology. Novavax agrees to the following: (a) Communications. Novavax will provide the U.S. Government with all communications and summaries thereof, both formal and informal, to or from FDA regarding the Technology and ensure that the U.S. Government representatives are invited to participate in any formal or informal Sponsor meetings with FDA; (b) Rights of Reference. The U.S. Government is hereby granted a right of reference as that term is defined in 21 C.F.R. § 314.3(b) (or any successor rule or analogous applicable law recognized outside of the U.S.) to any Regulatory Application submitted in support of the statement of work for the Project Agreement. When it desires to exercise this right, the U.S. Government agrees to notify Novavax in writing describing the request along with sufficient details for Novavax to generate a letter of cross-reference for the U.S. Government to file with the appropriate FDA office. The U.S. Government agrees that such letters of cross-reference may contain reporting requirements to enable Novavax to comply with its own pharmacovigilance reporting obligations to the FDA and other regulatory agencies. Nothing in this paragraph reduces the U.S. Government’s data rights as articulated in other provisions of the Project Agreement. (c) DoD Medical Product Priority. PL-115-92 allows the DoD to request, and FDA to provide, assistance to expedite development and the FDA’s review of products to diagnose, treat, or prevent serious or life-threatening diseases or conditions facing American military personnel. Novavax recognizes that only the DoD can utilize PL 115-92. As such, Novavax will work proactively with the DoD to leverage this this law to its maximal potential under this Project Agreement. Novavax shall submit a mutually agreed upon Public Law 115-92 Sponsor Authorization Letter to the U.S. Government within 30 days of award. 10.0 ENSURING SUFFICIENT SUPPLY OF THE PRODUCT (a) In recognition of the Government’s significant funding for the development and manufacturing of the product in this Project Agreement and the Government’s need to provide sufficient quantities of a safe and effective COVID-19 vaccine to protect the United States population, the Government shall have the remedy described in this section to ensure sufficient supply of the product to meet the needs of the public health or national security. This remedy is not available to the Government unless and until both of the following conditions are met: i. Novavax gives written notice, required to be submitted to the Government no later than 15 business days, of:


 
-21- 92962494_6 a. any formal management decision to terminate manufacturing of the NVX-CoV-2373 vaccine prior to delivery of 100 million doses to USG; b. any formal management decision to discontinue sale of the NVX- CoV-2373 vaccine to the Government prior to delivery of 100 million doses to USG; or c. any filing that anticipates Federal bankruptcy protection; and ii. Novavax has submitted an Emergency Use Authorization under §564 of the FD&C Act or a biologics license application provisions of §351(a) of the Public Health Service Act (PHSA). (b) If both conditions listed in section (a) occur, Novavax, upon the request of the Government, shall provide the following items necessary for the Government to pursue manufacturing of the NVX-CoV-2373 vaccine with a third party for exclusive sale to the U.S. Government: i. a writing evidencing a non-exclusive, nontransferable, irrevocable (except for cause), royalty-free paid-up license to practice or have practiced for or on behalf of the U.S. Government any Background IP as defined in clause 7.1 necessary to manufacture or have manufactured the NVX-CoV2373 vaccine; ii. necessary FDA regulatory filings or authorizations owned or controlled by Novavax related to NVX-Cov2373 and any confirmatory instrument pertaining thereto; and iii. any outstanding Deliverables contemplated or materials purchased under this Project Agreement. (c) This Article shall be incorporated into any contract for follow-on activities for the Government to acquire and use additional doses of the product. Per section 1.3, the estimated quantity for follow-on production/procurement is approximately 560 million doses. (d) This Article will survive the acquisition or merger of the Contractor by or with a third party. This Article will survive the expiration of this agreement. 11.0 SECURITY The security classification level for this effort is UNCLASSIFIED. Attachment D of the Project Agreement shall be referenced for supplemental security requirements associated with the execution of this project. 12.0 MISCELLANEOUS REQUIREMENTS (SAFETY, ENVIRONMENTAL, ETC.) N/A


 
-22- 92962494_6 13.0 GOVERNMENT FURNISHED PROPERTY/MATERIAL/INFORMATION 14.0 AGREEMENTS OFFICER’S REPRESENTATIVE (AOR) AND ALTERNATE AOR CONTACT INFORMATION AOR NAME: [***] EMAIL: [***] PHONE: [***] AGENCY NAME/DIVISION/SECTION: Joint Program Executive Office, Joint Program Lead-Enabling Biotechnologies Alternate AOR NAME: TBD MAILING ADDRESS: EMAIL: PHONE: AGENCY NAME/DIVISION/SECTION: HHS/ASPR/BARDA


 
92962494_6 ENCLOSURE 3: (SUPERSEDED) N/A – this enclosure has been superseded from the original and is no longer applicable.


 
Page 1 of 4 FOR OFFICIAL USE ONLY / PROCUREMENT SENSITIVE 92962494_6 ENCLOSURE 4: PATENT LISTING [Pursuant to Regulation S-K, Item 601(a)(5), this enclosure setting forth the patent listing has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]


 
Exhibit 10.48

Certain information identified with [***] has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACTED ID CODE PAGE OF PAGES
1 2
2. AMENDMENT/MOFIFICATION NO.

P00002
3. EFFECTIVE DATE

01-Dec-2020
4. REQUISITION/PURCHASE REQ. NO.

