NOVAVAX INC (Form: 10-Q, Received: 08/10/2020 16:37:27)

NOVAVAX 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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 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 or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

21 Firstfield Road, Gaithersburg, MD		20878
(Address of principal executive offices)		(Zip code)

(240) 268-2000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01 per share	NVAX	The Nasdaq Global Select Market

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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.


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 has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

The number of shares outstanding of the Registrant's Common Stock, $0.01 par value, was 61,278,148 as of July 31, 2020.

Table of Contents

NOVAVAX, INC.

TABLE OF CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION		2

Item 1.	Consolidated Financial Statements	2

	Consolidated Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019	2

	Unaudited Consolidated Statements of Operations and Unaudited Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2020 and 2019	3

	Unaudited Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2020 and 2019	4

	Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019	6

	Notes to the Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33

Item 4.	Controls and Procedures	34

PART II. OTHER INFORMATION		34

Item 1A.	Risk Factors	34

Item 6.	Exhibits	38

SIGNATURES		40

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NOVAVAX, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share information)


	June 30,		December 31,
	2020		2019
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	424,395	$	78,823
Marketable securities		77,902		—
Restricted cash		106,768		2,947
Accounts receivable		—		7,500
Prepaid expenses and other current assets		27,316		7,977
Total current assets		636,381		97,247
Restricted cash		411		410
Property and equipment, net		115,375		11,445
Intangible assets, net		5,250		5,581
Goodwill		118,849		51,154
Other non-current assets		55,961		7,120
Total assets	$	932,227	$	172,957

LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	9,242	$	2,910
Accrued expenses		38,690		14,867
Accrued interest		5,078		5,078
Deferred revenue		158,851		1,678
Other current liabilities		1,470		1,262
Total current liabilities		213,331		25,795
Deferred revenue		2,500		2,500
Convertible notes payable		321,323		320,611
Other non-current liabilities		10,725		10,068
Total liabilities		547,879		358,974

Commitments and contingencies

Preferred stock, $0.01 par value, 2,000,000 shares authorized; 438,885 shares of redeemable Series A Convertible Preferred Stock issued and outstanding at June 30, 2020 and no shares issued and outstanding at December 31, 2019		199,822		—

Stockholders' equity (deficit):
Common stock, $0.01 par value, 600,000,000 shares authorized at June 30, 2020 and December 31, 2019; 61,262,632 shares issued and 61,211,223 shares outstanding at June 30, 2020 and 32,399,352 shares issued and 32,352,416 shares outstanding at December 31, 2019		612		324
Additional paid-in capital		1,699,072		1,260,551
Accumulated deficit		(1,499,325)		(1,431,801)
Treasury stock, 51,409 shares, cost basis at June 30, 2020 and 46,936 shares, cost basis at December 31, 2019		(2,638)		(2,583)
Accumulated other comprehensive loss		(13,195)		(12,508)
Total stockholders' equity (deficit)		184,526		(186,017)
Total liabilities, preferred stock and stockholders' equity (deficit)	$	932,227	$	172,957

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

Table of Contents

NOVAVAX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share information)

(unaudited)


	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2020		2019		2020		2019

Revenue:
Grant and other	$	35,538	$	3,357	$	38,915	$	7,339
Total revenue		35,538		3,357		38,915		7,339

Expenses:
Research and development		34,846		30,417		51,741		65,890
General and administrative		17,719		9,606		27,098		18,338
Total expenses		52,565		40,023		78,839		84,228
Loss from operations		(17,027)		(36,666)		(39,924)		(76,889)
Other income (expense):
Investment income		297		474		732		894
Interest expense		(3,403)		(3,403)		(6,806)		(6,806)
Other income (expense)		2,612		(8)		2,613		(20)
Net loss	$	(17,521)	$	(39,603)	$	(43,385)	$	(82,821)

Basic and diluted net loss per share	$	(0.30)	$	(1.69)	$	(0.84)	$	(3.77)

Basic and diluted weighted average number of common shares outstanding		58,618		23,473		51,401		21,966

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2020		2019		2020		2019

Net loss	$	(17,521)	$	(39,603)	$	(43,385)	$	(82,821)
Other comprehensive income (loss):
Net unrealized gains on marketable debt securities available-for-sale		176		—		44		5
Foreign currency translation gain (loss) adjustment		1,115		70		(731)		(1,104)
Other comprehensive gain (loss)		1,291		70		(687)		(1,099)
Comprehensive loss	$	(16,230)	$	(39,533)	$	(44,072)	$	(83,920)

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

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NOVAVAX, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

Three Months Ended June 30, 2020 and 2019

(unaudited)


				Additional						Other		Stockholders'
	Common Stock			Paid-in		Accumulated		Treasury		Comprehensive		Equity
	Shares	Amount		Capital		Deficit		Stock		Income (Loss)		(Deficit)

	(in thousands, except share information)
Balance at March 31, 2020	53,906,322	$	539	$	1,450,279	$	(1,457,665)	$	(2,638)	$	(14,486)	$	(23,971)
Preferred stock beneficial conversion feature	—		—		24,139		(24,139)		—		—		—
Non-cash compensation cost for stock options, RSUs, SARs and ESPP	—		—		7,932		—		—		—		7,932
Exercise of stock options/Vesting of RSUs/Purchases under ESPP	316,815		3		8,947		—		—		—		8,950
Issuance of common stock, net of issuance costs of $2,647	7,039,495		70		207,775		—		—		—		207,845
Unrealized gain on marketable securities	—		—		—		—		—		176		176
Foreign currency translation adjustment	—		—		—		—		—		1,115		1,115
Net loss	—		—		—		(17,521)		—		—		(17,521)
Balance at June 30, 2020	61,262,632	$	612	$	1,699,072	$	(1,499,325)	$	(2,638)	$	(13,195)	$	184,526

Balance at March 31, 2019	23,495,466	$	235	$	1,206,317	$	(1,342,325)	$	(2,450)	$	(12,360)	$	(150,583)
Non-cash compensation cost for stock options, RSUs and ESPP	—		—		4,621		—		—		—		4,621
Fractional shares purchased in stock split	—		—		—		—		(1)		—		(1)
Issuance of common stock, net of issuance costs of ($3)	—		—		3		—		—		—		3
Foreign currency translation adjustment	—		—		—		—		—		70		70
Net loss	—		—		—		(39,603)		—		—		(39,603)
Balance at June 30, 2019	23,495,466	$	235	$	1,210,941	$	(1,381,928)	$	(2,451)	$	(12,290)	$	(185,493)

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

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NOVAVAX, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

Six Months Ended June 30, 2020 and 2019

(unaudited)


				Additional						Other		Stockholders'
	Common Stock			Paid-in		Accumulated		Treasury		Comprehensive		Equity
	Shares	Amount		Capital		Deficit		Stock		Income (Loss)		(Deficit)

	(in thousands, except share information)
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)		—		—		—
Non-cash compensation cost for stock options, RSUs, SARs and ESPP	—		—		11,897		—		—		—		11,897
Exercise of stock options/Vesting of RSUs/Purchases under ESPP	350,054		3		9,007		—		(55)		—		8,955
Issuance of common stock, net of issuance costs of $5,145	28,513,226		285		393,478		—		—		—		393,763
Unrealized gain on marketable securities	—		—		—		—		—		44		44
Foreign currency translation adjustment	—		—		—		—		—		(731)		(731)
Net loss	—		—		—		(43,385)		—		—		(43,385)
Balance at June 30, 2020	61,262,632	$	612	$	1,699,072	$	(1,499,325)	$	(2,638)	$	(13,195)	$	184,526

Balance at December 31, 2018	19,245,302	$	192	$	1,144,621	$	(1,299,107)	$	(2,450)	$	(11,191)	$	(167,935)
Non-cash compensation cost for stock options, RSUs and ESPP	—		—		10,179		—		—		—		10,179
Exercise of stock options/Purchases under ESPP	51,388		1		941		—		—		—		942
Fractional shares purchased in stock split	—		—		—		—		(1)		—		(1)
Issuance of common stock, net of issuance costs of $1,112	4,198,776		42		55,200		—		—		—		55,242
Unrealized gain on marketable securities	—		—		—		—		—		5		5
Foreign currency translation adjustment	—		—		—		—		—		(1,104)		(1,104)
Net loss	—		—		—		(82,821)		—		—		(82,821)
Balance at June 30, 2019	23,495,466	$	235	$	1,210,941	$	(1,381,928)	$	(2,451)	$	(12,290)	$	(185,493)

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

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NOVAVAX, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended
	June 30,
	2020		2019
Operating Activities:
Net loss	$	(43,385)	$	(82,821)
Reconciliation of net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		1,905		3,864
Loss on disposal of property and equipment		—		88
Amortization of debt issuance costs		712		712
Non-cash stock-based compensation		11,897		10,179
Other		(1,793)		1,269
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(61,079)		2,617
Accounts payable and accrued expenses		27,094		(10,952)
Deferred revenue		157,173		(5,577)
Net cash provided by (used in) operating activities		92,524		(80,621)

Investing Activities:
Capital expenditures		(3,884)		(1,281)
Acquisition of Praha Vaccines a.s., net of cash acquired		(164,204)		—
Proceeds from maturities of marketable securities		29,750		24,500
Purchases of marketable securities		(107,608)		(2,484)
Net cash provided by (used in) investing activities		(245,946)		20,735

Financing Activities:
Net proceeds from sale of preferred stock		199,822		—
Net proceeds from sales of common stock		393,763		55,242
Proceeds from the exercise of stock options and employee stock purchases		8,955		942
Net cash provided by financing activities		602,540		56,184
Effect of exchange rate on cash, cash equivalents and restricted cash		276		(22)
Net increase (decrease) in cash, cash equivalents and restricted cash		449,394		(3,724)
Cash, cash equivalents and restricted cash at beginning of period		82,180		81,959
Cash, cash equivalents and restricted cash at end of period	$	531,574	$	78,235

Supplemental disclosure of non-cash activities:
Property and equipment purchases included in accounts payable and accrued expenses	$	2,753	$	146
Supplemental disclosure of cash flow information:
Cash payments of interest	$	6,094	$	6,094

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

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NOVAVAX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2020

(unaudited)

Note 1 – Organization

Novavax, Inc. (“Novavax,” and together with its wholly owned subsidiaries, Novavax AB and 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 recently announced coronavirus vaccine candidate, NVX-CoV2373, as well as its other lead candidate, NanoFlu^TM, 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. The Company’s technology targets a variety of infectious diseases. The Company is also developing proprietary immune stimulating saponin-based adjuvants at Novavax AB, its wholly owned Swedish subsidiary. The Company’s lead adjuvant, Matrix-M™, has been shown to enhance immune responses and has been well-tolerated in multiple clinical trials.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated balance sheet as of June 30, 2020, the consolidated statements of operations and the consolidated statements of comprehensive loss for the three and six months ended June 30, 2020 and 2019, the consolidated statements of changes in stockholders’ equity (deficit) for the three and six months ended June 30, 2020 and 2019 and the consolidated statements of cash flows for the six months ended June 30, 2020 and 2019 are unaudited, but include all adjustments (consisting of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position, operating results, comprehensive loss, changes in stockholders’ equity (deficit) and cash flows, respectively, for the periods presented. Although the Company believes that the disclosures in these unaudited consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted under the rules and regulations of the United States Securities and Exchange Commission (“SEC”).

The unaudited consolidated financial statements include the accounts of Novavax, Inc. and its wholly owned subsidiaries, Novavax AB and Praha Vaccines a.s. All intercompany accounts and transactions have been eliminated in consolidation.

The accompanying unaudited 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 Praha Vaccines a.s., which is located in the Czech Republic, is the local currency (Czech Koruna). The translation of assets and liabilities of these subsidiaries to U.S. dollars is 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 loss in the accompanying unaudited consolidated balance sheets. The foreign currency translation adjustment balance included in accumulated other comprehensive loss was $13.2 million and $12.5 million at June 30, 2020 and December 31, 2019, respectively.

The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. Results for this or any interim period are not necessarily indicative of results for any future interim period or for the entire year. The Company operates in one business segment.

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Use of Estimates

The preparation of the consolidated financial statements in conformity with 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 (in thousands):


	June 30,		December 31,
	2020		2019
Cash	$	124,783	$	15,863
Money market funds		225,373		42,960
Asset-backed securities		24,250		20,000
Treasury bills		49,989		—
Cash and cash equivalents	$	424,395	$	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 include commercial paper, asset-backed securities, treasury bills and corporate notes. 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 sheets, and unrealized gains and losses on marketable securities are reported as a separate component of stockholders' 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.

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 11), payments received under the Bill & Melinda Gates Foundation (“BMGF”) grant agreement (see Note 11), escrow funds paid in connection with the acquisition of Praha Vaccines a.s. (see Note 5) and funds received in connection with a transaction in 2019 with Catalent Maryland, Inc. (formerly Paragon Bioservices, Inc.), a unit of Catalent Biologics (“Catalent”), pursuant to which the Company agreed to sell to Catalent certain assets related to its biomanufacturing and development activities 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.

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At both June 30, 2020 and December 31, 2019, the restricted cash balances (both current and non-current) consisted of $1.4 million of payments received from BMGF, $1.5 million held in escrow received in connection with the Catalent transaction and $0.4 million of security deposits. At June 30, 2020, the restricted cash balance also included $92.6 million of payments under the CEPI funding agreements and $11.2 million held in escrow that was paid by the Company in connection with the Praha Vaccines a.s. acquisition.

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 (in thousands):


	June 30,		December 31,
	2020		2019
Cash and cash equivalents	$	424,395	$	78,823
Restricted cash current		106,768		2,947
Restricted cash non-current		411		410
Cash, cash equivalents and restricted cash	$	531,574	$	82,180

Acquisitions

The Company applies the acquisition method of accounting to business combinations in accordance with ASC 805, Business Combinations. The Company’s consolidated financial statements include the operating results of an acquired entity from the date on which it obtains control of the business acquired. The Company recognizes and measures the identifiable assets acquired and liabilities assumed, as of the acquisition date, based on their estimated fair value with the excess purchase consideration, if any, recognized as goodwill. In determining fair value, the Company uses various recognized valuation methods, including the cost and market approaches. The Company initially performs these valuations based on preliminary estimates and assumptions by management or independent valuation specialists under Company supervision, where appropriate, and makes revisions as estimates and assumptions are finalized. The final determination of fair values must be completed no later than the first anniversary of the date of acquisition. The Company expenses acquisition related costs as incurred. See Note 5 for further discussion around the Company’s recent acquisition of Praha Vaccines a.s.

Revenue Recognition

The Company performs research and development under grant, license and clinical development agreements. Payments received in advance of work performed are recorded as deferred revenue.

The Company entered into funding agreements with CEPI that provide total funding of up to $388.4 million (see Note 11). The funding includes approximately $245.9 million in the form of a grant (“CEPI Grant Funding”) and up to $142.5 million in the form of one or more forgivable no interest term loans (“CEPI Forgivable Loan Funding”). Under the CEPI Grant Funding, the Company is entitled to reimbursement for costs that support development activities of NVX-CoV2373. The CEPI Forgivable Loan Funding is designated for the prepayment of certain manufacturing activities. The funding from CEPI is critical to enable ongoing development of NVX-CoV2373, and to enable the Company to obtain product licensing to produce the vaccine for use in clinical trials and commercial distribution, if approved.

The CEPI funding agreements do not provide a direct economic benefit to CEPI. Rather, the Company entered into an agreement with CEPI to attempt to develop a COVID-19 vaccine under which CEPI only benefits to the extent the arrangement furthers its public health mission. Based on these circumstances, the Company does not consider CEPI to be a customer and concluded the funding agreements are outside the scope of ASC 606, Revenue from Contracts with Customers. Payments received under the CEPI Grant Funding are considered conditional contributions under the scope of ASC 958-605, Not-for-Profit Entities – Revenue Recognition, and are recorded as deferred revenue until the period in which such research and development activities are performed and revenue can be recognized.

The CEPI Forgivable Loan Funding provides the Company access to up to $142.5 million in funds to be used in connection with the potential commercial manufacture of NVX-CoV2373. As of June 30, 2020, the Company received $76.0 million of such funding. Under the funding agreements, the Company is only required to repay the CEPI Forgivable Loan Funding if the proceeds of sales to one or more third parties of NVX-CoV2373 cover the Company’s costs of manufacturing such vaccine, not including manufacturing costs funded by CEPI.

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As the financial risk remains with CEPI, the Company has determined that the use of the CEPI Forgivable Loan Funding is outside the scope of ASC 470, Debt. The research and development risk is considered substantive, such that it is not yet probable the development will be successful. Therefore, the Company has concluded that ASC 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, the Company will account for its obligation under the CEPI Forgivable Loan Funding as a contract to perform research and development for others. The Company will record contract revenue as it performs the contractual research and development services.

The Company has determined that payments received under these agreements should be recorded as revenue rather than a reduction to research and development expenses. In reaching this determination that such payments should be recorded as revenue, management considered a number of factors, including whether the Company is principal under the arrangement, and whether the arrangement is significant to, and part of, the Company’s core operations. Further, management has consistently applied its policy of presenting such amounts as revenue.

Net Loss per Share

Net loss per share is computed using the weighted average number of shares of common stock outstanding. At June 30, 2020 and 2019, the Company had outstanding stock options, stock appreciation rights (“SARs”) and unvested restricted stock units (“RSUs”) totaling 7,797,651 and 2,935,847, respectively. In addition, at June 30, 2020, the Company had 438,885 shares outstanding of its newly designated Series A Convertible Preferred Stock , which are convertible into 4,388,850 shares of the Company’s common stock.

At June 30, 2020, the Company’s Notes (see Note 7) 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 shares due to the Company upon settlement of its capped call transactions are excluded from the computation, as their effect is antidilutive.

Recent Accounting Pronouncements

Recently Adopted

In January 2017, the FASB issued 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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Note 3 – Fair Value Measurements

The following table represents the Company's fair value hierarchy for its financial assets and liabilities measured at fair value (in thousands):


	Fair Value at June 30, 2020						Fair Value at December 31, 2019
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Money market funds(1)	$	225,373	$	—	$	—	$	42,960	$	—	$	—
Asset-backed securities(2)		—		24,250		—		—		20,000		—
Treasury bills(3)		—		99,972		—		—		—		—
Corporate debt securities		―		27,919		—		—		—		—
Total assets	$	225,373	$	152,141	$	—	$	42,960	$	20,000	$	—
Liabilities
Convertible notes payable	$	—	$	309,166	$	—	$	—	$	125,811	$	—

(1)	Classified as cash and cash equivalents as of June 30, 2020 and December 31, 2019, respectively, on the consolidated balance sheets.

(2)	Includes $24,250 and $20,000 classified as cash and cash equivalents as of June 30, 2020 and December 31, 2019, respectively, on the consolidated balance sheets.

(3)	Includes $49,989 classified as cash and cash equivalents as of June 30, 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 (see Note 7) 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 six months ended June 30, 2020 and 2019, the Company did not have any transfers between levels.

The amount recorded in the Company's unaudited 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 June 30, 2020 and December 31, 2019 were comprised of (in thousands):


	June 30, 2020								December 31, 2019
			Gross		Gross						Gross		Gross
	Amortized		Unrealized		Unrealized				Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value		Cost		Gains		Losses		Fair Value
Treasury bills	$	49,981	$	2	$	—	$	49,983	$	—	$	—	$	—	$	—
Corporate debt securities	$	27,877	$	42	$	—	$	27,919	$	—	$	—	$	—	$	—
Total	$	77,858	$	44	$	—	$	77,902	$	—	$	—	$	—	$	—

The primary objective of the Company's investment policy is the preservation of capital; thus, the Company's investment policy limits investments to certain types of instruments with high-grade credit ratings, places restrictions on maturities and concentrations in certain industries and requires the Company to maintain a certain level of liquidity.

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Note 5 – Acquisition of Praha Vaccines a.s.

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 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 Praha Vaccines a.s., a vaccine manufacturing company, organized and existing under the laws of the Czech Republic (“Praha Vaccines”), from the Sellers for approximately €151.7 million (approximately $167.3 million) in cash (the “Purchase Price”), subject to customary working capital adjustments (collectively, the “Acquisition”), which have not been finalized. The assets of Praha Vaccines 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.

The Purchase Price includes €10.0 million (approximately $11.1 million), which has been placed in an escrow account until September 30, 2020, less any amounts to settle claims made by the Buyer against the Sellers under the Deed or other ancillary agreements. The Deed and ancillary agreements contain customary warranties and post-completion covenants, as well as indemnities by each of the parties thereto.

Preliminary 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 has commenced 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. These appraisals are not yet complete and therefore, the amounts recorded for certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the Acquisition Date. The final determination of the fair value of certain assets and liabilities will be completed within the measurement period of up to one year from the Acquisition Date. The final values may also result in changes to depreciation and amortization expense related to certain assets such as buildings and equipment. Any potential adjustments made could be material in relation to the preliminary values presented in the table below.

The table below summarizes the preliminary allocation of the Purchase Price based upon the fair values of assets acquired and liabilities assumed at the Acquisition Date. The preliminary allocation is based upon information that was available to management at the time the consolidated financial statements were prepared and is subject to change prior to completion of the measurement period (in thousands):


Prepaid expense and other current assets	$	326
Property and equipment		96,739
Goodwill		70,468
Accounts payable		(1,193)
Accrued expenses		(205)
Other non-current liabilities		(813)
Purchase Price, net of cash acquired	$	165,322

The fair value of the assets acquired and liabilities assumed were preliminarily determined using market and cost valuation methodologies. The fair value measurements are 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, Fair Value Measurement and Disclosures. 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 4 to 25 years. The carrying value and expected lives of the fixed assets may change upon finalizing the purchase price allocation as valuation and engineering reports are finalized.

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The Company recorded $70.5 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 Praha Vaccines.

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

Determining the fair value of assets acquired and liabilities assumed requires the exercise of significant professional judgment. Use of different estimates and judgments could yield different results.

Impact to Financial Results for the Three and Six Months Ended June 30, 2020

The results of operations from Praha Vaccines have been included in the consolidated financial statements since the Acquisition Date. As a result, the consolidated financial results for the three and six months ended June 30, 2020 do not reflect a full three months and six months of Praha Vaccines results, respectively. From the Acquisition Date through June 30, 2020, Praha Vaccines has not recognized any revenue and recorded a net income of $1.8 million from Praha Vaccines’ operations.

The Company incurred approximately $1.9 million of costs related to the Acquisition in the three months ended June 30, 2020, which are included within general and administrative expenses in the consolidated statements of operations.

Supplemental Pro Forma Financial Information (Unaudited)

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 Praha Vaccines for the periods presented below and reflects the application of certain pro forma adjustments (in thousands, except per share amounts):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019

Revenue	$	35,538	$	3,357	$	38,915	$	7,339
Net loss		(18,196)		(42,119)		(45,821)		(87,367)
Basic and diluted net loss per share		(0.31)		(0.97)		(0.83)		(2.08)

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

Note 6 – Goodwill and Other Intangible Assets

Goodwill

The change in the carrying amounts of goodwill for the six months ended June 30, 2020 was as follows (in thousands):


	Amount
Balance at December 31, 2019	$	51,154
Goodwill resulting from the acquisition of Praha Vaccines		70,468
Currency translation adjustments		(2,773)
Balance at June 30, 2020	$	118,849

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Identifiable Intangible Assets

Purchased intangible assets consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands):


	June 30, 2020						December 31, 2019
	Gross						Gross
	Carrying		Accumulated		Intangible		Carrying		Accumulated		Intangible
	Amount		Amortization		Assets, Net		Amount		Amortization		Assets, Net
Finite-lived intangible assets:
Proprietary adjuvant technology	$	7,991	$	(2,764)	$	5,227	$	7,985	$	(2,562)	$	5,423
Collaboration agreements		3,608		(3,585)		23		3,606		(3,448)		158
Total identifiable intangible assets	$	11,599	$	(6,349)	$	5,250	$	11,591	$	(6,010)	$	5,581

Amortization expense for the six months ended June 30, 2020 and 2019 was $0.3 million.

Estimated amortization expense for existing intangible assets for the remainder of 2020 and for each of the five succeeding years ending December 31 will be as follows (in thousands):


Year	Amount
2020 (remainder)	$	222
2021		400
2022		400
2023		400
2024		400
2025		400

Note 7 – Long-Term Debt

Convertible Notes

The Company incurred approximately $10.0 million of debt issuance costs during the first quarter of 2016 relating to the issuance of $325 million aggregate principal amount of convertible senior unsecured notes that will mature on February 1, 2023 (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.

Total convertible notes payable consisted of the following at (in thousands):


	June 30,		December 31,
	2020		2019
Principal amount of the Notes	$	325,000	$	325,000
Unamortized debt issuance costs		(3,677)		(4,389)
Total convertible notes payable	$	321,323	$	320,611

Interest expense incurred in connection with the Notes consisted of the following (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019

Coupon interest at 3.75%	$	3,047	$	3,047	$	6,094	$	6,094
Amortization of debt issuance costs		356		356		712		712
Total interest expense on the Notes	$	3,403	$	3,403	$	6,806	$	6,806

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Note 8 – Preferred Stock

In June 2020, the Company entered into a redeemable Series A Convertible Preferred Stock Subscription Agreement (“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 (the “Preferred Private Placement”). Under the terms of the Preferred Stock, any holder thereof has the right to redeem shares of the Preferred Stock at the original purchase price if the Company fails to meet certain SEC filing requirements and file and maintain for at least one year a registration statement for the resale of the shares of common stock underlying the Preferred Stock. Because certain of these features are outside of the Company's control, the Company has classified the Preferred Stock outside of permanent equity.

Each share of Preferred Stock is convertible into ten shares of common stock. The conversion price is equal to $45.57 and is subject to adjustment based on standard anti-dilution provisions. Holders of Preferred Stock are not entitled to cumulative dividends, are not entitled to vote on matters submitted to common stockholders and have a liquidation preference over common stockholders equal to the greater of the original purchase price, plus declared and unpaid Preferred Stock dividends, and the amount that would be payable in respect of common stock assuming the Preferred Stock converted immediately prior to the liquidation. The Company recognized a beneficial conversion feature of approximately $24.1 million that was recorded within additional paid-in capital and accumulated deficit as the Preferred Stock issuance is only contingently redeemable and convertible at any time at the option of the holder.

Note 9 – Stockholders' Equity (Deficit)

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.

In May 2020, the Company entered into an At Market Issuance Sales Agreement ("May 2020 Sales Agreement"), which allows it to issue and sell up to $250 million in gross proceeds of its common stock. During the six months ended June 30, 2020, the Company sold 2.2 million shares of common stock under the May 2020 Sales Agreement resulting in $107.0 million in net proceeds, leaving $141.6 million remaining under the May 2020 Sales Agreement.

In March 2020, the Company entered into an At Market Issuance Sales Agreement (“March 2020 Sales Agreement”), which allowed it to issue and sell up to $150 million in gross proceeds of its common stock. During the six months ended June 30, 2020, the Company sold 8.6 million shares of common stock under the March 2020 Sales Agreement resulting in $148.1 million in net proceeds. The March 2020 Sales Agreement was fully utilized at that time.

In January 2020, the Company entered into an At Market Issuance Sales Agreement ("January 2020 Sales Agreement"), which allowed it to issue and sell up to $100 million in gross proceeds of its common stock. During the first quarter of 2020, the Company sold 10.5 million shares of common stock under the January 2020 Sales Agreement resulting in $98.7 million in net proceeds. The January 2020 Sales Agreement was fully utilized at that time.

In December 2018, the Company entered into an At Market Issuance Sales Agreement (“December 2018 Sales Agreement”), which allowed it to issue and sell up to $100 million in gross proceeds of its common stock. During the six months ended June 30, 2019, the Company sold 1.7 million shares of common stock under the December 2018 Sales Agreement, of which all were sold in the first quarter of 2019, resulting in $17.4 million in net proceeds. During the six months ended June 30, 2020, the Company sold 7.2 million shares of common stock under the December 2018 Sales Agreement, of which all were sold in the first quarter of 2020, resulting in $38.5 million in net proceeds. The December 2018 Sales Agreement was fully utilized at that time.

In December 2017, the Company entered into an At Market Issuance Sales Agreement (“December 2017 Sales Agreement”), which allowed it to issue and sell up to $75 million in gross proceeds of its common stock. During the six months ended June 30, 2019, the Company sold 2.5 million shares of common stock under the December 2017 Sales Agreement, of which all were sold in the first quarter of 2019, resulting in $37.9 million in net proceeds. The December 2017 Sales Agreement was fully utilized at that time.

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Note 10 – 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.

Stock Options and Stock Appreciation Rights

The following is a summary of stock options and stock appreciation rights activity under the 2015 Plan and 2005 Plan for the six months ended June 30, 2020:


	2015 Plan			2005 Plan
		Weighted-			Weighted-
		Average			Average
	Stock Options	Exercise Price		Stock Options	Exercise Price
Outstanding at January 1, 2020	3,388,701	$	35.64	501,780	$	64.19
Granted	2,820,041	$	22.28	—	$	—
Exercised	(209,959)	$	30.35	(76,856)	$	33.56
Canceled	(32,254)	$	41.18	(22,329)	$	52.26
Outstanding at June 30, 2020	5,966,529	$	29.50	402,595	$	70.71
Shares exercisable at June 30, 2020	953,073	$	85.48	402,595	$	70.71
Shares available for grant at June 30, 2020	3,098,569

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 1,014,200 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.

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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:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019

Weighted-average Black-Scholes fair value of stock options granted		$77.41		$8.50		$76.99		$23.43
Risk-free interest rate		0.3%-0.6%		1.8%-2.3%		0.3%-1.5%		1.8%-2.6%
Dividend yield		0%		0%		0%		0%
Volatility		116.0%-151.5%		127.3%-128.5%		116.0%-151.5%		111.6%-128.5%
Expected term (in years)		3.9-7.6		4.0		3.9-7.6		4.0-4.5
Expected forfeiture rate		0%		0%		0%		0%

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 June 30, 2020 was $357.5 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 June 30, 2020 was $34.1 million and 5.3 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 June 30, 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 and vesting of restricted stock awards for the six months ended June 30, 2020 and 2019 was $7.8 million and $0.1 million, respectively.

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 June 30, 2020, there were 278,543 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:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Range of Black-Scholes fair value of ESPP shares granted		$2.87-$21.80		$9.45-$34.78		$2.57-$35.00		$7.25-$34.78
Risk-free interest rate		1.5%-2.6%		1.3%-2.5%		1.5%-2.6%		1.2%-2.5%
Dividend yield		0%		0%		0%		0%
Volatility		66.6%-150.9%		59.7%-171.6%		66.6%-154.4%		52.2%-171.6%
Expected term (in years)		0.5-2.0		0.5-2.0		0.5-2.0		0.5-2.0
Expected forfeiture rate		0%		0%		0%		0%

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Restricted Stock Units

The following is a summary of restricted stock units activity for the six months ended June 30, 2020:


		Per Share
		Weighted-
		Average
	Number of	Grant-Date
	Shares	Fair Value
Outstanding and Unvested at January 1, 2020	1,102,311	$	5.95
Restricted stock units granted	457,204	$	75.97
Restricted stock units vested	(47,563)	$	18.61
Restricted stock units forfeited	(29,425)	$	25.46
Outstanding and Unvested at June 30, 2020	1,482,527	$	26.75

The Company recorded all stock-based compensation expense in the consolidated statements of operations as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Research and development	$	4,098	$	2,444	$	6,005	$	5,624
General and administrative		3,834		2,176		5,892		4,555
Total stock-based compensation expense	$	7,932	$	4,620	$	11,897	$	10,179

As of June 30, 2020, there was approximately $344 million of total unrecognized compensation expense related to unvested stock options, stock appreciation rights, restricted stock units and the ESPP. The increase in unrecognized compensation expense is primarily due to the awards 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, as discussed in the "Stock Options" section above, and the significant increase in the Company's common stock price in 2020. This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of 1.5 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 11 – U.S. Government Agreements, Grants and Licenses

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 Operation Warp Speed (“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 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 $1.6 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 currently authorized to make expenditures or incur obligations of up to $800 million, and the parties have committed to negotiate a definitive agreement by December 2020 that provides for aggregate costs payable to the Company up to but not in excess of the approved budget of $1.6 billion. If the parties have not agreed on definitive pricing or other terms by December 2020, or any extension of such target date granted by the U.S. Government, the U.S. Government has the discretion to unilaterally determine a fair and reasonable price for completion of the definitive agreement.

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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.

U.S. Department of Defense

In June 2020, the Company entered into a letter contract (the “DoD Contract”) with the U.S. Department of Defense (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 $60.0 million to the Company to support the manufacture of NVX-CoV2373. Under the DoD Contract, the Company is currently authorized to make expenditures or incur obligations up to $22.0 million, and the Company and the DoD have committed to negotiate a definitive cost-reimbursement contract by December 2020 that provides for costs payable by the DoD not to exceed $60.0 million. If the Company and the DoD have not agreed on pricing or terms by December 2020, or any extension of such target date granted by the DoD, the DoD has the discretion to determine a reasonable price or fee for completion of the contract.

Under the DoD Contract, the Company is expected to deliver 10 million doses of NVX-CoV2373 to the DoD in the fourth quarter of 2020. The 10 million doses of NVX-CoV2373 may be used in Phase 2/3 clinical trials or under an Emergency Use Authorization, 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. During the three months ended June 30, 2020, the Company recognized revenue from the DoD Contract of $0.3 million.

Coalition for Epidemic Preparedness Innovations

In May 2020, the Company entered into a restated funding agreement (the “CEPI Funding Agreement”) with CEPI, under which CEPI agreed to provide funding of up to $384.5 million to the Company to support the development of NVX-CoV2373, in addition to the $3.9 million of funding CEPI provided to the Company pursuant to an initial funding agreement entered into between the Company and CEPI in March 2020. The CEPI Funding Agreement provides up to $245.9 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.

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The scope and continuation of the CEPI Funding Agreement may be modified 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 funding agreements are restricted as to their use until expenditures contemplated in the funding agreements are incurred. During the three and six months ended June 30, 2020, the Company recognized revenue from the funding agreements of $34.2 million and $36.5 million, respectively.

Bill & Melinda Gates Foundation

In support of the Company's development of ResVax^TM, 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.

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 are restricted as to their use until expenditures contemplated in the BMGF Grant Agreement are incurred. During the three and six months ended June 30, 2020, the Company recognized revenue from the Grant of $0.2 million and $0.4 million, respectively, and has recognized approximately $82 million in revenue since the inception of the agreement.

Serum Institute of India Private Limited

In July 2020, the Company entered into a supply and license agreement with Serum Institute of India Private Limited (“SIIPL”), under which it 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 agreed to purchase the two vaccine components (the antigen drug substance and the Matrix-M adjuvant) from the Company and the parties will equally split the revenue from sale of such product 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 the product 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 partnership 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 Company anticipates that Takeda has manufacturing capacity of over 250 million doses per year. The Company will be entitled to receive payments based on the achievement of certain development and commercial milestones, as well as a portion of proceeds from the sale of the vaccine.

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At June 30, 2020, the Company's current restricted cash and deferred revenue balances on the consolidated balance sheet include its estimate of costs to be reimbursed and revenue to be recognized, respectively, in the next twelve months under the CEPI Funding Agreement and BMGF Grant Agreement.

Note 12 - CARES Act

On March 27, 2020, Congress enacted the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") to provide certain relief as a result of the COVID-19 pandemic. Amongst other items, the CARES Act lifts certain interest expense deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017. The enactment of the CARES Act did not result in any material adjustments to the Company's income tax provision or net deferred tax assets for the six months ended June 30, 2020.

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

Any statements in the discussion below and elsewhere in this Quarterly Report about expectations, beliefs, plans, objectives, assumptions or future events or performance of Novavax, Inc. (“Novavax,” and together with its wholly owned subsidiaries Novavax AB and Praha Vaccines a.s., the “Company,” “we” or “us”) are not historical facts and are forward-looking statements. Such forward-looking statements include, without limitation, statements with respect to our capabilities, goals, expectations regarding future revenue and expense levels and capital raising activities, including possible proceeds from our May 2020 Sales Agreement (defined below); 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 expectations with respect to manufacturing capacity, timing and production; our expectations with respect to the anticipated ongoing development and potential commercialization or licensure of NVX-CoV2373, NanoFlu™ and ResVax™; the expected timing and content of regulatory actions; funding from Operation Warp Speed (“OWS”), the Department of Defense (“DoD”) and the Coalition for Epidemic Preparedness Innovations (“CEPI”), and payments by 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. You generally can identify these forward-looking statements by 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” or 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 Quarterly Report may turn out to be inaccurate or materially different from actual results.

Because the risk factors discussed in this Quarterly Report and identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, 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 Quarterly Report, particularly those identified in Part II, Item 1A “Risk Factors” of this Quarterly Report and in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K. 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 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. Our vaccine candidates, including both our recently announced coronavirus vaccine candidate, NVX-CoV2373, as well as our lead candidate, NanoFlu, are genetically engineered, three-dimensional nanostructures of recombinant proteins critical to disease pathogenesis. We believe our protein-based candidates elicit differentiated immune responses that may be more efficacious than naturally occurring immunity or other, more traditional vaccine approaches. Our technology targets a variety of infectious diseases. We are also developing proprietary immune stimulating saponin-based adjuvants at Novavax AB, our wholly owned Swedish subsidiary. Our lead adjuvant, Matrix-M™, has been shown to enhance immune responses and has been well-tolerated in multiple clinical trials.