SEE SCHEDULE
5. PROJECT NO. (if applicable)
6. ISSUED BY    CODE W911QY 7. ADMINISTERED BY (If other than item 6)    CODE S2101A

W6QK ACC-APG NATICK DIVISION
[***]
DEFENSE CONTRACT MANAGEMENT AGENCY
DCMA BALTIMORE
217 EAST REDWOOD STREET
SUITE 1800
BALTIMORE MD 21202-3375


SCD: A
8. NAME AND ADDRESS OF CONTRACTOR (No., Street, County, State and Zip Code)
NOVAVAX, INC.
20 FIRSTFIELD RD
GAITHERSBURG MD 20878-1760

9A. AMENDMENT OF SOLICITATION NO.

9B. DATED (SEE ITEM 11)
X
10A. MOD. OF CONTRACT/ORDER NO. W911QY20C0077
X
10B. DATED (SEE ITEM 13)
04-Jun-2020
CODE    1UCZ4 FACILITY CODE
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offer
is extended,
is not extended,
Offer must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended by one of the following methods:
(a) By completing Items 8 and 15, and returning _________ copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (If required)
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS.
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A.    THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
X B.    THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(B).
C.    THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
D.    OTHER (Specify type of modification and authority)
E.    IMPORTANT: Contractor
is not,
is required to sign this document and return ___________ copies to the issuing office.
14.    DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)
Modification Control Number: soconnel2170
The purpose of this modification is to add payment instructions in accordance with DFARS PGI 204.7108 as follows:









Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.
EXCEPTION TO SF 30    30-105-04    STANDARD FORM 30 (Rev. 10-83)
APPROVED BY OIRM 11-84        Prescribed by GSA
        FAR (48 CFR) 53.243
92962538_6


15A.    NAME AND TITLE OF SIGNER (Type or print)
16A.    NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
[***] / CONTRACTING OFFICER

TEL: [***]    EMAIL: [***]
15B.    CONTRACT OR/OFFEROR

    
(Signature of person authorized to sign)
15C.    DATE SIGNED
16B.    UNITED STATES OF AMERICA

BY /s/ [***]    
(Signature of Contracting Officer)
16C.    DATE SUGNED

01-Dec-2020

    -2-
92962538_6

W911QY20C0077
P00002
Page 3 of 2
SECTION SF 30 BLOCK 14 CONTINUATION PAGE
SUMMARY OF CHANGES

SECTION SF 30 - BLOCK 14 CONTINUATION PAGE

The following have been added by full text:
    PAYMENT INSTRUCTIONS

PGI 204.7108 Payment Instructions.
In accordance with PGI 204.7108 (b) (1), the following link has been provided: The contracting officer shall insert the table at (b)(2), or a link to the table at (b)(2) (https://www.acq.osd.mil/dpap/dars/pgi/pgi_htm/current/PGI204_71.htm#payment_instructions).
NOTE: Line Item specific proration. If there is more than one ACRN within a deliverable line or deliverable subline item, the funds will be allocated in the same proportion as the amount of funding currently unliquidated for each ACRN on the deliverable line or deliverable subline item for which payment is requested.


(End of Summary of Changes)
92962538_6
Exhibit 10.49

Certain information identified with [***] has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE
S
PAGE OF PAGES
1 10
2. AMENDMENT/MODIFICATION NO.
P00003
3.EFFECTIVE DATE
05-Jan-2021
4. REQUISITION/PURCHASE REQ. NO.
SEE SCHEDULE
5. PROJECT NO.(If applicable)
6. ISSUED BY      CODE
W6QK ACC-APG NATICK DIVISION
[***]
W911QY 7. ADMINISTERED BY (If other than item 6)
DEFENSE CONTRACT MANAGEMENT AGENCY
DCMA BALTIMORE
217 EAST REDWOOD STREET
SUITE 1800
BALTIMORE MD 21202-3375
CODE S2101A
SCD: A
8. NAME AND ADDRESS OF CONTRACTOR (No., Street, County, State and Zip Code)
NOVAVAX, INC.
20 FIRSTFIELD RD
GAITHERSBURG MD 20878-1760
9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
X 10A. MOD. OF CONTRACT/ORDER NO.
W911QY20C0077
code 1UCZ4 facility code X 10B. DATED (SEE ITEM 13)
04-Jun-2020
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offer
is extended, is not extended.
Offer must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended by one of the following methods:
(a) By completing Items 8 and 15, and returning __ copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (If required)
See Schedule
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS.
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(B).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
X D. OTHER (Specify type of modification and authority)
FAR 52.216-25, Contract Definitization
E. IMPORTANT: Contractor is not,
is required to sign this document and return
_1_ copies to the issuing office.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)
Modification Control Number: soconnel21683
The purpose of this modification is to definitize terms and conditions of this Letter Contract as follows:
Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.
15A. NAME AND TITLE OF SIGNER (Type or print)
John A. Herrmann III, EVP & CLO
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
[***] / CONTRACTING OFFICER
TEL: [***]        EMAIL: [***]
92634853_7



15B. CONTRACTOR/ OFFEROR
____/s/ John A. Herrmann III____________
(Signature of person authorized to sign)

15C. DATE SIGNED

4-Jan-2021
16B. UNITED STATES OF AMERICA
BY (Signature of Contracting Officer)
/s/[***]
16C. DATE SIGNED
05-Jan-2021
EXCEPTION TO SF 30
APPROVED BY OIRM 11-84
30-105-04 STANDARD FORM 30 (Rev. 10-83) Prescribed by GSA
FAR (48 CFR) 53.243


    -2-
92634853_7




SECTION SF 30 BLOCK 14 CONTINUATION PAGE
SUMMARY OF CHANGES
SECTION SF 30 - BLOCK 14 CONTINUATION PAGE
The following have been added by full text:
HRPAS RATED ORDER
1.    This contract is designated as an Health Resources Priority Allocation (HRPAS) rated order (45 CFR 101) as approved by the Secretary of Health and Human Services on 10 November 2020.
2.    Block 1 of the SF 26 is hereby revised to incorporate a DPAS rating of DO-C9.
3.    The Contractor is hereby authorized to effect this rating on all vendors necessary to support the product development. Companies are required by law to accept rated orders and to provide preferential scheduling even over previously accepted orders if necessary to meet required delivery date(s).
4.    FAR clause 52.211-15, Defense Priority and Allocation Requirements is inserted by reference into Section I of this contract.
SECTION A - SOLICITATION/CONTRACT FORM
The total cost of this contract was decreased by $14,329,341.00 from $60,000,000.00 to $45,670,659.00.
The DPAS code DO-C9 has been added.
The following have been deleted:
LETTER CONTRACT
SECTION B - SUPPLIES OR SERVICES AND PRICES
CLIN 0001
The CLIN extended description has changed from:
The contractor shall complete development and production of the Novavax nanoparticle vaccine against COVID-19, to include, production of the M matrix adjuvant and the fill/finish capability, in accordance with the Performance Work Statement (PWS) attached in Section C. Deliverables shall be completed in accordance with the following schedule:
[***]
To:
    -3-
92634853_7




The contractor shall complete development and production of the Novavax nanoparticle vaccine against COVID-19, to include, production of the M matrix adjuvant and the fill/finish capability, in accordance with the Performance Work Statement (PWS) attached in Section C. Deliverables shall be completed in accordance with the following schedule: [***]
The estimated/max cost has decreased by $14,329,341.00 from $60,000,000.00 to $45,670,659.00.
The total cost of this line item has decreased by $14,329,341.00 from $60,000,000.00 to $45,670,659.00.
SUBCLIN 000104 is added as follows:
ITEM NO SUPPLIES/SERVICES
QUANTITY
UNIT UNIT PRICE
AMOUNT
000104 Funding for CLIN 0001
FFP
PURCHASE REQUEST NUMBER: 0011504522-0002
$[***]

NET AMT
$[***]
ACRN AC
CIN: GFEBS001150452200004
$[***]

SECTION C - DESCRIPTIONS AND SPECIFICATIONS
The following have been added by full text:
PERFORMANCE WORK STATEMENT
PERFORMANCE WORK STATEMENT (PWS)
PRODUCTION OF NOVAVAX MATRIX-M ADJUVANTED VACCINE AGAINST SARS-COV-2 IN RESPONSE TO THE COVID-19 PANDEMIC
21 December 2020
1.    Scope:
JPEO-CBRND-EB is seeking technical solutions and manufacturing capabilities to rapidly develop, test, and manufacture vaccine drug product against SARS-CoV-2 for use in phase 2/3 clinical trials and under emergency use authorization. The Contractor shall manufacture the Novavax SARS-CoV-2 vaccine product (NVX-CoV2373) and make a series of deliverables to fulfill this requirement.
    -4-
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2.    Requirements:
2.1.    The Contractor shall produce the recombinant antigen component of NVX- CoV2373. The Government will provide Government Furnished Information (GFI) regarding the scale up of the manufacturing process and the successful outcome of runs accomplished on W15QKN-16-9-1002. The Contractor shall acknowledge receipt of the GFI then shall start the production process for the required doses.
2.2.    The Contractor shall manufacture enough bulk drug substance to produce ten million doses of vaccine drug product, all under current Good Manufacturing Practices and compatible with use in a late stage development clinical evaluation or Emergency Use Authorization.
2.3.     The Contractor shall produce Matrix-M vaccine adjuvant for formulation of ten million doses of bulk drug substance (non US or US based).
2.4.     The Contractor shall execute the fill/finish portion of vaccine development to meet the dose requirements listed above.
2.5.     The Contractor shall ensure all quality control/assurance adhere to phase appropriate current Good Manufacturing Practices to ensure product quality and availability for use of the doses produced.
2.6.     The Contractor shall establish a production capability within the United States for the Matrix-M adjuvant.
2.7.     The Contractor shall prepare Certificates of Analysis for all lots of the following manufactured under this contract: bulk drug substance, final drug product and Matrix M adjuvant.
The Contractor shall deliver the required doses of drug product vaccine solely for use under an approved clinical trial or EUA.
2.8.     The Contractor shall provide Program Management relevant documents (IPT meeting minutes, schedule) (CDRL A002), quarterly and final report in accordance with CDRL A004.
2.9.     The Contractor shall provide incident reports on any delays in production or delivery of material within [***] of occurrence in accordance with CDRL A006.
The following have been deleted:
SECTION E - INSPECTION AND ACCEPTANCE
The following Acceptance/Inspection Schedule was added for SUBCLIN 000104:
INSPECT AT        INSPECT BY        ACCEPT AT        ACCEPT BY
N/A            N/A            N/A            N/A
SECTION G - CONTRACT ADMINISTRATION DATA
Accounting and Appropriation
Summary for the Payment Office
    -5-
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As a result of this modification, the total funded amount for this document was increased by $15,718,275.00 from $29,952,384.00 to $45,670,659.00.
SUBCLIN 000104:
Funding on SUBCLIN 000104 is initiated as follows:
ACRN: AC
CIN: GFEBS001150452200004
Acctng Data: 09720202021013000018170552520252    S.0074658.1.1.5    6100.9000021001
Increase: $15,718,275.00
Total: $15,718,275.00
Cost Code: AHPDD
The following have been modified:
252.232-7006 WIDE AREA WORKFLOW PAYMENT INSTRUCTIONS (DEC 2018)
(a) Definitions. As used in this clause—
“Department of Defense Activity Address Code (DoDAAC)” is a six position code that uniquely identifies a unit, activity, or organization.
“Document type” means the type of payment request or receiving report available for creation in Wide Area WorkFlow (WAWF).
“Local processing office (LPO)” is the office responsible for payment certification when payment certification is done external to the entitlement system.
“Payment request” and “receiving report” are defined in the clause at 252.232-7003, Electronic Submission of Payment Requests and Receiving Reports.
(b) Electronic invoicing. The WAWF system provides the method to electronically process vendor payment requests and receiving reports, as authorized by Defense Federal Acquisition Regulation Supplement (DFARS) 252.2327003, Electronic Submission of Payment Requests and Receiving Reports.
(c) WAWF access. To access WAWF, the Contractor shall—
(1) Have a designated electronic business point of contact in the System for Award Management at https://www.sam.gov; and
    -6-
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(2) Be registered to use WAWF at https://wawf.eb.mil/ following the step-by-step procedures for self-registration available at this web site.
(d) WAWF training. The Contractor should follow the training instructions of the WAWF Web-Based Training Course and use the Practice Training Site before submitting payment requests through WAWF. Both can be accessed by selecting the “Web Based Training” link on the WAWF home page at https://wawf.eb.mil/.
(e) WAWF methods of document submission. Document submissions may be via web entry, Electronic Data Interchange, or File Transfer Protocol.
(f) WAWF payment instructions. The Contractor shall use the following information when submitting payment requests and receiving reports in WAWF for this contract or task or delivery order:
(1) Document type. The Contractor shall submit payment requests using the following document type(s):
(i) For cost-type line items, including labor-hour or time-and-materials, submit a cost voucher.
(ii) For fixed price line items—
(A) That require shipment of a deliverable, submit the invoice and receiving report specified by the Contracting Officer.
(B) For services that do not require shipment of a deliverable, submit either the Invoice 2in1, which meets the requirements for the invoice and receiving report, or the applicable invoice and receiving report, as specified by the Contracting Officer.
(iii) For customary progress payments based on costs incurred, submit a progress payment request.
(iv) For performance based payments, submit a performance based payment request.
(v) For commercial item financing, submit a commercial item financing request.
(2) Fast Pay requests are only permitted when Federal Acquisition Regulation (FAR) 52.213-1 is included in the contract.
(3) Document routing. The Contractor shall use the information in the Routing Data Table below only to fill in applicable fields in WAWF when creating payment requests and receiving reports in the system.
Routing Data Table*
    -7-
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Field Name in WAWF Data to be entered in WAWF
Pay Official DoDAAC HQ0338
Issue By DoDAAC W911QY
Admin DoDAAC** S2101A
Inspect By DoDAAC W56XNH
Service Acceptor (DoDAAC) W56XNH