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Product Pipeline


Program		Current Development Stage
Coronavirus
● NVX-CoV2373⁽¹⁾⁽²⁾		Phase 2
● Middle East Respiratory Syndrome (“MERS”)		Preclinical
● Severe Acute Respiratory Syndrome (“SARS”)		Preclinical

Seasonal Influenza
● NanoFlu (Older Adults)⁽¹⁾		Phase 3⁽³⁾

Respiratory Syncytial Virus (“RSV”)
● ResVax⁽⁴⁾ (Infants via Maternal Immunization)		Phase 3
● Older Adults⁽¹⁾		Phase 2
● Pediatrics		Phase 1

Combination Seasonal Influenza/RSV⁽¹⁾		Preclinical

Ebola Virus (“EBOV”)⁽¹⁾		Phase 1

(1)	Includes Matrix-M adjuvant

(2)	Supported by funding from OWS, DoD and CEPI

(3)	Successfully achieved all primary endpoints and achieved statistical significance in key secondary endpoints

(4)	Supported by a grant from BMGF

A summary and status of these vaccine programs follows:

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; they include human diseases such as MERS and SARS, and COVID-19, the most recent disease resulting from the SARS-CoV2 virus. COVID-19 first emerged in late 2019 in China, and by March 2020 was declared a global pandemic by the World Health Organization. There are currently no licensed vaccines proven to prevent COVID-19, although a range of vaccine candidates are under development.

NVX-CoV2373

We have successfully produced a vaccine candidate, NVX-CoV2373, designed to provide protection against SARS-CoV-2, the virus that causes COVID-19. 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.

Clinical Development

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, which we 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 sizes (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. The Phase 2 portion of the study is expected to initiate in the third quarter of 2020, enrolling approximately 1,500 healthy adults in the U.S. and Australia. That Phase 2 portion of the trial is designed to assess expanded safety and immunogenicity in both adults 18-59 years of age and adults 60 years and above. We expect to report top-line data from the Phase 2 portion of the trial early in the fourth quarter of 2020.

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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.

Funding

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, under which we are entitled to receive funding of up to $1.6 billion to support certain activities related to the development of NVX-CoV2373, and the manufacture and delivery of NVX-CoV2373 to the U.S. government. We expect this funding will assist in rapidly developing 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 commercially, if approved. We expect the OWS arrangement to also fund the late-stage clinical studies necessary to determine the safety and efficacy of NVX-CoV2373, including a pivotal Phase 3 clinical trial with up to 30,000 subjects that we expect to begin in the fourth quarter of 2020. OWS funding is also expected to support our plans to file submissions for licensure with the FDA.

In June 2020, we were awarded a contract by the U.S. DoD under which we are entitled to receive funding of up to $60 million for the manufacturing of NVX-CoV2373. In May 2020, we signed a restated funding agreement with CEPI under which we are entitled to receive funding of up to $384.5 million (the “CEPI Funding Agreement”), in addition to the $3.9 million of funding CEPI provided in March 2020, 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 arrangement, 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, CEPI and other global non-governmental organizations and governmental leaders in 2020.

Manufacturing

In May 2020, we announced the acquisition of Praha Vaccines a.s. (“Praha Vaccines”), formerly part of the Cyrus Poonawalla Group, in an all cash transaction of approximately $167.3 million, subject to customary working capital adjustments. The acquisition includes a biologics manufacturing facility and associated assets in Bohumil, Czech Republic. The facility is expected to provide annual capacity of over 1 billion doses of antigen starting in 2021 for NVX-CoV2373. 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 completing a renovation that includes Biosafety Level-3 (BSL-3) capabilities. As part of the transaction, approximately 150 employees with significant experience in vaccine manufacturing and support have 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. We plan to work collaboratively with the Serum Institute of India (SII), part of the Cyrus Poonawalla Group, to increase production levels at the Bohumil facility by the end of 2020.

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. These arrangements are expected to allow us to significantly increase our capacity to deliver doses of NVX-CoV2373 in 2020 and 2021.

In July 2020, we announced a manufacturing partnership with FUJIFILM Diosynth Biotechnologies (“FDB”) that allows for the large-scale contract production of NVX-CoV2373 in connection with our OWS arrangement, initially at FDB’s facility in North Carolina.

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Also in July 2020, we entered into a supply and license agreement with Serum Institute of India Private Limited (“SIIPL”), 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 agreed to purchase the two vaccine components (the antigen drug substance and the Matrix-M adjuvant) from us and we will equally split the revenue from sale of such product by SIIPL 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 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 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 the product 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.

In August 2020, we announced a partnership 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. We anticipate that Takeda has 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 proceeds from the sale of the vaccine.

MERS/SARS

Historically, we developed a vaccine candidate against MERS, a novel coronavirus first identified in 2012, as well as 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.

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 18 years old and older adults, but also occurring in the general population. According to an influenza vaccines forecast by GlobalData in 2019, 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). Recent flu seasons have shown an increase in the influenza disease burden. For the 2017-18 flu season, the Centers for Disease Control and Prevention estimates that influenza in the U.S. resulted in 48.8 million illnesses, 959,000 hospitalizations and 79,400 deaths, a dramatic increase across all categories compared to previous years.

In March 2020, we announced positive top-line results from our Phase 3 clinical trial of our nanoparticle seasonal quadrivalent influenza vaccine candidate, including our proprietary Matrix-M adjuvant (“NanoFlu”). The trial was a randomized, observer-blinded, active controlled trial in approximately 2,652 healthy older adults (65 years and older) across 19 clinical sites in the U.S. The trial’s primary objective was to demonstrate non-inferior immunogenicity as measured by hemagglutination inhibition (“HAI”) titers of vaccine homologous influenza strains compared to a licensed seasonal vaccine, and to describe its safety profile. NanoFlu achieved all the primary objectives, and was well-tolerated and had a safety profile comparable to a U.S.-licensed quadrivalent vaccine, Fluzone^® Quadrivalent with a modest increase in local adverse events. NanoFlu also achieved statistical significance in key secondary endpoints. This positive data will support a U.S. biologics license application (“BLA”), which BLA will include process performance qualification and a lot consistency clinical trial, and licensure of NanoFlu using the U.S. Food and Drug Administration’s (“FDA”) accelerated approval pathway.

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In January 2020, we announced that the FDA granted NanoFlu 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 program permits the FDA to review modules of a BLA as they are received instead of waiting for the entire BLA submission. In addition, priority review (six-month review versus standard 10-month review) is an additional benefit that may potentially be available for NanoFlu in the future.

In June 2019, we announced that the FDA acknowledged that the accelerated approval pathway is available for NanoFlu. For seasonal influenza vaccines, the HAI antibody response is considered an acceptable surrogate marker of activity that is reasonably likely to predict clinical benefit. To be considered for accelerated approval, a BLA for a new seasonal influenza vaccine should include results from one or more well-controlled studies designed to meet immunogenicity endpoints along with a commitment to conduct confirmatory post-marketing studies of clinical effectiveness in preventing influenza.

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.

Data from our Prepare trial, which was initiated in December 2015, was announced in February 2019. 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 these 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. ResVax is thus the first RSV vaccine to show efficacy in a Phase 3 clinical trial, and in addition, showed important effects against a variety of pre-specified exploratory endpoints and post-hoc analyses. This included a ~60% reduction in RSV-related severe hypoxemia and a ~74% reduction in RSV-related, radiographically-confirmed pneumonia through day 90. As in previous clinical trials, ResVax also showed favorable safety and tolerability results. In light of the fact that the trial failed to meet the primary endpoints, the FDA and European Medicines Agency recommended that we conduct an additional Phase 3 clinical trial to confirm efficacy. BMGF has 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”); BMGF continues to financially support our efforts to conduct certain follow-on analyses of the Phase 3 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.

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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.

Combination Respiratory Vaccine

With the ongoing development of our NanoFlu and RSV F Vaccine, a strong rationale exists for developing a combination respiratory vaccine that is designed to protect susceptible populations against both diseases. Although testing is at an early stage, we believe that a combination vaccine against both influenza and RSV may be achievable. Additional combinations of our vaccines, including combinations that include NVX-CoV2373, are also being considered.

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 no licensed treatments proven to prevent EBOV, although a range of blood, immunological and drug therapies are under development.

We have developed an EBOV glycoprotein vaccine candidate (“Ebola GP Vaccine”) expressed in insect cells, using our core recombinant baculovirus technology. In five separate studies, carried out in collaboration with the National Institute of Allergy and Infectious Disease, active immunization with Ebola GP Vaccine was shown to be highly immunogenic and efficacious in preventing lethal disease in non-human primates challenged with EBOV. Our 2015 Phase 1 clinical trial demonstrated that our Ebola GP Vaccine is highly immunogenic in humans, well-tolerated and, in conjunction with our proprietary Matrix-M adjuvant, demonstrated marked antigen dose-sparing and induced significant increases in neutralizing antibody titers. Although not in active development, our Ebola GP Vaccine is a viable development opportunity in the event of dedicated funding or a partnership arrangement.

Sale of Preferred Stock

In June 2020, we entered into an agreement to sell 438,885 shares of newly designated Series A Convertible Preferred Stock, par value $0.01 per share (“Preferred Stock”), at a purchase price of $455.70 per share, convertible into 4,388,850 shares of common stock, to an investment fund affiliated with RA Capital Management (“RA Capital”) in a private placement, at an effective purchase price per share of common stock equal to the June 12, 2020 closing price of our common stock. Upon closing, we received gross proceeds of approximately $200 million. Holders of Preferred Stock are not entitled to cumulative dividends, are not entitled to vote on matters submitted to common stockholders and have a liquidation preference over common stockholders (see “Note 8 – Preferred Stock” included in our Notes to Consolidated Financial Statements).

Sales of Common Stock

In May 2020, we entered into an At Market Issuance Sales Agreement (“May 2020 Sales Agreement”), which allows us to issue and sell up to $250 million in gross proceeds of our common stock. During the six months ended June 30, 2020, we sold 2.2 million shares of common stock under the May 2020 Sales Agreement resulting in $107.0 million in net proceeds, leaving $141.6 million remaining under the May 2020 Sales Agreement.

In March 2020, we entered into an At Market Issuance Sales Agreement (“March 2020 Sales Agreement”), which allowed us to issue and sell up to $150 million in gross proceeds of our common stock. During the six months ended June 30, 2020, we sold 8.6 million shares of common stock under the March 2020 Sales Agreement resulting in $148.1 million in net proceeds. The March 2020 Sales Agreement was fully utilized at that time.

In January 2020, we entered into an At Market Issuance Sales Agreement (“January 2020 Sales Agreement”), which allowed us to issue and sell up to $100 million in gross proceeds of our common stock. During the first quarter of 2020, we sold 10.5 million shares of common stock under the January 2020 Sales Agreement resulting in $98.7 million in net proceeds. The January 2020 Sales Agreement was fully utilized at that time.

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In December 2018, we entered into an At Market Issuance Sales Agreement (“December 2018 Sales Agreement”), which allowed us to issue and sell up to $100 million in gross proceeds of our common stock. In January 2020, we sold 7.2 million shares of common stock under the December 2018 Sales Agreement resulting in $38.5 million in net proceeds. The December 2018 Sales Agreement was fully utilized at that time.

Critical Accounting Policies and Use of Estimates

There are no material changes to our critical accounting policies as described in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the SEC.

Recent Accounting Pronouncements Not Yet Adopted

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

The following is a discussion of the historical financial condition and results of operations of the Company and should be read in conjunction with the unaudited consolidated financial statements and notes thereto set forth in this Quarterly Report.

Three Months Ended June 30, 2020 and 2019 (amounts in tables are presented in thousands, except per share information or as otherwise indicated)

Revenue:


	Three Months Ended
	June 30,
					Change 2019
Revenue:	2020		2019		to 2020
Total revenue	$	35,538	$	3,357	$	32,181

Revenue for the three months ended June 30, 2020 was $35.5 million as compared to $3.4 million for the same period in 2019, an increase of $32.2 million. Revenue for the three months ended June 30, 2020 was primarily comprised of revenue for services performed under the CEPI Funding Agreement. Revenue for the three months ended June 30, 2019 was primarily comprised of revenue for services performed under the BMGF Grant Agreement and revenue from Novavax AB. The significant increase in revenue was due to increased development activities relating to NVX-CoV2373 under the CEPI Funding Agreement.

We expect revenue in 2020 to significantly increase due to our NVX-CoV2373 program, which we anticipate will be primarily funded by OWS, CEPI, DoD and/or other potential non-dilutive funding sources.

Expenses:


	Three Months Ended
	June 30,
					Change 2019
Expenses:	2020		2019		to 2020
Research and development	$	34,846	$	30,417	$	4,429
General and administrative		17,719		9,606		8,113
Total expenses	$	52,565	$	40,023	$	12,542

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Research and Development Expenses

Research and development expenses include salaries, stock-based compensation, laboratory supplies, consultants and subcontractors, including external contract research organizations, and other expenses associated with our process development, program-related manufacturing, clinical, regulatory and quality assurance activities for our programs. In addition, indirect costs such as fringe benefits and overhead expenses related to research and development activities, are also included in research and development expenses. Research and development expenses increased to $34.8 million for the three months ended June 30, 2020 from $30.4 million for the same period in 2019, an increase of $4.4 million, or 15%. The increase was primarily due to increased development activities relating to NVX-CoV2373, partially offset by decreased employee-related and other costs and development activities of ResVax as compared to the same period in 2019. At June 30, 2020, we had 298 employees dedicated to our research and development programs versus 265 employees as of June 30, 2019. For 2020, we expect research and development expenses to significantly increase due to our anticipated development activities for our NVX-CoV2373 program (see discussion on our NVX-CoV2373 program above) and increases in employee-related costs.

Expenses by Functional Area

We track our research and development expenses by the type of costs incurred in identifying, developing, manufacturing and testing vaccine candidates. We evaluate and prioritize our activities according to functional area and therefore believe that project-by-project information would not form a reasonable basis for disclosure to our investors. Historically, we did not account for internal research and development expenses by project, since our employees’ work time is spread across multiple programs and our internal manufacturing clean-room facility produces multiple vaccine candidates.

The following summarizes our research and development expenses by functional area for the three months ended June 30 (in millions):


	2020		2019
Manufacturing	$	19.7	$	19.2
Vaccine Discovery		3.0		1.7
Clinical and Regulatory		12.1		9.5
Total research and development expenses	$	34.8	$	30.4

We do not provide forward-looking estimates of costs and time to complete our research projects 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 with any significant degree of certainty 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.

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General and Administrative Expenses

General and administrative expenses increased to $17.7 million for the three months ended June 30, 2020 from $9.6 million for the same period in 2019, an increase of $8.1 million, or 84%. The increase in general and administrative expenses is primarily due to increased professional fees relating to the Praha Vaccines acquisition and supporting our NVX-CoV2373 program and increased employee-related expenses. At June 30, 2020, we had 61 employees dedicated to general and administrative functions versus 43 employees as of June 30, 2019. For 2020, we expect general and administrative expenses to significantly increase due to increased activities related to supporting our NVX-CoV2373 program and increases in employee-related costs.

Other Income (Expense):


	Three Months Ended
	June 30,
					Change 2019
	2020		2019		to 2020
Other Income (Expense):
Investment income	$	297	$	474	$	(177)
Interest expense		(3,403)		(3,403)		—
Other income (expense)		2,612		(8)		2,620
Total other income (expense)	$	(494)	$	(2,937)	$	2,443

We had total other expense, net of $0.5 million for the three months ended June 30, 2020 as compared to $2.9 million for the same period in 2019. In the three months ended June 30, 2020, we recorded a $2.7 million gain on the intercompany loan with Praha Vaccines due to changes in the exchange rates.

Net Loss:


	Three Months Ended
	June 30,
					Change 2019
	2020		2019		to 2020
Net Loss:
Net loss	$	(17,521)	$	(39,603)	$	22,082
Net loss per share	$	(0.30)	$	(1.69)	$	1.39
Weighted shares outstanding		58,618		23,473		35,145

Net loss for the three months ended June 30, 2020 was $17.5 million, or $0.30 per share, as compared to $39.6 million, or $1.69 per share, for the same period in 2019. The decrease in net loss was primarily due to increased revenue under the CEPI Funding Agreement in the three months ended June 30, 2020.

The increase in weighted average shares outstanding for the three months ended June 30, 2020 is primarily a result of sales of our common stock in 2020 and 2019.

Six Months Ended June 30, 2020 and 2019 (amounts in tables are presented in thousands, except per share information or as otherwise indicated)

Revenue:


	Six Months Ended
	June 30,
					Change 2019
Revenue:	2020		2019		to 2020
Total revenue	$	38,915	$	7,339	$	31,576

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Revenue for the six months ended June 30, 2020 was $38.9 million as compared to $7.3 million for the same period in 2019, an increase of $31.6 million. Revenue for the six months ended June 30, 2020 was primarily comprised of revenue for services performed under the CEPI Funding Agreement. Revenue for the six months ended June 30, 2019 was primarily comprised of revenue for services performed under the BMGF Grant Agreement and revenue from Novavax AB. The significant increase in revenue was due to increased development activities relating to NVX-CoV2373 under the CEPI Funding Agreement.

Expenses:


	Six Months Ended
	June 30,
					Change 2019
Expenses:	2020		2019		to 2020
Research and development	$	51,741	$	65,890	$	(14,149)
General and administrative		27,098		18,338		8,760
Total expenses	$	78,839	$	84,228	$	(5,389)

Research and Development Expenses

Research and development expenses include salaries, stock-based compensation, laboratory supplies, consultants and subcontractors, including external contract research organizations, and other expenses associated with our process development, program-related manufacturing, clinical, regulatory and quality assurance activities for our programs. In addition, indirect costs such as fringe benefits and overhead expenses related to research and development activities, are also included in research and development expenses. Research and development expenses decreased to $51.7 million for the six months ended June 30, 2020 from $65.9 million for the same period in 2019, a decrease of $14.1 million, or 21%. This decrease was primarily due to decreased development activities of ResVax and lower employee-related and other costs in the six months ended June 30, 2020 as compared to the same period in 2019, partially offset by increased development activities relating to NVX-CoV2373. At June 30, 2020, we had 298 employees dedicated to our research and development programs versus 265 employees as of June 30, 2019.

Expenses by Functional Area

The following summarizes our research and development expenses by functional area for the six months ended June 30 (in millions):


	2020		2019
Manufacturing	$	29.0	$	40.9
Vaccine Discovery		5.0		3.5
Clinical and Regulatory		17.7		21.5
Total research and development expenses	$	51.7	$	65.9

General and Administrative Expenses

General and administrative expenses increased to $27.1 million for the six months ended June 30, 2020 from $18.3 million for the same period in 2019, an increase of $8.8 million, or 48%. The increase in general and administrative expenses is primarily due to increased professional fees relating to the Praha Vaccines acquisition and supporting our NVX-CoV2373 program and increased employee-related expenses. At June 30, 2020, we had 61 employees dedicated to general and administrative functions versus 43 employees as of June 30, 2019.

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Other Income (Expense):


	Six Months Ended
	June 30,
					Change 2019
	2020		2019		to 2020
Other Income (Expense):
Investment income	$	732	$	894	$	(162)
Interest expense		(6,806)		(6,806)		—
Other income (expense)		2,613		(20)		2,633
Total other income (expense)	$	(3,461)	$	(5,932)	$	2,471

We had total other expense, net of $3.5 million for the six months ended June 30, 2020 as compared to $5.9 million for the same period in 2019. In the six months ended June 30, 2020, we recorded a $2.7 million gain on the intercompany loan with Praha Vaccines due to changes in the exchange rates.

Net Loss:


	Six Months Ended
	June 30,
					Change 2019
	2020		2019		to 2020
Net Loss:
Net loss	$	(43,385)	$	(82,821)	$	39,436
Net loss per share	$	(0.84)	$	(3.77)	$	2.93
Weighted shares outstanding		51,401		21,966		29,435

Net loss for the six months ended June 30, 2020 was $43.4 million, or $0.84 per share, as compared to $82.8 million, or $3.77 per share, for the same period in 2019. The decrease in net loss was primarily due to increased revenue under the CEPI Funding Agreement in the three months ended June 30, 2020.

The increase in weighted average shares outstanding for the six months ended June 30, 2020 is primarily a result of sales of our common stock in 2020 and 2019.

Liquidity Matters and Capital Resources

Our future capital requirements depend on numerous factors including, but not limited to, the commitments and progress of our research and development programs, the progress of preclinical and clinical testing, 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 manufacturing and distribution costs. We plan to continue to have multiple vaccines and product candidates in various stages of development, and we believe our operating expenses and capital requirements will fluctuate depending upon the timing of events, such as the scope, initiation, rate and progress of our preclinical studies and clinical trials and other research and development activities. We have primarily funded our recent operations with proceeds from the sale of common stock and preferred stock in equity offerings, and revenue under the BMGF Grant Agreement and CEPI Funding Agreement. We anticipate our future operations to be additionally funded by OWS, CEPI, DoD and/or other potential non-dilutive funding sources.

As of June 30, 2020, we had $609.5 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 $424.4 million in cash and cash equivalents, $77.9 million in marketable securities and $107.2 million in restricted cash as of June 30, 2020 as compared to $78.8 million in cash and cash equivalents and $3.4 million in restricted cash as of December 31, 2019.

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The following table summarizes cash flows for the six months ended June 30, 2020 and 2019 (in thousands):


	Six Months Ended
	June 30,
					Change 2019
	2020		2019		to 2020
Summary of Cash Flows:
Net cash (used in) provided by:
Operating activities	$	92,524	$	(80,621)	$	173,145
Investing activities		(245,946)		20,735		(266,681)
Financing activities		602,540		56,184		546,356
Effect on exchange rate on cash, cash equivalents and restricted cash		276		(22)		298
Net increase (decrease) in cash, cash equivalents and restricted cash		449,394		(3,724)		453,118
Cash, cash equivalents and restricted cash at beginning of period		82,180		81,959		221
Cash, cash equivalents and restricted cash at end of period	$	531,574	$	78,235	$	453,339

Net cash provided by operating activities increased to $92.5 million for the six months ended June 30, 2020, as compared cash used in operating activities to $80.6 million for the same period in 2019. The increase in cash provided is primarily due to payments received under the CEPI Funding Agreement and timing of payments to third-parties.

During the six months ended June 30, 2020 and 2019, our investing activities consisted of purchases and maturities of marketable securities, our acquisition of Praha Vaccines in 2020 and, to a much lesser extent, capital expenditures. Capital expenditures for the six months ended June 30, 2020 and 2019 were $3.9 million and $1.3 million, respectively. For 2020, we expect a significant increase in our capital expenditures due to our development activities for our NVX-CoV2373 program.

Our financing activities consisted primarily of sales of our common stock under our At Market Issuance Sales Agreements and issuance of preferred stock in a private placement, and to a lesser extent, stock option exercises and purchases under our Employee Stock Purchase Plan. In the six months ended June 30, 2020, we received net proceeds of $392.3 million from selling shares of common stock through our At Market Issuance Sales Agreements and $199.8 million through the issuance of preferred stock in a private placement. In the six months ended June 30, 2019, we received net proceeds of $55.2 million from selling shares of common stock through our At Market Issuance Sales Agreements.

Based on our most recent cash flow forecast, we believe our current capital is sufficient to fund our operating plans for a minimum of twelve months from the date that this Quarterly Report was filed. Additional capital may be required in the future to develop our vaccine candidates through clinical development, manufacturing and commercialization.

Our ability to fund the Company’s operations is dependent upon management’s plans, which include receiving non-dilutive funding from domestic and international sources, raising additional capital in the near term primarily through a combination of equity and debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements and in the longer term, from revenue related to product sales, to the extent our product candidates receive marketing approval and can be commercialized. New financings may not be available to the Company on commercially acceptable terms, or at all. Also, any collaborations, strategic alliances and marketing, distribution or licensing arrangements may require us to give up some or all of our rights to a product or technology, which in some cases may be at less than the full potential value of such rights.

Off-Balance Sheet Arrangements

We did not have any material off-balance sheet arrangements as of June 30, 2020.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The primary objective of our investment activities is preservation of capital, with the secondary objective of maximizing income. As of June 30, 2020, we had cash and cash equivalents of $424.4 million, $77.9 million in marketable securities, all of which are current, $107.2 million in restricted cash and working capital of $423.1 million.

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Our exposure to market risk is primarily confined to our investment portfolio, which historically has been 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.

Interest and dividend income is recorded when earned and included in investment income. Premiums and discounts, if any, on marketable securities are amortized or accreted to maturity and included in investment income. The specific identification method is used in computing realized gains and losses on the sale of our securities.

We are headquartered in the U.S. where we conduct the vast majority of our business activities. We have two foreign consolidated subsidiaries, Novavax AB, which is located in Sweden, and Praha Vaccines, which is located in the Czech Republic. 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 $2.6 million at June 30, 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 $9.8 million at June 30, 2020.

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 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the assistance of our chief executive officer and chief financial officer, has reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of June 30, 2020. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving such control objectives. Based on the evaluation of our disclosure controls and procedures as of June 30, 2020, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

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 June 30, 2020, and has concluded that there was no change that occurred during the quarterly period ended June 30, 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 Praha Vaccines that are included in our June 30, 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 Praha Vaccines.

PART II. OTHER INFORMATION

Item 1A. Risk Factors

Other than the additional risk factors disclosed below, there are no material changes to the Company’s risk factors as described in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

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Although there has been rapid progress, pursuit of our COVID-19 vaccine candidate, NVX-CoV2373, remains at an early stage. We may be unable to 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 clinical testing. Even though we observed positive results in pre-clinical and early clinical trials, such results may not be predictive of future clinical trial results and whether they will be sufficient to support regulatory approval, accelerated or otherwise. Our development of NVX-CoV2373 is in an early stage, and we may be unable to produce a vaccine that successfully treats COVID-19 in a timely manner, if at all.

Additionally, our ability to develop an effective vaccine to respond to COVID-19 depends on our ability to effectively scale up manufacturing capabilities at our own locations and those of our manufacturing partners and contractors. We recently acquired Praha Vaccines, including its vaccine manufacturing facility in Bohumil, Czech Republic and approximately 150 Praha Vaccines employees. Strategic transactions, such as our acquisition of Praha Vaccines, 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. We are also actively entering into agreements with third-party manufacturers and distributors to manufacture both bulk drug substance and our proprietary Matrix-M adjuvant for NVX-CoV2373 and to distribute NVX-CoV2373. Reliance on third parties involves many risks, including risks that such third parties may not complete manufacturing or distribution activities on schedule, in compliance with regulatory requirements, within budget or in accordance with our quality standards. 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. Rapid and significant growth may strain our administrative and operational infrastructure 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.

There is significant competition in the development of a vaccine against COVID-19 and we may never see returns on the significant resources we are devoting to NVX-CoV2373.

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 currently have programs to develop COVID-19 vaccine candidates. While we are not aware of all of our competitors’ efforts, there are reports that Johnson & Johnson/Janssen, Pfizer, GlaxoSmithKline, Moderna, Sanofi, Inovio, AstraZeneca and many other companies are all in various stages of developing vaccine candidates against COVID-19. Despite funding provided to us to date, many of our competitors pursuing vaccine 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.

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We are working toward the large-scale development, manufacturing and distribution of NVX-CoV2373 through a variety of government and private funding sources. For instance, we entered into funding agreements with CEPI to fund up to $388 million for clinical development and manufacturing activities for NVX-CoV2373 and we entered into the OWS Agreement to fund up to $1.6 billion, of which we are currently authorized to make expenditures or incur obligations of up to $800 million, to support the development, manufacture and delivery of NVX-CoV2373 to the U.S. Government. To the extent pricing negotiations are ongoing, however, such funding sources have discretion over the distribution of funding commitments, and to the extent funding commitments in such agreements are conditioned on our meeting certain milestones, 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 and there can be no assurance that we will be able to timely obtain additional government or private funding, if at all. For example, our agreement with CEPI requires that we adhere to certain equitable access principles regarding allocation and pricing, which may impact our ability to make profits. Future third-party investors and strategic partners, if any, may also impose restrictions on or mandate input as to our conduct of clinical trials, manufacturing activities or distribution activities, which may cause delays in the event of disagreement. We can make no assurance that the OWS Agreement or the funding agreements with CEPI will have a positive impact on our financial results.

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.

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 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.

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 regulations, 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 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 all parties 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, including the FDA, 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 and 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.

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In addition, since 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.

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.

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.

Our operations, and those of our clinical research organizations, contract manufacturing organizations, vendors of materials needed in manufacturing, 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 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.

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Item 6. Exhibits


3.1		Second Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015 (File No. 000-26770))

3.2		Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 9, 2019 (File No. 000-26770))

3.3		Certificate of Designation of Series A Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on June 19, 2020 (File No. 000-26770))

3.4		Amended and Restated By-Laws of the Company (Incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012, filed on March 12, 2013 (File No. 000-26770))

4.1		Form of Series A Convertible Preferred Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on June 19, 2020 (File No. 000-26770))

10.1*±		Restated Funding Agreement, entered into on May 11, 2020, by and between the Company and the Coalition for Epidemic Preparedness Innovations

10.2††		Amended and Restated Novavax, Inc. 2015 Stock Incentive Plan (Incorporated by reference to Appendix A of the Registrant’s Definitive Proxy Statement filed on May 13, 2020 in connection with the Annual Meeting held on June 25, 2020 (File No. 000-26770))

10.3*±		Share Purchase Agreement, dated May 27, 2020, by and among the Company (solely as guarantor), Novavax AB, De Bilt Holdings B.V., Poonawalla Science Park B.V., Bilthoven Biologicals B.V. and Serum International B.V. (solely as guarantor)

10.4*±		Letter Contract, entered into on June 8, 2020, by and between the Company and the U.S. Department of Defense Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense

10.5		Series A Convertible Preferred Subscription Agreement, dated as of June 15, 2020, by and between the Company and RA Capital Healthcare Fund, L.P. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 19, 2020 (File No. 000-26770))

31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act

31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act

32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following financial information from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, (ii) the Consolidated Statements of Operations for the three and six-month periods ended June 30, 2020 and 2019, (iii) the Consolidated Statements of Comprehensive Loss for the three and six-month periods ended June 30, 2020 and 2019, (iv) the Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three and six-month periods ended June 30, 2020 and 2019, (v) the Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2020 and 2019, and (vi) the Notes to Consolidated Financial Statements.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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††Management contracts, compensatory plans or arrangements.

*	Filed herewith or furnished.

±	Certain portions of this exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed.

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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.

Date: August 10, 2020	By:	/s/ Stanley C. Erck
		Stanley C. Erck
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: August 10, 2020	By:	/s/ John J. Trizzino
		John J. Trizzino
		Executive Vice President, Chief Business Officer, Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

Exhibit 10.1

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.

CEPI

Outbreak Response Funding Agreement (Step 2)

Agreement Summary


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


CEPI INFORMATION
Mailing Address:	Coalition for Epidemic Preparedness Innovations, PO Box 123 Torshov, N-0412 Oslo, Norway
Project Lead:	[***], Vaccine Development Project Leader
Management Contact:	[***], Director of Vaccine Research & Development

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
Expiry Date	As described in Clause 19.1 of the Terms and Conditions in Annex A.
This Agreement includes and incorporates by reference:	The agreement (referred to as the “Agreement”) means this Agreement Summary together with the following: - Terms and Conditions (Annex A) - Team Charter (Annex B) - iPDP for Work Package(s) amended and restated (Annex C) - Budget for Work Package(s) amended and restated (Annex D)

THIS AGREEMENT is between Awardee and the Coalition for Epidemic Preparedness Innovations (“CEPI”) and is effective as of the date of the last signature, below (the “Effective Date”). Each party to this Agreement may be referred to individually as a “Party” and together as the “Parties.” This Agreement sets out the terms and conditions governing the performance of the Project, funding of the Project and how the results of the Project shall be used to further CEPI’s mission. As a condition of this funding award, the Parties enter into this Agreement by having their authorized representatives sign below.

Signed for and on behalf of:

COALITION FOR EPIDEMIC PREPAREDNESS INNOVATIONS

Signature:	/s/ Richard Hatchett

Name:	Richard Hatchett

Title:	Chief Executive Officer

Date:	2020-05-11

NOVAVAX, INC.

Signature:	/s/ John A. Herrmann III

Name:	John A. Herrmann III

Title:	SVP, General Counsel & Corporate Secretary

Date:	2020-05-11

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Annex A: Terms and Conditions

{The Terms and Conditions follow this cover page.}

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ANNEX A: Outbreak Response Award Terms and Conditions

1.	Definitions:

1.1.“Affiliate” means any business entity controlled by, controlling or under common control with, a Party.

1.2.“Agreement Summary” means the signature page that identifies the Parties and to which this Annex A is attached.

1.3.“Awardee Background IP” has the meaning described in Clause 5.1.

1.4.“Background IP” has the meaning described in Clause 5.1.

1.5.“Budget” means the schedule of funds to be paid by CEPI for the Project activities in the Work Packages identified in Annex D, as may be amended from time to time.

1.6.“Commercial Benefits” has the meaning described in Clause 15.1.

1.7.“Cost of Goods” (or “COGs”) means [***] in conformity with relevant U.S. GAAP or IFRS accounting principles.

1.8.“Enabling Rights” means rights to Intellectual Property and Project Results that could be asserted by Awardee to block CEPI from exercising its rights under Clause 13 of this Agreement. For purposes of this Agreement, Enabling Rights also includes the contractual rights under contracts executed for the Project that control the use of such items, for example, in material transfer agreements.

1.9.“Equitable Access Plan” has the meaning described in Clause 14.11.

1.10.“Field” means the public health vaccine response to the Outbreak and to other coronaviruses against which a Project Vaccine may be at least partially cross-protective.

1.11.“Financial Report” has the meaning described in Clause 3.7.

1.12.“Integrated Product Development Plan” (or “iPDP”) means one or more Work Packages that collectively include the various activities, deliverables, milestones, phases, risks and timelines associated with the Project. The initial iPDP is set forth as Annex C.

1.13.“Intellectual Property” (or “IP”) means the intangible property rights claiming or covering the discoveries, inventions and materials as well as the works of authorship made by Awardee under the Project, such as copyrights, patents and trademarks.

1.14.“Joint Monitoring and Advisory Group” or “JMAG” has the meaning described in Clause 2.3.

1.15.“LMICs” means “Low and Middle Income Countries” as defined by the Organisation for Economic Co-operation and Development as may be updated from time-to-time.

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1.16.“Outbreak” means the COVID-19 outbreak caused by the SARS-CoV-2 virus or any strain, mutations and related recurrences of such virus.

1.17.“Project” means Awardee’s activities under this Agreement, as are described in the Team Charter, Work Package(s) and Budget.

1.18.“Project Continuity Plan” has the meaning described in Clause 13 “Project Data” has the meaning described in Clause 9.1.

1.19.“Project Expansion” means the inclusion of additional Project activities to be undertaken by Awardee through an additional Work Package(s) as may be related to expanding activities or accelerating the timeline for research and development, clinical trials, manufacturing, production of product stockpiles, and the like.

1.20.“Project Materials” has the meaning described in Clause 9.2.

1.21.“Project Results” means all of the tangible results that are made or developed by Awardee under the Project, including the Project Vaccine, and directly related to such Product Vaccine, assays necessary for Project Vaccine production, whether in whole or in components, protocols used in Project Vaccine clinical or non-clinical evaluation, Project Data, and Project Materials.

1.22.“Project Vaccine” means Awardee’s lead vaccine candidate against SARS-CoV-2, as described in the iPDP in any form or dosage of pharmaceutical composition or preparation.

1.23.“Public Health License” means a grant by Awardee to CEPI of all relevant rights under Project Results, Enabling Rights and Background IP for use in the Field by CEPI as described in Clause 13.

1.24.“Ready Reserve of Clinical Trial Material” has the meaning described in Clause 12.1.

1.25.“Stage Gate” means a mutually agreed “go/no go” decision point to continue a given Work Package or to commence activities in another Work Package.

1.26.“Step 1 Agreement” means the agreement between the Parties covering the [***] of the Project effective March 8, 2020.

1.27.“Subawardees” has the meaning described in Clause 2.6.

1.28.“Sub-Grant Awardees” has the meaning described in Clause 2.6.

1.29.“Team Charter” has the meaning described in Clause 2.1.

1.30.“Technical Report(s)” has the meaning described in Clause 2.4.

1.31.“Third Party Background IP” has the meaning described in Clause 5.1.

1.32.“Third Party Code” has the meaning described in Clause 11.2.

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1.33.“Trusted Collaborator” has the meaning described in Clause 13.2.

1.34.“Trusted Manufacturer” has the meaning described in Clause 13.2.

1.35.“Work Package(s)” means a discrete set of activities in an iPDP as identified in Annex C. Additional Work Package(s) may be agreed to by the Parties after the Effective Date, which, upon execution by both Parties, shall be annexed to and become a part of this Agreement.

2.	Project Management and Organization:

2.1.Team Charter. The Project shall be managed by the Parties as described in the Team Charter in Annex B.

2.2.iPDP and Work Packages. The Project shall be described in an iPDP in Annex C and organized into one or more Work Packages, having an associated Budget attached in Annex D. The Parties may agree to multiple Work Packages as of the Effective Date, some of which shall be pursued in parallel, others of which shall commence upon the occurrence of Stage Gates and others being optional and exercisable in CEPI’s discretion. A Work Package may include one or more Stage Gates. Additional Work Packages may be added as additional annexes to this Agreement as agreed in writing by the Parties pursuant to Section 21.6. Work Packages may also be modified or extended with mutual written consent pursuant to Section 21.6.

2.3.Joint Monitoring and Advisory Group. The Team Charter establishes a joint monitoring and advisement group (“JMAG”) that shall meet and interact regularly on a [***] basis to advance the Project. The JMAG shall undertake to provide coordinated efforts by CEPI and Awardee to: (i) facilitate communications between the Parties; (ii) review the progress of the Project; (iii) discuss substantial proposed changes in the scope or conduct of applicable clinical and animal studies; (iv) discuss clinical trial protocols, publications and regulatory submissions; (v) coordinate the sharing of any Project Results identified in a Work Package as intended for use by other CEPI awardees; (vi) review and update the Project Continuity Plan; (vii) review and update the Equitable Access Plan; and (viii) discuss plans, as appropriate, for the development of manufacturing and its scale-up and scale-out.

2.4.Technical Reports and Access to Project Results. Awardee shall disclose Project Results informally to CEPI’s Project Lead, at meetings of the JMAG and through regular written reports of progress made under the iPDP using a template provided by CEPI (“Technical Reports”), within [***] of a Project’s [***]. Awardee also shall make Project Results available to CEPI as described in the iPDP or otherwise as may reasonably be requested.

2.5.Stage Gates. When Awardee believes that a Stage Gate in a Work Package will be achieved, Awardee shall notify the JMAG, [***] provide relevant information and request a meeting of CEPI’s committee authorized to assess completion of Stage Gates (“Stage Gate Review Committee”). Awardee’s Project Manager shall coordinate with CEPI’s Project Manager to schedule the Stage Gate Review Committee meeting to be held no more than [***] after the request. CEPI shall notify Awardee of the Stage Gate Review Committee’s decision no more than [***] after its meeting. If the Stage Gate Review Committee agrees that a Stage Gate has been successfully achieved, the JMAG shall [***] authorize Awardee to continue previously agreed Work Package activities. When a Stage Gate has not been achieved to the reasonable

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satisfaction of the Stage Gate Review Committee, the JMAG shall [***] discuss in good faith how to address this and whether amendments to the relevant Work Package would address the issue or increase the probability of a successful outcome to the Project.

2.6.Affiliates and Subawardees. Awardee’s activities may be undertaken by Affiliates and contracted third parties (collectively, “Subawardees”) that are identified in a Work Package or reasonably approved by JMAG. Awardee shall be responsible for the acts and omissions of all of its Subawardees. Awardee shall ensure that: (i) Subawardees engaged as procurements pursuant to Clause 14 of the Third Party Code agree to the terms of the Third Party Code applicable to their activities; and (ii) Subawardees engaged as sub-grant awardees pursuant to Clause 15 of the Third Party Code (“Sub-Grant Awardees”) agree to be subject to the Third Party Code and to all of the obligations applicable to Awardee under this Agreement, including obligations for the auditing, inspections, record keeping, use of funds and all other compliance obligations as are applicable to Awardee under this Agreement.

2.7.Services Provided by Other CEPI Funding Recipients. Awardee acknowledges that a particular Work Package may require a further contract to be negotiated directly between Awardee and another recipient of CEPI funding, through which certain Services are provided directly to Awardee.

2.8.[***] Awardee shall use [***] to achieve the objectives and timelines of each Work Package and to meet each Stage Gate in a Work Package within the agreed timeframe, it being understood that neither Party can assure a positive technical outcome for any Work Package.

3.	Use of Funds; Procurement; Project Records:

3.1.Use and Management of Funds. The Budget sets for the funding for each Work Package. Awardee shall use funding from CEPI only in accordance with a Work Package unless otherwise agreed by CEPI in advance. Awardee shall manage CEPI funds with financial controls and practices consistent with U.S. GAAP and further in compliance with CEPI’s policies and procedures as described in Clause 11.2 of this Agreement, which include CEPI’s Third Party Code, Cost Guidance and related procurement policies.

3.2.Procurement. All procurement by Awardee and Sub-Grant Awardees shall be conducted under the best practice regime for procurement activities within the territory where that procurement is taking place and also in compliance with Clause 11.2 of this Agreement.

3.3.Payments. Payments under this Agreement shall be made in U.S. dollars ($) to Awardee’s bank account identified on the Agreement Summary. CEPI shall make payments [***] identified in the Budget and shall make adjustments to the initial payment hereunder to accommodate any funds carried forward from the Step 1 Agreement. Awardee shall be entitled to submit a payment request form to CEPI upon execution of this Agreement and thereafter [***]. Tranches of funding for each payment request under this Agreement shall be paid by CEPI [***] after receipt of all of the following: (i) payment request by Awardee; (ii) any [***] Technical Report due at the time of the payment request; and (iii) any [***] Financial Report due at the time of the payment request, each to be submitted using templates provided by CEPI. Payments may be adjusted to reflect any [***] as well as any [***] as noted in the Financial Report.

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3.4.Delayed Payments. CEPI may delay or condition a payment if:

(a)Awardee has not achieved a material milestone in accordance with the iPDP by the agreed time, unless such delay has been approved by the JMAG in accordance with the Team Charter or otherwise by CEPI;

(b)CEPI has been notified by Awardee that it or any Subawardees are no longer in compliance with the representations and warranties in Clause 16 at the time the payment tranche is requested; or

(c)Awardee has not reasonably completed the payment request form or submitted reasonably satisfactory [***] Technical Reports and Financial Reports.

3.5.Hold on Payment During a Material Breach. CEPI is not obliged to pay any tranches of funding for any Work Package for so long as Awardee is in breach of a material obligation under this Agreement.

3.6.Retained Final Payment. CEPI shall retain [***] identified in the Budget and release it within [***] days after accepting Awardee’s final Technical Report and Financial Report. Within [***] of CEPI’s receipt of the both the Technical Report and Financial Report, CEPI shall notify Awardee of CEPI’s acceptance or rejection of such report(s).

3.7.Financial Reports. Awardee shall provide reports of its expenditures under the Budget with supporting documentation and using a template provided by CEPI (“Financial Reports”) within [***] of a Project’s [***], such other date(s) as may be identified in the Budget. Awardee shall submit a final Financial Report within [***] after the completion of any Work Package.

3.8.Project Records. Awardee shall keep accurate records of its Project activities and expenditures under each Work Package and retain them for [***] after termination of this Agreement.

3.9.Access to Financial Records. During the term and for a period of [***] after expiration or termination of this Agreement, CEPI, or its designee (which shall be a internationally recognized certified public accounting firm, not engaged on a contingent basis), and at CEPI’s reasonable cost, shall have on-site access to inspect Awardee’s Project-related financial records once annually upon at least [***] advance notice. Such inspections shall be conducted during normal operating hours in a manner to minimize disruption to Awardee’s business. For clarity, access to such records also shall be provided to records related to Cost of Goods as described in Clause 14.

3.10.Project Financial Audits. During the term and for a period of [***] after expiration or termination of this Agreement, if requested by CEPI, and at CEPI’s reasonable cost, [***] notice, Awardee’s external auditors shall conduct a Project audit in accordance with ISA800 and/or ISA805 and like standards and provide CEPI with audited statements. Such requests shall not occur more frequently than [***] and will be conducted during normal operating hours in a manner to minimize disruption to Awardee’s business.

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4.	Changing Project Scope, Timelines or Funding as Outbreak Develops:

4.1.Changing Project Scope. The Parties acknowledge the possibility that, as the Outbreak develops in ways not foreseen in the initial Work Package(s), a Project Expansion may become essential. For example, the extent or severity of the Outbreak may increase, the Project Vaccine may be prioritized by public health authorities for clinical studies and/or manufacture or advances in vaccine technology may permit acceleration of the Project. Alternatively, it may become necessary for CEPI to limit Project scope or defer certain activities. For example, the WHO may determine that the Outbreak is no longer a Public Health Emergency of International Concern (“PHEIC”), third party products may be prioritized for development or deployment by an international decision-making process, CEPI may need to focus its resources on other product in its portfolio, or the Project Vaccine may not appear to meet Outbreak response needs.

4.2.Implementing Changes in Project Scope or Timing. At the request of either Party, and as a matter of urgency, the Parties shall discuss in good faith: (i) whether a Project Expansion may be undertaken at CEPI’s cost through modification of an existing Work Package, approval of an additional Work Package or utilization of the Project Continuity Plan in Clause 13; or (ii) how best to limit Project scope or defer certain activities in a Work Package. For clarity, during the Outbreak, CEPI reserves the right to terminate a Work Package if this is necessary in its sole discretion, provided CEPI pays Awardee all costs incurred or obligated to date and including any non-cancellable costs under such Work Package, and also provided that, if requested by CEPI, Awardee shall reasonably demonstrate the incurred, obligated or non-cancellable nature of such costs.

4.3.Participation By Other Funders. Other funders may offer to fund certain parts of a Work Package or a Project Expansion. Additional funding mechanisms may become available to either Party. The Parties shall, in good faith, facilitate such participation and appropriate revisions to relevant Work Packages and the Budget, as well as managing any potentially conflicting commitments.

5.	Ownership of Project Results; Intellectual Property:

5.1.Background IP. Awardee shall retain ownership of its intellectual property existing as of the Effective Date, or developed or acquired independently of the Project during the term of this Agreement (“Awardee Background IP”) and licenses to third party intellectual property secured prior to the Effective Date [***] (“Third Party Background IP” which, along with Awardee Background IP, shall be referred to as “Background IP”), and nothing in this Agreement shall be deemed to assign any ownership in, or grant a license to, CEPI with respect to such Background IP; except for the limited license rights otherwise expressly provided herein for the Public Health License.

5.2.Ownership of Project Results. Awardee shall own the rights to Project Results.

5.3.Ownership of Intellectual Property. Awardee shall own all Intellectual Property. Upon request [***] Awardee shall update CEPI regarding the status of Intellectual Property rights sought and obtained. Awardee shall have the right, but not the obligation, to seek IP protection at its own cost.

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5.4.Third Party IP. The Parties shall notify each other [***] regarding any third party IP they become aware of that might impact Awardee’s ability to perform its obligations under this Agreement and activities contemplated under the Project Continuity Plan and Equitable Access Plan. The Parties shall cooperate in good faith to resolve any such matters.

6.	Clinical Studies:

6.1.Clinical Trials. If any Work Package includes research involving human subjects, such activities must comply with applicable laws and regulations, including requirements related to use of clinical data outside of the country in which a given clinical trial is conducted. Clinical trials also shall comply with CEPI’s policies and procedures in Clause 11.2, which include CEPI’s Clinical Trials Policy.

6.2.Clinical Trial Protocols. Awardee shall be responsible for clinical trial protocol development and shall consult reasonably in advance with CEPI and/or CEPI’s designee regarding clinical trial protocols before they are finalized or submitted to institutional review boards, ethics committees or regulatory authorities.

6.3.Clinical Data. The data arising in the conduct of a clinical trial shall be collected in a way that ensures that each subject, prior to enrolment and in accordance with all applicable laws and regulations, including all applicable data protection and privacy requirements, provides informed consent to allow:

(a)direct access to her or his medical records;

(b)the processing of data relating to her or him and to the movement of that data to other countries, including countries outside of the European Economic Area;

(c)the transfer of such data to Awardee;

(d)the transfer of anonymised data to CEPI and/or CEPI’s designee;

(e)the collection and use of clinical trial data (duly anonymised and, at CEPI’s request, blinded) for the purposes of this Agreement;

(f)the collection and use of biological samples and the use of data (duly anonymised and, at CEPI’s request, blinded) derived from such samples by CEPI or its designated Assessors for the purposes of this Agreement; and

(g)the use of such data for the purpose of obtaining approval from applicable regulatory agencies.

6.4.Sponsorship and Management of Clinical Trials. Awardee shall be the sponsor of any clinical trial (unless CEPI and Awardee otherwise agree in writing), and shall be responsible for obtaining and maintaining all regulatory approvals (including ethical committee approvals) necessary or reasonably useful for the conduct of the clinical trial. In addition, Awardee shall establish an internal Trial Steering Committee (TSC) and a Safety Monitoring Committee or Data Safety Monitoring Board, as applicable (either, a DSMB). Awardee shall, consistent with

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DSMB charter documents, permit a CEPI representative or designee to: (i) attend meetings of DSMB for the clinical trial as an observer (either in person or by electronic means); and (ii) receive all papers that a member of the DSMB would be entitled to receive. The foregoing obligation shall not apply to the extent CEPI’s attendance at a meeting or receipt of papers would jeopardize the integrity/blinded nature of an ongoing clinical trial; during an ongoing clinical trial, Awardee will provide CEPI open session DSMB documents, DSMB recommendation forms and other “open” documents and after a clinical trial is unblinded, CEPI may receive papers that a member of DSMB would be entitled to receive.

6.5.Safety Notifications. Awardee shall notify the JMAG in writing [***] following any single safety event of concern or a series of safety events considered by the DSMB as relevant in relation to the Project Vaccine and at least within [***] after such event or series of events becomes known to Awardee.

6.6.Registration of Clinical Trials: Awardee shall publish details of any clinical trial in a publicly accessible clinical trial register, where patient privacy is upheld, as required under law and, as applicable, prior to the commencement of patient recruitment for such clinical trial.

6.7.Priority for Clinical Trials. Awardee acknowledges that the pool of subjects available in areas of Outbreak to participate in a clinical trial to test products may be limited. Accordingly, if WHO, CEPI or a regulatory authority in the area where the clinical trial is to be conducted determines that a product other than a Project Vaccine has substantially greater potential and should be prioritized instead for a particular clinical trial, Awardee shall abide by such determination and shall not proceed with a clinical trial of such Project Vaccine unless required to do so by a relevant regulatory authority and Awardee shall be reimbursed for its costs, including non-cancellable costs, incurred resulting from such determination to not proceed.

6.8.Potential WHO Clinical Trials. Awardee shall not unreasonably decline a request to participate in a Phase IIb or III clinical trial as requested by WHO and/or CEPI to compare the Project Vaccine with other COVID-19 vaccine candidates, under a Project Expansion.

7.	Regulatory Activities:

7.1.Regulatory Activities. Awardee shall pursue the regulatory activities described in the iPDP and associated Work Package(s).

7.2.Meetings with Regulatory Authorities. Awardee shall invite a CEPI or its designee to observe all material interactions between Awardee and regulatory authorities relating to a Project Vaccine. At CEPI’s reasonable request, Awardee shall request a meeting with regulatory authorities to deal with any significant unresolved issues.

7.3.Regulatory Filings. Awardee shall consult regularly with CEPI regarding regulatory strategy for a Project Vaccine and shall provide advance copies of all regulatory submissions for review and comment by CEPI no later than [***] prior to their contemplated submission to a regulatory authority. If a final version is not available by [***] prior to submission, then a mature draft version can be submitted to CEPI for review at that time. Additionally, Awardee shall put copies of the following on a confidential electronic archiving service designated CEPI:

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(a)all submissions to regulatory authorities and regulatory filings in respect of a Project Vaccine together with all data included or referenced therein (other than ministerial submissions that do not involve safety or efficacy issues); and

(b)material documents and information exchanged between any regulatory authority and the Awardee relating to a Project Vaccine.

7.4.Product Development Standards. To the extent applicable to the Project, Awardee shall comply with Good Laboratory Practices, Good Clinical Practices, and Good Manufacturing Practices.

7.5.Other Access and Cross References. Awardee shall provide access to other regulatory files and records in good faith and as appropriate to achieve the objectives of this Agreement. For clarity, this may include permission to cross reference master files related to the platform on which the Project Vaccine is produced.

8.	Animal Studies:

8.1.Animal Studies. If any Work Package includes research involving animals, such activities must comply with applicable laws and regulations, and with CEPI’s policies and procedures in Clause 11.2, which include CEPI’s Use of Animals Policy.

8.2.Approvals. Awardee shall obtain and maintain all regulatory approvals (including ethical committee approvals) necessary or reasonably useful for the conduct of research involving animals.

9.	Dissemination of Project Results; Publication:

9.1.Dissemination of Project Data. Awardee shall disseminate pre-clinical and clinical trial data (including any negative results, animal model deaths and any toxicology study issues) produced under the Project (collectively, “Project Data”), as described in the iPDP and this Agreement or as otherwise agreed by the JMAG.

9.2.Dissemination of Project Materials. Awardee shall disseminate biological samples, Project Vaccines, and other tangible materials produced under the Project (collectively, “Project Materials”) as described in the iPDP and this Agreement or as otherwise agreed by the JMAG. If Awardee develops animal models under the Project, they shall also be considered Project Materials and disseminated as described in the iPDP and this Agreement or as otherwise agreed by the JMAG.

9.3.Dissemination of Project Results to the Broader Outbreak Community. As described in the iPDP and elsewhere in this Agreement, or as otherwise agreed by the JMAG, and subject to the payment by CEPI of actual costs and reasonable protection for Awardee’s rights under this Agreement, Awardee shall disseminate Project Results (excluding any chemistry, manufacturing and controls (“CMC”) data, or any information that would violate relevant privacy laws, or any information that Awardee can reasonably demonstrate to CEPI is sensitive and should not be so disseminated) with the broader Outbreak research community, such as disease-specific assays

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and standards, animal models, correlates of protection or risk, or diagnostics and epidemic preparedness mechanisms.

9.4.Dissemination of Project Data to Countries Hosting Clinical Studies. Subject to reasonable protection for Awardee’s rights under this Agreement, Awardee shall, to the extent it has the legal right to do so, make all Project Data (excluding any chemistry, manufacturing and controls (CMC) data), such as results of disease-specific assays, animal models, correlates of protection or risk, or diagnostics and epidemic preparedness mechanisms arising from such clinical trial available to that country’s Ministry of Health or equivalent.

9.5.Publication of Project Data for the Outbreak Research Community. Project Data shall be shared rapidly with the broader community, consistent with Awardee’s requirements as a public company, in accordance with (i) WHO’s 2016 Guidance for Managing Ethical Issues in Infectious Disease Outbreaks; (ii) WHO’s 2016 Guidance on Good Participatory Practices in Trials of Interventions Against Emerging Pathogens; (iii) and Wellcome Trust’s Statement on Sharing Research Data and Findings Relevant to the Coronavirus (COVID-19) Outbreak to which CEPI is a signatory.

9.6.Clinical Trial Data. CEPI’s Clinical Trials Policy requires that clinical data and results (including negative results) must be disclosed publicly in as close to real time as possible. Accordingly, such data must be shared through an easily discoverable existing public route (website or system) that includes a metadata description, where patient privacy is upheld, and the system follows a request-for-information approach (where requests are fulfilled subject to an independent review and approval step). Clinical trial data shall be submitted for publication within twelve (12) months after each final study report or report submitted to CEPI. During the same time period, Awardee shall make the results available to the relevant country’s Ministry of Health or equivalent. The clinical trial ID or registry identifier code/number shall be included in all publications of clinical trials.

9.7.Open Access. CEPI requires “Open Access” for Project Data. This means that a copy of the final manuscript of all research publications, journal articles, scholarly monologues and book chapters published under this Clause 9 must be deposited into PubMed Central (or Europe PubMed Central) or otherwise made freely available upon acceptance for publication or immediately after the publisher’s official date of final publication. Moreover, all peer-reviewed published research that is funded, in whole or in part, by CEPI shall be published in accordance with the principles of Plan S (“Accelerating the transition to full and immediate Open Access to scientific publications”), a UK and European data sharing initiative for research funded by public grants.

9.8.Statement of Support in Publications. All such publications shall include a statement that the work was “supported, in whole or in part, by funding from CEPI” (or words to the same effect) and shall credit, where appropriate, the country in which any clinical trials were performed.

10.

Independent Assessors:

10.1.Independent Assessors. As described in a Work Package or as otherwise reasonably required by CEPI, CEPI may engage one or more independent third-party laboratories or

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collaborators (“Assessors”), in confidence and at CEPI’s expense, to evaluate Project Results, including the Project Vaccine, in order to provide CEPI with directly comparable evaluations of similar materials produced under CEPI’s portfolio of awarded projects. The results of the testing, analysis, meta-analysis or other assessments shall be subject to the confidentiality obligations under this Agreement. CEPI shall provide to the Awardee access to the results of such analysis or assessment relevant to Awardee’s activities under the Project, including information regarding the methodology of the overall analysis or assessment and rationale for conclusions reached under such analysis or assessment sufficient to give context to such results, as well as reasonable access to discuss the same with any such Assessors. For clarity, one of CEPI’s assessors is the Task Force for Global Health and its SPEAC team of vaccine safety experts.

10.2.Awardee Cooperation. Awardee shall provide reasonable assistance to CEPI and any designated Assessor, including:

(a)ensuring that any samples to be transferred or exported by or on behalf of Awardee from a clinical trial site or sample storage site are transferred and/or exported pursuant to the terms and conditions of a suitable to-be-agreed-upon material transfer agreement to be entered into between Awardee and the Assessor in addition to any other applicable laws and regulations.

(b)cooperate in regard to data analysis, to the extent relevant under a given Work Package, by CEPI’s Assessor by:

(i)providing data or other information generated under this Agreement to CEPI’s designated Assessor as CEPI shall request, including data regarding CMC, formulation or the results of any of its pre-clinical or clinical trials (duly anonymized and, upon CEPI’s request, blinded) and other documents and information such as study protocols, case report forms needed to develop standardized approaches and tools for safety data management;

(ii)providing CEPI’s designated Assessor with other data (duly anonymised and, upon CEPI’s request, blinded) as CEPI may reasonably request in order to conduct comparative assessments; and

(iii)providing CEPI’s designated Assessor with clinical trial data (duly de- identified and, at CEPI’s request, blinded) for the purposes of signal detection or meta-analyses of safety data (including across product candidates).

11.

Compliance:

11.1.Compliance with Applicable Laws. Awardee shall comply with the laws and regulations that are applicable to the activities performed under the Project.

11.2.Compliance with CEPI’s Policies and Procedures. Awardee shall comply with those CEPI policies and procedures communicated to Awardee as they apply to the activities performed under the Project and the use of CEPI funds. As of the Effective Date of this Agreement, these policies and procedures consist of the Third Party Code and Cost Guidance. For clarity, the Third Party Code is a periodically updated, consolidated statement of CEPI’s

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mission and vision, which further describes and incorporates various CEPI policies, procedures and requirements applicable to recipients of CEPI funds. The Third Party Code also describes requirements for procurements and sub-grants. For avoidance of doubt, Awardee shall be considered to have satisfied the Procurement Requirements of Article 14 of the Third Party Code in regard to those procurements/activities in the Budget or a Work Package for which Awardee has specifically identified a Subawardee. The Cost Guidance describes CEPI’s principles regarding eligible direct and indirect costs, non-eligible costs, and valuing in-kind contributions. CEPI shall advise Awardee from time-to-time of material changes to such policies and procedures.

11.3.Compliance Audit. Upon at least [***] notice, CEPI, or an auditor appointed by CEPI (which shall be an internationally recognized certified public accounting firm, not engaged on a contingent basis) shall be entitled to audit no more than [***] and at CEPI’s reasonable cost, Awardee’s performance of its compliance obligations under this Agreement. Such audits will be conducted during normal operating hours in a manner to minimize disruption to Awardee’s business.

12.

Ready Reserve of Clinical Trial Material:

12.1.Ready Reserve. Unless already addressed by a Work Package, CEPI may request that Awardee undertake the manufacturing and maintenance of a Ready Reserve of Clinical Trial Material through an additional Work Package or Project Expansion, which may include doses from consistency batches. For purposes of this Agreement, a “Ready Reserve of Clinical Trial Material” means a quantity of doses for potential use in a clinical trial of the Project Vaccine, which has not yet received a marketing approval. Such Ready Reserve of Clinical Trial Material may be used for further clinical trials, to advance product development and for emergency use subject to the necessary regulatory approvals or consents, in each case in emergency situations based on national or international guidance (such as by the WHO) or in such other manner as CEPI may reasonably determine. An additional Work Package covering such activities shall be negotiated [***] and in good faith by the Parties.

12.2.Management of Ready Reserve. The Parties agree that CEPI may delegate the management of the Ready Reserve of Clinical Trial Material to WHO or other CEPI designee.

13.

Project Continuity:

13.1.Awardee Contingency Plan. [***] Awardee shall create and maintain a contingency plan, reasonably approved by CEPI, to address the possible impacts of the COVID-19 pandemic on its own organization as relates to the Project, as described in the iPDP.

13.2.Project Continuity Plan. Because of the exigent nature of the Outbreak, the iPDP shall include a Project Continuity Plan that, at a minimum, shall address the following items:

(a)responsibilities and level of access on the part of other collaborators, Subawardees and consortium members, if any, to Project Results and Enabling Rights;

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(b)management of key Project Materials through participants in the Project and other entities such as the BioEscrow® deposit service of the American Type Culture Collection;

(c)identification of a proposed third party, for example, a Subawardee, under contract to Awardee that is capable of performing the activities in agreed Work Packages, Additional Work Packages or a Project Expansion (“Trusted Collaborator”), in the event that Awardee is unable to continue its activities under this Agreement or declines CEPI’s request to undertake additional Work Packages or a Project Expansion; and

(d)at least a preliminary identification of one or more geographically dispersed manufacturing sites, under contract with Awardee, to produce Project Vaccine for use in the Field (“Trusted Manufacturer”). Awardee shall make a final designation of one or more Trusted Manufacturers, in consultation with CEPI, and prior to the start of a Phase II clinical trial.

13.3.Alternative Designations by CEPI. If Awardee does not designate a Trusted Collaborator and/or Trusted Manufacturer, or they notify Awardee that they are no longer available, then CEPI may propose a Trusted Collaborator or Trusted Manufacturer to Awardee. Neither Party may unreasonably decline to accept the designation of a proposed Trusted Collaborator under Clause 13.2 or this Clause 13.3. Once designated and under contract to pursue Project activities, a Trusted Collaborator and Trusted Manufacturer shall be a Subawardee for the purposes of this Agreement.

13.4.Public Health License. Subject to the terms of this Agreement, Awardee hereby grants a worldwide and royalty free Public Health License to CEPI, on the condition that CEPI may only exercise the rights granted under the Public Health License in the event that:

(a)CEPI is not in material breach of its obligations under this Agreement;

(b)the Project Vaccine has achieved licensure with at least one regulatory body (including but not limited to emergency licensure); and

(c)one or more of the triggers set out in Clause 13.5 has occurred.

CEPI shall be entitled to sublicense Project Results, Enabling IP and Background IP included in the Public Health License in accordance with this Clause 13. Each sublicense shall be in writing and CEPI shall require that each sublicensee complies with the terms of the Public Health License, and if receiving a sublicense to Third Party Background IP, also complies with the terms of the Third Party Background IP license agreement. If a license to Third Party Background IP does not permit further sublicensing by CEPI, Awardee agrees to directly grant CEPI’s designee a sublicense consistent with the Public Health License, provided such third party designee agrees to comply with the terms of the Third Party Background IP license agreement, including, without limitation, any payment of sublicense fees attributable to such sublicense grant. CEPI will remain responsible and liable for the performance of sublicenses under such sublicensed rights to the same extent as if such activities were conducted by CEPI.

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13.5.Public Health License Triggers. Consistent with Clause 13.4, CEPI’s right to exercise the Public Health License shall be satisfied when:

(a)Awardee declines to participate in an Additional Work Package or Project Expansion as requested by CEPI, either directly or indirectly through a Subawardee;

(b)CEPI and Awardee agree, in good faith, that Awardee shall not be able to perform the activities under an agreed Work Package, either directly or indirectly through a Sub awardee;

(c)Awardee is in material breach of this Agreement or the Equitable Access Plan and has not cured such breach within [***] days of notification of such breach by CEPI unless otherwise mutually agreed; or

(d)the Agreement is terminated by CEPI pursuant to Clause 19.2(a)-(b) (default or insolvency) or 19.3(c) - (e) (unavailability to perform Project activities, failure to satisfy payment criteria or fraud).

13.6.Agreement between CEPI and the Trusted Collaborator or Trusted Manufacturer. In the event that the Public Health License is exercised, CEPI may request assignment of the relevant Trusted Collaborator or Trusted Manufacturer contracts from Awardee or, at CEPI’s option, endeavour to reach agreement directly with the Trusted Collaborator and/or Trusted Manufacturer, as the case may be, to perform such activities as CEPI may deem necessary. At CEPI’s request, Awardee shall use [***] to facilitate the conclusion of a direct contractual relationship between the Trusted Collaborator or Trusted Manufacturer, as the case may be, and CEPI. If those negotiations do not result in an agreement in [***], then CEPI may grant rights under its Public Health License to a third party unilaterally designated by CEPI as a Trusted Collaborator or Trusted Manufacturer, without approval from Awardee.

13.7.Effects of Exercise of the Public Health License. Upon exercise of the Public Health License and written notice to Awardee, Awardee [***] shall:

(a)provide CEPI with an updated list of Enabling Rights and applicable Background IP, along with an invoice for any payments due under any license agreement for Third Party Background IP attributable to the grant of the Public Health License to CEPI or a sublicensee;

(b)provide CEPI with a good faith schedule of key technology transfer activities and estimated costs for the technology transfer in Clause 13.6;

(c)[***] transfer to the Trusted Collaborator and/or Trusted Manufacturer, as the case may be, and at CEPI’s reasonable cost, all Project Results, Project Materials described in Clause 13.2(b), all guidance, information, materials and assistance reasonably required to accomplish the Project activities identified by CEPI; and

(d)shall be deemed to have covenanted not to sue CEPI or designee for the exercise of the Public Health License.

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14.

Equitable Access:

14.1.Commitment to Equitable Access. CEPI is committed to achieving equitable access to the results of all CEPI-supported programmes pursuant to the “Equitable Access Policy” referenced in CEPI’s Third Party Code. Equitable Access means that a Project Vaccine is available first to populations at risk when and where they are needed at affordable prices. For clarity, it is CEPI’s intention that the price of a Project Vaccine shall be commercially sustainable to the manufacturer.

14.2.Project Vaccine Registration. Awardee shall cooperate with CEPI, and at CEPI’s cost, take such actions as are mutually agreed to register Project Vaccines in countries identified as priorities. If Awardee is not the license holder for purposes of registration in a given country, then Awardee shall be responsible for ensuring that its Subawardee facilitate such registrations as requested by CEPI. Awardee shall utilize WHO pre-qualification or similar registrations systems to the extent available.

14.3.Global Allocation. It is the Parties’ expectation that a global allocation and purchasing entity (the “Global Allocation Body”) shall be constituted within six (6) months after the Effective Date of this Agreement to purchase, allocate, and direct the distribution of COVID-19 vaccines including Project Vaccine. Awardee, will negotiate, in good faith a separate agreement or purchase order to supply Project Vaccine as may be required by the Global Allocation Body in such agreement or purchase order to the Global Allocation Body during the Pandemic Period and after the Pandemic Period for LMICs. For the purposes of this paragraph “Pandemic Period” means the period of time between the date that WHO declared COVID-19 to be a PHEIC (that is, 30 January 2020) and the date that WHO declares the PHEIC to have ended including any period of a COVID-19 pandemic re-emergence as declared by the WHO.

14.4.Pandemic Period Production and Supply. During the Pandemic Period, Awardee shall:

(a)produce Project Vaccine as described in the Work Package(s), if not greater;

(b)provide the JMAG with a regularly updated [***] statement of its actual capacity and a forecast of its planned capacity for manufacturing of Project Vaccine;

(c)provide the JMAG with [***] advance written notice of each manufacturing run for the Project Vaccine;

(d)supply up to [***] of the quantity of the Project Vaccine produced for purchase by the Global Allocation Body pursuant to Clause 14.3 during the Pandemic Period. For clarity, Awardee may not allocate or obligate Project Vaccine doses to other third parties during the Pandemic Period that conflicts with its obligations under this Clause 14; and

(e)discuss in good faith with JMAG how to achieve its requirements for doses of Project Vaccine, including any potential increase in Awardee’s manufacturing capacity.

14.5.Post-Pandemic Period Production and Supply. After the Pandemic Period, Awardee shall continue to produce and supply Project Vaccine for purchase as required by the Global Allocation Body pursuant to Clause 14.3.

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14.6.Pricing Objectives. The Parties acknowledge that the price of the Project Vaccine is critical to achieving Equitable Access during the Pandemic Period. Accordingly, Awardee agrees that its pricing shall be reasonable to achieve Equitable Access for populations in need of a Project Vaccine as well as an appropriate return on investment for vaccine manufacturers that make on-going supply commercially sustainable. The Parties acknowledge that the availability of pandemic insurance as described in Clause 17.7 shall be a relevant cost factor in Equitable Access. For clarity, the purchase of Project Vaccine by the Global Allocation Body or by any other purchasing agent(s) designated by CEPI shall be considered to have satisfied the pricing requirements for Equitable Access.

14.7.Costs and Sales. Consistent with the commitments in Clauses 14.4 to 14.6, Awardee shall:

(a)provide written [***] updates to the JMAG regarding its COGs for Project Vaccines and discuss relevant product development decisions that could affect COGs; and

(b)sell the Project Vaccine doses to the Global Allocation Body during and after the Pandemic Period pursuant to Clause 14.3.

14.8.Information about Production, Supply, Pricing and Sales. Upon written request by CEPI, Awardee shall provide reasonable information about its COGs, production, supply, pricing and sales of Project Vaccine sufficient to evaluate whether such activities meet the Equitable Access Policy.

14.9.Audit of Cost of Goods. No more than [***] and at CEPI’s reasonable cost, CEPI shall have the right to review or to designate an external auditor (which shall be an internationally recognized certified public accounting firm, not engaged on a contingent basis) to review Awardee’s financial records relevant to the information provided in Clause 14.8. Such audits will be conducted during normal operating hours in a manner to minimize disruption to Awardee’s business. In event that the audit concludes that the COGs and production, allocation, supply or pricing of Project Vaccine doses are not substantially in accordance with the achievement of Equitable Access as described in Clause 14.1, then Awardee shall: [***]. The provisions of this Clause 14.9 shall apply to any Sub-Grant Awardees and Trusted Collaborators.

14.10.Manufacturing in Multiple Countries. Awardee shall use [***] to establish operational manufacturing facilities in one or more geographically dispersed manufacturing sites as described in the Work Packages.

14.11.Equitable Access Plan. The foregoing commitments regarding Equitable Access shall constitute the “Equitable Access Plan.” This Equitable Access Plan shall be reviewed by JMAG no less than annually and shall take into account changes in COGs over time, production yield and volume and production economics. The Equitable Access Plan shall be regularly updated during the term of this Agreement.

14.12.Alternative to the Global Allocation Body. In the event that a Global Allocation Body is not constituted as expected by the Parties in Clause 14.3, then CEPI or its designated purchasing agent(s) shall have the rights attributed in this Clause 14 to the Global Allocation Body.

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14.13.Loan Facility. CEPI shall fund certain of Awardee’s manufacturing related expenses, that may include reservation fees to secure future production capacity for the Project, certain acquisition fees to secure materials for the Project, and the like, each a “Loan Facility Payment,” as described in the iPDP and Budget, which Awardee may, in its sole discretion, elect to draw upon. CEPI, as lender, shall provide funds to Awardee, as borrower, as follows:

(a)CEPI hereby makes available to Awardee a term loan facility in an amount up to USD $142,500,000.00 (“Loan Amount”), which Loan Amount may be increased by mutual written agreement pursuant to Awardee’s request and CEPI’s acceptance of a loan request as described in subsection (d) below.

(b)Awardee shall apply the full amount of each tranche borrowed by it (each, a “Loan”) under this Clause 14.13 towards each such Loan Facility Payment.

(c)Awardee will request any Loan from CEPI hereunder generally no less than [***] prior to the proposed date of such Loan. For clarity, the advance of a Loan by CEPI for activities under any Work Package shall not be deemed as agreement by CEPI that any required Stage Gates have been achieved.

(d)Loans shall be requested by Awardee on a loan request form provided by CEPI which shall require that Awardee:

(i)affirms that, as of the date of such request, Awardee is not in default or insolvent pursuant to Clause 19.2;

(ii)affirms that the representations and warranties made by Awardee in Clauses 16.1 and 16.2 remain true and correct;

(iii)sets out the amount of the requested Loan, with a supporting third-party agreement or invoice and other documentation reasonably requested by CEPI;

(iv)sets forth any reimbursement to CEPI for or credit offsets against any [***] of a prior Loan amount that was not applied to a Loan Facility Payment; and

(v)sets out a triggering event for repayment (“Repayment Trigger”) for each Loan Facility Payment. For clarity, the nominal Repayment Trigger is the date that Awardee receives an advance purchase commitment or other purchase of Project Vaccine pursuant to Clauses 14.3 to 14.5. The Repayment Trigger may be adjusted by mutual written agreement. In general it is understood that Awardee will undertake to repay each Loan (if such Loan has not otherwise been Discharged) at the time it receives payment for one or more purchases of the Project Vaccine related to such Loan, provided such payment covers Awardee’s actual COGs, not including the amount of the associated Loan, as further described in Clause 14.14.

Awardee’s failure to meet these requirements shall be grounds for CEPI to deny the advancement of any requested Loan, until such requirements are met.

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14.14.Repayment and Discharge. Unless Discharged, each Loan shall be repaid on the date determined by its Repayment Trigger and when repaid by Awardee, will be acknowledged by CEPI as cancelled. Failure by Awardee to repay the Loans to CEPI as described in this Clause 14.14, shall be a material breach of this Agreement and CEPI shall be entitled to specific performance of this obligation. Generally, Awardee shall be released from repaying a Loan (“Discharged”) and such Loan shall be deemed a grant made by CEPI to Awardee when (i) Awardee demonstrates on or before the date determined by its Repayment Trigger of such Loan that Awardee was unable to utilize such reserved capacity or materials, as the case may be, or (ii) Awardee demonstrates that it was unable to secure one or more advanced purchase commitments or other purchases of the associated Project Vaccine and further demonstrates, to CEPI’s reasonable satisfaction, that there is no likely prospect for sale of such Project Vaccine or that Novavax is disposing of such Project Vaccine.