(4) Payment request. The Contractor shall ensure a payment request includes documentation appropriate to the type of payment request in accordance with the payment clause, contract financing clause, or Federal Acquisition Regulation 52.216-7, Allowable Cost and Payment, as applicable.
(5) Receiving report. The Contractor shall ensure a receiving report meets the requirements of DFARS Appendix F.
(g) WAWF point of contact.
(1) The Contractor may obtain clarification regarding invoicing in WAWF from the following contracting activity’s WAWF point of contact.
(2) Contact the WAWF helpdesk at 866-618-5988, if assistance is needed.
(End of clause)
SECTION H - SPECIAL CONTRACT REQUIREMENTS
The following have been modified:
SPECIAL CONTRACT REQUIREMENTS
1. Prohibition of Use of Laboratory Animals:
Notwithstanding of any other provisions contained in this award or incorporated by reference herein, the recipient is expressly forbidden to use or subcontract for the use of laboratory animals in any manner whatsoever without the express written approval of the US Army Medical Research and Material Command, Animal Care and Use Office (USAMRMC ACURO). You will receive written approval to begin research under the applicable protocol proposed for this award from the USAMRMC ACURO under separate letter to the recipient and Principle Investigator. A copy of this approval will be provided to the Contracting Officer for the official file. Noncompliance with any award provision of this clause may result in the withholding of funds and or the termination of the award. Information and guidance is provide at the following web site:
https://mrmc.amedd.army.mil/index.cfm?pageid=research_protections.acuro
    -8-
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2. Prohibition of Use of Human Subjects:
Research under this award involving the use of human subjects may not begin until the U.S. Army Medical Research and Materiel Command’s Office of Research Protections, Human Research Protections Office (HRPO) approves the protocol. Written approval to begin research or subcontract for the use of human subjects under the applicable protocol proposed for this award will be issued from the US Army Medical Research and Materiel Command, HRPO, under separate letter to the funded institution and the Principal Investigator. A copy of this approval will be provided to the Contracting Officer for the official file. Non-compliance with any provision of this clause may result in withholding of funds and or the termination of the award. Information and guidance is provided at the following web site:
https://mrmc.amedd.army.mil/index.cfm?pageid=research_protections.hrpo
3. Prohibition of Use of Human Anatomical Substances:
Research at funded institutions using human anatomical substance may not begin until the US Army Medical Research and Material Command; Human Research Protections Office (USAMRMC HARPO) approves the protocol. Written approval to begin research or subcontract for the use of human anatomical substances under the applicable protocol proposed for this award will be issued from the USAMRMC HARPO under a separate letter to the funded institution and the Principal Investigator. A copy of the approval will be provided to the Contracting Officer for the official file. Non-compliance with any award provision of this clause may result in the withholding of funds and or the termination of the award. Information and guidance is provided at the following web site: https://mrmc.amedd.army.mil/index.cfm?pageid=research_protections.hrpo
4. Lot Release Data and cGMP Certification Prior to Shipment and/or Government Acceptance.
5. Shipping Documentation Finished Drug Product
Prior to shipment of the drug product, the contractor shall provide copies of all documentation required for Government review and approval of vaccine lot release to include sample labels, Safety Data Sheets, Certificates of Compliance, Certificates of Analysis, Advance Shipping Notice, and weekly summary of damaged/missing/unacceptable delivered vaccine doses.
6. FDA Inspection and Enforcement Documentation
Within [***], the contractor shall provide copies of any FDA inspection or enforcement documentation, including Notice of Inspections, Inspection Observations (e.g., FDA 482s, International Council for Harmonization (ICH) member, foreign inspections, establishment inspection report); Notice of Violations (FDA 483s, untitled letters, warning letters, civil or criminal compliance actions and meetings related thereto); Disqualification of clinical investigator, contract manufacturing organization, or institutional review boards (IRBS); Responses to any enforcement or inspection action; regulatory authorization or approval-related letter and/or warning or untitled letter that is reasonably likely to materially impede production or the ability to meet supply deadlines under the contract, including status of Emergency Use Authorization and/or Biologics License Application approval.
    -9-
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7. Manufacturing Reports and Dose Tracking Projections/Actuals aligned with the BARDA Data Infrastructure, pursuant to W15QKN-16-9-1002.
The contractor shall provide Dose Tracker Projections ([***]) to include Shipping and Inventory Actuals in the context shown below: Supply Chain and Distribution Tracking--Provide the following information in order to coordinate the movement and delivery of vaccine product from manufacturing locations to USG distribution centers:
Provide Points of Contact information (name, title, phone, email) for manufacturing / supply chain personnel for each manufacturing, CMO, storage and distribution locations:
Head of Manufacturing
Production Planning
Logistics
Distribution
Labeling
Provide vaccine labeling, packaging and distribution information as soon as it becomes available. At a minimum, include the following:
Primary Container Information
Number of doses per primary container
Unit of Sale (carton, box, package, other)
Quantity per Unit of Sale
National Drug Code (NDC) or NDC-like code under EUA
Unit of Sale dimensions (H,W, L)
Unit of Sale weight
Intermediate Package
Intermediate Package dimensions
Intermediate Package weight
Quantity Unit of Sale per pallet
Storage Requirements
Stability Information
Obtain concurrence on planned shipment protocols prior to transport
If vaccine will require ultra-cold storage temperatures at the designated distribution centers, products should be packaged in 100-dose units to facilitate pick/pack process and reduce exposure of workers to ultra-cold temperatures.
Include the following DSCSA data elements, TI, TH and TS in packing lists.
Include the contract number and CDC’s PO number (which BARDA will provide at the time the bulk order is submitted) on the packing list for all shipments
Include a copy of the MSDS (with QR code) in the packing list envelope with each shipment.
Send EDI 856 Advanced Shipment Notice for all products shipped to a USG directed location. CDC will provide EDI mapping specifications that include the CDC generated PO number.
Send electronic/scanned copies of all bulk shipment related documents to the COR for three-way matching on the day shipment occurs
8. Drug Supply Chain Security Act.
    -10-
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The contractor shall ensure that the provision of doses is compliant with applicable provisions of the Drug Supply Chain Security Act (DSCSA) Sections 581-585 of PL 11354 (Nov 27, 2013), taking into account FDA’s regular guidance for the public health response.
SECTION I - CONTRACT CLAUSES
The following have been added by reference:
52.204-25 Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment. AUG 2020
52.211-15 Defense Priority And Allocation Requirements APR 2008
252.227-7015 Technical Data--Commercial Items FEB 2014