Repayment of Loans shall be made as follows:

(a)If (i) CEPI and Awardee agree to fully utilize reserved capacity from a Loan and (ii) Awardee obtains one or more advance purchase commitments or other purchases of the Project Vaccine produced pursuant to such reserved capacity, any such purchase proceeds that Awardee receives that are in excess of Awardee’s corresponding actual COGs, not including the amount of the associated Loan, shall be used to repay the Loan up to the full amount;

(b)If (i) CEPI and Awardee agree to partially utilize reserved capacity from a Loan and (ii) Awardee obtains one or more advance purchase commitments or other purchases of the Project Vaccine produced pursuant to such reserved capacity, in the interest of assuring Equitable Access to Project Vaccine, a pro-rated portion of the Loan related to the unused reserved capacity will be Discharged and any such purchase proceeds that Awardee receives that are in excess of Awardee’s corresponding actual COGs, not including the amount of the associated Loan, shall be used to repay the remaining portion of the Loan;

(c)If CEPI and Awardee agree not to utilize any reserved capacity from a Loan (whether or not CEPI utilizes the reserved capacity pursuant to Clause 14.16(a)), the entire amount of the Loan shall be Discharged;

(d)If against CEPI’s agreement, Awardee utilizes all or a portion of the reserved capacity from a Loan, Awardee shall repay the Loan in the full amount in [***] after Awardee starts utilizing the reserved capacity;

(e)For a Loan related to the purchase of materials, if Awardee obtains one or more advance purchase commitments or other purchases of the Project Vaccine produced using such material, any such purchase proceeds that Awardee receives that are in excess of Awardee’s corresponding actual COGs, not including the amount of the associated Loan, shall be used to repay the Loan up to the full amount; and

(f)Notwithstanding the previous, the Parties recognize that a variety of external factors, may impact repayment of a Loan and therefore agree to timely meet as requested

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by one Party and discuss a good faith adjustment to the repayment scenarios described herein.

14.15.Interest on Loans. No interest shall accrue or be payable on any Loan made under the Loan Facility.

14.16.Other Use of Reserved Capacity.

(a)If, as described in Clause 14.14(c), CEPI and Awardee agree not to utilize any reserved capacity from a Loan and the period of time for such reserved capacity is available, then CEPI shall have the right, but not an obligation, to use the reserved capacity for production of a designated third party product at its own cost but with the benefit of any unused credit recognized from the Loan Facility Payment, as provided by the underlying agreement with the entity with which such manufacturing capacity has been reserved.

(b)Awardee shall ensure that any contract with a relevant manufacturer to reserve and utilize reserved capacity secured by one or more Loan Facility Payment shall provide CEPI with the rights contemplated in the immediately preceding subsection (a); and shall provide copies of such contracts to CEPI in confidence. For clarity, Awardee shall have [***] after the Effective Date of this Agreement in which to secure such rights under any relevant third party contract already signed as of the Effective Date.

15.

Commercial Benefits:

15.1.Commercial Benefits. CEPI is required by its own funders to obtain a share of any awardee’s Commercial Benefits as a contribution to support CEPI’s programme activities. As used in this Agreement, “Commercial Benefits” means any economically quantifiable benefits that arise from the commercial exploitation of the Project Results (including the Project Vaccine) other than in preparation for or in response to the Outbreak. Examples of Commercial Benefits include the sales of a Project Vaccine for market, commercial licensing of Project IP, receipt of government-granted incentives such as Priority Review Vouchers and revenue from the commercialization of combination, derivative or follow-on products (including antibody products, assays and vaccines) or application of production technology resulting in whole or part from CEPI funding.

15.2.Sharing of Commercial Benefits. Notwithstanding Clause 15.1, In consideration for the Awardee accepting and complying with the provisions of Clause 13, CEPI agrees to forgo any share of potential Commercial Benefits.

16.

Representations and Warranties:

16.1.Awardee Warranties. Awardee warrants that the following statements are true and correct to its reasonable knowledge and belief as they relate to the Project as of the Effective Date:

(a)it has the full power and authority to enter into and assume its obligations under this Agreement;

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(b)this Agreement has been duly executed and is legal binding and enforceable in accordance with its terms:

(c)it is in material compliance with all statutes, regulations, directives and requirements of any governmental entity;

(d)it does not infringe, misappropriate or violate the intellectual property, privacy or publicity rights of any third party;

(e)it is not under any obligation, contractual or otherwise, to any person or third party in respect of the Enabling Rights that conflicts with or is inconsistent in any material respect with the terms of this Agreement or that would impede the complete fulfillment of its obligations under this Agreement;

(f)it has disclosed in writing to CEPI any actual or contemplated commitments or obligations to third parties for Project Vaccine doses;

(g)it has identified Enabling Rights in writing to CEPI;

(h)neither Awardee nor agreed Subawardees, if any, nor any officer or employee of the foregoing has been debarred or is subject to debarment by a regulatory authority or funding agency anywhere in the world; and

(i)all financial and other information submitted to CEPI in relation to this Agreement is true, complete and accurate in all material respects.

16.2.Awardee Representation. During the Term of this Agreement, Awardee shall:

(a)notify CEPI [***] in the event that any of the foregoing warranties are no longer true and correct, and shall so notify CEPI at least at the time that Awardee requests any disbursement of Project funds;

(b)provide written updates to the JMAG regarding Enabling Rights acquired or created during the course of the Project;

(c)notify CEPI before accepting third-party funds related to the Project (not including public financings by Awardee via at-the-market offerings or other follow-on offerings of equity or debt);

(d)make no encumbrances over, dispose of, or otherwise deal with the Project Results, Intellectual Property and Enabling Rights in any way that would be reasonably deemed inconsistent with this Agreement, including the Public Health License, or that would impede the complete fulfillment of its obligations under this Agreement without the express written permission of CEPI; and

(e)notify CEPI promptly if it becomes aware that any actions are likely or have already been taken by the government of any country in which Awardee shall conduct Project activities that may adversely affect Awardee’s commitments in this Agreement, including

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Equitable Access. For clarity, such government actions may relate, for example, to the exercise of eminent domain or sovereign rights over Project Vaccine doses.

16.3.Additional Awardee Representation. In the event that the Public Health License becomes exercisable, then continuing after the expiration or termination of this Agreement, Awardee shall make no encumbrances over, dispose of, or otherwise deal with the Project Results, Intellectual Property and Enabling Rights, in any way that may be inconsistent with the objectives of this Agreement, including the Public Health License, without the express written permission of CEPI

16.4.CEPI Warranties. CEPI warrants that the following statements are true and correct to its reasonable knowledge and belief, as relate to the Project:

(a)it has the full power and authority to enter into and assume its obligations under this Agreement;

(b)it is in material compliance with all statutes, regulations, directives and requirements of any governmental entity; and

(c)it has not granted rights to any third party in respect of Project Results (other than in accordance with the terms of this Agreement).

16.5.No Other Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NO PARTY MAKES, AND EACH PARTY EXPRESSLY DISCLAIMS, ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF PATENTS, NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES.

17.

Insurance, Liability and Indemnification; Liability:

17.1.Insurance. Awardee shall maintain insurance sufficient to cover the activities, risks, and potential omissions relevant to the Project, including clinical trial liability insurance cover, in accordance with generally accepted industry standards and as required by law. In the event that the Public Health License becomes exercisable and CEPI exercises such rights, CEPI shall maintain comparable insurance protection. Awardee shall provide CEPI with a certificate confirming such insurance upon request.

17.2.Indemnification for Third Party Claims. Awardee shall indemnify and defend CEPI, its Affiliates, officers, directors, third party contractors and employees from and against any and all claims, damages, and liabilities asserted by third parties (including claims for negligence) which arise directly or indirectly from: (i) Awardee’s, or its Affiliate’s or Subawardee’s activities under this Agreement, (ii) the research, development, manufacture, promotion or use of any Project Vaccine, Project Results or Enabling Rights (including for clarity, the use of any Project Results in development activities and clinical studies) conducted by Awardee, or its Affiliates or Subawardees, or (iii) any claim that the use of Awardee’s Intellectual Property Rights infringe the intellectual property rights of any third party, except to the extent such claim, damage or liability is caused by CEPI’s negligence or intentional misconduct. In the event that the Public

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Health License becomes exercisable and CEPI exercises such rights, the obligations of this Clause 17.2 shall apply to CEPI mutatis mutandis.

17.3.Conduct of Responses to Third Party Claims. Each Party shall use all reasonable endeavours to inform the other Party [***] of any circumstances that are likely to give rise to a third party claim which may be covered by Clause 17.2 together with copies of all relevant papers and official documents. The indemnified party shall not take any material action in respect of any third party claim which is covered by Clause 17.2 without the consent of the indemnifying party, including settlement of any such third party claim, provided such consent is not unreasonably conditioned, withheld or delayed. The indemnifying party assumes control of defence of the claim and shall keep the indemnified party fully informed of the progress of all relevant third party claims which are covered by Clause 17.2 and shall fully consult with the indemnified party on the nature of any defence to be advanced in advance. The indemnified party may have its counsel participate in (but not control) the defence of a claim at the indemnified party’s own expense.

17.4.Exclusions. Except in the event of a breach of a Party’s confidentiality obligations under Clause 18 or CEPI’s breach of the scope of the Publice Health License, neither Party shall be liable to the other Party for any [***] arising out of any breach of or failure to perform any of the provisions of this Agreement.

17.5.Liability Cap. [***]

17.6.Exclusions from Liability Cap. Notwithstanding the foregoing, nothing in this Agreement shall limit the liability of either Party in respect of: [***]

17.7.Pandemic Insurance. The Parties acknowledge that, as of the Effective Date, the WHO is considering an insurance mechanism that would provide insurance cover for the suppliers of investigational products for use in the case of a PHEIC declared by WHO. The Parties agree that, if and when this mechanism is established, they shall discuss in good faith the impact of such arrangements on the Parties’ obligations under this Agreement and how it would apply to the supply of Project Vaccines.

18.

Confidentiality:

18.1.Confidential Information. Confidential Information means non-public information disclosed by one Party to the other. For avoidance of doubt, for so long as none of the exceptions in Section 18.2 apply, COGs, production, supply, pricing and sales of Project Vaccine shall be deemed Confidential Information of Awardee, provided however, that CEPI shall have the right to utilize and disclose such Confidential Information in a manner that anonymizes Awardee’s identity by aggregating it with similar information from other of CEPI’s awardees or third parties. Each Party undertakes that during the term of this Agreement and for [***] after, it shall keep confidential and not disclose the other Party’s Confidential Information to any person other than its employees, agents, consultants, contractors, professional advisers, Subawardees and regulatory authorities and, in the case of CEPI, its funders and Assessors, who have a need to know and agree to respect its confidentiality. Each Party shall take commercially reasonable

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precautions to protect against unauthorized disclosure. For clarity, Project Results may be disclosed and utilized by the Parties as set out in this Agreement.

18.2.Confidentiality Limitations. Confidential Information shall not include:

(a)information already known to the receiving Party and which is not subject to prexisting obligations of confidentiality;

(b)information that is independently developed by the receiving Party;

(c)information that is or becomes part of the public domain other than by unauthorized disclosure by receiving Party;

(d)information properly obtained by the receiving Party from a source that, to the best knowledge of the receiving Party, is not bound by a confidentiality obligation to the disclosing Party; and

(e)information to the limited extent that is required to be disclosed by a competent legal authority; provided, that where it is free to do so, the receiving Party shall give notice of such disclosure to the disclosing Party as soon as reasonably practicable.

19.

Term and Termination:

19.1.Term. This Agreement shall commence on the Effective Date identified in the Agreement Summary and shall continue in full force and effect until the activities set out in all active Work Packages, including any additional Work Packages, have been completed or until the Agreement otherwise is terminated pursuant to this Clause 19 (the “Term”).

19.2.Termination by Either Party for Default or Insolvency. Either Party (the “Terminating Party”) may terminate this Agreement by giving written notice of termination, effective immediately, if the other Party (the “Defaulting Party”):

(a)breaches a material obligation in this Agreement and either fails to cure that breach within a cure period of [***] after notice from the Terminating Party or longer time if agreed in writing or if prompt and reasonable steps to cure the breach are undertaken when the breach is not reasonably capable of cure with [***] and such diligent efforts are maintained until cure is achieved; or

(b)makes any arrangement with its creditors, resolves to or undergoes any insolvency proceeding anywhere in the world (except for the purpose of solvent amalgamation or reconstruction).

19.3.Other Termination by CEPI. CEPI shall be entitled to terminate this Agreement by providing written notice of termination to Awardee in the following circumstances:

(a)with [***] if CEPI notifies Awardee that there are material safety, regulatory or ethical issues with continuing the Project, as reasonably determined by CEPI;

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(b)subject to Clause 4.2 upon [***] prior written notice, if CEPI determines that the Project must be limited in scope or terminated;

(c)CEPI reasonably determines that Awardee is unable, or shall become unable, to discharge its obligations under this Agreement, [***] and Awardee does not reasonably alleviate CEPI’s concerns within a cure period of [***] or such longer time as may be agreed by the Parties in writing; or

(d)Awardee does not satisfy the criteria in Clause 3.4 required for CEPI to pay funding tranches under a Work Package and fails to satisfy those criteria in full within a cure period of [***] or such longer time as may be agreed by the Parties in writing.

(e)Awardee has committed fraud or a Financial Irregularity. For purposes of this Agreement, “Financial Irregularity” refers to any and all kinds of corruption, including bribery, nepotism and illegal gratuities; misappropriation of cash, inventory and all other kinds of assets; and making fraudulent financial and non-financial statements to CEPI.

19.4.Payments After Certain Terminations by Awardee. If this Agreement is terminated by Awardee pursuant to Clause 19.2(a) - (b) (default or insolvency on the part of CEPI) or terminated by CEPI pursuant to Clause 19.3(a) - (b) (issues precluding continuation of the Project or limiting of Project Scope by CEPI), then CEPI shall reimburse Awardee for all reasonably incurred expenses through termination and any non-cancellable expenses relating to Project activities that were included in the iPDP and/or authorised by CEPI and that arise through termination and after the termination date, solely to the extent they are not otherwise covered by CEPI funding.

19.5.Effects of Termination by CEPI under Clause 19.2(a) - (b) or 19.3 (c) - (e). If this Agreement is terminated by CEPI pursuant to Clause 19.2(a) - (b) (default or insolvency on the part of Awardee) or 19.3 (c) - (e) (inability to proceed or financial issues with Awardee), then, CEPI shall reimburse Awardee for all reasonably incurred expenses through termination and any non-cancellable expenses relating to the Project activities that were included in in the iPDP and/or authorised by CEPI and that arise through termination and after the termination date]. Additionally, Awardee shall use all reasonable endeavours to, at CEPI’s expense:

(a)make all Project Data publicly available in such manner as CEPI may direct, except to the extent that to do so would result in the public disclosure of Enabling Rights that would not otherwise reasonably be publicly disclosed;

(b)ship to CEPI (or its designee) all Project Materials within [***] of CEPI requesting such Materials in writing;

(c)[***] transfer to CEPI (or its designee), any regulatory approvals and applications for regulatory approvals relating to the Project Vaccine;

(d)provide CEPI with an updated list of all sublicense, contract manufacturing agreements and other third party agreements and arrangement to which Awardee is a party that solely relate to the development of the Project Vaccine and still have work outstanding (the “Contracts”) within [***] of the Termination Date;

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(e)as requested by CEPI, and to the extent it has the legal right to do so (i) assign the benefit (subject to the assumption of the burden) of one or more Contracts to CEPI (or its designee) and, where consent of a third party is required, seek to obtain such consent; (ii) novate one or more Contracts to CEPI (or its designee); or (iii) terminate one or more Contracts in accordance with its terms [***];

(f)as requested by CEPI, perform technology transfer, on an expedited basis, to a Trusted Collaborator or Trusted Manufacturer, as the case may be; and

(g)as requested by CEPI, provide written confirmation or ratification in the event that CEPI exercises the Public Health License.

19.6.Additional Effects of Termination. In all termination events:

(a)CEPI shall not be required to make any further payments to Awardee under this Agreement or any Work Package other than as specified in this Clause 19;

(b)Awardee shall return any CEPI funds within [***] from the date of termination that are unspent, if any, after deducting reimbursement to Awardee for all reasonably incurred expenses through termination and any non-cancellable expenses relating to the Project activities that were included in the iPDP and/or authorised by CEPI and that arise through termination and after the termination date;

(c)each Party shall return or destroy, as requested by the other Party, the Confidential Information of the other Party, except: (i) CEPI may retain the Project Results subject to the obligations of confidentiality set out in Clause 18, (ii) each Party may keep one (1) copy of such Confidential Information for monitoring compliance, and (iii) solely in the event that the Public Health License has been exercised, CEPI may retain such other Confidential Information reasonably required by CEPI to exercise and benefit from the Public Health License. Neither Party shall be required to delete copies of Confidential Information stored on automatic electronic backup systems;

(d)if there is an on-going clinical trial, unless agreed otherwise by the Parties in writing, Awardee shall ensure that no additional trial subjects are enrolled and the Parties shall work together to plan and implement a wind-down of the study in an orderly fashion, with due regard for patient safety and the rights of any participating subjects.

19.7.Repayment of Funds for Financial Irregularity. Where termination is due to any Financial Irregularity or fraudulent or illegal activity by Awardee, Awardee shall repay to CEPI the amount of funds related to such financial irregularity or fraudulent or illegal activity within [***] of the notice of termination.

19.8.Survival of Rights and Identified Clauses. Termination of this Agreement shall be without prejudice to the rights and duties of either Party accrued prior to termination. The following sections shall continue to be enforceable notwithstanding termination or expiration: Clauses 2.6, 3.6 - 3.10, 6.4 - 6.5, 9 -11, 13 - 15, 17, 18.1 and 19 - 20 as well as any other provision, which by its nature, is intended to survive termination.

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20.

Resolving Differences:

20.1.Resolution by the JMAG. Awardee and CEPI shall cooperate in good faith to resolve differences and disputes about the Project at the JMAG.

20.2.Escalation to Senior Management of the Parties. Any difference or dispute that cannot be resolved by the JMAG shall be submitted to the Parties’ respective Chief Executive Officers or designees for resolution. If the Parties remain unable to resolve such dispute within [***] or such additional time as mutually agreed, then the Parties irrevocably submit to arbitration for its resolution.

20.3.Arbitration. Any disputes to be resolved by binding arbitration (including any question regarding its existence, validity or termination or this Agreement), shall be referred to and finally resolved by arbitration under the [***], which Rules are incorporated by reference into this Clause. The number of arbitrators shall be three. The seat, or legal place, of arbitration shall be [***]. The language to be used in the arbitral proceedings shall be English. Notwithstanding the foregoing, any Party may seek specific performance, interim or final injunctive relief or any other relief of similar nature or effect in any court of competent jurisdiction. The seat, or legal place, of arbitration shall be [***]. The language to be used in the arbitral proceedings shall be English. Notwithstanding the foregoing, any Party may seek specific performance, interim or final injunctive relief or any other relief of similar nature or effect in any court of competent jurisdiction.

20.4.Public Health License. If CEPI invokes its rights under a Public Health License under Clause 13, then the Parties shall pursue [***]. However, because of the exigent circumstances in the Outbreak, Awardee agrees that CEPI [***] and the ultimate resolution of any dispute shall be [***].

21.

Miscellaneous:

21.1.Relationship of the Parties. Neither Party shall by reason of this Agreement be empowered to act as agent for the other Party or to pledge the credit of the other Party. Neither Party shall be held liable for or incur liability in respect of the acts or defaults of the other Party.

21.2.Announcements and Use of Names. Neither Party shall issue any press release, public statement or public announcement with respect to this Agreement with the prior written consent of the other Party. Neither Party shall use the name or trademarks of the other Party or its Affiliates in any press release, public statement or publication without the named Party’s prior express written consent. After the initial announcement, or as required by law, either Party may disclose a description of the Project, the names of each Party and its Project Lead, and the amount of the CEPI funding without the prior consent of the other Party.

21.3.Assignment. Neither Party shall, without the prior written consent of the other Party, such consent not to be unreasonably withheld or delayed, assign its rights or obligations under this Agreement to any third party, except that CEPI may do so to an organisation of equivalent charitable mission and Awardee may do so as part of a sale of the entire business required for the satisfaction of Awardee’s obligations under this Agreement, provided that in each instance, such permitted assignee assumes all rights and obligations under this Agreement. This Agreement will

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be binding upon, inure solely to the benefit of and be enforceable by each Party and their respective permitted successors and assigns.

21.4.Notice. Any notice to be given pursuant to this Agreement shall be in writing in the English language and shall be delivered by overnight courier, by registered, recorded delivery or certified mail (postage prepaid) to the address of the recipient Party provided in the Agreement Summary or such other address as a Party may from time to time designate by written notice. Any notice given pursuant to this clause shall be deemed to have been received on the day of receipt, provided receipt occurs on a business day of the recipient Party or otherwise on the next following business day of the recipient. The Parties agree that email and fax are not valid methods of giving notice under this Agreement.

21.5.Entire Agreement. This Agreement, including its Agreement Summary and Annexes, constitutes the entire agreement and understanding between the Parties relating to its subject matter and together they supersede and replace all prior arrangements, whether written or oral, between the Parties relating to the subject matter of this Agreement, including without limitation, the Step 1 Agreement, which , with effect on and from the Effective Date, shall be amended and restated in the form of this Step 2 Agreement; and all activities thereunder shall be governed by and construed in accordance with the provisions of this Step 2 Agreement.

21.6.Amendments to this Agreement. No variation, amendment, modification or supplement to this Agreement, including its Annexes, shall be valid unless and until it is made in writing and signed by a duly authorised representative of each Party.

21.7.Conflicts Between Components. If there is any conflict between the provisions of this Agreement, the Third Party Code and any Work Package, then the provisions of this Agreement shall prevail, followed by the provisions of the Third Party Code, followed by the provisions of the Work Package.

21.8.Force Majeure. Neither Party shall be deemed to have defaulted under or to be in breach of this Agreement for failure or delay in fulfilling material obligations when such failure or delay is directly caused by an event outside of their reasonable control, including but not limited to acts of war, insurrections, acts of terrorism, acts of God or acts, omissions or delays in acting or failure to act by any of CEPI’s funders (collectively a “Force Majeure Event”). Each Party shall inform the other [***] and in writing of any Force Majeure Event and the Parties shall seek to agree on the appropriate course of action under the circumstances. In the case of an Outbreak, the Parties shall be expected to continue to carry out their obligations pursuant to applicable Work Packages with all due health and safety precautions.

21.9.No Rights for Third Parties. A person who is not a Party to this Agreement has no right under the Contracts (Rights of Third Parties) Act of 1999 or otherwise to enforce or to enjoy the benefit of any term of this Agreement.

21.10.No Waiver. Neither Party shall be deemed to have waived any of its rights or remedies under this Agreement unless the waiver is expressly made in writing and signed by a duly authorized representative of that Party.

-30-

21.11.Headings. The captions to the several clauses and subclauses are not a part of this Agreement but are merely for convenience to assist in locating and reading this Agreement.

21.12.Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

21.13.Business Day Requirements. In the event that any notice or other action or omission is required to be taken by a Party under this Agreement on a day that is not a business day then such notice or other action or omission shall be deemed to require to be taken on the next occurring business day.

21.14.Further Assurances. Each Party shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof or to better assure and confirm unto such other Party its rights and remedies under this Agreement.

21.15.Counterparts and Electronic Signing. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Additionally, this Agreement may be signed electronically by exchanging signed PDF versions or by using an online service such as DocuSign ®.

21.16.Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of England and Wales without giving effect to any choice of law or conflict of law provisions or rules that would cause the application of the laws of any other jurisdiction.

-31-

Annex B: Team Charter

{The Team Charter follows this cover page.}

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

Team Charter

For the COVID-19 agreement package

Novavax, Inc. – Development of a SARS-CoV-2 recombinant spike protein nanoparticle vaccine (SARS-CoV-2 rS) with Matrix-M^TM Adjuvant

This “Team Charter” describes the operation and the governance of the SARS-CoV-2 rS Vaccine Development Program.

The aim of this Team Charter is to provide project management and operational guidance. It is designed to function as an operational document to explain the roles and responsibilities of Awardee (“Project Team”) and CEPI while also setting out how the Project will operate in practice. In the event of any conflict between this Team Charter and the Terms and Conditions of the Agreement, the Terms and Conditions shall prevail in all circumstances.

Unless specifically defined in this Team Charter, all defined terms shall have the same meaning as set out in the Terms and Conditions.

The objectives of the Project are described in the Integrated Product Development Plan (“IPDP”). For document locations, please refer to section 7 “Document Management and Archiving”, below.

1. Project Team Composition and Responsibility

It is the responsibility of the Project Team to perform the work described in the IPDP pursuant to certain Work Packages on the terms of the Agreement.

The Project Team will be comprised of:

Awardee’s Project Lead (“Project Lead”): [***] Awardee’s Project Manager (“Project Manager”): [***]

Additional details of the Project Team members and Project Team structure are set out in Schedule 1 to this Annex.

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

2. CEPI Team Composition and Responsibility

The CEPI team will be composed of a project lead (CEPI Project Lead), a project manager (CEPI Project Manager), and a contract manager (CEPI Contract Manager). This team will be supplemented from time to time by relevant experts, internal or external to CEPI under appropriate confidentiality arrangements to be parts of the JMAG or sub-teams depending on the specific needs of the project.

The responsibility of the CEPI team in the Project is:

To mobilize experts and consultants in order to support the Project Team to overcome obstacles during the Project. This function is offered on an ad-hoc basis;

To be part of the JMAG with its responsibilities;

To oversee that project milestones and deliverables are met according to the Agreement and its schedules; and

To ensure that CEPI’s investment is closely monitored and that funds are distributed in accordance with the Agreement.

3. Project Governance Structure

The Project governance structure is set out in Schedule 2 to this Annex.

The Awardee’s Project Lead should encourage all Project Team members to contribute to the development strategy.

The style of communication is encouraged to be objective, open and direct.

Personal accountability in the Project Team should be pre-defined and clearly articulated along with a set of measurable actions and deadlines, together with definition of roles and responsibilities.

If there is a risk that deadlines or other Project requirements will not be met, the first approach is for precautions and counter measures to be taken by the Project Team.

4. Joint Monitoring and Advisory Group Composition (JMAG)

JMAG’s Remit

The JMAG shall be entitled to:

monitor the performance and technical content of each Work Package against the milestones and their dates, and critically assess the results on an on-going basis to identify and address any weaknesses or delays in any Work Package;

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

approve the achievement of milestones (but shall not have the right to approve final Project completion);

provide a forum for discussion as to whether the activities currently agreed to are sufficient to satisfy CEPI’s Mission;

have the authority to approve extensions to Work Package timelines up to [***] of the originally planned timeframe as set out in the relevant Work Package[***];

have the authority to approve transfer of funds between cost categories within a Project Budget, [***];

review and approve proposed changes and updates to the IPDP;

review and approve the regulatory strategy for the use of the Product and receive regular updates on regulatory filings and submissions;

review the contractual and operational status and capabilities of Trusted Collaborator(s);

approve the [***] IPDP Reports;

10.

review any reports and updates provided by any site visit groups;

11.

provide a forum for coordinating the Parties’ responses to issues with respect to a Product, to the extent relating to CEPI’s use in the Field, including unexpected disruptions to the supply of the Product, recalls, safety issues or withdrawals of Product;

12.

receive written notification of all Project Results; and

13.

make such other decisions as may be delegated to the JMAG pursuant to the Agreement or by written agreement of the Parties.

Limitations on JMAG

The JMAG has no right to do any of the acts set out below. These acts can only be done by CEPI or jointly by the Parties as set out in the Agreement:

confirm willingness to fund any additional Work Packages (such decision is to be made solely by CEPI);

approve the Financial Reports;

approve completion of the Project;

amend or vary the provisions of the Terms and Conditions

approve any Sub-Awardee(s) to the extent not identified in the IPDP

alter the fundamental scope or objectives or agreed completion date of the Project; and

approve an overall increase to a Project Budget or timeline.

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

JMAG Composition

The JMAG Members shall be comprised of the following persons:

Two “Voting Members”, who will be the Awardee Project Lead (who shall also be the chairperson of the JMAG) and the CEPI Project Lead. The Awardee Project Lead or nominee and the CEPI representative or nominee shall both have the right to vote on matters brought before the JMAG and falling within the JMAG remit. CEPI may, at its sole discretion, appoint or remove the CEPI representative or nominee by notice in writing to the Awardee; and

“Non-Voting Members” Each of the Parties may invite those persons whose special skills or knowledge might advance the Project, to attend and address the JMAG meetings as observers. Such Non-Voting Members shall not have a right to participate in the JMAG decision-making process. The Project Lead shall ensure that any such attendees sign confidentiality agreements in a form acceptable to all Parties. Each Party shall pay for the reasonable documented travel expenses and/or consulting fees of the Non-Voting Members it proposed and shall ensure that such travel is conducted in accordance with CEPI’s Travel Policy.

Quorum

The quorum for JMAG meetings shall be the [***]. Decisions of the JMAG shall be made by [***]. Where consensus cannot be reached, the matter shall be escalated in accordance with Clause 21 of the Agreement.

Meeting Organisation

The Project Lead or his/her designee, shall be responsible for organising JMAG meetings, including preparing meeting papers and ensuring that minutes of meetings are produced promptly after each meeting and circulated to Members in a timely manner.

5. Project Team and JMAG Team Meetings

Each team, sub-team and JMAG will have a kickoff meeting to start its activities and a final meeting to end the operation of the team/sub-team and capture the lessons learned.

It is suggested that the following meetings will take place throughout the Project.

Please note, that this list is only suggested best practice. Given the nature of the COVID-19 emergency, it is likely that more frequent communication may well be necessary.

Type	Frequency/ Participants	Agenda/ Content	Minutes	Comments
[]*	[***]	[***]	[***]	[***]

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

Type	Frequency/ Participants	Agenda/ Content	Minutes	Comments
[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]

6. Communication with Stakeholders

Stakeholder communications regarding the Project between CEPI and the Awardee should be reviewed and approved by the JMAG. In order to maintain open communication with these stakeholders, copies of the final minutes will be distributed on request to CEPI and Awardee organization members, who are bound by confidentiality restrictions. The two Project Leads (Awardee and CEPI) will consult each other prior to any communication to third parties, presentations, press releases, conference data presentation about the Project.

7. Special treatment of Data and Materials with the COVID-19 Community

The Awardee shall advise the JMAG when they believe that the sharing of any particular data set or biological material might foster the development of vaccine candidates against COVID-19. The JMAG will discuss whether and how such data or materials could be shared with other CEPI awardees or the broader COVID-19 research community, under appropriate contractual provisions, including confidentiality.

Following agreement by the JMAG, it is the responsibility of the Awardee’s Project Leader to ensure such data or material is shared The identification and distribution of the material will be identified in the IPDP during the Project as mutually agreed.

8. Document Management and Archiving

The Awardee shall provide and maintain a secure computer platform satisfactory to the Parties to serve as a repository of Project documents (“the Secure Portal”).

It is the responsibility of the Project Manager to ensure that relevant documents are posted on the Secure Portal in a timely manner, including: agenda and meeting minutes of JMAG and Project team meetings, target product profile, the IPDP, planning documents, Risk Register, Project Budget, Financial and IPDP Reports and organizational charts.

The JMAG will agree to a list of JMAG members that will have access to the Secure Portal.

9. Planning

The Project Lead, or their nominated deputy, is responsible for maintaining the following plans for the Project (“Project Plans”), the frequency of updates of which will be agreed by the JMAG:

Project Plans:

Project Gantt chart: used for tracking and risk management (Microsoft Project file)

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

iPDP: should be regarded as a “living document” and updated regularly (Microsoft Word document). These updates should be reviewed by JMAG.

Risk register: used for risk management, updated every [***]

10. Budgets

Within each Work Package, the Awardee Project Lead is accountable for managing the budget, and CEPI is accountable for making payments in accordance with the Agreement.

11. Review of Team Charter

This Team Charter may be amended as required by a decision of the JMAG.

12. Appendices

Schedule 1: Project Team Members and Structure

Schedule 2: Project Governance Structure

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

Schedule 1: Project Team Members and Structure

Novavax Members

Name	Role in Project, Function	Contact details (email / mobile)
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

CEPI Members

Name	Role in Project, Function	Contact details (email / mobile)
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]
[***]	[***]	[***]
			[***]

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

Figure 1: Project Team Structure

[INSERT DIAGRAM FROM IPDP WHERE RELEVANT]

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

Schedule 2: Project Governance Structure

ANNEX B – TEAM CHARTER FOR COVID-19 PACKAGE

Annex C: Integrated Product Development Plan

{The initial iPDP follows this cover page.}

[Pursuant to Regulation S-K, Item 601(a)(5), this Annex setting forth the initial integrated product development plan under this Restated Funding Agreement 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.]

Annex D: Budget

{The initial Budget follows this cover page.}

[Pursuant to Regulation S-K, Item 601(a)(5), this Annex setting forth the initial budget under this Restated Funding Agreement for approximately $388 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.]

Exhibit 10.3

EXECUTION VERSION

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.

Dated

27 May 2020

between

NOVAVAX AB

and

NOVAVAX, INC.

and

THE PERSONS LISTED IN SCHEDULE 1

and

SERUM INTERNATIONAL BV

SHARE PURCHASE AGREEMENT

1. DEFINITIONS AND INTERPRETATIONS		2

2. SALE OF SALE SHARES		12

3. COMPLETION		13

4. PURCHASE PRICE		13

5. ESCROW		16

6. WARRANTIES		17

7. PROTECTION OF GOODWILL		19

8. GUARANTEE		21

9. FURTHER ASSURANCE AND OTHER OBLIGATIONS		25

10. OTHER PROVISIONS		27

SCHEDULE 1 LIST OF SELLERS AND SALE SHARES		35

SCHEDULE 2 DETAILS OF THE COMPANY		36

SCHEDULE 3 IDENTIFICATION OF THE REAL PROPERTY		37

SCHEDULE 4 COMPLETION OBLIGATIONS		44

SCHEDULE 5 COMPLETION ACCOUNTS		48

SCHEDULE 6 WARRANTIES		57

SCHEDULE 7 LIMITATIONS ON LIABILITY		90

SCHEDULE 8 MATERIAL CONTRACTS		93

SCHEDULE 9 DATA ROOM INDEX		96

THIS DEED is made on 27 May 2020 between:

(1)	NOVAVAX AB a company incorporated under the laws of Sweden with company registration number 556549-4019, whose registered address is at Kungsgatan 109, 753 18 Uppsala, Sweden (the “Buyer”);

(2)	NOVAVAX, INC., a company incorporated under the laws of Delaware, United States of America and having its principal place of business at 21 Firstfield Road, Gaithersburg, MD 20878, United States America (the “NVAX Guarantor”);

(3)	The persons listed in Schedule 1 (List of Sellers and Sale Shares) (the “Sellers” and each a “Seller”); and

(4)	SERUM INTERNATIONAL BV, a company incorporated under the laws of the Netherlands under RSIN number 851751787 and establishment number 000025173979 with its registered office at Antonie van Leeuwenhoeklaan 9, Bilthoven, 3721 MA, the Netherlands (the “CPG Guarantor”),

(together the “Parties” and each a “Party”).

BACKGROUND

(A)	The Parties desire for the Sellers to sell and the Buyer to acquire the entire issued share capital of the Company (the “Proposed Transaction”).

(B)	In connection with the Proposed Transaction, the Sellers have agreed to sell and the Buyer has agreed to buy the Sale Shares (defined below) on and subject to the terms set out herein.

(C)	The CPG Guarantor has agreed to guarantee certain obligations of the Sellers pursuant to this Deed and the other Transaction Documents on the terms and conditions set out in Clause 8 (Guarantee).

(D)	The NVAX Guarantor has agreed to guarantee certain obligations of the Buyer pursuant to this Deed on the terms and conditions set out in Clause 8 (Guarantee).

IT IS AGREED as follows:

1.	DEFINITIONS AND INTERPRETATIONS

1.1	In this Deed, the expressions set out below shall have the following meanings:

“2019 Accounts” means the audited financial statements of the Company for the 12 month period ending December 31, 2019 including a balance sheet, a profit and loss account with the notes on them, directors’ and auditors’ reports and a cash flow statement, a copy of which is contained in Folder 8.3.3 of the Data Room;

“Accounts” means the 2019 Accounts and the audited financial statements of the Company, comprising the individual accounts of the Company for (i) the 12 month period ending December 31, 2017 and (ii) the 12 month period ending on December 31, 2018, with each respective report including a balance sheet, a profit and loss account

with the notes on them, directors’ and auditors’ reports and a cash flow statement, copies of which are contained in Folder 8.3.3 of the Data Room;

“Accounts Date” means December 31, 2019;

“Additional Diligence Request Questions” means the documents dated 18 May 2020, 24 May 2020 and 26 May 2020 containing additional questions of the Buyer and its advisors and additional answers of the Company, the Sellers and their advisors to those questions drafted as a result of the review of the Data Room by the Buyer and its advisors as appended to the Disclosure Letter;

“Adjustment Date” the fifth Business Day following the date on which the Completion Accounts and the Purchase Price Statement are agreed or determined in accordance with Schedule 5 (Completion Accounts).

“Affiliates” means with respect to any person, any other person that Controls, is Controlled by or is under common Control with such person, and in the case of the Sellers, the CPG Guarantor and the Company, a person who is a personally related person (in Czech: osoba blízká) within the meaning of Section 22 of the Czech Civil Code and/or any person connected (within the meaning of sections 1122 and 1123 Corporation Tax Act 2010) to the foregoing persons, and “Affiliates” shall be interpreted accordingly;

“Agreed Form” means a form agreed between the Parties on or prior to the date of this Deed, and for the purposes of identification initialled (or signed) by or on behalf of the Parties;

“Anti-Bribery and Corruption Laws” means legal requirements relating to anti-bribery or anti-corruption (governmental or commercial), which apply to the business and dealings of the Company, including legal requirements that prohibit the corrupt payment, offer, promise or authorisation of the payment or transfers of anything of value (including gifts or entertainment), directly or indirectly, to any foreign government official, foreign government employee or commercial entity to obtain a business advantage, such as without limitation, the US Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010, and all national and international legal requirements enacted to implement the OECD Convention Combating Bribery of Foreign Officials in International Business Transactions;

“Articles of Association” means the articles of association of the Company as amended and currently in force as at the date of this Deed;

“Axis Facility Agreement” means the EUR 75,000,000 Secured term loan facility agreement dated 29 January 2018 for the Company arranged by Axis Bank Limited, DIFC Branch;

“Axis Interest Amount” means an amount equal to EUR 310,269.46;

“Axis Principal Amount” means an amount equal to EUR 65,000,000;

“Axis Repayment Amount” means the amount required to repay the Axis Facility Agreement in full pursuant to the terms of the Pay-off Letter;

“Business” means activities related to the construction, refurbishment and/or modification of a facility located in Bohumil, the Czech Republic, for the manufacture of bulk inactivated polio vaccines and related activities;

“Business Day” means any day other than a Saturday, Sunday or any day which is a public holiday in New York, United States of America, the Czech Republic, England and Wales and the Netherlands;

“Business Warranties” means the warranties set out in Schedule 6 (Warranties) other than the Tax Warranties or the Fundamental Warranties;

“Business Warranty Claim” means a claim by the Buyer for a breach of a Business Warranty;

“Company” means Praha Vaccines a.s., a company incorporated under the laws of the Czech Republic with company registration number 060 02 919, whose registered address is at Bohumil 138, 281 63 Jevany, Czech Republic, registered in the Commercial Registered maintained by the Municipal Court in Prague, Section B, Insert 22392;

“Completion” has the meaning given in Clause 3.2;

“Completion Accounts” has the meaning given to such term in Schedule 5 (Completion Accounts);

“Completion Date” means the date on which Completion occurs;

“Completion Payment” means the sum of the Initial Consideration and the Start-up Costs;

“Confidential Information” means all information relating to the Company and/or information which is used in or otherwise relates to the Company and/or the Business, its employees, customers, suppliers or other contractual relationships, or financial or other affairs, including but not limited to any information relating to:

(a)

the Company’s manufacturing facilities including but not limited to its capacity and production lines, personnel, supply chain and other logistical features;

(b)

Know-How (including trade secrets and all technical information in relation to products and processes); and/or

(c)

future projects, business development or planning, commercial relationships “and negotiations;

“Control” means the power to direct the management and policies of a person (directly or indirectly), whether through ownership of voting securities, by contract or otherwise, and the term “Controlled” shall be interpreted accordingly;

“Copyright” means copyright, which includes all rights in computer software and in databases and all rights or forms of protection which have equivalent or similar effect to the foregoing and which subsist anywhere in the world;

“COVID-19 virus” means the 2019 novel coronavirus disease named as such by the World Health Organisation on 11 February 2020;

“Czech Civil Code” means Czech Act No. 89/2012 Coll., the Civil Code, as amended;

“CZK” or “Czech crown(s)” means Czech crowns, being the legal currency of the Czech Republic;

“Data Protection Authority” means any body responsible for enforcing Data Protection Legislation in any jurisdiction in which the Company operates and/or carries out its Business;

“Data Protection Legislation” means all laws relating to data protection and/or the use, protection and privacy of personal data (including, but not limited to, the privacy of electronic communications) which are (or have been) from time to time applicable to the Company including: (i) the General Data Protection Regulation (EU) 2016/679; (ii) European Directive 2002/58/EC; and (iii) all other applicable laws, regulations and secondary legislation implementing each of (i) and (ii), as the case may be, in each case, as amended, replaced, supplemented or updated from time to time and together with any subordinate or related legislation made under or in connection with any of the foregoing, together with all applicable codes of conduct and practice, guidance and opinions relating to data protection and privacy issued in any relevant jurisdiction by, or with the approval of, any supervisory authority or any trade association of which the Company is a member;

“Data Room” means the contents of the electronic data room in respect of the Proposed Transaction hosted by Intralinks as at 3:30 pm local Czech Republic time on 26 May 2020 and contained on the USB to be certified by or on behalf of the Sellers and the Buyer as promptly as practicable after the date hereof and the index of which is appended to the Deed as Schedule 9 (Data Room Index);

“Data Room Comfort Letter” means the letter from Intralinks confirming the date and time that the Data Room was frozen;

“Disclosed” means fairly disclosed in such a manner and in such detail as to enable a reasonable buyer to make an informed and accurate assessment of the nature, scope and extent of the matter concerned and “Disclose” and “Disclosure” shall be construed accordingly;

“Disclosed Information” means the content of the Additional Diligence Request Questions, the content of the Disclosure Letter and the Data Room;

“Disclosure Letter” means the letter dated the date of this Deed from the Sellers to the Buyer, making Disclosures against the Business Warranties and Tax Warranties receipt of which has been acknowledged by the Buyer;

“Due Amount” means the amount (if any) due for payment by the Sellers to the Buyer in respect of a Resolved Claim;

“Effective Time” has the meaning given to such term in paragraph 1.1 of Schedule 5 (Completion Accounts);

“Encumbrance” means a mortgage, pledge, charge (whether fixed or floating), lien, assignment by way of security, liability, option, restriction, right of first refusal, right of pre-emption, third party right or interest, other encumbrance or security interest of any kind whatsoever, any right of set-off or counterclaim, or another type of preferential arrangement (including a title transfer or retention arrangement) having similar effect or any agreement, whether conditional or otherwise to create any of the foregoing;

“Environment” means:

(a)

land, including, without limitation, surface land, sub-surface strata, sea bed and river bed under water (as defined in paragraph (b) below) and natural and man-made structures;

(b)

water, including without limitation, coastal and inland waters, surface waters, ground waters and water in drains and sewers;

(c)

air, including, without limitation, air inside buildings and in other natural and manmade structures above or below ground; and

(d)

any and all living organisms or systems supported by those media, including, without limitation, humans;

“Environmental Consents” means all consents, licences, authorisations, permits, registrations, notifications or other approval required under or in relation to any Environmental Laws;

“Environmental Laws” means all applicable European, national and local laws concerning Environmental Matters including but not limited to regulations, directives, statutes, secondary legislation, statutory guidance, circulars and codes of practice and common law, and also laws, decrees, orders, ordinances, rules, regulations and codes applicable in the Czech Republic and court rulings that have a generally binding effect in the Czech Republic, obligations or requirements applicable in the Czech Republic relating to the protection of or prevention of harm to human health or safety, the environment or natural resources and/or the presence, usage, storage, treatment, clean-up, removal, management, transportation, manufacture, handling, production or disposal of Hazardous Substances;

“Environmental Matters” means all matters relating to pollution, contamination, human health and/or the environment, including but not limited to those maters relating to health and safety, waste, nuisance, discharges, emissions, deposits, disposals and releases to land, air and water, and the sale, import, export, manufacture, use, treatment, storage, handling, deposit, transport or disposal of chemicals, wastes, radioactive substances or any other polluting, dangerous, hazardous or toxic substances or materials or forms of energy;

“Escrow Account” means the designated escrow account or ledger with the Escrow Account Agent which holds the Escrow Amount;

“Escrow Account Agent” means JPMorgan Chase Bank, N.A., or such other financial institution experienced in providing cash escrow services jointly appointed by the Buyer and the Sellers to open an account to hold the Escrow Amount;

“Escrow Account Agreement” means the agreement the Agreed Form between the Buyer, the Sellers and the Escrow Account Agent relating to the operation of the Escrow Account;

“Escrow Amount” means EUR 10,000,000;

“Escrow Release Date” means 30 September 2020;

“Estimated Indebtedness” means the sum of EUR 310,269.46;

“Estimated Liability” means in relation to an Outstanding Claim, the bona fide estimate of the amount of the Sellers’ liability to the Buyer if the Outstanding Claim were to be resolved in the Buyer’s favour, as agreed or determined in accordance with Clause 4.6.2;

“EUR”, “Euro” or “€” means the single currency of the participating members of the European Union that each adopt or has adopted the Euro as its lawful currency in accordance with the legislation of the European Union relating to the Economic and Monetary Union;

“Expert” has the meaning given in paragraph 1 of Schedule 5 (Completion Accounts);

“Financial Information” means the unaudited financial information set out in 8.3.3.6 and 8.3.3.7 of the Data Room;

“Fundamental Warranties” means the Warranties set out in paragraphs 1 and 2 of Schedule 6 (Warranties);

“Fundamental Warranty Claim” means a claim by the Buyer for a breach of the Fundamental Warranties;

“Governmental Entity” means any supra-national, national, state, municipal or local government (including any subdivision, court, administrative agency or commission or other authority thereof) or any regulatory, taxing, importing or other governmental or quasi-governmental authority, including the European Union;

“Handover Protocol” means a handover protocol in the Agreed Form relating to the transfer of the Sale Shares from the Sellers to the Buyer;

“Hardware” means the computer and data processing systems used by the Company excluding the Software, but including all plant and equipment which may include embedded software or similar processing systems;

“Hazardous Substance” means a natural or artificial substance, organism, preparation, article, material, waste or products, pollutants, contaminants, hazardous waste, other chemical products or toxic, hazardous or noxious pollution (or words of similar import) which (alone or combined with another substance, preparation or article) is or may be harmful to the Environment or a living organism, or which is prohibited, restricted or penalized under Environmental Law;

“Indebtedness” has the meaning given in paragraph 1.1 of Schedule 5 (Completion Accounts);

“Indebtedness Adjustment” means the positive or negative sum found by deducting the Estimated Indebtedness from the Indebtedness;

“Initial Consideration” means the sum of EUR 65,000,000;

“Insolvency Act” means Czech Act No. 182/2006 Coll., on Insolvency and Methods of its Resolution, as amended;

“Intellectual Property Rights” means all intellectual property rights, including (without limitation) patents, supplementary protection certificates, petty patents, utility models, trade marks, database rights, rights in designs, Copyrights and topography rights (whether or not any of these rights are registered, and including applications and the right to apply for registration of any such rights) and all inventions, Know-How, trade secrets, techniques and confidential information, customer and supplier lists and other proprietary knowledge and information, and all rights and forms of protection of a similar nature or having equivalent or similar effect to any of these which may subsist anywhere in the world, in each case for their full term, and together with any renewals or extensions;

“IT Contracts” means all written and oral agreements or arrangements (including those currently being negotiated at the date of this Deed) under which any third party (including, without limitation, any source code deposit agents) provides or will provide any element of, or services relating to, the IT Systems, including leasing, hire purchase, licensing, maintenance, website hosting, outsourcing, security, back-up, disaster recovery, insurance and services agreements;

“IT Systems” means the Hardware and the Software;

“Know-how” means confidential or proprietary industrial, technical or commercial information and techniques (whether written, unwritten or in any other form and whether confidential or not) including, without limitation, drawings, data relating to inventions, formulae, techniques, specifications, test results, reports, research reports, project reports and testing procedures, shop practices, instruction and training manuals, market forecasts, quotations, lists and particulars of customers and suppliers, marketing methods and procedures;

“Material Contracts” means contracts listed in Schedule 8(Material Contracts);

“Notice” has the meaning given in Clause 10.6;

“NVAX Group” means the Buyer and any other body corporate which is from time to time, a parent undertaking of the Buyer, a subsidiary undertaking of the Buyer or a subsidiary undertaking of a parent undertaking of the Buyer and from Completion shall include the Company, and references to “any member of the NVAX Group” shall be construed accordingly;

“NVAX’s Solicitors” means Ropes & Gray International LLP of 60 Ludgate Hill, London, EC4M 7AW, United Kingdom;

“Open Source Software” means software that contains, or is derived in any manner (in whole or in part) from, any software that is distributed or otherwise made available under a licence which:

(a)

satisfies some or all of the criteria of the Open Source Definition (as published by the Open Source Initiative from time to time and set out at the date of this Deed at http://opensource.org/osd); and/or

(b)

adopts a licensing or distribution model that requires the licensee to publish or otherwise make available to the licensor and/or other licensees the human-readable source code to any modification or derivative work used or created by or on behalf of the licensee;

“Outstanding Claim” means a Relevant Claim that has been notified by the Buyer to the Sellers in accordance with this Deed, but which is not a Resolved Claim as at the Escrow Release Date;

“Pay-off Letter” means the pay-off letter to be dated on the date of this Deed between the Company and Axis Bank Limited, DIFC Branch in the Agreed Form;

“Permit” means a permit, licence, consent, approval, certificate, qualification, specification, registration or other similar authorisation and/or a filing of a notification, report or assessment necessary in any jurisdiction for the proper and efficient operation of the Business, its ownership, possession, occupation or use of an asset;

“Pro-forma Working Capital Statement” the pro-forma statement of the Working Capital of the Company in the form set out in Part B of Schedule 5 (Completion Accounts);

“Property” means the freehold real property of the Company the details of which are set out in Schedule 3 (Identification of the Real Property);

“Public Sources” means the information with respect to the Company which is freely and immediately available online from the following public sources:

(a)

the Czech commercial register (in Czech: obchodní rejstřík) and the Collection of Deeds maintained by the relevant Czech registry court (in Czech: sbírka listin);

(b)

the Czech trade register (in Czech: živnostenský rejstřík);

(c)

the Czech national registry of trademarks, (in Czech: rejstřík národních ochranných známek);

(d)

the Czech domain names registry (CZ-NIC);

(e)

the Czech insolvency register (in Czech: insolvenční rejstřík); and

(f)

the Czech land registry (in Czech: Katastr nemovitostí České republiky)(excluding the Collection of Deeds);

“Purchase Price” means the aggregate purchase price for the Sale Shares, as set out in Clause 4.2;

“Purchase Price Statement” has the meaning given to such term in paragraph 1.1. of Schedule 5 (Completion Accounts);

“Relevant Claim” means a claim under this Deed or any other Transaction Document;

“Resolved Claim” means a Relevant Claim that has been: (a) agreed in writing between the Buyer and the Sellers as to both liability and quantum; (b) finally determined by a court of competent jurisdiction from which there is no right of appeal, or from whose judgment the relevant party is debarred (by passage of time or otherwise) from making an appeal and which cannot be amended or modified by way of legal means; or (c) unconditionally withdrawn by the Buyer in writing to the Sellers;

“Restricted Period” means a period of [***] from the Completion Date;

“Sale Shares” means the 20 ordinary certificated registered shares issued by the Company with a nominal value of CZK 100,000 each, the aggregate stated value of CZK 2,000,000, being the entire issued share capital of the Company;

“Sellers’ Group” means the Sellers and any other body corporate which is from time to time a direct or indirect: (i) parent undertaking of any Seller; (ii) subsidiary undertaking of any Seller; or (iii) subsidiary undertaking of a parent undertaking of any Seller; and (iv) any person who is a personally related person (in Czech: osoba blízká) within the meaning of Section 22 of the Czech Civil Code and/or any person connected (within the meaning of sections 1122 and 1123 Corporation Tax Act 2010) to the foregoing persons in (i) to (iii) (inclusive) and any reference to “Sellers’ Group Company” and “any member of the Sellers’ Group” shall be construed accordingly;

“Sellers’ Solicitors” means Bird & Bird s.r.o. advokátní kancelář of Na Příkopě 583/15 110 00 Prague 1, the Czech Republic;

“Software” means all computer programs, including operating system and applications software, implementations of algorithms, and program interfaces, whether in source code or object code form and all documentation, including user manuals relating to the foregoing, used in the Business;

“Start-up Costs” means the sum of EUR 11,696,000;

“Tax” or “Taxation” has the meaning given to “Tax” or “Taxation” in the Tax Deed;

“Tax Authority” has the meaning given to “Tax Authority” in the Tax Deed;

“Tax Claim” means a Tax Warranty Claim or a claim pursuant to the Tax Deed;

“Tax Deed” means the tax deed in the Agreed Form to be entered into between the parties thereto on the date of this Deed;

“Tax Warranty” means any the warranties provided at paragraph 24 of Schedule 6 (Warranties);

“Tax Warranty Claim” means a claim for breach of the Tax Warranties;

“Transaction Documents” means this Deed, the Disclosure Letter, the Tax Deed, the Escrow Account Agreement and any Agreed Form documents and such other ancillary documents as may be required to give effect to the arrangements and agreements set out in this Deed;

“Total Payment” means the aggregate sum of the Purchase Price and the Axis Repayment Amount;

“VAT” means:

(a)

any Tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

(b)

any other Tax of a similar nature, whether imposed by a member state of the European Union in substitution for, or levied in addition to, such Tax referred to in paragraph (a) above, or imposed elsewhere;

“Warranties” means the Fundamental Warranties, the Business Warranties and the Tax Warranties, in each case, as set out in Schedule 6 (Warranties); and

“Working Capital Adjustment” means the sum of the current assets less current liabilities of the Company as at the Effective Time and shown in the Completion Accounts, calculated on a consolidated basis in accordance with the accounting principles, policies, standards, practices, evaluation rules and estimation techniques specified in this Schedule 5 (Completion Accounts).

1.2	In this Deed a reference to a clause or Schedule, unless the context otherwise requires, is a reference to a clause of or a schedule to this Deed.

1.3	In this Deed, unless otherwise specified:

1.3.1

the word “including” and words of similar import shall mean “including, without limitation,” unless otherwise specified;

1.3.2

words in the singular include the plural and in the plural include the singular and a reference to one gender includes a reference to all genders;

1.3.3

a reference to a statute or a statutory provision is a reference to it as it is in force for the time being taking account of any amendment, extension or re-enactment and includes any subordinate legislation for the time being in force made under it provided that any such amendment, extension or re-enactment does not increase the liability of the Parties under this Deed;

1.3.4

any reference to any document other than this Deed is a reference to that other document as amended, varied, supplemented, or novated (in each case, other than in breach of the provisions of this Deed) at any time;

1.3.5

any reference to an “undertaking” shall be construed in accordance with section 1161 of the Companies Act 2006 and any reference to a “parent undertaking” or a “subsidiary undertaking” means respectively a “parent undertaking” or “subsidiary undertaking” as defined in sections 1162 and 1173(1) of the Companies Act 2006, save that an undertaking shall be treated for the purposes of the membership requirement in sections 1162(2)(b) and (d) and section 1162(3)(a) as a member of another undertaking even if its shares in that other undertaking are registered in the name of (i) its nominee

or (ii) another person (or its nominee) by way of security or in connection with the taking of security;

1.3.6

any reference to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term; and

1.3.7

the obligations of the Sellers under this Deed and the other Transaction Documents to which they are party shall be joint and several.

1.4	The headings in this Deed do not affect its interpretation.

1.5	The preamble and the schedules to this Deed form an integral part thereof.

2.	SALE OF SALE SHARES

2.1	The Sellers shall sell and the Buyer shall buy the Sale Shares on the terms and subject to the terms of this Deed.

2.2

The Sellers shall sell the Sale Shares with full title guarantee free from any Encumbrance and any other third party rights and the Buyer shall purchase the Sale Shares with effect from and including the Completion Date, to the extent that as from that date all rights and advantages accruing to the Sale Shares, including any dividends or distributions declared or paid on the Sale Shares after that date, shall belong to the Buyer.

2.3	The Sellers waive or agree to procure the waiver of any and all rights or restrictions in respect of the Sale Shares that may have been conferred on the Sellers by the Articles of Association or otherwise as may affect the transactions contemplated by this Deed including:

2.3.1

any rights or restrictions of redemption, pre-emption, income, first refusal or transfer it may have with respect to the Sale Shares; and

2.3.2

any rights to acquire or subscribe for any Sale Shares.

3.	COMPLETION

3.1	Simultaneously with the execution of this Deed, the Parties shall procure that the obligations set out in Part A of Schedule 4 (Completion Obligations) have been performed by each of the Parties.

3.2

Immediately following the Parties’ compliance with their respective obligations in Part A of Schedule 4 (Completion Obligations), the sale and purchase of the Sale Shares in accordance with the terms of this Deed (“Completion”) shall take place when the Parties each perform their respective obligations set out in Part B and Part C of Schedule 4 (Completion Obligations) at the offices of the Sellers’ Solicitor or such other place as the Parties may agree.

3.3

Each of the Parties, as appropriate, agrees to perform (or procure the performance of) all such acts and/or to execute and deliver (or procure the execution and delivery of) all such documents, as may be required by law or as may be necessary or reasonably requested by the Buyer or the Sellers for the purpose of (i) completing each of the Transaction Documents in accordance with their terms, and (ii) vesting in the Buyer the full legal and beneficial title to the Sale Shares and otherwise giving the Buyer and the Sellers the full benefit of this Deed and any Transaction Document. Unless otherwise agreed, each Party shall be responsible for its own costs and expenses incurred in connection with the provisions of this Clause 3.

3.4	With effect as of the Completion Date:

3.4.1

the Buyer undertakes to refrain from (and shall procure that the Company and/or any other member of the NVAX Group will refrain from) using, displaying or otherwise referring to any of the logos, names or other markings of any of the Sellers’ Group Companies in any of the NVAX Group’s activities; and

3.4.2

the Sellers undertake to refrain from (and shall procure that other members of the Sellers’ Group will refrain from) using, displaying or otherwise referring to any logos, names or other markings of the Company or any other references to “Praha Vaccines”.

3.5	The Parties hereby expressly agree and acknowledge that from Completion, the Sellers shall not have any obligations relating to the operation of any Material Contracts.

4.	PURCHASE PRICE

4.1	The Purchase Price shall be satisfied in cash and shall be calculated in accordance with this Clause 4.

4.2	The “Purchase Price” shall be the sum of:

4.2.1

the Initial Consideration;

4.2.2

the Start-up Costs;

4.2.3

the Escrow Amount (subject to Clauses 4.6, 4.7.4 and 5 (Escrow));

4.2.4

the Working Capital Adjustment; and

4.2.5

the Indebtedness Adjustment.

4.3

The Completion Payment shall be payable by the Buyer to the Sellers on the Completion Date. All payments to be made to the Sellers under this Deed shall be made in Euro by electronic transfer of immediately available funds to such account(s) of the Sellers or an Affiliate of the Sellers as is/are notified to the Buyer by or on behalf of the Sellers. Payment in accordance with this Clause 4.3 shall be a good and valid discharge of the Buyer’s obligation to pay the sum in question and the Buyer shall not be concerned to see the application of the monies so paid.

4.4	The Escrow Amount shall be calculated and payable in accordance with Clauses 4.6, 4.7.4 and 5 (Escrow).

4.5	The Purchase Price shall insofar as legally permitted be deemed to be reduced by the amount of any payment made to the Buyer for each and any claim under this Deed or a claim under any Transaction Document.

4.6	Escrow Amount

4.6.1

Subject to the terms of this Clause 4.6, Clause 4.7.4 (if applicable) and Clause 5 (Escrow), the Sellers shall be entitled to receive the Escrow Amount on the Escrow Release Date such amount to be satisfied out of, and deducted from, the amount standing to the balance of the Escrow Account from time to time in accordance with Clause 5 (Escrow).

4.6.2

If on the Escrow Release Date:

(a)

a Due Amount (or any part of it) is outstanding, the Buyer shall be entitled (at its sole discretion) to satisfy all (to the extent possible) or part of the Sellers’ liability to pay the Due Amount by way of set-off against the Escrow Amount then payable, and to treat its obligation to pay such Escrow Amount as being reduced pro tanto by the amount so set-off pursuant to this Clause 4.6.2; and/or

(b)

if there is an Outstanding Claim, the Buyer shall be entitled (at its sole discretion) to withhold from the Escrow Amount then payable an amount equal to the Estimated Liability or, if lower, the full amount of the Escrow Amount.

Where the provisions of Clause 4.6.2(b) apply, the Buyer and the Sellers shall use all reasonable endeavours to agree the Estimated Liability in respect the Outstanding Claim as soon as possible and in any event at least five (5) Business Days prior to the Escrow Release Date. If they fail to resolve such matters five (5) Business Days prior to the Escrow Release Date, the Buyer or the Sellers may refer such matter in dispute to an Expert for a resolution in accordance with the procedure set out in paragraph 3 of Schedule 5 (Completion Accounts) mutatis mutandis and the Parties agree that no amounts shall be released from the Escrow Account pending the Expert’s determination of the relevant matter in dispute.

4.6.3

Nothing in this Clause 4.6 shall prejudice, limit or otherwise affect:

(a)

any right or remedy the Buyer may have against the Sellers from time to time, whether arising under this Deed or any other Transaction Documents; or

(b)

the Buyer’s right to recover against the Sellers, whether before or after the payment of the Escrow Amount is made in accordance with this Deed.

4.6.4

Any amount withheld by the Buyer in accordance with this Clause 4.6 shall not be regarded as imposing any limit on the amount of any claims under this Deed or any other Transaction Documents.

4.6.5

If a Due Amount is not satisfied in full by way of set-off under this Clause 4.6, nothing in this Deed shall prevent or otherwise restrict the Buyer’s right to recover the balance from the Sellers and the Due Amount (to the extent not so satisfied) shall remain fully enforceable against the Sellers.

4.7	Determination of the Completion Accounts and the adjustment of the Purchase Price

4.7.1

Following Completion the Parties shall procure that the Completion Accounts and the Purchase Price Statement are prepared and agreed or determined (as the case may be) in accordance with Schedule 5 (Completion Accounts) and shall be final and binding on the Parties in the absence of manifest error or fraud.

4.7.2

Working Capital Adjustment

The following payments shall be made on or before the Adjustment Date:

(a)

the Buyer shall pay, or cause an Affiliate to pay, the Sellers an amount equal to 100 per cent. of the Working Capital Adjustment if the amount is a positive number; or

(b)

the Sellers shall pay, or cause an Affiliate to pay, the Buyer an amount equal to 100 per cent. of the Working Capital Adjustment if the amount is a negative number.

4.7.3

Indebtedness Adjustment

The following payments shall be made on or before the Adjustment Date:

(a)

if the aggregate sum of the Indebtedness as set out in the Purchase Price Statement exceeds the Estimated Indebtedness, the Sellers shall pay, or cause an Affiliate to pay, the Buyer an amount equal to 100 per cent. of the amount by which the Indebtedness set out in the Purchase Price Statement exceeds the Estimated Indebtedness; or

(b)

if the aggregate sum of the Indebtedness as set out in the Purchase Price Statement is less than the Estimated Indebtedness, the Buyer shall pay, or cause an Affiliate to pay, the Sellers an amount equal to 100 per cent. of the amount by which the Estimated Indebtedness set out in the Purchase Price Statement exceeds the Indebtedness.

4.7.4

Any payment due to the Buyer under Clauses 4.7.2 and 4.7.3 shall be made by electronic transfer to such account of the Buyer, an affiliate of the Buyer, or NVAX’s Solicitors as is notified to the Sellers by or on behalf of the Buyer no later than five (5) Business Days before the Adjustment Date and such payment must be made without undue delay, provided that the Buyer may

elect in writing that any such amount due to the Buyer from the Sellers pursuant to Clause 4.7.2(b) or Clause 4.7.3(a) may be satisfied by way of set-off against the Escrow Amount which may be due to the Sellers.

4.7.5

Any payment due to the Sellers under Clauses 4.7.2 and 4.7.3 shall be made by electronic transfer to such account(s) of the Sellers or an affiliate of the Sellers as is/are notified to the Buyer by or on behalf of the Sellers no later than five (5) Business Days before the Adjustment Date and such payment must be made without undue delay.

4.7.6

If, at the Adjustment Date, any amount is due for payment by the Sellers to the Buyer in respect of a claim in respect of the Warranties or a claim under any Transaction Document, the Buyer shall be entitled (at its sole discretion) to satisfy all (to the extent possible) or part of the Sellers’ outstanding payment obligation by way of set-off against any amount that is payable by the Buyer under Clause 4.7.2(a) or Clause 4.7.3(b) to treat its obligation to pay that sum as being reduced pro tanto by the amount so set off.

5.	ESCROW

5.1

The Buyer shall pay the Escrow Amount into the Escrow Account on the Completion Date. The Escrow Amount (together with any accrued interest thereon) shall only be applied in accordance with the provisions of Clause 4.6, Clause 4.7.4 (if applicable), this Clause 5 and the terms of the Escrow Account Agreement.

5.2	The Buyer and the Sellers shall procure that, on the Escrow Release Date, the Escrow Amount less than any amounts to be reduced pursuant to Clauses 4.6 and 4.7.4 shall be released to the Sellers in accordance with the terms of the Escrow Account Agreement.

5.3	The receipt by NVAX’s Solicitors or the Sellers of any payment made out of the Escrow Account shall be an absolute discharge of the paying party (and the paying party shall not be concerned to see the application of any such amount thereafter).

5.4

Interest which accrues on the Escrow Account shall (after deduction of any amounts required by law) follow the capital and be released to the Party or Parties entitled thereto contemporaneously with, and proportionately to, the release of the capital. The liability to Tax on any interest on any amount in the Escrow Account shall be borne by the party ultimately entitled to that interest.

5.5	Any payments (including payments of interest) made under this Clause 5 shall be made subject to any deductions or withholdings required by law (if any).

5.6

Fifty per cent. of any fees and/or negative interest rate charge payable to the Escrow Account Agent shall be paid by the Buyer and fifty per cent. of any fees and/or negative interest rate charge payable to the Escrow Account Agent shall be paid by the Sellers. The amount of such fees and negative interest rate charge and their payment are set out in the Escrow Account Agreement.

5.7	The Buyer and the Sellers agree to promptly provide such instructions to the Escrow Account Agent (where relevant in the form specified in the Escrow Account

Agreement), and to take all other actions as shall be necessary to give effect to the provisions of Clause 4 (Purchase Price), this Clause 5 and the terms of the Escrow Account Agreement.

5.8	If at any time following the date upon which the Escrow Amount falls due for payment in accordance with Clause 4.6:

5.8.1

all Outstanding Claims have become Resolved Claims; and

5.8.2

there is a nil balance standing to the credit of the Escrow Account,

the Buyer and the Sellers shall promptly instruct the Escrow Account Agent to close the Escrow Account.

6.	WARRANTIES

6.1	Seller Warranties

6.2	The Sellers warrant to the Buyer that each of the Warranties is true and accurate and is not misleading at the date of this Deed.

6.3	Each Business Warranty and Tax Warranty is given subject to and is qualified by:

6.3.1

any matter or fact which is specifically provided in the Transaction Documents;

6.3.2

to the extent Disclosed, any matter contained in the Disclosure Information;

6.3.3

all matters and information which would be revealed by an inspection or search of the Public Sources on the date of this Deed.

6.4

[***].

6.5	The Fundamental Warranties shall not be qualified in any way and:

6.5.1

are separate and independent and, unless expressly provided to the contrary, are not limited or restricted by reference to or inference from the terms of any other provision of this Deed or any other Warranty; and

6.5.2

shall not in any respect be extinguished or affected by the execution of this Deed and/or Completion,

provided that the Sellers’ aggregate liability for a breach of Fundamental Warranties shall not exceed [***]. The Sellers shall not be liable in respect of a Fundamental Warranty Claim unless written notice of such claim is served upon the Sellers on or before the [***] anniversary of the Completion Date.

6.6	Where any statement in the Warranties is qualified by the expression “to the best of the knowledge, information and belief of the Sellers” or “so far as the Sellers are aware” or any similar expression, the Sellers shall be deemed to have knowledge of:

6.6.1

anything of which any of [***] has knowledge;

6.6.2

anything of which such person ought reasonably to have knowledge given his particular position in, and responsibilities to, the Company; and

6.6.3

anything of which such person would have knowledge had he made due and careful enquiry immediately before giving the Warranties.

6.7	Any claim under the Warranties shall be limited in accordance with Schedule 7 (Limitations on Liability) provided that none of the provisions in Schedule 7 shall apply:

6.7.1

in the case of any fraud, fraudulent misrepresentation, dishonesty or wilful concealment on the part of the Sellers, any member of the Sellers’ Group or the Company or any of their respective agents, officers, board or supervisory board members or employees; or

6.7.2

in relation to any of the Fundamental Warranties.

6.8

Each Seller undertakes to the Buyer that in the event of any claim being made against it arising out of or in relation to any Transaction Document it will not (and will procure no member of the Sellers’ Group will) bring any claim against the Company (or any of its directors, officers, board or supervisory board members, employees, agents or advisors) on which or on whom it may have relied before agreeing to the terms of this Deed and/or the Tax Deed or authorising any statement in the Disclosure Letter. To the extent that any such claim exists, each Seller irrevocably waives (and shall ensure that each member of the Sellers’ Group shall waive) the right to bring any such claim against or recover any sums the Company (or any of its directors, officers, board or supervisory board members, employees, agents or advisors) in relation to such claim. The Company and any of its directors, officers, board or supervisory board members, employees, agents or advisors may enforce the terms of this Clause 6.8 in accordance with the Contracts (Rights of Third Parties) Act 1999, provided that:

6.8.1

any such third party shall obtain the written consent of the Buyer; and

6.8.2

any such third party shall not be entitled to assign its rights under this Clause 6.8.

6.9	Buyer Warranties

The Buyer warrants to the Sellers that each of the below warranties is true and accurate and is not misleading as at the date of this Deed:

6.9.1

the Buyer has full power and authority (without requiring the consent of any other person) and has taken all necessary corporate (or other) actions and obtained all corporate authorisations and consents to enter into and exercise its rights and perform its obligations under this Deed, together with any of the Transaction Documents to be executed by the Buyer;

6.9.2

this Deed and any of the Transaction Documents to be executed by the Buyer will, when executed, constitute lawful, valid and binding obligations of the Buyer in accordance with their respective terms;

6.9.3

the execution and delivery of this Deed (and any of the Transaction Documents to be executed by the Buyer) and the performance of and compliance with their terms and provisions will not:

(a)

conflict with or result in a breach of, or constitute a default under, any agreement or instrument to which the Buyer is a party or by which it is bound;

(b)

conflict with or result in a breach of any law, regulation, order, writ, injunction or decree of any court or agency or Governmental Entity; or

(c)

require any consent or approval of, or require any notice to or any registration with, any Governmental Entity that has not been unconditionally and irrevocably obtained or made at the date of this Deed;

6.9.4

the Buyer has been duly incorporated and is validly existing under the laws of its jurisdiction of incorporation; and

6.9.5

the Buyer is not insolvent or unable to pay its debts and has not stopped paying its debts as they fall due.

7.	PROTECTION OF GOODWILL

7.1	Each of the Sellers and the CPG Guarantor undertakes to the Buyer and each member of the NVAX Group that save with the prior written consent of the Buyer, it will not and will procure that none of their respective Affiliates will, directly or indirectly during the Restricted Period:

7.1.1

solicit the services of, endeavour to entice away from the Company or employ (or see to solicit the services of, endeavour to entice away from the Company or employ) any officer, director, senior or managerial employee, consultant, service provider or supplier of the Company (whether or not such person would commit any breach of his contract of employment or engagement by reason of leaving the service of the Company);

7.1.2

solicit business from any customer or client of the Company for the purpose of providing that customer or client with products and/or services which are the same as or similar to any product and/or services which is was involved in providing to that customer or client at any time in the 12 month preceding the date of this Deed;

7.1.3

interfere or seek to interfere with contractual or other trade relations between the Company and any of its customers, clients and/or suppliers; or

7.1.4

do or say anything which is harmful to the Company’s goodwill as subsisting at the date of this Deed at any time to any person who has dealt with the Company at any time during the 12 months prior to the date of this Deed.

7.2	Notwithstanding the provisions of Clause 7.1, the Buyer agrees and acknowledges that the Sellers and other members of the Seller’s Group are engaged in the business of the

manufacture of vaccines and the Sellers and the other members of the Sellers’ Group shall not be prohibited from soliciting the services of, or otherwise contracting with, any suppliers, service providers and/or consultants who supply and/or provide services (as the case may be) to the Sellers’ Group in the ordinary course of the business of the Sellers’ Group without detriment to the Company.

7.3	Each of the Sellers and CPG Guarantor agrees (having taken independent legal advice) that the undertakings contained in Clause 7.1 are reasonable and necessary for the protection of the legitimate interests of the Buyer and the NVAX Group and that these restrictions do not work harshly on it.

7.4

Each of the undertakings contained in Clause 7.1 is a separate undertaking by each of the Sellers and the CPG Guarantor and shall be enforceable by the Buyer (on its own behalf and on behalf of the Company and any other member of the NVAX Group) separately and independently of its right to enforce any one or more of the other covenants contained in Clause 7.1 and if one or more of the undertakings is held to be against the public interest or unlawful or in any way an unreasonable restraint of trade, the remaining undertakings shall continue to bind each Seller and the CPG Guarantor.

7.5

Each of the Buyer, the Sellers and the CPG Guarantor further agree that, without prejudice to any other remedy which may be available to the Buyer, the Buyer shall be entitled to seek injunctive or other equitable relief in relation to any breach or prospective breach of the undertakings in Clause 7.1, it being acknowledged that an award of damages may not be an adequate remedy for such a breach.

8.	GUARANTEE

8.1	The CPG Guarantee and CPG Guarantor Warranties

8.1.1

The CPG Guarantor hereby:

(a)

absolutely, unconditionally and irrevocably guarantees to the Buyer the prompt and full discharge by the Sellers of all of the liabilities and obligations of the Sellers under this Deed (including, without limitation, pursuant to Clauses 2, 3, 6.1, 7 and 9) and any other Transaction Document (the “ CPG Obligations”) in accordance with the terms hereof (the “CPG Guarantee”); and

(b)

agrees that if the Sellers fail to perform and timely discharge all or any of the CPG Obligations, the CPG Guarantor shall, upon demand perform or discharge the same.

8.1.2

The CPG Guarantor acknowledges that the CPG Guarantee is an absolute and unconditional guarantee of payment and performance and not merely of collection.

8.1.3

The CPG Guarantor as principal obligor and as a separate and independent obligation and liability from its obligations and liabilities under this Clause 8 agrees to indemnify and keep indemnified the Buyer in full and on demand from and against all and any losses, cost, claims, liabilities, damages, demands and expenses (including reasonable legal fees) suffered or incurred

by the Buyer arising out of, or in connection with, the enforcement of the CPG Guarantee and any failure of the Sellers (or their respective successor in interest) to perform or discharge any of the obligations.

8.1.4

To the fullest extent permitted by law, the CPG Guarantor waives diligence, protest, notice of protest, presentment, demand of payment, notice of dishonour and all other suretyship defences other than the defence of actual payment and/or performance. No beneficiary of the CPG Guarantee shall be obligated to file any claim relating to the CPG Obligations in the event that any of the Sellers becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure to so file shall not affect the CPG Guarantor’s obligations hereunder.