The following have been deleted:
52.216-23 Execution And Commencement Of Work APR 1984
52.216-25 Contract Definitization OCT 2010
52.216-26 Payments Of Allowable Costs Before Definitization DEC 2002
252.217-7027 Contract Definitization DEC 2012


SECTION J - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS
The below Table of Contents has been added
Exhibit/Attachment Table of Contents
DOCUMENT TYPE     DESCRIPTION            PAGES    DATE
Exhibit A    Program Status Report A004
Exhibit A    Report Production or Delivery
    Problems A006
Exhibit A    IPT Meeting Min A002
Attachment 1    Bilateral Signature P00003

(End of Summary of Changes)


    -11-
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CONTRACT DATA REQUIREMENTS LIST
(1 Data Item)
Form Approved
OMB No. 0704-0188
The public reporting burden for this collection of information is estimated to average 110 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to the Department of Defense, Executive Services and Communications Directorate (0704-1088). Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to any penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number. Please do not return your form to the above organization. Send completed form to the Government Issuing Contracting Officer for the Contract/PR No. Listed in Block E.
A. CONTRACT LINE ITEM NO.
0001
B. EXHIBIT
A
C. CATEGORY:
TDP ____    TM         Other:
D. SYSTEM/ITEM
Novavax Nanoparticle Vaccine
E. CONTRACT/PR NO.
W911QY-20-C-0077
F. CONTRACTOR
Novavax, Inc
1. DATA ITEM NO.
A004
2. TITLE OF DATA ITEM
Program Progress Report
3. SUBTITLE
4. AUTHORITY (Data Acquisition Document No.)
DI-MGMT-80555A
5. CONTRACT REFERENCE
PWS paragraph 2.9
6. REQUIRING OFFICE
JPL CBRND Enabling Biotechnologies
7. DD 250 REQ
N/A
9. DIST STATEMENT REQUIRED
B
10. FREQUENCY
[***]
12. DATE OF FIRST SUBMISSION
[***]
14. DISTRIBUTION
a. ADDRESSEE b. COPIES
8. APP CODE
N/A
11. AS OF DATE
13. DATE OF SUBSEQUENT SUBMISSION
[***]
Draft Final
Reg Repro




16. REMARKS

4. DID may be obtained at: http://quicksearch.dla.mil/. Paragraphs 3.5, 3.6, 3.6.1, 3.6.2, 3.7, 3.7.1, 3.7.2, . does not apply.