8.1.5

The CPG Guarantor’s liability under the CPG Guarantee shall not be affected by any waiver, concession, allowance of time, compromise or forbearance given to, or made with, the Sellers (or any successor in interest).

8.1.6

Where an obligation of any of the Sellers has arisen and/or a liability of the Sellers has been incurred and any such obligation or liability remain unsatisfied, the beneficiaries of the CPG Guarantee do not have to pursue any remedy against the Sellers (or its successor in interest) before proceeding against the CPG Guarantor under the CPG Guarantee. As long as any liability incurred by the Sellers (or their respective successor in interest) to the Buyer guaranteed under the CPG Guarantee remains unsatisfied, the CPG Guarantor shall not, in respect of any payment made or liability arising under the CPG Guarantee, effect (or try to effect) any recovery from the Sellers (or their respective successor in interest), whether by receipt of money, set-off, proof of debt, enforcement of security or otherwise. For the avoidance of doubt, any demand under the CPG Guarantee shall be made after the dispute resolution mechanism available to the Buyer under this Deed against the Sellers has first been exhausted.

8.1.7

The CPG Guarantor agrees that the CPG Guarantee constitutes a continuing guarantee and will remain in full force and effect by way of a continuing security regardless of any intermediate payment for discharge in whole or in part until no sum remains payable (or could be required to be paid) by the Sellers to the Buyer in respect of the CPG Obligations. The CPG Guarantee may be enforced as many times as may be necessary to enforce the CPG Obligations. Furthermore, the CPG Guarantor’s obligations under the CPG Guarantee are additional to, and not in substitution for, any security or other guarantee or indemnity at any time existing in favour of any person, whether from or by the CPG Guarantor or otherwise and whether in respect of the same or similar obligations or otherwise.

8.1.8

The CPG Guarantor warrants to the Buyer that as at the date of this Deed:

(a)

it has full power and authority (without requiring the consent of any other person) and has taken all necessary corporate (or other) actions and obtained all corporate authorisations and consents to enter into and exercise its rights and perform its obligations under this Deed, together with any of the Transaction Documents to be executed by it;

(b)

this Deed and any of the Transaction Documents to be executed by it will, when executed, constitute lawful, valid and binding obligations on it in accordance with their respective terms.;

(c)

the execution and delivery of this Deed (and any of the Transaction Documents to be executed by it) and the performance of and compliance with their terms and provisions will not:

(i)

conflict with or result in a breach of, or constitute a default under, any agreement or instrument to which it is a party or by which it is bound; or

(ii)

conflict with or result in a breach of any law, regulation, order, writ, injunction or decree of any court or agency or Governmental Entity;

(d)

it has been duly incorporated and is validly existing under the laws of its jurisdiction of incorporation; and

(e)

it is not insolvent or unable to pay its debts and has not stopped paying its debts as they fall due.

8.2	The NVAX Guarantee and NVAX Guarantor Warranties

8.2.1

The NVAX Guarantor hereby:

(a)

absolutely, unconditionally and irrevocably guarantees to the Sellers the prompt and full discharge by the Buyer of the payment obligations of the Buyer in respect of the Purchase Price in accordance with the terms hereof (the “NVAX Obligations”) (the “NVAX Guarantee”); and

(b)

agrees that if the Buyer shall fail to perform and timely discharge all or any of the NVAX Obligations, the NVAX Guarantor shall, upon demand perform or discharge the same.

8.2.2

The NVAX Guarantor acknowledges that the NVAX Guarantee is an absolute and unconditional guarantee of payment and not merely of collection.

8.2.3

The NVAX Guarantor as principal obligor and as a separate and independent obligation and liability from its obligations and liabilities under this Clause 8 agrees to indemnify and keep indemnified the Buyer in full and on demand from and against all and any losses, cost, claims, liabilities, damages, demands and expenses (including reasonable legal fees) suffered or incurred by the Sellers arising out of, or in connection with, the enforcement of the NVAX Guarantee and any failure of the Buyer (or its successor in interest) to perform or discharge any of the obligations.

8.2.4

To the fullest extent permitted by law, the NVAX Guarantor waives diligence, protest, notice of protest, presentment, demand of payment, notice of dishonour and all other suretyship defences other than the defence of actual

payment and/or performance. No beneficiary of the NVAX Guarantee shall be obligated to file any claim relating to the NVAX Obligations in the event that the Buyer becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure to so file shall not affect the NVAX Guarantor’s obligations hereunder.

8.2.5

The NVAX Guarantor’s liability under the NVAX Guarantee shall not be affected by any waiver, concession, allowance of time, compromise or forbearance given to, or made with, the Buyer (or any successor in interest).

8.2.6

Where an obligation of any of the Buyer has arisen and/or a liability of the Buyer has been incurred and any such obligation or liability remain unsatisfied, the beneficiaries of the NVAX Guarantee do not have to pursue any remedy against the Buyer (or its successor in interest) before proceeding against the NVAX Guarantor under the NVAX Guarantee. As long as any liability incurred by the Buyer (or its successor in interest) to the Buyer guaranteed under the NVAX Guarantee remains unsatisfied, the NVAX Guarantor shall not, in respect of any payment made or liability arising under the NVAX Guarantee, effect (or try to effect) any recovery from the Buyer (or its successor in interest), whether by receipt of money, set-off, proof of debt, enforcement of security or otherwise. For the avoidance of doubt, any demand under the NVAX Guarantee shall be made after the dispute resolution mechanism available to the Sellers under this Deed against the Buyer has first been exhausted.

8.2.7

The NVAX Guarantor agrees that the NVAX Guarantee constitutes a continuing guarantee and will remain in full force and effect by way of a continuing security regardless of any intermediate payment for discharge in whole or in part until no sum remains payable (or could be required to be paid) by the Buyer to the Sellers in respect of the NVAX Obligations. The NVAX Guarantee may be enforced as many times as may be necessary to enforce the NVAX Obligations but the Sellers shall in no event be entitled to seek an amount in excess of the payment obligations of the Buyer in respect of the Purchase Price payable in accordance with the terms of this Deed. Furthermore, the NVAX Guarantor’s obligations under the NVAX Guarantee are additional to, and not in substitution for, any security or other guarantee or indemnity at any time existing in favour of any person, whether from or by the NVAX Guarantor or otherwise and whether in respect of the same or similar obligations or otherwise. The Parties agree that the NVAX Guarantee shall terminate and cease to have any effect whatsoever in the event the this Deed is terminated (and there is no NVAX Obligation outstanding as at termination), and/or the Purchase Price has been paid by on or behalf of the Buyer.

8.2.8

The NVAX Guarantor warrants to the Sellers that as at the date of this Deed:

(a)

(b)

this Deed and any of the Transaction Documents to be executed by it will, when executed, constitute lawful, valid and binding obligations on it in accordance with their respective terms;

(c)

the execution and delivery of this Deed (and any of the Transaction Documents to be executed by it) and the performance of and compliance with their terms and provisions will not:

(i)

conflict with or result in a breach of, or constitute a default under, any agreement or instrument to which it is a party or by which it is bound; or

(ii)

conflict with or result in a breach of any law, regulation, order, writ, injunction or decree of any court or agency or Governmental Entity;

(d)

it has been duly incorporated and is validly existing under the laws of its jurisdiction of incorporation; and

(e)

it is not insolvent or unable to pay its debts and has not stopped paying its debts as they fall due.

9.	FURTHER ASSURANCE AND OTHER OBLIGATIONS

9.1	Further Assurance

Each Party shall, and shall use all reasonable endeavours to procure that any necessary third party shall, promptly execute and deliver such documents and perform such acts as the other Party may reasonably require for the purpose of giving full effect to this Deed and any of the Transaction Documents.

9.2	Sellers’ covenant relating to information requirements

The Sellers acknowledge that NVAX Guarantor is a U.S. public company with its shares listed on the Nasdaq Global Select Market (“Nasdaq”) and subject to various reporting, disclosure and filing requirements under law. The Sellers covenant and agree to cooperate with NVAX Guarantor’s reasonable requests in order to prepare the pro forma financial statements and historical financial statements required to be filed by the NVAX Guarantor with the Securities and Exchange Commission (the “SEC”), in connection with the NVAX Guarantor’s obligations to report the Proposed Transaction on a Current Report on Form 8-K, or as otherwise required or permitted by law. The Sellers acknowledge that the filings described in this Clause 9.2 necessitate timely cooperation, including cooperation in the performance of incremental audit procedures necessary, by the Sellers to facilitate the execution and filing of an accountant’s consent. The Sellers covenant and agree to promptly cooperate from and after the date hereof to facilitate such actions and to supply the requested information as described in this Clause 9.2. [***]

9.3	Transitional Services

If, within 90 days of the Completion Date, the Buyer identifies any service reasonably required for the operation of the Business and/or the Company’s operations as at

Completion, in each case, that is supplied directly or indirectly by a member of the Seller’s Group prior to Completion or is provided on terms requiring the Company to be a member of the Sellers’ Group (each a “Transitional Service”), the Parties agree and undertake that the Sellers and the Buyer shall promptly negotiate in good faith a transitional services agreement (including a schedule of Transitional Service to be appended thereto which shall include a detailed description of each service, the related service levels and any dependencies, a mechanism for amending the services and adding any additional service that meet the criteria of being a Transitional Service, all related costs (including third party costs) and the methodology for the calculation of them, the duration of the service, which cannot exceed 12 month from the date of the transitional services agreement, the duration of any notice period required to terminate a service, details of a separation plan to allow for the seamless transition of all services).

9.4	Post-Completion filing

Following Completion, the Sellers shall perform (or procure the performance of) all such acts and/or execute and file (or procure the execution and filling of) all such documents, as may be required by law for the purpose of deregistering from respective registers any and all security established over the assets of the Company in connection with the Axis Facility Agreement.

9.5	Buyer Undertaking – Praha Employees and []*

Each of the Buyer and the NVAX Guarantor undertakes to the Sellers and the CPG Guarantor that save with the prior written consent of the CPG Guarantor, it will not and will procure that no member of the NVAX Group will use in any material respect any Know-how in the possession of any person who is at the date of this Deed an employee of the Company to [***].

9.6	Seller Group Release of the Company

At Completion, the Sellers hereby agree to (and shall procure that each member of the Sellers’ Group shall) fully and irrevocably release and discharge the Company from any and all:

9.6.1

claims, debts, demands and/or any other amounts owing to the Sellers or any member of the Sellers’ Group has or may have against the Company; and

9.6.2

duties, obligations and liabilities that the Company has, or may have, to the Sellers or any member of the Sellers’ Group as at the date of this Deed,

whether arising before, on or after the date of Completion.

9.7	Seller indemnity

The Sellers unconditionally and irrevocably agree, as a continuing obligation, to indemnify and hold the Buyer harmless with respect to any loss which the Buyer or the Company may incur at any time or from time to time from the date of this Deed (whether by way of finally determined damages or settlement) and all reasonable third party costs and expenses (including legal fees), in each case, on a Euro for Euro basis, as a result of any breach of the Data Protection Legislation and all other applicable laws and regulations regulating data protection, privacy or the recording, monitoring or

interception of communications, including but not limited to (i) any penalties, fines or other measures imposed on the Company by the relevant Government Entity (including, without limitation, any Data Protection Authority) and (ii) any claims by third parties for damages or compensation relating to data protection and/or privacy matters.

9.8	Post Closing Domain Name transfer

The Seller shall, as soon as reasonably practicable following Completion and in any event within 10 Business Days of notice from the Company, procure that the domain name prahavaccines.cz which as at the date of this Deed is registered in the name of [***] be transferred to and registered in the Company at no cost to the Company or the NVAX Group (the “Domain Name Transfer”). The Sellers undertake to the Buyer to take all such action required to effect the Domain Name Transfer in accordance with the provisions of this Clause 9.8.

9.9	Data Room Post-Completion Deliverable

As promptly as practicable following Completion, the Sellers shall deliver to the Buyer or its nominee a PDF copy of the Data Room Comfort Letter signed by Intralinks delivered by email together with a USB copy of the Data Room.

10.

OTHER PROVISIONS

10.1	Announcements and Confidentiality

10.1.1

No Party to this Deed shall make any public announcements, press releases, communications, circular or disclosures in respect of this Deed or the transactions contemplated hereby without the prior written consent of the Buyer and the Sellers; provided that, this Clause 10.1.1 and Clause 10.1.2 do not apply to public announcements or disclosure: (i) which is required by applicable law, a court of competent jurisdiction or a competent judicial, governmental, supervisory or regulatory body or any other Governmental Entity; (ii) otherwise made by the Buyer or any member of the NVAX Group or any member of the Sellers’ Group in connection with the reporting requirements of the NVAX Guarantor/CPG Guarantor (as relevant) as a public listed company: (w) under applicable laws; (x) by an auditor of any member of the NVAX Group or the Sellers’ Group; (y) under the rules or guidelines of any stock exchange on which the NVAX Guarantor is listed; or (z) in connection with the NVAX Guarantor’s or CPG Guarantor’s communications with its public shareholders and such disclosure is reasonably necessary for the purposes of public communications. Notwithstanding this Clause 10.1.1, the Parties may, subject to the terms and conditions of this Deed, make internal announcements to their respective employees and Affiliates and communicate with Governmental Entities regarding this Deed and the transactions contemplated herein.

10.1.2

Subject to Clauses 10.1.1 and 10.1.3, each Party shall treat as strictly confidential and not disclose or use any information received or obtained as a result of entering into this Deed (or any Transaction Document) which relates to:

(a)

the existence and the provisions of this Deed and of any agreement entered into pursuant to this Deed;

(b)

the negotiations relating to this Deed (and any such other agreements);

(c)

(in the case of the Sellers and the CPG Guarantor), any Confidential Information including any information or trade secrets relating to the Business and/or the Company and any other information relating to the business, financial or other affairs (including future plans and targets) of the NVAX Group.

10.1.3

Clause 10.1.2 shall not prohibit disclosure or use of any information if and to the extent:

(a)

the disclosure or use is required to vest the full benefit of this Deed and any transactions contemplated hereby;

(b)

the disclosure or use is required to perform its obligations under this Deed or any agreement entered into pursuant to this Deed;

(c)

the disclosure is made to a Tax Authority in connection with the Tax affairs of the disclosing Party or an Affiliate;

(d)

the information is or becomes publicly available (other than by breach of this Deed or any other confidentiality obligation owed by the Parties);

(e)

such disclosure or use is required for the purpose of any judicial or arbitral proceedings arising out of this Deed or any other Transaction Document;

(f)

the disclosure is made to the professional advisers, insurers, auditors or bankers of a Party or (in the case of the Buyer) providers or potential providers financing and their respective professional advisers, in each case, on a need-to-know basis, provided that the recipient is either bound by professional duties of confidentiality or has undertaken to comply with this Clause 10.1.3 in respect of such information as if it were a Party;

(g)

the disclosure is required by applicable law or regulation, by any competent judicial, governmental or regulatory body, or by the rules of any recognised stock exchange provided that, to the extent reasonably practicable and permitted by law, the Party under the obligation to make disclosure shall use its reasonable efforts to notify the other Party before making the disclosure. Each Party agrees that the obligation to notify the other Party pursuant to this Clause 10.1.3(g) shall not apply to any bona fide routine disclosures made to a Governmental Entity pursuant to a process or request not specifically targeted at the other Party; or

(h)

the other Parties have given prior written approval to the disclosure or use.

10.1.4

Each member of the NVAX Group and of the Sellers’ Group may enforce the terms of this Clause 10.1 subject to and in accordance with the provisions of the Contracts (Rights of Third Parties) Act 1999.

10.2	Successors and Assigns

10.2.1

This Deed is personal to the Parties and, accordingly, subject to Clauses 10.2.2 and 10.3, neither Party shall be entitled to assign, transfer or create any trust in respect of the benefit or burden of any provision of this Deed, without the prior written consent of the other Parties.

10.2.2

All or any of the Buyer’s rights under this Deed or any of the Transaction Documents which are referred to in this Deed and to which the Company and/or any or all of the Sellers are a party may (notwithstanding any other provisions contained in this Deed or any of the Transaction Documents) be assigned or transferred by the Buyer to or in favour of :

(a)

any other NVAX Group Company (or by any such NVAX Group Company to or in favour of any other NVAX Group Company); and/or

(b)

any person by way of security for borrowings of any NVAX Group Company or by any liquidator, administrator or receiver of any NVAX Group Company or by any other person entitled to enforce such security,

and in any such case, the Buyer shall notify in writing the Company and the Sellers accordingly.

10.3	Third Party Rights

10.3.1

Any provision of this Deed which confers a benefit upon any member of the NVAX Group (the “Third Parties”) is intended to be enforceable by the Third Parties under the Contracts (Rights of Third Parties) Act 1999. For the avoidance of doubt, such provisions shall include Clauses 6 (Warranties) and 7 (Protection of Goodwill) of this Deed.

10.3.2

No other provisions of this Deed which confer benefits upon any third party shall be enforceable pursuant to Contracts (Rights of Third Parties) Act 1999 by any such third party.

10.3.3

Notwithstanding the provisions of Clause 10.3.1, the Parties may amend, vary or terminate this Deed in such a way as may affect any rights or beliefs of any Third Party, which are directly enforceable against the parties under the Contracts (Rights of Third Parties) Act 1999, without the consent of such Third Party.

10.3.4

Any Third Party entitled pursuant to the Contracts (Rights of Third Parties) Act 1999 to enforce any rights or benefits conferred on it by this Deed may

not veto any amendment, variation or termination of this Deed, which is proposed by the Parties and which may affect the rights or benefits of the Third Party.

10.4	Variation

10.4.1

This Deed may be varied only by a document signed by or on behalf of each of the Parties to this Deed.

10.4.2

Except as otherwise expressly provided herein, no amendment, modification or waiver of any of the provisions of this Deed shall be effective against any Party, unless each Party has consented to such amendment, modification or waiver in writing and no course of dealing between the Parties or any delay in exercising any rights hereunder by any of them shall operate as a waiver of any rights.

10.4.3

The rights and remedies under this Deed are cumulative except as expressly provided in this Deed, and not exclusive of any rights and remedies provided by law. No failure or delay by any Party in exercising any right or remedy provided by law or under this Deed shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude it or its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any further exercise of it or the exercise of any other remedy.

10.5

Costs

Each Party shall pay the costs and expenses incurred by it in connection with the entering into and completion of this Deed.

10.6	Notices

Any notice or other communication to be given or made under or in connection with this Deed (each a “Notice”) must be given in writing to the Party due to receive such Notice and must be signed by or on behalf of the person giving it.

10.7	Method of Service

A Notice must be served in one of the following ways:

10.7.1

by hand – by hand to the relevant address specified in Clause 10.10; or

10.7.2

by post – by prepaid first-class post to the relevant address specified in Clause 10.10; or

10.7.3

by airmail – by prepaid international airmail to the relevant address specified in Clause 10.10.

10.8	Deemed Delivery

Unless there is evidence that it was received earlier, a Notice is deemed given, as follows:

10.8.1

by hand – upon delivery, if delivered during a Business Day or at the start of the next Business Day, if delivered at any other time; or

10.8.2

by post – at the start of the second Business Day after the date of posting; or

10.8.3

by airmail – at the start of the fourth Business Day after posting.

10.9	In Clause 10.8, “during a Business Day” means any time between 9.30am and 5.30pm on a Business Day based on the local time where the recipient of the Notice is located. References to “the start of [a] Business Day” and “the end of [a] Business Day” shall be construed accordingly.

10.10

Address for Service

Notices shall be addressed as follows:

10.10.1

notices for the Buyer and the NVAX Guarantor shall be addressed and sent to the address indicated at the front of this Deed, with copies (which of themselves shall not constitute Notice for the purposes of this Clause) to (i) Will Rosen of Ropes & Gray International LLP, 60 Ludgate Hill, London EC4M 7AW, United Kingdom and emailed at the same time to Will.Rosen@ropesgray.com and (ii) Paul Kinsella and Tara Fisher of Ropes & Gray LLP, 800 Boylston Street, Boston, MA 02199-3600, United States of America and emailed at the same time to Paul.Kinsella@ropesgray.com and Tara.Fisher@ropesgray.com; and

10.10.2

notices for the Sellers and CPG Guarantor shall be addressed and sent to the addresses indicated at Schedule 1 (List of Sellers and Sale Shares).

10.11

Change of Details

A Party may change its address for service provided that it gives the other Party not less than 21 days’ prior notice in accordance with this Clause 10.11. Until the end of such notice period, service on either address shall remain effective.

10.12

Agent For Service of Proceedings

10.12.1

Each of the Parties undertakes to ensure that at all times a person with an address in England is appointed as its process agent to receive on its behalf service of any proceedings in respect of any dispute or claim that arises out of or in connection with this Deed or its subject matter or formation (including non-contractual disputes or claims) (the “Process Agent”). Such service shall be deemed completed on delivery to the Process Agent, whether or not it is forwarded to or received by each of the Parties.

10.12.2

At the date of this Deed:

(a)

the Buyer and the NVAX Guarantor have appointed CSC Capital Markets UK Limited of Level 37, 25 Canada Square, Canary Wharf, London, England, E14 5LQ as their Process Agent; and

(b)

the Sellers and the CPG Guarantor have appointed Law Debenture Corporate Services Limited of Fifth Floor, 100 Wood Street, London, EC2V 7EX as their Process Agent.

10.12.3

If any such person(s) listed at Clause 10.12.2 above ceases to be able to act as process agent or no longer has an address in England, each of the relevant Parties shall immediately appoint a replacement Process Agent and deliver to the other Parties a notice setting out the new Process Agent’s name and address together with a copy of the new Process Agent’s acceptance of its appointment.

10.12.4

Each of the Parties irrevocably agrees that any proceedings or document served on the Process Agent will be validly served if delivered in accordance with Clauses 10.7 and 10.8.

10.12.5

Nothing contained in this Deed shall affect the right to serve process in any other manner permitted by law.

10.13

Interest

If any of the Sellers or the Buyer default in the payment when due of any sum payable under this Deed or any Transaction Document, its liability shall be increased to include interest on such sum from the date when such payment is due until the date of actual payment (after as well as before judgment) at a rate per annum of [***] from time to time. Such interest shall accrue day to day.

10.14

Invalidity

10.14.1

If any provision of this Deed or part-provision of this Deed is or becomes invalid, unenforceable or illegal, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this Clause shall not affect the validity and enforceability of the rest of this Deed.

10.14.2

If one Party gives notice to the other of the possibility that any provision or part-provision of this Deed is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to amend such provision so that, as amended, it is legal, valid and enforceable, and, to the greatest extent possible, achieves the intended commercial result of the original provision.

10.15

Entire Agreement

This Deed (together with any documents referred to in or required to be entered into pursuant to this Deed, including the Transaction Documents) contains the entire and only agreement and understanding between the Parties and supersedes all prior agreements, understandings or arrangements (both oral and written) relating to the subject matter of this Deed and any such document. This Clause 10.15 does not limit or exclude any liability which is a result of fraud, fraudulent misrepresentation, dishonesty or wilful concealment.

10.16

Effect of Completion

10.16.1

Except to the extent that they have been performed and except where this Deed provides otherwise, the obligations contained in this Deed remain in full force and effect after Completion.

10.16.2

The remedies of the Buyer or the Sellers in respect of any breach of the Warranties or warranties under Clause 6.9 (Buyer’s Warranties) and Clause 8.2.8 (Guarantee) (as relevant) shall continue to subsist notwithstanding Completion.

10.17

Other Remedies

Any remedy or right conferred upon the Buyer or the Sellers (as the case may be) for breach of this Deed shall be in addition to and without prejudice to all other rights and remedies available to them except as expressly provided in this Deed.

10.18

Counterparts

This Deed may be executed in any number of counterparts each of which when executed is an original and all of which together shall constitute one agreement. Any Party may enter into this Deed by executing a counterpart and this Deed shall not take effect until it has been executed by all Parties.

10.19

Governing Law and Submission to Jurisdiction

10.19.1

This Deed and the rights and obligations of the Parties including all non-contractual obligations arising under or in connection with it shall be governed by English law.

10.19.2

Subject to Clause 10.19.3, in the event of any dispute arising out of or in connection with this Deed and/or any non-contractual obligation arising in connection with this Deed (“Dispute”), the Parties will first attempt in good faith to resolve the Dispute by negotiation and consultation between themselves. In the event that such Dispute is not resolved within [***], any Party may, by a notice to the other Parties, have such Dispute referred to the chief executive officers/directors of the Parties, who will attempt in good faith to resolve such Dispute by negotiation and consultation within [***] period following receipt of such notice. Any failure to comply with this Clause 10.19.2 shall not prejudice the claim in question.

10.19.3

Any Dispute which is not resolved within the time period pursuant to Clause 10.19.2 may be referred by any Party to the Courts of England and Wales which shall have the exclusive jurisdiction to settle any Dispute. Notwithstanding the terms of Clause 10.19.2, the Buyer shall at all times be entitled to seek injunctive or other equitable relief in relation to any breach or prospective breach of the undertakings given in favour of the Buyer or a member of the NVAX Group pursuant to the Transaction Documents.

10.19.4

The Parties agree that the Courts of England and Wales are the most appropriate and convenient Courts to settle any Dispute, and, accordingly, that they will not argue to the contrary.

SCHEDULE 1 LIST OF SELLERS AND SALE SHARES

Name	Address of the registered office	Shareholding
Bilthoven Biologicals B.V.	[***]	[***]
Poonawalla Science Park B.V.	[***]	[***]
De Bilt Holdings B.V.	[***]	[***]

SCHEDULE 2

DETAILS OF THE COMPANY


Incorporated:	7 April 2017
Registered Number:	060 02 919
Registered in:	Commercial Register maintained by the Municipal Court in Prague, Section B, Insert 22392
Registered Office:	Bohumil 138, 281 63 Jevany, Czech Republic
Issued share capital:	CZK 2,000,000
Board Members:	[***]
Supervisory Board Members:	[***]
Proxy Holders:	[***]
Auditors:	PricewaterhouseCoopers Audit, s.r.o.
Accounting Reference Date:	December 31
Charges:	Charges over the receivables from insurance contracts, bank accounts, movable assets, Real Property, business enterprise of the Company and the Sale Shares, all established in connection with the Axis Facility Agreement

SCHEDULE 3

IDENTIFICATION OF THE REAL PROPERTY

[***]

COMPLETION OBLIGATIONS

Part A: Sellers’ and Buyer’s Obligations immediately prior to Completion

1.1	The Sellers shall deliver to the Buyer:

(a)

a duly signed copy of this Deed executed by the Sellers and the CPG Guarantor; and

(b)

a copy of the Pay-off Letter duly executed by the parties thereto.

1.2	The Buyer shall deliver to the Sellers a duly signed copy of this Deed executed by the Buyer and the NVAX Guarantor.

1.3	The Buyer shall arrange for the telegraphic transfer by CHAPS of the Axis Repayment Amount to Axis Bank Limited to the Pay-off Account (as defined in the Pay-off Letter) in accordance with the terms of the Pay-off Letter.

Part B: Sellers’ Obligations on Completion

1.	Delivery Obligations

1.1	Share Transfers, Statutory Books, and Documents of Title etc.

(a)

an endorsement each of the share certificates representing the Sale Shares to the Buyer by affixing and executing an endorsement on each of the share certificates together representing the Sale Shares;

(b)

the share certificates representing the Sale Shares owned by the Sellers endorsed in accordance with Clause 1.1(a) above to the Buyer;

(c)

a duly executed counterpart of the Handover Protocol signed by the Sellers under a power of attorney (if applicable);

(d)

as evidence of the authority of each person executing a document referred to in this 1.1 above on the Sellers’ behalf:

(i)

a copy of the minutes of a duly held meeting of the directors of each Seller authorising the execution by each Seller of the document, certified to be a true copy by a director or the secretary of the relevant Seller; or

(ii)

a copy of the power of attorney conferring the authority, certified to be a true copy by a director or the secretary by the Sellers; or

(iii)

such other evidence to the Buyer’s satisfaction of the authority of any person to sign on behalf of the Sellers;

(e)

as evidence of the authority of each person executing a document referred to in this Part B: of Schedule 4 on the CPG Guarantor’s behalf:

(i)

a copy and/or a copy of an extract of the minutes of a duly held meeting of the directors of the CPG Guarantor authorising the execution by the CPG Guarantor of the document, certified to be a true copy by a director or the secretary of the CPG Guarantor; or

(ii)

a copy of the power of attorney conferring the authority, certified to be a true copy by a director or the secretary by the CPG Guarantor; or

(iii)

such other evidence to the Buyer’s satisfaction of the authority of any person to sign on behalf of the CPG Guarantor; and

(f)

the copy of the up-to-date full extract from the Czech commercial register (in Czech: obchodní rejstřík) in respect to the Company;

1.2	Resignation Letters and Associated Matters

(a)

resignation letters in the Agreed Form executed as deeds by the members of the Board of Directors and Supervisory Board of the Company (other than such individuals as nominated by the Buyer in writing), in each case acknowledging that the officer in question has no claim against the Company for compensation for loss of office or otherwise;

(b)

any property in the possession of any officer or employee of the relevant Company resigning at Completion;

1.3	Transaction Documents

(a)

the Disclosure Letter duly executed by the Sellers;

(b)

the Tax Deed duly executed by the Sellers;

(c)

the Escrow Account Agreement duly executed by the Sellers;

(d)

a declaration by each Seller stating: (a) that it has waived the right to all claims (existing and conditional) against the Company; (b) that it has not assigned any claims against the Company to third parties; and (c) all contracts and agreements entered into by and between the Company and the Sellers or between the Company and any Affiliates of the Sellers have been terminated, provided such contracts or agreements have been concluded (unless agreed otherwise by the Parties with respect to particular contracts), in the Agreed Form.

Part C: the Buyer’s Obligations on Completion

Upon compliance by each Seller with its obligations set out in Part B: of this Schedule 4 to the satisfaction of the Buyer, the Buyer shall:

1.	pursuant to Clause 4.3, at Completion, arrange for the telegraphic transfer by CHAPS of the Completion Payment to the Sellers at:

(a)

in respect of EUR 42,012,151.80 of the Completion Payment payable to De Bilt Holdings B.V., [***] in respect of EUR 19,096,432.64 of the Completion Payment payable to [Bilthoven Biologicals B.V., [***]; and

(b)

in respect of EUR 15,277,146.11 of the Completion Payment payable to Poonawalla Science Park B.V. [***];

delivery of which shall discharge the Buyer from its obligation to pay such amount of the Purchase Price to the Sellers;

2.	pursuant to Clause 5.1, arrange for the telegraphic transfer by CHAPS of the Escrow Amount into the Escrow Account;

3.	deliver to the Sellers the Escrow Account Agreement duly executed by the Buyer and the Escrow Account Agent;

4.	deliver to the Sellers a signed acknowledgment of the Disclosure Letter;

5.	deliver to the Sellers the Tax Deed duly executed by the Buyer;

6.	take delivery of the share certificates representing the Sale Shares endorsed in accordance with paragraph 1.1(b) of Part B: of this Schedule 4 above from the Sellers;

7.	execute and deliver to the Sellers a counterpart of the Handover Protocol signed by the Buyer;

8.	as evidence of the authority of each person executing a document referred to in this Part C: of Schedule 4 on the Buyer’s behalf:

(a)

a copy of the minutes of a duly held meeting of the directors of the Buyer authorising the execution by the Buyer of the document, certified to be a true copy by a director or the secretary of the Buyer; or

(b)

a copy of the power of attorney conferring the authority, certified to be a true copy by a director or the secretary by the Buyer; or

(c)

such other evidence to the Sellers’ satisfaction of the authority of any person to sign on behalf of the Buyer; and

9.	as evidence of the authority of each person executing a document referred to in this Part C: of Schedule 4 on the NVAX Guarantor’s behalf:

(a)

a copy and/or a copy of an extract of the minutes of a duly held meeting of the directors of the NVAX Guarantor authorising the execution by the NVAX

Guarantor of the document, certified to be a true copy by a director or the secretary of the NVAX Guarantor; or

(b)

a copy of the power of attorney conferring the authority, certified to be a true copy by a director or the secretary by the NVAX Guarantor; or

(c)

such other evidence to the Sellers’ satisfaction of the authority of any person to sign on behalf of the NVAX Guarantor.

SCHEDULE 4

COMPLETION ACCOUNTS

Part A: Preparation, Delivery and Agreement

1.	Definitions

1.1	The definitions in this paragraph apply in this Deed:

“Completion Accounts” means the statement of the Working Capital Adjustment and the Indebtedness (including the notes thereon), as prepared and agreed or determined (as the case may be) in accordance with this Schedule 5;

“Dispute Notice” has the meaning set out in paragraph 2.3 of this Schedule;

“Draft Documents” has the meaning set out in paragraph 2.1 of this Schedule;

“Effective Time” means 11:59pm (UK time) on the Business Day before the Completion Date;

“Expert” means a member of an independent firm of chartered accountants of international repute appointed in accordance with paragraph 3 of this Schedule to resolve any dispute arising between the Parties in connection with the preparation of the Completion Accounts and/or the Purchase Price Statement;

“Indebtedness” means, in relation to the Company, other than current liabilities taken into account in the calculation of the Working Capital Adjustment and the Axis Principal Amount in relation to the Company, the aggregate amount of borrowings and any other financial indebtedness in the nature of borrowing (in each case, including the principal amount and any accrued and unpaid interest, any contingent obligations and fees, costs and expenses owed by the Company or relating to any such obligations), including (without double counting):

(a)

borrowings from any bank, financial institution or other entity other than the Axis Principal Amount;

(b)

indebtedness arising under any bond, note, loan stock, debenture, commercial paper, other securities or similar instrument;

(c)

reimbursement obligations with respect to letters of credit, bankers’ acceptances performance bonds, sureties or similar obligations or facilities;

(d)

payment obligation under any interest rate swap agreement, forward rate or sales agreement, futures, options, interest rate cap or collar agreement or other hedging arrangement (including financial agreements or arrangements entered into for the purpose limiting or managing interest rate risk);

(e)

receivables sold or discounted (otherwise than on a non-recourse basis);

(f)

all accrued but unpaid income Taxes of the Company (taking into account any estimated Taxes paid) and any deferred Taxes in respect of income, revenue, payments including to employees that is attribute to periods beginning prior to the Completion;

(g)

the amount of any liability in respect of any guarantee or counter-indemnity obligation, endorsements or assumptions;

(h)

indebtedness for borrowed money secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Encumbrances on property owned by the Company, whether or not indebtedness secured thereby shall have been assumed;

(i)

money raised pursuant to any factoring arrangement, debenture, bond, note, loan stock, standby or documentary letter of credit or other similar instrument, or any amount raised by acceptance under any acceptance credit facility;

(j)

obligations incurred, issued and/or assumed under any conditional sale, title retention, forward sale or purchase or any similar agreement or arrangement creating obligations incurred, issued and/or assumed with respect to the deferred purchase price of property, services or assets (other than customary trade credit given in the ordinary course of trading);

(k)

any provision for loss contracts whether or not accrued in accordance with accounting standards;

(l)

indebtedness under any hire purchase agreement or finance lease (whether for land, machinery, equipment or otherwise) or similar arrangement which is a liability under accounting standards;

(m)

any obligations with respect to vendor advances or any other advances made to the Company including deferred revenue liabilities;

(n)

any indebtedness for monies borrowed or raised under any other transaction that has the commercial effect of borrowing;

(o)

pension liabilities, deferred compensation liabilities and liabilities arising from accrued but unpaid bonuses (including any profit-sharing bonuses) or commissions, fees and other amounts due to a Governmental Entity or any other persons in connection with the foregoing;

(p)

all payables by the Company to (i) any of the Company’s directors, employees, officers or Affiliates or (ii) any shareholders of the Sellers or a member of the Sellers’ Group;

(q)

customer deposits or any identified shortfalls in inventory owned by a customer and held by the Company on behalf of such customer;

(r)

(i) all fees and expenses incurred by or on behalf of the Company in connection with the negotiation and execution of this Deed and the other Transaction Documents, the performance of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby, including (x) the fees and expenses of all investment bankers, lawyers or professional advisors for services in connection with the transactions contemplated hereunder and thereunder and (y) any amount required to be paid to a third party in connection with obtaining any consent, waiver or approval required to be obtained in connection with the consummation of the transactions contemplated hereby or thereby; (ii) all success, retention, stay, change of

control or similar obligations payable to any employee or director upon, as a result of, or where one of the conditions to payment is, the consummation of the transactions contemplated hereunder (regardless of whether such bonuses or other obligations are paid prior to, on or after the Completion Date, it being understood that such obligations shall be deemed incurred prior to Completion and regardless of whether such payments are single trigger or double trigger) including, in each case, all liabilities and obligations of the Company for the payment of, or with respect to, Taxes (including any income or employment Taxes, including the employer portion of any payroll Taxes) and other fees and expenses (including workers’ compensation and administrative fees) related to any of the foregoing;

(s)

unaccrued leave (including sick leave);

(t)

all unpaid accrued interest on any borrowings or indebtedness referred to in the paragraphs above, together with any prepayment premiums, make-whole, or other penalties, costs, fees, expenses, breakage costs or other obligations arising (or which would arise) in connection with the repayment of any such borrowings, indebtedness or obligations on the Completion Date, including, for the avoidance of doubt, the Axis Interest Amount; and

(u)

any prepayment premiums and penalties, and any other fees, expenses, indemnities and other amounts payable as a result of the prepayment or discharge of any of the foregoing.

in each case as at the Effective Time and shown in the Completion Accounts, calculated on a consolidated basis in accordance with the accounting principles, policies, standards, practices, evaluation rules and estimation techniques specified in this Schedule 5;

“Purchase Price Statement” means the statement setting out the amount of the Working Capital Adjustment and Indebtedness shown in, or derived from, the Completion Accounts, together with the resulting calculation of the Purchase Price, and as prepared and agreed or determined (as the case may be) in accordance with this Schedule;

“Resolution Period” has the meaning set out in paragraph 2.6 of this Schedule;

“Review Period” means the period of [***] commencing on the first Business Day after the day on which the Sellers receive the Draft Documents from the Buyer in accordance with paragraph 2.1 of this Schedule; and

“Specific Policies” has the meaning set out in Part D of this Schedule.