14. Submit in electronic format in Microsoft Office (Word, Excel & PowerPoint) or in another formatapproved by the Government to the following email addresse(s): [***].

The Program Progress Report provides the Government with the means to evaluate and monitor the progress made by the contractor of tasks in accomplishing the goals established for the program.
COR/Government Technical Representative 1
KO 1
15. TOTAL
G. PREPARED BY

[***]
H. DATE

(9/2/20)
I. APPROVED BY

[***]
J. DATE

03 Sep 20

CONTRACT DATA REQUIREMENTS LIST
(1 Data Item)
Form Approved
OMB No. 0704-0188
The public reporting burden for this collection of information is estimated to average 110 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to the Department of Defense, Executive Services and Communications Directorate (0704-1088). Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to any penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number. Please do not return your form to the above organization. Send completed form to the Government Issuing Contracting Officer for the Contract/PR No. Listed in Block E.
A. CONTRACT LINE ITEM NO.
0001
B. EXHIBIT
A
C. CATEGORY:
TDP ____    TM         Other
    -13-
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D. SYSTEM/ITEM
Novavax Nanoparticle Vaccine
E. CONTRACT/PR NO.
W911QY-20-C-0077
F. CONTRACTOR
Novavax, Inc
1. DATA ITEM NO.
A006
2. TITLE OF DATA ITEM
Report, Production or Delivery Problems
3. SUBTITLE
4. AUTHORITY (Data Acquisition Document No.)
DI-MGMT-81178
5. CONTRACT REFERENCE
PWS paragraph 2.10
6. REQUIRING OFFICE
JPL CBRND Enabling Biotechnologies
7. DD 250 REQ
N/A
9. DIST STATEMENT REQUIRED
B
10. FREQUENCY
As Req
12. DATE OF FIRST SUBMISSION
[***]
14. DISTRIBUTION
a. ADDRESSEE b. COPIES
8. APP CODE
N/A
11. AS OF DATE
N/A
13.DATE OF SUBSEQUENT SUBMISSION
[***]
Draft Final
Reg Repro
    -14-
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16. REMARKS

4. DID may be obtained at: http://quicksearch.dla.mil/.

14. Submit in electronic format in Microsoft Office (Word, Excel & PowerPoint) or in another format approved by the Government to the following email addresse(s): [***].

The contractor shall report any incident to the Government that could result in more than a one month delay in schedule from the most recent IMS critical path delivered to the Government. Telephonically contact the program manager for the government within one day of incident. A written summary report shall be submitted within three business days of an incident, to include, what happened, what was the impact, if there are any available corrective actions and a time line for when the corrective actions would be in place.
COR/Government Technical Representative 1
KO 1
15. TOTAL
G. PREPARED BY

[***]
H. DATE

(8/21/20)
I. APPROVED BY

[***]
J. DATE

01 Sep 20

    -15-
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CONTRACT DATA REQUIREMENTS LIST
(1 Data Item)
Form Approved
OMB No. 0704-0188
The public reporting burden for this collection of information is estimated to average 110 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to the Department of Defense, Executive Services and Communications Directorate (0704-1088). Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to any penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number. Please do not return your form to the above organization. Send completed form to the Government Issuing Contracting Officer for the Contract/PR No. Listed in Block E.
A. CONTRACT LINE ITEM NO.
0001
B. EXHIBIT
A
C. CATEGORY:
TDP ____    TM         Other: MGMT
D. SYSTEM/ITEM
Novavax Nanoparticle Vaccine
E. CONTRACT/PR NO.
W911QY-20-C-0077
F. CONTRACTOR
Novavax, Inc
1. DATA ITEM NO.
A002
2. TITLE OF DATA ITEM
Report, Record of Meeting/Minutes
3. SUBTITLE
4. AUTHORITY (Data Acquisition Document No.)
DI-ADMIN-81505
5. CONTRACT REFERENCE
PWS 2.9
6. REQUIRING OFFICE
JPL CBRND Enabling Biotechnologies
7. DD 250 REQ
N/A
9. DIST STATEMENT REQUIRED
B
10. FREQUENCY
AS REQ
12. DATE OF FIRST SUBMISSION
[***]
14. DISTRIBUTION
a. ADDRESSEE b. COPIES
8. APP CODE
N/A
11. AS OF DATE
13.DATE OF SUBSEQUENT SUBMISSION
[***]
Draft Final
Reg Repro
    -16-
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16. REMARKS4. DID may be obtained at: HYPERLINK "http://quicksearch.dla.mil/" http://quicksearch.dla.mil/.14. Submit in electronic format in Microsoft Office (Word, Excel & PowerPoint) or in another format approved by the Government to the following email addresse(s): [***]IPT meetings shall occur no less than twice a month with the Government. The contractor shall submit an agenda which will include action items from the previous meeting as well as new topics to discuss, NLT 3 days prior to the scheduled meeting. As part of the agenda submission, the contractor shall submit any supporting documents (presentations, schedule, read-ahead), if applicable. The contractor shall submit IPT meeting minutes to the Government indicating the progress of the work for assigned tasks. They shall include all agenda items discussed, other relevant discussions including potential problem areas and proposed action to resolve the problems, and a list of meeting action items. A draft of the IPT meeting minutes is due to the Government five days following the meeting. The Government will review and provide comment on the draft minutes within five business days of receipt, lack of comments will be taken as concurrence. Contractor shall submit final minutes within three business days of receipt of government comments. COR/Government Technical Representative 1
KO 1
15. TOTAL
G. PREPARED BY