1.2	Any period of time specified in this Schedule may be extended by agreement in writing between the Sellers and the Buyer.

2.	Preparing the Completion Accounts and Purchase Price Statement

2.1	As soon as practicable following Completion but in any event within 75 calendar days after the Completion Date, the Buyer shall prepare and deliver to the Sellers for review

draft Completion Accounts and the Purchase Price Statement on the basis of the requirements, accounting policies and accounting methods set out in Part C of Schedule 5 and in the same (or substantially the same) format as the Pro-forma Completion Accounts (together the “Draft Documents”).

2.2	Following Completion, the Sellers shall promptly provide the Buyer (and its agents or advisers) with access to such of its information, books and records as the Buyer (or its agents or advisers) may reasonably require in connection with the preparation of the Draft Documents.

2.3

No later than [***], the Sellers shall serve a written notice on the Buyer stating whether or not they agree with the Draft Documents. In the case of any disagreement, the notice (“Dispute Notice”) shall specify in reasonable detail each matter or item in dispute and, to the extent practicable, any adjustments which the Sellers consider should be made to the Draft Documents.

2.4

During the Review Period, subject to the Sellers complying with any hold harmless or similar requirements of the Buyer or its accountants in connection with the release of such working papers to the Seller and subject to the Buyer’s or the NVAX Group’s legal privilege, the Buyer shall upon reasonable notice and during normal business hours, permit the Sellers (and their agents or advisers) to access and review the Buyer’s working papers relating to the preparation of the Draft Documents and such books and records of the Company as the Sellers (or their agents or advisers) may reasonably require for the purpose of reviewing the Draft Documents.

2.5	If, during the Review Period, the Sellers:

(a)

serve a written notice on the Buyer confirming their agreement with the Draft Documents, they shall, with effect from the date of service of such notice, constitute the Completion Accounts and the Purchase Price Statement and shall be final and binding on the Parties; or

(b)

fail to serve a Dispute Notice, the Draft Documents shall, with effect from the expiry of the Review Period, constitute the Completion Accounts and the Purchase Price Statement and shall be final and binding on the Parties.

2.6

If the Sellers serve a Dispute Notice in accordance with paragraph 2.3 of this Schedule, the Parties shall, during the period of [***] commencing on the date of service of the Dispute Notice (“Resolution Period”), seek in good faith to reach agreement on the disputed matters. If, before the Resolution Period expires, the disputed matters are:

(a)

resolved by the Parties in writing, the Draft Documents (revised as necessary to reflect the Parties’ agreement) shall constitute the Completion Accounts and the Purchase Price Statement, and shall be final and binding on the Parties with effect from the date of their agreement; or

(b)

not resolved by the Buyer and the Sellers in writing, then at any time following the expiry of the Resolution Period either party may, by written notice to the

other, require the disputed matters to be referred to an Expert for determination in accordance with paragraph 3 of this Schedule.

2.7

[***]

3.	Expert Determination

3.1	If a notice is served by either party pursuant to paragraph 2.6(b) of this Schedule, the Parties shall use all reasonable endeavours to reach agreement regarding the identity of the person to be appointed as the Expert and to agree terms of appointment with the Expert.

3.2

If the Parties fail to agree on an Expert and their terms of appointment within [***] of either Party serving details of a proposed Expert on the other, then either Party shall be entitled to request the President for the time being of the Institute of Chartered Accountants of England and Wales to appoint the Expert and to agree the terms of appointment on behalf of the Parties.

3.3	Except for any procedural matters, or as otherwise expressly provided in this Schedule, the scope of the Expert’s determination shall be limited to determining the unresolved matters in the Dispute Notice relating to:

(a)

whether the Draft Documents have been prepared in accordance with the requirements of this Schedule;

(b)

whether any errors have been made in the preparation of the Draft Documents; and

(c)

any consequential adjustments, corrections or modifications that are required in order for the Draft Documents to have been prepared in accordance with the requirements of this Schedule.

3.4	The Buyer and the Sellers shall co-operate with the Expert and shall provide such assistance and access to such documents, personnel, books and records as the Expert may reasonably require for the purpose of making their determination.

3.5

The Buyer and the Sellers shall be entitled to make submissions to the Expert including oral submissions and each of the Buyer and the Sellers shall, with reasonable promptness, supply the other party with all such information and access to its documentation, books and records as the other Party may reasonably require in order to make a submission to the Expert in accordance with this paragraph.

3.6

To the extent not provided for in this paragraph 3, the Expert may in their reasonable discretion determine such other procedures to assist with the conduct of their determination as they consider just or appropriate including (to the extent they consider necessary) instructing professional advisers to assist in reaching their determination.

3.7	Unless otherwise agreed by the Parties, the Expert shall be required to make their determination in writing (including reasons for their determination) and to provide a

copy to each party as soon as reasonably practicable and in any event within [***] of their appointment.

3.8	All matters under this paragraph 3 shall be conducted, and the Expert's decision shall be written, in the English language.

3.9	The Expert shall act as an expert and not as an arbitrator. Save in the event of manifest error or fraud:

(a)

the Expert's determination of any matters referred under this Schedule shall be final and binding on the Parties; and

(b)

the Draft Documents, subject to any adjustments, corrections or modifications that are necessary to give effect to the Expert's determination, shall constitute the Completion Accounts and the Purchase Price Statement for the purpose of this Deed.

3.10	If an appointed Expert becomes unwilling or incapable of acting, or does not deliver their determination within the period required by this paragraph 3:

(a)

the Buyer and the Sellers shall use their respective reasonable endeavours to agree the identity and terms of appointment of a replacement Expert;

(b)

if the Buyer and the Sellers fail to agree and appoint a replacement Expert within [***] of a replacement being proposed in writing by one Party, then either Party may apply to the President for the time being of the Institute of Chartered Accountants of England and Wales to discharge the appointed Expert and to appoint a replacement Expert; and

(c)

this paragraph 3 shall apply in relation to each and any replacement Expert as if they were the first Expert appointed.

3.11	The Parties shall act reasonably and co-operate to give effect to the provisions of this paragraph 3 and shall not do anything to hinder or prevent the Expert from making a determination.

(a)

[***] incurred in connection with the Expert's determination pursuant to this paragraph 3. The Expert's fees and any costs or expenses incurred in making their determination (including the fees and costs of any advisers appointed by the Expert) shall be borne [***] or in such other proportions as the Expert may direct.

Part B: Pro-forma Completion Accounts

1.	[Working Capital]

The following specific accounting policies shall be applied in calculating the Working Capital:

1.1. Current assets of the Company for the purpose of calculating Working Capital Adjustment shall be:

all unrestricted cash or cash which will become unrestricted at Completion and cash equivalents; EUR [ ]

prepaid expenses to those only of benefit to the Buyer; EUR [ ]

non-obsolete inventory (does not include spares); and EUR [ ]

collectible accounts receivables and any other receivables (including goods and services);

EUR [ ]

1.2. Current liabilities of the Company for the purposes of calculating the Working Capital Adjustment shall include:

short term debt; EUR [ ]

accrued liabilities; EUR [ ]

accounts payable; EUR [ ]

deferred revenue (including customer advance payments and/or deposits); and EUR []

accrued Taxes and accrued expenses. EUR [ ]

Working Adjustment Amount EUR [ ] being an amount equal to the current assets less the current liabilities

Part C: Basis of Preparation of the Completion Accounts

General Requirements

The provisions of Part B and Part D and this Part C of this Schedule 5 shall apply for the purposes of preparing the Completion Accounts. The draft Completion Accounts shall:

be prepared in accordance with the specific items, accounting policies and principles (if any) set out in Part D of this Schedule 5, so that, in the case of any conflict, such policies and principles shall override the provisions of paragraphs 2 and 3;

subject to paragraph 1, be prepared in accordance with the relevant accounting policies, principles, practices and procedures adopted by the Company in the preparation of the Accounts, so that, in the case of any conflict, such policies, principles, practices and procedures shall override the provisions of paragraph 3;

where none of the accounting policies, principles, practices or procedures referred to in paragraphs 1 and 2 deal with the matter, be prepared or determined in accordance with Czech GAAP consistent with past practice and the basis on which the 2019 Accounts were prepared to the extent reflected in the Completion Accounts as at the Accounts Date;

exclude any effects of the change in control or ownership of the Company contemplated by this Deed and shall not reappraise the value of any of the assets of the Company as a result of such change in control or ownership; and

be prepared on a going concern basis and take no account of post-balance sheet events occurring or information becoming available more than 75 calendar days after Completion.

Part D: Specific Policies

SCHEDULE 5

WARRANTIES

1.	Capacity and Authority of the Sellers

1.1

The Sellers have full power and authority (without requiring the consent of any other person) and has taken all necessary corporate (or other) actions and obtained all corporate authorisations and consents, to enter into and exercise its rights and perform its obligations under this Deed, together with any of the Transaction Documents to be executed by the Sellers.

1.2	This Deed and any of the Transaction Documents to be executed by the Sellers will, when executed, constitute lawful, valid and binding obligations of the Sellers in accordance with their respective terms.

1.3	The execution and delivery of this Deed (and any of the Transaction Documents to be executed by the Sellers) and the performance of and compliance with their terms and provisions will not:

(a)

conflict with or result in a breach of, or constitute a default under, any agreement or instrument to which any of the Sellers or the Company is a party or by which it or the Company is bound or of the Articles of Association;

(b)

conflict with or result in a breach of any law, regulation, order, writ, injunction or decree of any court or agency or other Governmental Entity; or

(c)

1.4	Each of the Sellers and the Company has been duly incorporated and is validly existing under the laws of its jurisdiction of incorporation.

1.5	None of the Sellers or the Company is a party to any agreement or bound by any obligation, the terms of which will prevent the Buyer from enjoying the full benefit of this Deed.

1.6	Each Seller is not insolvent or unable to pay its debts and has not stopped paying its debts as they fall due.

2.	The Sale Shares and Share Capital

2.1	The Sale Shares referred to in Schedule 2 (Details of the Company) represent 100% of the Company’s registered capital, have been duly issued and there are no shares in the capital of the Company that are allotted but not issued.

2.2	All of the Sale Shares are fully paid or credited as fully paid, and have been properly allotted and issued.

2.3	The Sellers are the sole legal and beneficial owners of that number of Sale Shares set opposite their respective names in Schedule 1 (List of Sellers and Sale Shares) and such

Sale Shares are free from all Encumbrances. With respect to the proprietary right of the Sellers to the Sale Shares, there are no outstanding claims against the Sellers or the Company or disputes over the proprietary rights or otherwise of the Sale Shares on the part of the previous owners or third parties that might affect the ability of the Sellers to sell and transfer the Sale Shares.

2.4

Save only as provided in this Deed, there are no agreements or arrangements in force which call for the present or future creation, allotment, issue, transfer, redemption or repayment of, or grant to any person the right (whether exercisable now or in the future and whether conditional or not) to call for the creation, allotment, issue, transfer, redemption or repayment of, any share capital of the Company (including by way of option or under any right of conversion or pre-emption).

2.5

Neither the Sellers nor the Company have agreed or are obligated to transfer or in any other way dispose of the whole or part of the Sale Shares to any third party except for the Buyer nor has it agreed or is it obligated to transfer the Sale Shares to a trust (in Czech: svěřenský fond) or a similar legal vehicle.

2.6

The Sellers are entitled to exercise 100 percent of voting rights in the general meeting of the Company or outside the same and is entitled to 100 percent share in the profit generated by the Company and all other rights of the sole holder of the Sale Shares under the applicable legal regulations and the Company’s Articles of Association, all that without any limitation.

2.7

No approval, consent, licence or notice from or to any Governmental Authority is necessary to ensure the validity, enforceability or performance of the obligations of the Sellers under this Deed or to effect Completion, including the transfer of the Sale Shares to the Buyer, other than as set out in this Deed.

2.8	All the rights associated with the Sale Shares under the relevant legal regulations and the Articles of Association are attached to the Sale Shares and no division of individually transferable rights has occurred.

2.9	No decision of the general meeting of the Company (or decision of a sole shareholder of the Company) has been made which would approve a change in type or form of the Sale Shares.

2.10	The Company has not, at any time:

(a)

repaid or redeemed or agreed to repay or redeem any shares of any class of its share capital or otherwise reduced or agreed to reduce any class of its issued share capital or purchased any of its own shares or carried out any transaction having the effect of a reduction of capital; or

(b)

made, or resolved or agreed to make, any issue of shares or other securities by way of capitalisation of profits or reserves.

3.	Constitution and Statutory Book and Reports

3.1	Articles of Association

The copy of the Articles of Association delivered to the Buyer by or on behalf of the Sellers is accurate and complete and sets out in full the rights and restrictions attaching to the share capital of the Company.

3.2	Statutory Books

To the extent required by applicable law, the statutory books (including all registers and minute books) of the Company have been properly kept and are up to date, in its possession and contain a complete and accurate record of the matters which are required in accordance with the law and the Company has not received any notice or allegation that any of them is incorrect or incomplete or should be rectified.

3.3

Filings

All resolutions, annual returns, filings, registrations, notifications and applications and other documents required to be delivered by the Company to the Commercial Register or to any other governmental or regulatory body or to any local authority have been properly prepared and filed and are true and complete.

3.4	Intra Vires

The Company has the power to carry on the Business and/or its operations as now conducted and the Business and its operations has at all times been carried on intra vires.

3.5	Powers of Attorney

The Company has not executed any power of attorney or conferred on any other person other than its directors, officers and employees any authority to enter into any transaction on behalf of or to bind the Company in any way, and no such power of attorney remains in force or was granted or conferred within the three years prior to the date of this Deed.

4.	Subsidiaries and Associated Companies

4.1	The Company does not have, and has never had and has not agreed to acquire any interest in any subsidiaries or subsidiary undertakings.

4.2

The Company has no associated companies, an associated company being an entity (other than a subsidiary undertaking) in which the Company has a participating interest, being a beneficial interest in a holding of more than 20 per cent. of the shares of such entity, and over whose operating and financial policies the Company exercises a significant influence, in particular in terms of its policy decisions relating to the expansion or contraction or activities of the business determining the balance between dividend and reinvestment.

4.3	The Company does not own any shares or stock in the capital of nor has any beneficial or other interest in any company or business organisation of whatever nature nor does it control or take part in the management of any other company or business organisation.

4.4	The Company does not have any branch, division, agency, place of business, operation, or substantial assets outside of its country of incorporation.

5.	Directors and Shadow Directors

5.1	The only board and supervisory board members of the Company are the persons whose names are listed in Schedule 2 (Details of the Company).

5.2	The Company does not have any liability as a former member, director, officer or shadow director of any body corporate or otherwise, nor are there circumstances in which such liability could arise.

5.3	No person is or has been a shadow director of the Company.

6.	Related Party Arrangements

6.1	The Company is not a party to any agreement or arrangement with any Seller, any of the Sellers’ Affiliates or any member of the Sellers’ Group.

6.2	The Company does not use any assets owned by, or facilities or services provided by any Seller, any of the Sellers’ Affiliates or any member of the Sellers’ Group.

6.3	The Company is not, nor would be, liable to any Seller, any of the Sellers’ Affiliates or any member of the Sellers’ Group as a result of or in connection with the termination of any agreement or arrangement with such persons.

7.	Information

7.1

Schedules

The facts stated in Schedule 2 (Details of the Company) are true and accurate in all respects.

8.	Accounts

8.1

General

(a)

The Accounts have been prepared and audited on a proper and consistent basis, in accordance with the law and applicable standards, principles and practices generally accepted in the country of its incorporation.

(b)

No change in accounting policies has been made in preparing the accounts of the Company for each of the last four financial years of the Company ended on the Accounts Date, except as stated in the audited balance sheet and profit and loss accounts for those years.

(c)

The Accounts show a true and fair view of the assets, liabilities and state of affairs of the Company as at the Accounts Date and of the profits and losses of the Company for the financial year ended on the Accounts Date.

8.2	Historical Trends

The profits and losses of the Company shown by the 2019 Accounts and by the audited accounts of the Company for the three preceding accounting periods and the trend of profits and losses shown in such audited accounts have not (save to the extent clearly

disclosed in such audited accounts) been affected to a material extent by any non-recurring, exceptional or short-term items (including, but not limited to, any pension contribution holiday or any rental or other outgoing at below market rates) or by any other matter which has rendered such profits or losses unusually high or low.

8.3	Fixed Assets

The value of all of the fixed assets of the Company as shown in the Accounts is at cost less depreciation. The depreciation of the fixed assets of the Company has been made at a rate sufficient to write down the value of such assets to nil by not later than the end of their useful working lives and no fixed asset has attributed to it a value exceeding its current market value as at the Accounts Date and there has been no revaluation of such fixed assets since their acquisition.

8.4

Stock

In the 2019 Accounts:

(a)

stock was valued in the same way as in the audited accounts of the Company for the three preceding financial years and on the basis of the lower of cost or net realisable value; and

(b)

all redundant and obsolete stock was written-off and all slow-moving and damaged stock was written down appropriately.

8.5	Liabilities

The 2019 Accounts make proper provision, reserve or note (as appropriate) for:

(a)

all bad and doubtful debts;

(b)

all liabilities and obligations (whether actual, contingent or otherwise); and

(c)

all capital commitments,

of the Company.

8.6	Off-balance Sheet Financing

The Company is not engaged in any financing (including the incurring of any borrowing or any indebtedness in the nature of acceptances or acceptance credits) of a type which would not be required to be shown or reflected in the 2019 Accounts.

8.7	Accounting Records

All books of account and other records of the Company (including any which it may be obliged to produce under any contract now in force) have been kept on a consistent basis, are up to date, are in its possession, and are true and complete in accordance with the law and applicable standards, principles and practices generally accepted in the country of its incorporation.

8.8	Accounting Reference Date

The accounting reference date of the Company under its applicable law is, and during the last six years has always been 31 December.

8.9	The Financial Information

The Financial Information:

(a)

have been prepared with due care and attention, and on a consistent basis with historic management accounts and/or historic financial information of a similar type of the Company; and

(b)

show with reasonable accuracy the:

(i)

assets and liabilities (whether present or future, actual or contingent) and the state of affairs and financial position as at the date to which they have been prepared; and

(ii)

profits/losses for the period in respect of which they have been prepared,

of the Company, but it is acknowledged that they are not prepared on a statutory basis and are subject to normal and recurring year-end adjustments and the absence of notes.

8.10	Net Assets

The value of the net assets of the Company at the date of this Deed is not less than the value of the net assets of the Company as shown in the 2019 Accounts (determined on the same bases and in accordance with the same accounting policies as those adopted for the purpose of preparing the Accounts but excluding any revaluations since the Accounts Date).

8.11	Provision for Tax

The Accounts reserve or provide in accordance with applicable standards, principles and practices generally accepted in the Czech Republic for all Tax liable to be assessed on the Company, or for which it is or may become accountable, for all periods starting on or before the Accounting Date (whether or not the Company has or may have a right of reimbursement against another person). The Accounts reserve in accordance with applicable standards and practices generally accepted in the Czech Republic for all contingent or deferred liabilities to Tax for all periods starting on or before the Accounts Date.

9.	Business since the Accounts Date

9.1

General

Since the Accounts Date:

(a)

the Company has carried on its operation and/or its business prudently and in the ordinary and usual course and so as to maintain the operation and/or business as a going concern; and

(b)

the Company has traded at a profit and there has been no material adverse change in the financial or trading position of the Company and no fact, matter, event or circumstance has occurred, which is likely to give rise to any change.

9.2

Specific

Since the Accounts Date:

(a)

the Company has not, other than in the ordinary course of Business:

(i)

disposed of, or agreed to dispose of, an asset; or

(ii)

assumed or incurred, or agreed to assume or incur, a liability, obligation or expense (whether actual or contingent);

(b)

the Company has not disposed of or agreed to dispose of an asset for an amount which is lower than either the book value or an open market arm’s length value of such asset (whichever is the higher);

(c)

the Company has not acquired or agreed to acquire an asset for an amount which is higher than open market arm’s length value;

(d)

other than with respect to the Material Contracts, the Company has not made, or agreed to make, capital expenditure exceeding in total [***] or incurred, or agreed to incur, a commitment (or series of connected commitments) involving capital expenditure exceeding in total [***];

(e)

no supplier or customer has ceased or substantially reduced its trade with the Company or has altered the terms of trade to the Company’s disadvantage;

(f)

other than with respect to the Material Contracts, there have been no material increases or decreases in the levels of debtors or creditors or in the average collection or payment periods for debtors and creditors respectively;

(g)

no distribution of capital or income has been declared, made or paid by the Company;

(h)

no resolution of the members of the Company;

(i)

the Company has not repaid or redeemed any share or loan capital or agreed to any such repayment or redemption;

(j)

the Company has not repaid any sum in the nature of borrowings in advance of any due date or made any loan (including in each case, intra-group basis) or incurred any indebtedness or agreed to do so; and

(k)

the Company has not paid nor is under an obligation to pay any service, management or similar charges or any interest or amount in the nature of interest to any other person nor incurred any liability to make such a payment or made any payment to any member of the Sellers’ Group or any of their connected persons whatsoever.

9.3

The Company has no liabilities, obligations or commitments, whether primary or secondary, direct or indirect, absolute, accrued, contingent or otherwise, except those specifically provided for and Disclosed (i) in the Accounts as of the Accounts Date; and (ii) those which have been incurred in the ordinary course of business since the Accounts Date and which are not material in amount.

10.	Assets

10.1	Ownership and Condition

(a)

There is no asset of the Company (tangible or intangible) which is not set out in 8.3.4.1 of the Data Room.

(b)

There are no Encumbrances, nor has the Company agreed to create any Encumbrances, over any part of its undertaking or assets.

(c)

Each asset used by the Company (tangible or intangible) is:

(i)

legally and beneficially owned by the Company; and

(ii)

where capable of possession, in the possession of the Company.

(d)

The Company owns each asset (whether tangible or intangible) that is necessary for the operation of the Company and/or the Business and, without limitation, no rights relating to the operation of the Company and/or the Business are owned or otherwise enjoyed by or on behalf of any member of the Sellers’ Group (other than rights as shareholders in the Company) or any third party.

(e)

All plant, machinery, vehicles and equipment used by the Company are in good repair and condition and have been properly maintained (in accordance with appropriate technical specifications, safety regulations and the terms and conditions of any applicable agreements), and none is dangerous, inefficient, obsolete or in need of renewal or replacement.

(f)

The Company’s asset registers comprise a true and accurate record of all the plant, machinery, equipment, vehicles and other assets owned, possessed or used by it and are not misleading in any way.

(g)

Maintenance contracts are in force in respect of each of those assets of the Company which it is normal to have maintained by independent or specialist contractors and in respect of each of those assets which the Company is obliged to maintain or repair under a leasing or similar agreement. Those assets have been regularly maintained to a good technical standard and in accordance with:

(i)

safety regulations required to be observed in relation to them; and

(ii)

the provisions of any applicable leasing or similar agreement.

10.2	Hire Purchase and Leased Assets

The Company is not party to, nor is liable under, a lease or hire, hire purchase, credit sale or conditional sale agreement.

10.3

Stock

(a)

The Company’s stock is of satisfactory quality and is saleable in the usual course of its operation and/or business in accordance with its current price list.

(b)

The Company has not supplied or agreed to supply defective or unsafe goods or goods which fail to comply with their terms of sale.

(c)

No goods in a state ready for supply by the Company are defective or unsafe or will fail to comply with terms of sale similar to terms of sale on which similar goods have been sold previously by the Company.

(d)

The Company’s level of stock is reasonable having regard to current and anticipated demand.

10.4

Debtors

(a)

No debt shown in the 2019 Accounts, the Financial Information or the Company’s accounting records is overdue by more than 12 weeks or is the subject of any arrangement of any kind with the relevant debtor.

(b)

The Company has not released a debt shown in the 2019 Accounts, the Financial Information or the Company’s accounting records, so that the debtor has paid or will pay less than the debt’s book value.

(c)

None of the debts shown in the 2019 Accounts, the Financial Information or the Company’s accounting records has been deferred, subordinated or written off or become irrecoverable to any extent. To the best of the Sellers’ knowledge, information and belief, each of these debts will realise its book value in the usual course of collection.

(d)

The Company has not granted credit terms exceeding 30 days.

11.	Liabilities

11.1	Borrowings

The total amount borrowed by the Company does not exceed any limitation on its borrowings contained in the Articles of Association or in any debenture or loan stock deed or any other instrument or agreement to which the Company is a party.

11.2	Facilities

Details of all overdrafts, loans, invoice discounting, factoring or other financial facilities or any arrangement relating to the management of any interest rate or exchange rate liability which is outstanding or available to the Company are contained in the Disclosure Letter and nothing has been done or omitted to be done to affect or prejudice the continuance of any such facilities or arrangements in full force and effect (save where the prepayment of such facilities is provided for expressly in this Deed).

11.3	Bank Accounts

(a)

A statement of all the Company’s bank accounts and of the credit or debit balances on such accounts as at a date not more than seven days before the date of this Deed is attached to the Disclosure Letter. The Company does not have any other bank or deposit accounts (whether in credit or overdrawn) other than those included in such statement.

(b)

Since the preparation of the statement referred to at paragraph 11.3(a) above, there have been no payments out of any such accounts except for routine payments in the ordinary and usual course of trading and the balances on such accounts are not now substantially different from the balances shown on such statement.

11.4	Working Capital

The Company has sufficient working capital for the purpose of continuing to carry on its operation and/or the Business in its present form and at its present level of turnover and for the purposes of executing, carrying out and fulfilling all obligations and expected liabilities in accordance with their terms for the period of 12 months after Completion.

11.5	Guarantees and Indemnities

(a)

The Company is not party to and is not liable under any guarantee, indemnity or other agreement to secure or incur a financial or other obligation with respect to another person’s obligation.

(b)

No part of the loan capital, borrowings or indebtedness in the nature of borrowings of the Company is dependent on the guarantee or indemnity of, or security provided by, another person.

11.6	Events of Default

No event has occurred or been alleged to have occurred or is likely to arise which:

(a)

constitutes an event of default, or otherwise gives rise to an obligation to repay, or to give security under any agreement relating to borrowing (or indebtedness in the nature of borrowing) (or will do so with the giving of notice or with the lapse of time (or both)); or

(b)

will lead to any security for any borrowing or indebtedness in the nature of borrowing or any guarantee, indemnity or other obligation of the Company becoming enforceable (or will do so with the giving of notice or lapse of time (or both)).

11.7

Grants

(a)

The Company is not liable to repay an investment or other grant, subsidy, allocations, allowances or other promotional funds made to it by any body.

(b)

No fact or circumstance (including the execution and performance of this Deed) exists which might entitle a body to require repayment of, or refuse an

application by the Company for, the whole or part of a grant, subsidy, allocations, allowances or other promotional funds

(c)

The Company has complied with all conditions under the subsidies, grants, allocations, allowances or other promotional funds received by the Company in the last five years.

12.	Trading Arrangements

12.1	Customers and Suppliers

(a)

During the year ending on the date of this Deed, no substantial supplier or customer of the Company has ceased, reduced or indicated its intention to cease or reduce training with the Company or changed or indicated an intention to change the terms upon which it trades with the Company, nor, to the best of the Sellers’ knowledge, information and belief is a substantial supplier or customer of the Company likely to do so.

(b)

Neither in the financial period ending on the Accounts Date, nor since the Accounts Date, has any person (individually or jointly with any other person) bought from or sold to the Company more than five per cent. in aggregate of all purchases or sales made by the Company during that period.

(c)

The Company has no agreement or arrangement with any customer or supplier on terms which are materially different from the Company’s standard terms.

12.2

Contracts

(a)

Disclosed in the Data Room is a list of all agreements and contracts to which the Company is party and is in force as at the date of this Deed, and true and accurate copies of all such contracts are contained in the Data Room in Folders 8.2.3, 8.3.5, and 8.3.8.

(b)

Other than as Disclosed in the Data Room, the Company is not a party to or liable under any contract, transaction, arrangement or liability which involves, or is likely to involve obligations or liabilities which, by reason of their nature or magnitude, ought reasonably to be made known to a prospective purchaser of the Sale Shares, including any which:

(i)

is of an unusual or abnormal nature, or outside the ordinary and proper course of business;

(ii)

is of a long-term nature (that is, unlikely to have been fully performed, in accordance with its terms, more than six months after the date on which it was entered into or undertaken);

(iii)

is incapable of termination in accordance with its terms by the Company, on 60 days’ notice or less;

(iv)

cannot readily be fulfilled or performed by the Company on time without undue or unusual expenditure of money, effort or personnel;

(v)

involves payment by the Company by reference to fluctuations in the index of retail prices, or any other index or in the rate of exchange for any currency;

(vi)

involves an aggregate outstanding expenditure or other liability by the Company of more than EUR 65,000; or

(vii)

restricts its freedom to engage in any activity or business, or confines its activity or business to a particular place.

(c)

Disclosed in the Data Room in Folder 8.3.5 and 8.3.8 is a list of:

(i)

all agreements entered into by the Company for the supply of products or services at a fixed price, any obligations of which remain or will remain to be performed following the Completion Date or in respect of which full payment has not or will not have been received as at the Completion Date;

(ii)

all agreements pursuant to which independent contractors have been engaged to provide services to or on behalf of the Company where obligations remain (or will remain) to be performed as at the Completion Date or have been performed within the last 12 months; and

(iii)

all agreements under which any obligation of the Company has been sub-contracted to any person or under which any such obligation may be sub-contracted to any person where obligations remain or will remain to be performed as at the Completion Date or have been performed within the last 12 months.

(d)

The Material Contracts comprise all contracts (including work orders) in connection with the installation and operational qualification of process equipment and the supporting clean utilities installed for the erstwhile IPV manufacturing process to which the Company is party.

12.3	Preferential Terms

The Disclosure Letter contains details of all material discounts, over-riders, rebates, allowances and other preferential terms of any nature available to the Company from its suppliers or offered by the Company to its customers.

12.4	Validity and Performance of Agreements

(a)

Neither the Company nor any Seller has any knowledge of the invalidity or unenforceability of, or a ground for termination, avoidance or repudiation of, an agreement, arrangement or obligation to which the Company is a party.

(b)

No party with whom the Company has entered into an agreement, arrangement or obligation has given notice of its intention to terminate, or has sought to repudiate or disclaim, the agreement, arrangement or obligation.

(c)

No party with whom the Company has entered into an agreement or arrangement is in material breach of the agreement or arrangement. No matter exists which might give rise to such a breach.

(d)

The Company is not in breach of any agreement or arrangement (including limitation, the Material Contracts). No matter exists which might give rise to such a breach.

(e)

No orders or similar instructions have been made by any court or other competent authority requiring the modification of any agreement, arrangement or obligation to which the Company is party and the Sellers are not aware of any circumstances which could give rise to any such order or similar instruction in the future.

12.5	Tender Offers

The Company does not have an outstanding bid, tender or sale or service proposal, which is substantial in relation to its operation and/or business or which, if accepted, would be likely to result in a loss.

12.6	Guarantees, Indemnities and Letters of Comfort

The Company is not party to any guarantee, indemnity, letter of credit, letter of comfort or analogous or similar agreement given by or for the benefit of the Company.

12.7	Defective Products and Services

(a)

There is no claim, and there are no circumstances, and there have been no claim or circumstances in the six years prior to the date of this Deed, which may lead to any claim, against the Company for faulty, defective or dangerous goods, services, work or materials or for breach of representation, warranty or condition or for delays in delivery or completion of contracts or for deficiencies of design or performance or otherwise relating to liability for goods or services sold or supplied by or on behalf of the Company.

(b)

The Company has not agreed to produce or deliver replacement goods or perform replacement or additional services after the date of this Deed or to take back any goods (whether defective or not) or reimburse the cost of any services or to effect modifications or repairs to the same free of charge or otherwise than at arm’s-length rates or to issue a credit note, money-back guarantee or write-off or reduce indebtedness in respect thereof.

12.8	Joint Venture, Partnership, Agency or Licensing Agreements

The Company is not liable under:

(a)

an agreement, arrangement or obligation by which the Company is a member of a joint venture, consortium, partnership or association (other than a bona fide transaction), shareholder or similar arrangement or agreement or any agreement which purports to regulate control or otherwise affects the voting or disposition of its Sale Shares; or

(b)

a distributorship, promotional, representation, franchising, agency, marketing, licensing or management agreement or arrangement.

12.9

Permits

(a)

Full and accurate details of all Permits of which the Company has the benefit are contained in Folders 8.2.1.1 and 8.2.2.1 of the Data Room.

(b)

The Company has obtained and complied with the terms and conditions of each Permit.

(c)

There are no pending or threatened proceedings, which might in any way affect the Permits and the Sellers are not aware of any other reason why any of them should be suspended, threatened or revoked or be invalid.

13.	Effect of Sale

Neither the execution nor performance of this Deed or any document to be executed at or before Completion pursuant to this Deed will:

(a)

result in the Company losing the benefit of a Permit or an asset, licence, grant, subsidy, right or privilege which it enjoys at the date of this Deed in any jurisdiction;

(b)

conflict with, or result in a breach of, or give rise to an event of default under, or require the consent of a person under, or enable a person to terminate, or relieve a person from an obligation under, an agreement, arrangement or obligation to which the Company is a party (including, without limitation, under a Material Contract) or a legal or administrative requirement in any jurisdiction;

(c)

result in any customer being entitled to cease dealing with the Company or to substantially reduce its existing level of business or to change the terms upon which it deals with the Company;

(d)

result in any supplier being entitled to cease supplying the Company or to substantially reduce its supplies to or to change the terms upon which it supplies the Company;

(e)

materially adversely affect or result in the termination of any Intellectual Property Rights owned by the Company or any agreement relating to material Intellectual Property Rights used in its operation and/or the Business; or

(f)

make the Company liable to offer for sale, transfer or otherwise acquire any assets, including shares held by it in other bodies corporate under their articles of association or any agreement or arrangement.

14.	Intellectual Property

14.1	Complete and accurate particulars are set out in the Data Room of:

(a)

all registered and material unregistered Intellectual Property Rights owned, used or held for use by the Company.

(b)

all licences, rights, agreements, authorisations and permissions (in whatever form and whether express of implied) under which the Company:

(i)

uses or exploits Intellectual Property Rights owned by any third party; or

(ii)

has licensed or agreed to license Intellectual Property Rights to, or otherwise permitted the use of any Intellectual Property Rights by, any third party,

and so far as the Sellers are aware, all such licences are valid and binding and there is no past or present breach of any such licences, rights, agreements, authorisations or permissions.

14.2

The Company owns or is otherwise entitled to use pursuant to an existing and legally enforceable agreement all Intellectual Property Rights required to carry on its operation and/or the Business free from all Encumbrances, including without limitation any third-party Intellectual Property Rights contained in any of the products or services supplied by the Company.

14.3	All applicable application, registration, renewal and any other fees or taxes due up to and including the date of Completion in relation to the Intellectual Property Rights owned by the Company have been paid in full.

14.4	The registered and material unregistered Intellectual Property Rights owned, used or held for use by the Company are subsisting and enforceable and, so far as the Sellers are aware:

(a)

nothing has been done, or not been done, as a result of which any of them has ceased or might cease to be subsisting or enforceable;

(b)

all procedural steps being reasonable and commercially prudent in the ordinary and proper course of business in relation to the registration of registerable Intellectual Property Rights owned by the Company have been taken; and

(c)

all persons retained, commissioned, employed or otherwise engaged by the Company who, in the course of such engagement, created, discovered, conceived or developed work in which Intellectual Property Rights subsist or might reasonably have been expected to subsist, are bound by agreements with the Company whereby all such Intellectual Property Rights vest in the Company and all moral rights are irrevocably and unconditionally waived.

14.5

So far as the Sellers are aware, there has been no infringement, misappropriation, misuse, violation or other unauthorised use at any time of any Intellectual Property Rights owned by the Company. No proceedings, complaints or claims relating to the same have been brought or threatened by the Company and, so far as the Sellers are aware, no fact or circumstance exists which might give rise to any proceeding of that type.

14.6	The activities of the Company have not, do not and are not likely to infringe, misappropriate, misuse, or violate any third-party Intellectual Property Rights.

14.7

There are not and have not been in the last six years any actual, threatened or, notices, proceedings, challenges, actions, complaints or claims brought against any the Company impugning the title, ownership, use, validity or enforceability in respect of any Intellectual Property Rights owned by the Company or otherwise used in the operations of the Company and/or the Business, and, so far as the Sellers are aware, there is no fact or matter likely to give rise to any of the same.

14.8

There are no Intellectual Property Rights or licence of Intellectual Property Rights the loss, termination or expiration of which would have a material adverse effect on the operation of the Company and/or the Business, and no such loss, termination or expiration is likely to occur during the twelve (12) month period starting on the date of this Deed.

14.9	All Know-how, Confidential Information and trade secrets which are material to the Business:

(a)

have been kept confidential and have not been disclosed to any third party otherwise than in the ordinary course of business and subject to an enforceable obligation of confidentiality on the person to whom they are disclosed; and

(b)

is adequately documented or is otherwise embodied in physical form to enable the Buyer to acquire its full benefit and is in the possession or control of the Company.

14.10

The Company is not party to any confidentiality or other agreement or subject to any duty which restricts the free exploitation, use or disclosure of any Know-how, confidential information or trade secrets used in the Company and/or the Business, and, so far as the Sellers are aware no unauthorised use of any such information has been made.

15.	Information Technology

15.1	The Data Room contains:

(a)

complete and accurate particulars of the IT Systems; and

(b)

complete and accurate copies of all IT Contracts.

15.2	Save as set out in the IT Contracts, the Company is the sole and legal and beneficial owner of or otherwise has the full right and authority to use the IT Systems free from any Encumbrances.