[***]
H. DATE

(8/21/20)
I. APPROVED BY

[***]
J. DATE

03 Sep 20

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE
S
PAGE OF PAGES
1 10
2. AMENDMENT/MODIFICATION NO.
3. EFFECTIVE DATE
    05-JAN-2021
4. REQUISITION/PURCHASE REQ. NO.
SEE SCHEDULE
5. PROJECT NO. (If applicable)
6. ISSUED BY    CODE W911QY 7. ADMINISTERED BY (If other than item 6)    CODE S2101A
    -17-
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W6QK-ACC-APG NATICK DIVISION
[***]
DEFENSE CONTRACT MANAGEMENT AGENCY
DCMA BALTIMORE
217 EAST REDWOOD STREET    SCD: A
SUITE 1800
BALTIMORE MD 21202-3375
8. NAME AND ADDRESS OF CONTRACTO (No., Street, County, State and Zip Code)
    NOVAVAX, INC.
    20 FIRSTFIELD RD
    GAITHERSBURG MD 20676-1760
9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
X
10A. MOD. OF CONTRACT/ORDER NO.
W911QY20C0077
CODE    1UCZ4 FACILITY CODE X
10B. DATED (SEE ITEM 13)
04-Jun-2020
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offer. is extended is not extended
Offer must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended by one of the following methods:
(a) By completing Items 8 and 15, and returning          copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted. such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (If required)
See Schedule
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS.
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ODER NO. IN TIEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATION CHANGES (such as changes in paying office, appropriate date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(B)
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

X
D. OTHER ( Specify type of modification and authority)
    FAR 52.216-25, Contract Definization
E. IMPORTANT : Contractor     is not,     is required to sign this document and return      1      copies to the issuing office:
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

Modification Control Number:    soconnel21683
The purpose of this modification is to definitize terms and conditions of this Letter Contract as follows:











Except as provided herein, all terms and conditions of the document references in Item 9A and 10A, as heretofore changed, remains unchanged and in full force and effect.
    -18-
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15A. NAME AND TITLE OF SIGNER (Type or Print)
John A. Herrmann III, EVP & CLO
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or Print)

TEL:    EMAIL:
15B. CONTRACTOR/OFFEROR

/s/ John A. Herrmann III    
(Signature of person authorized to sign)
15C. DATE SIGNED
4 January 21
16B. UNITED STATES OF AMERICA

    
(Signature of Contracting Officer)
16C. DATE SIGNED

    -19-
92634853_7

Exhibit 10.56


Certain information identified with [***] has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.








Amendment Number 1 To the iPDP and Budget
of the “Outbreak Response Funding Agreement (Step 2)” Having an Effective Date of May 11, 2020

(CEPI Identification #: [●])
Amendment Summary

COUNTERPARTY INFORMATION
Name: Novavax, Inc. (“Awardee”)
Mailing Address: 21 Firstfield Road, Gaithersburg, MD 20878
Project Lead:
[***], Global Program Management
Management Contact:
[***], Commercial Strategy

CEPI INFORMATION
Name: Coalition for Epidemic Preparedness Innovations (“CEPI”)
Mailing Address:
PO Box 123 Torshov, N-0412 Oslo, Norway
Visiting Address:
Marcus Thranes gate 2, N-0412 Oslo, Norway
Project Lead:
[***], Vaccine Development Project Leader     
Management Contact:
[***], Director of Vaccine Research & Development    

AMENDMENT AGREEMENT INFORMATION
Project Name
Novavax Outbreak Response To Novel Coronavirus (COVID-19)    
CEPI Programme Name
Outbreak Response To Novel Coronavirus (COVID-19)
Effective Date Date of last signature below
This Amendment includes and incorporates by reference:
The Amendment means this Agreement Summary together with the
following, which in the event of conflict shall have priority in the order set out below:
iPDP for Work Package(s) amended and restated (Annex C)
Budget for Work Package(s) amended and restated (Annex D)

91278453_4



THIS AMENDMENT is made by and between Awardee and the CEPI, either of which may be referred to individually as a "Party" and together as the "Parties." This Amendment Number 1 amends the original iPDP (Annex C) and Budget (Annex D) of the “Outbreak Response Funding Agreement (Step 2)” between the Parties having an Effective Date of May 11, 2020 (“Original Agreement”). The Parties have agreed to modify the original iPDP (Annex C) and Budget (Annex D) of the Original Agreement, which are hereby amended and restated as are attached to this Amendment Summary.

Upon signature by the Parties below, newly authorized expenditures made pursuant to the amended and restated iPDP and Budget shall be deemed to have been made pursuant to this Amendment.

Save as set out above, all terms and conditions of the Original Agreement shall remain unchanged and shall remain in full force and effect.

Informal Summary: For the convenience of the Parties, the following is an informal, non-binding description of the major changes to the original iPDP and its Budget.

Adjustment in Phase 1 and 2 clinical trials including [***];
Removal of [***] as a site for scale-up process development;
Addition of BioFabri as a site for scale-up process development and demonstration lots;
Removal of [***].

Signed for and on behalf of COA LITION FOR EPIDEMIC PREPAREDNESS INNOVATIONS by: Signature: /s/ Richard Hattchet

Richard Hattchet
Name:…………………………………………..

Title:…Chief……Executive……Offi. cer

2020-10-21
Date:…………………………………………….
Signed for and on behalf of Novavax, Inc. by:
Signature: /s/John Herrmann

109995-0033-007
Name:…………………………………………..

Title:…EVP,……ChiefLegalOff. icer

2020-11-02
Date:…………………………………………….


91278453_4

IMAGE_11A.JPG




Annex C: Integrated Product Development Plan

[Pursuant to Regulation S-K, Item 601(a)(5), this Annex setting forth the integrated product development plan under this Amendment Number 1 has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted annexes to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]

91278453_4

IMAGE_11A.JPG




Annex D: Budget

[Pursuant to Regulation S-K, Item 601(a)(5), this Annex setting forth the budget under this Amendment Number 1 for approximately $399.5 million has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted annexes to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]
91278453_4

Exhibit 21
LIST OF SUBSIDIARIES

The following is a list of subsidiaries of the Company as of December 31, 2020

Name of Subsidiary             Jurisdiction of Incorporation or Organization
         
Novavax AB                         Sweden

Novavax CZ (formerly Praha Vaccines a.s.)         The Czech Republic

Exhibit 23.1

        
Consent of Independent Registered Public Accounting Firm
 
We consent to the incorporation by reference in the following Registration Statements:
    
(1)Registration Statement (Form S-8 No. 333-243758) pertaining to the Novavax, Inc. stock incentive plan,
(2)Registration Statement (Form S-3 No. 333-237094) pertaining to Novavax, Inc. common stock, preferred stock, warrants and units,
(3)Registration Statement (Form S-3 No. 333-235761) pertaining to Novavax, Inc. common stock, preferred stock, warrants and units,
(4)Registration Statement (Form S-8 No. 333-233133) pertaining to the Novavax, Inc. stock incentive plan and 2013 employee stock purchase plan,
(5)Registration Statement (Form S-8 No. 333-226498) pertaining to the Novavax, Inc. stock incentive plan and 2013 employee stock purchase plan,
(6)Registration Statement (Form S-8 No. 333-219829) pertaining to the Novavax, Inc. stock incentive plan,
(7)Registration Statement (Form S-8 No. 333-213069) pertaining to the Novavax, Inc. stock incentive plan and 2013 employee stock purchase plan,
(8)Registration Statement (Form S-8 No. 333-206354) pertaining to the Novavax, Inc. stock incentive plan,
(9)Registration Statement (Form S-8 No. 333-198121) pertaining to the Novavax, Inc. stock incentive plan,
(10)Registration Statement (Form S-8 No. 333-190600) pertaining to the Novavax, Inc. stock incentive plan,
(11)Registration Statement (Form S-8 No. 333-190599) pertaining to the Novavax, Inc. 2013 employee stock purchase plan,
(12)Registration Statement (Form S-8 No. 333-183113) pertaining to the Novavax, Inc. stock incentive plan,
(13)Registration Statement (Form S-8 No. 333-145298) pertaining to the Novavax, Inc. stock incentive plan,
(14)Registration Statement (Form S-8 No. 333-130990) pertaining to the Novavax, Inc. stock incentive plan,
(15)Registration Statement (Form S-8 No. 333-110401) pertaining to the Novavax, Inc. stock incentive plan,
(16)Registration Statement (Form S-8 No. 333-97931) pertaining to the Novavax, Inc. stock incentive plan,
(17)Registration Statement (Form S-8 No. 333-46000) pertaining to the Novavax, Inc. stock incentive plan,
(18)Registration Statement (Form S-8 No. 333-77611) pertaining to the Novavax, Inc. stock incentive plan,
(19)Registration Statement (Form S-8 No. 333-03384) pertaining to the Novavax, Inc. stock incentive plan,
(20)Registration Statement (Form S-8 No. 33-80279) pertaining to the Novavax, Inc. stock incentive plan, and
(21)Registration Statement (Form S-8 No. 33-80277) pertaining to the Novavax, Inc. stock incentive plan



Exhibit 23.1

        
of our reports dated March 1, 2021, with respect to the consolidated financial statements of Novavax, Inc., and the effectiveness of internal control over financial reporting of Novavax, Inc., included in this Annual Report (Form 10-K) of Novavax, Inc. for the year ended December 31, 2020.

/s/ Ernst & Young LLP

Tysons, Virginia
March 1, 2021




Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Stanley C. Erck, certify that:
1.I have reviewed this Annual Report on Form 10-K 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 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 evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.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 the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 1, 2021 By: /s/ Stanley C. Erck
Stanley C. Erck
President and Chief Executive Officer



Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, Gregory F. Covino, certify that:
1.I have reviewed this Annual Report on Form 10-K 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 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 evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.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 the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 1, 2021 By: /s/ Gregory F. Covino
Gregory F. Covino
Executive Vice President and Chief Financial Officer



Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT
TO 18 UNITED STATES CODE §1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Annual Report of Novavax, Inc. (the “Company”) on Form 10-K for the fiscal period ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stanley C. Erck, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 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, as amended; 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 this Report.
Date: March 1, 2021 By: /s/ Stanley C. Erck
Stanley C. Erck
President and Chief Executive Officer
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.


Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18
UNITED STATES CODE §1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Annual Report of Novavax, Inc. (the “Company”) on Form 10-K for the fiscal period ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregory F. Covino, Executive Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 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, as amended; 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 this Report.
Date: March 1, 2021 By:
/s/ Gregory F. Covino
Gregory F. Covino
Executive Vice President and Chief Financial Officer
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.