15.3

The IT Systems are not wholly or partly dependent on any facilities which are not under the control, operation or ownership of the Company and no action will be necessary to enable such systems to continue to be used in the Company and/or the Business to the same extent and in the same manner as they have been used prior to the date of this Deed.

15.4	So far as the Sellers are aware, the Company has not copied or used any of the Software in violation of the applicable licence or otherwise violated any of its agreements or the rights of the licensor.

15.5

The IT Systems are adequate for the current needs of the Company and/or the Business and, so far as the Sellers are aware, are not defective in any material respect and have not been materially defective or materially failed to function at any time during the last three years prior to the date of this Deed.

15.6	The IT Systems have been regularly maintained and are in good working order and function in accordance with all specifications and any other descriptions under which they have been supplied and have the benefit of appropriate maintenance and support agreements as set out in the Data Room.

15.7	The IT Systems do not so far as the Sellers are aware use or contain, use, incorporate or otherwise include any Open Source Software.

15.8	The Company is licensed to use the Software as set out in the Data Room and so far as the Sellers are aware no action will be necessary to enable it to continue to use such software as they have been used prior to the date hereof.

15.9	All versions of the Software used in the Company and/or the Business are up to date, including any released patches or bug fixes, and is currently supported by the respective owners of the Software.

15.10

In the twelve (12) months preceding Completion, the Company has not suffered a material breach of security in relation to any of its IT Systems and its has in place adequate procedures, processes and software to:

(a)

protect the IT Systems used by it and any data (including personal data) held on such IT Systems;

(b)

prevent any accidental or unlawful destruction, loss or alteration of, or any unauthorised disclosure of or access to any such data; and

(c)

prevent the introduction of viruses or similar destructive code,

all of the above are documented in a data security breach plan.

15.11

The Company maintains and keeps up to date back-up systems and disaster recovery systems and has in place procedures sufficient to enable it to continue to function without any material disruption or interruption if there was material damage to or destruction of some or all of the IT Systems, documented in disaster recovery,. A copy of each plan is included in the Data Room at reference 8.3.6.1.1.

15.12

The Company has in place a disaster recovery plan to enable the Company and/or the Business to continue if there was material damage to or destruction of some or all of the IT Systems and a data security breach plan. A copy of each plan is included in the Data Room.

15.13

Any material Software under licence from a third party is subject to source code escrow arrangements such that the Company is entitled to access such source in the event of insolvency or other specified circumstances or the relevant licensor.

15.14

Complete and accurate particulars (including details of registrants and expiry dates) of all domain names, websites, URLs and social media accounts owned or used by the Company are included in the Data Room.

15.15

The IT Contracts are valid and binding and no act or omission has occurred which would, if necessary with the giving of notice or lapse of time, constitute a breach of any such contract.

15.16

There are and have been no claims, disputes or proceedings arising or threatened under any of the IT Contracts. So far as the Sellers are aware, no fact or circumstance exists which might give rise to a proceeding of that type.

16.	Data Protection

16.1

The Company has at all times complied in all material respects with the Data Protection Legislation and all other applicable laws and regulations regulating data protection, privacy or the recording, monitoring or interception of communications, and in the twenty four (24) months preceding the date of this Deed there were no facts or circumstances likely to give rise to any allegation of material non-compliance with such Data Protection Legislation by the Company

16.2	The Sellers have obtained all necessary rights, permissions and consents to permit the disclosure and transfer of personal data in connection with the transactions contemplated by this Deed, and such transfer will not violate the Data Protection Legislation.

16.3

The Company has not suffered a material breach of security leading to any accidental or unlawful destruction, loss, alteration or unauthorised disclosure of or access to, any personal data transmitted, stored or otherwise processed by the Company or by any third party on its behalf, and no such breaches have been suspected or threatened and there are no circumstances likely to give rise to any such breach.

16.4	The Company has not been, nor so far as the Sellers are aware, a breach of any personal data security breach reporting or notification requirement under any law, regulation or mandatory code.

16.5	The Company has not received either:

(a)

any notice, letter, claim or complaint from any Data Protection Authority, data subject or other third party alleging non-compliance with the Data Protection Legislation (or any part thereof); or

(b)

any claim for compensation relating to the Data Protection Legislation,

and, so far as the Sellers are aware, there are no circumstances which may give rise to the giving of any such notice or the making of any such notification.

17.	Insurance

17.1	Insurance of assets

Each insurable asset of the Company has at all material times been and is at the date of this Deed insured to its full replacement value (with no provision for deduction or excess) against each risk normally insured against by a person operating the Business and/or activities (if any) operated by the Company.

17.2	Other insurance

The Company has at all material times been and is at the date of this Deed adequately insured against accident, damage, injury, third party loss (including product liability), credit risk, loss of profits and all other risks to which a person operating the Business and/or activities (if any) operated by the Company is exposed.

17.3

Policies

The Data Room:

(a)

contains a true and accurate (which is not misleading in any way whatsoever) list at reference 8.3.2 of each current insurance and indemnity policy in respect of which the Company has an interest (including any active historic policies which provide cover on a losses occurring basis) (together the “Policies”);

(b)

contains, in relation to each of the Policies, the following information, which is true, accurate and not misleading:

(i)

name of insured(s);

(ii)

name of insurer(s);

(iii)

period of cover;

(iv)

classes of risks covered;

(v)

basis of cover (namely, claims made or losses occurring);

(vi)

deductible (amount of deductible and details of whether it is applied on (i) a per “cause” or “event” basis, and/or (ii) an aggregate basis;

(vii)

any applicable limits (including any per “cause” or “event” limits and any aggregate limits);

(viii)

the premium payable in respect of the policy;

(ix)

all exclusions contained in the policy; and

(x)

any relevant conditions or warranties which may affect the availability of cover under the policy.

17.4	Status of the Policies

(a)

Each of the Policies is valid and enforceable and is not void or voidable.

(b)

The Company has not done anything or omitted to do anything which might:

(i)

make any of the Policies void or voidable; or

(ii)

prejudice the ability to effect insurance on the same or better terms in the future.

(c)

No insurer under any of the Policies has disrupted or given any indication that they intend to dispute the validity of any of the Policies on any grounds.

(d)

To the best of the Sellers’ knowledge, information and belief, there is nothing which could:

(i)

vitiate any of the Policies; or

(ii)

prejudice the ability to effect insurance on the same or better terms in the future.

(e)

None of the Policies contains any provisions as to change of control or ownership of the insured.

(f)

No insurer has ever cancelled or refused to accept or continue any insurance in relation to the Company.

17.5

Claims

(a)

No claims have been made, no claim is outstanding and no fact or circumstances exists which might give rise to a claim under any of the Policies.

(b)

No event, act or omission has occurred which requires notification under any of the Policies.

(c)

None of the insurers under any of the Policies has refused, or given any indication that it intends to refuse, indemnity in which or in part in respect of any claims under the Policies.

(d)

Nothing has been done or omitted to be done, and there is nothing, which might entitle the insurers under any of the Policies.

17.6

Premiums

(a)

All premiums which are due under the Policies have been paid.

(b)

The Company has not done anything or omitted to do anything, and there is nothing which might result in an increase in the premium payable under any of the Policies.

18.	Compliance and Litigation

18.1	Compliance with Laws

The Company is entitled to carry on its operation of the Company and/or the Business without conflict with any valid right of any person, firm or company and the Company has conducted its operation and/or business in accordance with all applicable laws and

regulations and there is no violation of, or default with respect to, any statute, regulation, order, decree or judgement of any court or any Governmental Entity which may have an adverse effect upon the assets, operations or business of the Company.

18.2	Licences and Consents

All necessary licences, consents, permits and authorisations (public or private) have been obtained by the Company to enable the Company to carry on its operations and/or the Business effectively in the places and in the manner in which such operation and/or business is now carried on and all such licences, consents, permits and authorisations are valid and subsisting and the Sellers know of no reason why any of them should be suspended, cancelled or revoked.

18.3	Current Litigation

Neither the Company, nor any person for whose acts or defaults the Company may be vicariously liable, is subject to any outstanding order, decree or court stipulation or involved in any civil, criminal or arbitration proceedings (including any restitution proceedings). No such order, decree, stipulation or proceedings are pending or threatened by or against the Company or any such person and, so far as the Sellers are aware, there are no facts or circumstances which are likely to lead to any such order, decree, stipulation or proceedings and no person or authority has made any statement suggesting that he or it might initiate such order, decree, stipulation or proceedings.

18.4	Past Litigation

(a)

During the six years prior to the date of this Deed, civil, criminal, arbitration, administrative or other proceedings (including any restitution proceedings) in any jurisdiction have been commenced by or against the Company nor have any such proceedings been threatened, settled or compromised.

(b)

During the six years prior to the date of this Deed no civil, criminal, arbitration, administrative or other proceedings (including any restitution proceedings) in any jurisdiction have been commenced by or against any officer, agent or employee (past or present) of the Company as a result of any act or omission by him in the course of his duties to the Company nor have any such proceedings been threatened, settled or compromised.

18.5

Judgments

Neither the Company nor any of its officers, agents or employees (past or present), in his capacity as such, is subject to any order, decree, award, decision or judgment given by any court, tribunal, arbitrator, governmental agency or other regulatory body (including in respect of any restitution proceedings or claims) in any jurisdiction nor is it/he a party to any undertaking or assurance given to any court, tribunal, arbitrator, governmental agency or other regulatory body which is still in force. So far as the Sellers are aware, there are no facts or circumstances which may result in its/his becoming subject to any such order, decree, award, decision or judgment or being required to be a party to any such undertaking or assurance.

18.6	Anti-Bribery and Corruption

(a)

The Company has not, directly or indirectly:

(i)

given, promised, offered or authorised; or

(ii)

accepted, requested, received or agreed to receive,

any payment, gift, reward, rebate, contribution, commission, incentive, inducement or advantage to or from any person, in contravention of any Anti-Bribery and Corruption Laws.

(b)

The Company has instituted, maintained and monitored policies and procedures that are designed to ensure, and which are reasonably expected to continue, continued compliance with the Anti-Bribery and Corruption Laws.

(c)

Neither the Company nor any of its directors, officers, employees or agents is currently the target of any economic or financial sanctions, including, without limitation, being a person (“Sanctions Target”):

(i)

listed in any list of sanctioned persons maintained by the U.S. Government, including by the Office of Foreign Asset Control of the U.S. Department of the Treasury, the U.S. Department of State, by the United Nations Security Council, the European Union or by the United Kingdom through HM Treasury;

(ii)

operating, organised or resident in a country or territory which is itself the subject or target of any economic or financial sanctions; or

(iii)

owned or controlled by any such person or persons.

(d)

At no time during the prior three years has the Company or any of its directors, officers, employees or agents has been the subject of current or pending, investigation, enforcement proceedings for violations of economic or financial sanctions laws.

(e)

At no time during the prior three years has the Company or nor any of its directors, officers, employees or agents engaged in any trade with or provided services to a Sanctions Target in breach of any economic or financial sanctions laws nor is the Company or any of its officers, directors, employees or contractors currently engaged in any such activities in breach of any economic or financial sanctions laws.

18.7	Investigations

Neither the Company nor any of its officers, agents or employees (past or present), in his capacity as such, is subject to any investigation, enquiry or disciplinary proceedings (whether judicial, quasi-judicial or otherwise). No such investigation, enquiry or disciplinary proceedings are currently pending or threatened and, so far as the Sellers are aware, there are no facts or circumstances which may give rise to any such investigation, enquiry or disciplinary proceedings.

18.8	Unlawful Payments

Neither the Company nor any of its officers, agents or employees (past or present) in the course of his duties to the Company has:

(a)

induced a person to enter into an agreement or arrangement with the Company by means of an unlawful or immoral payment, contribution, gift or other inducement; or

(b)

offered or made an unlawful or immoral payment, contribution, gift or other inducement.

19.	Insolvency

19.1

General

(a)

The Company is not insolvent or in imminent danger of bankruptcy under Section 3 of the Insolvency Act and has not stopped paying its debts as they fall due. The Company has not been the subject of (i) an insolvency petition, (ii) a motion to commence enforcement proceedings or similar motion/petition in the relevant jurisdiction or under the previously applicable Czech legislation, or (iii) tax enforcement proceedings under Czech Act No. 280/2009 Coll., the Tax Code, as amended, or similar proceedings under the respective jurisdiction or according to previously applicable Czech legislation. There is no threat of such petition being filed, or (iv) no compulsory auction is being conducted pursuant to Czech Act No. 26/2000 Coll., on Public Auctions, as amended, and there is no threat of such auction taking place.

(b)

No receiver or administrative receiver or manager or receiver and manager or trustee or similar person has been appointed over the whole or any part of the assets or undertaking of the Company. Nor has any other step been taken (including the taking of possession by a mortgagee or charge) to enforce any Encumbrance over any of the assets of the Company and no event has occurred to give the right to enforce such Encumbrance.

(c)

No court has declared the Company to be an invalid legal person within the meaning of Section 129 of the Czech Civil Code, and no such proceedings are taking place. No petition has been filed and no decision has been adopted by the competent bodies of the Company, or by any court concerning the liquidation of the Company, or any transformation of the same within the meaning of the applicable legislation which has not been registered in the Commercial Register.

19.2	Administration

No provisional liquidator, trustee or administrator has been appointed in relation to the Company. No notice has been given or filed with the court of an intention to appoint an administrator. No petition or application has been presented or order made for the appointment of an administrator in respect of the Company.

19.3	Moratorium

No moratorium has been declared or has taken effect in respect of any indebtedness of the Company.

19.4	Arrangements with creditors

There are no proceedings in relation to any compromise or arrangement with creditors or any winding up, bankruptcy or other insolvency proceedings concerning the Company and, so far as the Sellers are aware, no events have occurred which would justify such proceedings or which could lead to the Company being dissolved and its assets being distributed.

19.5	Scheme of arrangement

No compromise or arrangement has been proposed, agreed to or sanctioned in respect of the Company, nor has any application been made to, or filed with, the court for permission to convene a meeting to vote on a proposal for any such compromise or arrangement.

19.6	Overseas Insolvency

There has not occurred, in relation to the Company or any of its assets in any country or territory in which it is incorporated or carries on its operations and/or business or to the jurisdiction of whose courts it or any of its assets is subject, any event which corresponds in that country or territory with any of those mentioned in paragraphs 19.1 to 19.5.

20.	Officers and Employees

20.1	Particulars

(a)

The Data Room contains complete and accurate details, as at the date of this Deed, a true and accurate list of all the employees who are employed in the Company and/or Business including those who are on any leave of absence (including without limitation maternity leave, disability or other long-term leave of absence) and shows in relation to each employee:

(i)

gender, date of birth, date employment commenced and date continuous employment commenced (if different), period of continuous service and workplace location;

(ii)

all other terms and conditions of employment including where applicable job title or job function, job grade, pay, notice periods, holiday entitlements, sick pay, benefits (car, healthcare etc.), restrictive covenants and any entitlements to severance or other payments on termination of employment (including enhanced redundancy payments);

(iii)

arrangements relating to hours of work, part-time work, overtime or shift arrangements and any on call or similar arrangements and any entitlement to payments relating to such arrangements;

(iv)

holiday entitlements and the basis on which holiday pay is calculated and paid and has been calculated and paid during the period of 24 months immediately preceding the date of this Deed;

(v)

the terms of any share option, bonus, commission, incentive or other similar scheme in which any of the employees are entitled to participate (together with details of their entitlements);

(vi)

a copy of the staff handbook and/or standard terms and conditions applicable in respect of all officers, directors and employees. and

(vii)

any disciplinary or grievance procedures (including any appeal procedures) relating to any of the employees;

(b)

No change in relation to any of the information in paragraphs 20.1(a)(i) to 20.1(a)(vii) (inclusive) is due to any employee within six months from the date of this Deed and no request for any such change has been received from any employee.

(c)

The Company has not made any outstanding offer or agreed to employ or engage any person who is not an employee of the Company at the date of this Deed.

(d)

The Company is not party to, bound by or proposing to introduce in respect of any of its current or former directors, employees, workers or contractors any incentive scheme (including, without limitation, any share option or other equity or equity-related arrangement, commission, profit sharing or bonus scheme).

(e)

There are no sums owing to or from (or that have accrued for the benefit of) any employee or worker other than reimbursement of expenses, wages for the current salary period, holiday pay for the current holiday year and employee season-ticket loans entered into in the ordinary course of business. Any carried forward holiday entitlements, or payments in lieu thereof, have been made or accrued in the Company’s accounts.

(f)

No employee will be entitled to receive any payment or benefit arising out of or in connection with either this Deed and/or Completion.

(g)

The employees are all employed by the Company and work wholly or mainly in the Business and there are no other employees, or any other person, who are employed or engaged wholly or mainly in the Business and/or the operations of the Company.

(h)

Any independent contractor, agent and consultant has been properly classified by the Company as an independent contractor (as opposed to an employee) and the Company has not received any notice, complaint or dispute from any authority or current or former contractor, disputing such classification.

20.2	Compliance

(a)

The Company has complied in all material respects with all its obligations to or in respect of all its current and former employees, workers, consultants and contractors arising out of their terms and conditions of employment or engagement, the Company’s employment practices, and/or with any relevant requirement under the laws in any applicable jurisdiction.

(b)

The Company has not in the past six years incurred any liability for the failure to comply with all Laws respecting occupational health and safety, or any liability relating to the classification and compensation of employees and independent contractors, wages and hours (including without limitation minimum wage and overtime), and withholdings and deductions.

20.3

Notices

(a)

The contract of employment of each employee of the Company may be terminated by the Company without compensation (other than that payable by statute) by giving at any time no more than three months’ notice.

(b)

No employee is currently in the process of being made redundant, nor has been made redundant in the last 12 months.

(c)

No employee has given notice to terminate his contract of employment or is under notice of dismissal.

(d)

No employee intends to resign in connection with this Deed.

20.4

Disputes

There are no existing claims in relation to the Company by or in respect of any employee or former employee in respect of his employment.

20.5	Trade Unions

(a)

The Company does not have any agreement or arrangement with or recognise a trade union or other collective bargaining agreement or arrangement and the execution of any collective bargaining agreement currently negotiated will not have material adverse effect on the Company’s obligation towards its employees.

(b)

There has not during the 12 months prior to the date of this Deed been, nor is there currently in progress, any strike, work stoppage, work to rule, lock out or overtime ban or other industrial, trade union or works council action by the employees of the Company which has disrupted its operation and/or the Business, and there is nothing likely to give rise to such a dispute or claim.

(c)

The Company has not in the past six years incurred any liability for failure to provide information, notify or to otherwise consult with employees under any applicable Law.

20.6	Work Permissions

Every employee of the Company who requires permission (including a residency visa or work permit) to work in the country in which they work has current and appropriate permission to do so and no such permissions have lapsed or expired. The Company does not sponsor any person for work and/or residency visa where that person is not an employee whose sole work is carried out for the Company.

20.7	TUPE Transfers

No person has transferred to, or from, the Company by operation of the Transfer of Undertakings (Protection of Employment) Regulations 2006 or otherwise in the two years before the date of this Deed.

21.	Pensions

21.1

Details of each scheme, arrangement or agreement for the provision of pension, retirement, savings, death, ill-health, disability or accident, vacation, bonuses, compensation, fringe benefit or other employee benefits (each, a “Scheme”) to which the Company is a party to, operates, contributes to or participates in, or with respect to which the Company has any liability (contingent or otherwise) (the “Disclosed Schemes”) and copies of the relevant terms and rules currently governing each of the Disclosed Schemes are in the Data Room.

21.2	Apart from the Disclosed Schemes, the Company is not a party to and does not operate, contribute to or participate in or have any liability (contingent or otherwise) with respect to any Scheme.

21.3

Save for the current payment period, there are no material contributions or premium payments due from the Company to the Disclosed Schemes (other than those Disclosed Schemes which do not require funds to be contributed to them) which have not been paid or specifically provisions in the Accounts and the Company has complied in all material respects with its obligations under the Disclosed Schemes.

21.4	A list of individuals who are contributing members of any Disclosed Scheme with details of the rates of contribution (member and employer) and such other data as is necessary to establish their respective entitlements to contributions under the Disclosed Schemes is in the Data Room.

21.5	No Disclosed Scheme is, or within the preceding six years has been, the subject of any examination or participated in any correction programme by any relevant regulator.

22.	Property

22.1	The Property comprises all the real property owned, occupied or otherwise used for the operation of the Company and/or the Business and is free from any Encumbrances.

22.2

The information in respect of the Property set out in Schedule 3 is true, accurate and not misleading and the Company is the sole legal and beneficial owner of, is in possession and actual occupation of (or is entitled to possess and occupy), the whole of the Property on an exclusive basis, and has good and marketable title to the Property.

22.3	The Company has not entered into any agreement (whether written or oral) to acquire any other interest in real property which has not been completed.

22.4	The Property is not and has not been, subject to any restitution proceedings (and no grounds on the basis of which it could be subject thereto exists) or any insolvency or other similar proceedings, nor proceedings on enforcement of court.

22.5	The Company has not entered into any agreement (whether written or oral) to acquire any other interest in real property which has not been completed.

22.6	Neither the Company nor any Seller has entered into any agreement (whether written or oral) or commitment to dispose of or encumber the Property or any part of it.

22.7

The Company does not have any actual or contingent liability (whether as owner, former owner, licensee or as tenant or former tenant, or as original contracting party, or as guarantor of any party) in relation to any real property, freehold or leasehold, other than in as Disclosed respect of the Property.

22.8

The Company is in physical possession and actual occupation of the Property on an exclusive basis, no part of any building on the Property is vacant and no right of occupation or enjoyment has been acquired or is in the process of being acquired by any third party or has been granted or agreed to be granted to any third party in respect of the Property.

22.9	The Property is not being used nor is it intended or required by the Company to be used other than for the permitted use under applicable planning or zoning legislation.

22.10

There are no outstanding notices, actions, disputes, claims or demands between the Company and any third party relating to or affecting the Property or any other premises adjacent to the Property and none are threatened.

22.11

No buildings or structures on the Property are undergoing substantial works or construction, refurbishment or alteration or have done so in the last five years and there are no proposals for the development of the Property (including traffic proposals, schemes or other substantial works in the vicinity of the Property).

22.12

The Property or any part thereof, has not been contributed to the registered capital of any company, co-operative or trust (in Czech: svěřenský fond) or a similar legal vehicle.

22.13

The Property enjoys direct access to and access from public roads.

22.14

There are no structures, utility connections, or assets owned by third parties located on the Property without a proper easement or similar right established.

22.15

There exist water, sewerage, electric, gas and telephone utility service adequate for the intended use of the Property, all of which are connected to the mains by media located entirely on, in or under the Property. All utility connections serving the Property are owned by the Company.

22.16

The wear and tear of the individual parts of the Property corresponds in all material respects to the age of the individual parts of the Property and (ii) there are no structural defects or physical damage to the Buildings fabric which could substantially affect or hinder the current use of the Property.

22.17

All Laws relating to the protection of the Property against fire have been fully complied with. The Property has the required fire protection systems installed.

23.	Environmental Matters

23.1	The Company (and each of its officers, employees and agents in the course of its operations and/or Business) complies and has complied with all applicable Environmental Law in all material respects and any agreement, covenant, undertaking,

guarantee or indemnity under which it has any obligation or liability and the Company has not received any notification under Environmental Law or any such agreement, covenant, undertaking, guarantee or indemnity requiring it to take or omit to take any action.

23.2	The Company possesses all Environmental Consents required for the purposes of carrying out its business and/or operation.

23.3

Neither the Company nor any person for whose acts or defaults the Company may be vicariously liable is involved, or has in the last six years been involved, in nor is there pending or threatened against the Company nor any person for whom it is vicariously liable, any civil, criminal, arbitration, administrative proceeding or inquiry relating to the Environment and no fact or circumstance exists which might give rise to any of the aforesaid.

23.4	There are no environmental or health and safety surveys, reports, studies, tests, insurance appraisals, assessments or audit reports or associated documentation and correspondence relating to the assets, operation and business of the Company.

23.5	No Hazardous Substance has in the last six years been or is being disposed of, stored, kept or is present on, in or under any Property, nor so far as the Sellers are aware in water or the ground or groundwater on or under any Property.

23.6

The Company has not been notified that the condition of any Property is not such that any investigation, treatment, remediation or other works are or could be required under Environmental Law or any covenant, undertaking, guarantee or indemnity under which the Company has or may have an obligation or liability, or would be undertaken by a prudent owner or occupier of any Property.

23.7	There have not been and there are not now any releases or emissions or any threats of any releases or emissions into the Environment of any Hazardous Substance from or at the Property.

24.

Tax

24.1	Tax Returns and Compliance

(a)

The Company has submitted on a timely basis every material Tax return, notice and computation, and provided on a timely basis all information, it is required by law to submit to any Tax Authority, each such Tax return, notice and computation and all such information is true, accurate and complete in all material respects, and no such return, notice, computation or information is the subject of any dispute with any Tax Authority, nor, so far as the Sellers are aware, is it likely to become so subject.

(b)

The Company has discharged every material Tax liability which has fallen due and there is no Tax liability in respect of which the date for payment has been postponed by agreement with the relevant Tax Authority or by virtue of any right under any Tax legislation.

(c)

The Company has properly made all material deductions, withholdings and retentions required to be made by it and has accounted for all such deductions, withholdings and retentions to each relevant Tax Authority.

(d)

The Company is not, and has not been, liable to pay a material penalty, surcharge or fine in connection with Tax.

(e)

The Company has no liability for deferred tax.

(f)

The Company has not in the last four years been, nor is currently, subject to any non-routine investigation, audit, enquiry or visit by any Tax Authority, and so far as the Sellers are aware no such investigation, audit, enquiry or visit is expected.

(g)

All material records which the Company is required to keep for Tax purposes or which are necessary to calculate the Company’s liability to Tax (including on any future disposal of its assets) have been duly kept and are in the possession of the Company.

(h)

The gross book value shown in, or adopted for the purposes of, the Accounts as the value of each of the tangible fixed assets of the Company does not exceed the amount which on a disposal of such asset at the date of this Deed would be deductible as acquisition cost in computing the capital gain or deductible loss.

24.2	No distribution or deemed distribution has been made (or will be deemed to have been made) by the Company, except dividends shown in their statutory accounts, and the Company is not bound to make any such distribution.

24.3	Tax Grouping

The Company has not at any time in the last three years: (i) had its tax affairs or payments dealt with on a consolidated or group basis with any person, or (ii) entered into any tax sharing arrangement.

24.4	Transfer Pricing

(a)

So far as the Sellers are aware the Company is not, nor has been, party to any transaction or arrangement for which the pricing stands to be adjusted under applicable transfer pricing or thin capitalization legislation.

(b)

All transactions entered into by the Company have been on arm’s length terms.

24.5	Tax Residence

The Company is resident for tax purposes solely in the jurisdiction in which it is incorporated. The Company does not have any taxable branch, agency, permanent or fixed establishment, or other taxable presence, in any other jurisdiction.

24.6	Tax Avoidance

So far as the Sellers are aware, the Company has not been party to any transaction which is required to be disclosed to any Tax Authority under any rules requiring disclosure of tax-advantaged transactions.

24.7	Value Added Tax

(a)

The Company, if is required to be registered, is properly registered for the purposes of VAT in each jurisdiction in which it is liable to be so registered.

(b)

The Company has complied in all material respects with all Tax legislation concerning VAT, and has made, obtained and kept up to date accurate records, invoices and other documents appropriate or requisite for the purposes of such Tax legislation.

(c)

The Company is not, nor has it been, partially exempt from VAT, and the Sellers are not aware of any circumstances by which the Company might not be entitled to credit for all VAT chargeable on supplies received, and imports and acquisitions made, by it.

(d)

All Material Contracts are subject to VAT which is accounted for by the Company under the ‘reverse charge’ mechanism such that no cash payment is paid to the supplier in respect of such VAT amount.

24.8	Stamp Duty

All material documents in the enforcement of which the Company may be interested have been duly stamped and/or had any relevant transfer duties or Taxes paid.

24.9	Clearances

(a)

No Tax Authority has agreed to operate any special arrangement (being an arrangement not available to taxpayers generally and not specifically provided for in tax legislation) in respect of the Tax affairs of the Company. The Company is recipient of Investment Incentives from the Czech Tax Authority.

(b)

Each material Tax Authority clearance or ruling on which the Company relies or has in the last four years relied was made on the basis of full and accurate disclosure and the Company has complied with any applicable conditions thereto. All such clearances or rulings have been disclosed in the Data Room.

24.10

Tax Indemnity

The Company is not bound by any material indemnity, guarantee or covenant to pay in respect of Tax in connection with the disposal of any interest in any entity.

24.11

Completion

(a)

No material liability to Tax will arise for the Company as a result of the entry into or Completion of this Deed or any other Transaction Documents.

(b)

The Company did not own as at the Accounts Date any asset which, if disposed of at the date of this Deed for consideration equal to its net book value as

included in the 2019 Accounts, would give rise to a clawback or disallowance of depreciation relief.

24.12

Position since the Accounts Date

(a)

The Accounts include proper provision or reserve, as at the Accounts Date, in accordance with applicable accounting standards for Taxation for which the Company is or will become liable to account.

(b)

Since the Accounts Date the Company has not disposed of any material capital asset or, so far as the Sellers are aware, entered into any other transaction outside the ordinary course of business which will give rise to any material tax liability, or incurred any material item of revenue expenditure which will not be deductible for tax purposes other than in accordance with past practice.

(c)

The Company has duly made all material claims, elections or consents in respect of Tax which are assumed to have been made for the purposes of the Accounts.

24.13

Secondary liability

So far as the Sellers are aware, the Company is not, nor is likely to become, liable for any Tax which is the primary liability of any person other than the Company.

24.14

Tax deductions

Except to the extent reflected in the 2019 Accounts, the Company does not stand to have any deduction which would otherwise be allowable for tax purposes denied as a result of any applicable rules on hybrid and other mismatches or corporate interest restriction (or equivalent rules) in respect of any period or part period ending on or before Completion.

24.15

Employment related securities

The Company will not be obliged to pay or account for any income tax or social security contributions in consequence of the entry into or Completion of this Deed or any vesting, transfer, exercise, redemption or other transaction in shares, securities or options in connection therewith.

24.16

Employment status

The persons treated by the Company for taxation and social security purposes as employees correctly include all persons who should be so treated.

25.	Disclosures

25.1

So far as the Sellers are aware, the Sellers have Disclosed all such information and copies of all documents relating to the Sellers, the Sale Shares, the Company and the business, assets and labilities of the Company that would be material to a prudent purchaser considering the acquisition of the Company, acting reasonably and being advised by professional advisors.

25.2	The documents disclosed in the Data Room in the form provided to the Buyer constitute true and correct copies of such documents and materials held by the Company and/or the Sellers.

SCHEDULE 6

LIMITATIONS ON LIABILITY

1.	Monetary Limits on Claims

1.1	The maximum aggregate liability of the Sellers for all Business Warranty Claims and all Tax Claims shall not exceed an amount equal to [***].

1.2	The Sellers shall not be liable in respect of a Business Warranty Claim unless and until:

(a)

the amount of each individual Business Warranty Claim exceeds [***], in which event, subject to paragraph 1.2(b), the Sellers’ liability, in respect of such Business Warranty Claim, shall be for the total amount of such Business Warranty Claim and shall not be limited to the excess only (and for this purpose, a number of Business Warranty Claims arising out of the same, related or similar matters, facts or circumstance shall be aggregated and form a single Business Warranty Claim); and

(b)

the aggregate amount of all Business Warranty Claims against the Sellers exceeds [***] (the “Threshold”), in which event the Sellers’ liability shall be for the total amount of all Business Warranty Claims and shall not be limited to the amount in excess of the Threshold.

1.3

For the purposes of calculating the Business Warranty Claims that count towards the Threshold, there shall be included in any Business Warranty Claim the amount of any costs, expenses and other liabilities reasonably incurred by the Buyer and the Company in connection with the making of any such claim.

2.	Time Limits for Claims

2.1	The Sellers shall not be liable in respect of a Tax Claim or the Business Warranty Claim unless written notice of such claim (the “Notice”) is served upon the Sellers:

(a)

in the case of a Tax Claim on or prior to [***]; and

(b)

in the case of a Business Warranty Claim on or before the [***] of the Completion Date,

2.2	Following the giving of Notice under paragraph 2.1(b):

(a)

where the claim arises by reason of a liability of the Buyer or a member of the NVAX Group, which at the time of service of the notice, is contingent only or otherwise not capable of being quantified, the liability of the Sellers shall determine, if legal proceedings in respect of such claim have not been commenced within [***] of such claim ceasing to be contingent or becoming capable of being quantified; or

(b)

where the claim does not fall within paragraph 2.2(a) above, the liability of the Sellers shall determine, if legal proceedings have not been commenced within [***] of the service of such notice.

2.3

The Notice shall provide reasonable details (to the extent that such details are known to the Buyer) of the nature of the Business Warranty Claim or Tax Claim (as the case may be), the circumstances that have given rise to it, the calculation of the amount claimed (so far as it is possible for the Buyer to calculate such amount), references to the particular provision of this Deed, in each case on a without prejudice basis, and reasonable documentation (if available) evidencing the Business Warranty Claim (provided that any failure by the Buyer to provide any of such details shall not prejudice the Business Warranty Claim or Tax Claim in question).

2.4

Without prejudice to any remedies available to the Buyer except as expressly provided in this Deed, the Buyer shall provide the Sellers with a reasonable period of at least [***] for assessment of the Notice and/or the alleged Business Warranty Claim in which they may decide to remedy it to the reasonable satisfaction of the Buyer to the extent that the relevant breach is capable of remedy and without any loss to any NVAX Group Company.

2.5	Nothing in this Schedule 7 shall have the effect of limiting or restricting any liability in respect of a claim resulting from fraud, fraudulent misrepresentation, dishonesty or wilful concealment.

3.	Double Claims

If the same fact, matter, event or circumstance gives rise to more than one claim for breach of any Business Warranties of this Deed, the Buyer shall not be entitled to recover more than once in respect of the same loss.

4.	Changes and/or after Completion and other Exclusions

4.1	The Sellers shall not be liable for any claim or to the extent that it arises, or is increased or extended by:

(a)

any change to legislation, any increase in rates of Taxation or any change in the published practice of a revenue authority, in each case that came in force on or after the Completion but not actually or prospectively in force at the date of this Deed;

(b)

any change in the accounting reference date of the Company made on and/or after Completion; or

(c)

any change in any accounting policy or practice of the Company made on or after Completion, save where such change is required to conform such policy or practice with relevant accounting standards, or where such change is necessary to correct an improper policy or practice.

4.2	The Sellers shall not be liable for any Business Warranty Claim or Tax Warranty Claim to the extent that:

(a)

the Sellers remedy such claim to the reasonable satisfaction of the Buyer without any loss to the Company or any member of the NVAX Group within [***] of the notice of the relevant claim; or

(b)

such claim directly and solely arises as a result of any voluntary act, omission, transaction or arrangement carried out by, at the written request of, or with the written approval of the Buyer save where such action act, omission, transaction or arrangement was taken, made or entered into to comply with applicable laws, regulation and the rules of any Governmental Entity and/or any contractual obligation binding on the NVAX Group.

5.	Reimbursement of Claims

5.1

If, after the Sellers have made any payment in respect of a Business Warranty Claim, the Buyer recovers from a third party a cash sum which is directly referable to that payment (the “Recovery Amount”), then the Buyer shall forthwith repay (or procure the repayment of) to the Sellers so much of the Recovery Amount (less any Taxes incurred in relation thereto and all reasonable costs, charges and expenses incurred in making such recovery) as does not exceed [***].

5.2

If the Buyer or the Company becomes entitled to recover from some other person any sum in respect of any matter giving rise to a Business Warranty Claim made by the Buyer against the Sellers for a breach of any Business Warranties, the Buyer shall and shall procure that the Company shall take reasonable steps to enforce such recovery and shall repay to the Sellers the amount paid by it to the Buyer or the Company up to, but not exceeding, the sum recovered from such other person less any Taxes incurred in relation thereto and any actual or projected increased costs in obtaining insurance which the Buyer reasonably determines are directly or indirectly attributable to the fact(s) or matter(s) giving rise to such Warranty Claim.

6.	Mitigation

Nothing in this Schedule 7 will in any way restrict or limit the general obligation of the Buyer (or the relevant members of the NVAX Group) to mitigate any loss or damage which it may suffer as a result of any matter giving rise to any Warranty Claim.

7.	Insurance

If at any time after Completion the Sellers wish to insure all or any part of its liability in respect of any Business Warranty Claim, the Buyer shall provide such information as the Sellers or any prospective insurer or broker may reasonably require for the purposes of effecting such insurance subject to such insurer or broker providing confidentiality undertakings in favour of the Company and/or the Buyer to the reasonable satisfaction of the Buyer and provided always that the Buyer shall not be required to provide any information which reasonably breach or endanger the Buyer’s (or any member of the NVAX’s Group’s) legal privilege.

Certain Schedules Omitted from Share Purchase Agreement

Pursuant to Regulation S-K, Item 601(a)(5), certain schedules to the Share Purchase Agreement, as listed below, have not been filed. The Registrant agrees to furnish supplementally a copy of any omitted schedules or exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.

SCHEDULES

Material Contracts

Data Room Index

IN WITNESS of which this Deed has been duly executed and delivered as a deed on the date which first appears on page 1 above.

Executed as a DEED by	)
NOVAVAX AB	)		/s/ Magnus Savenhed
	)	By:	Magnus Savenhed
acting by:		Title:	Chief Executive Officer


In the presence of:

Witness Signature:			/s/ Jenny Savenhed

Witness Name:			Jenny Savenhed

Witness Address:			[***]





Witness Occupation:			Operation Manager, Vahenfall

Signature Page to the Share Purchase Agreement


Executed as a DEED by	)
NOVAVAX, INC.	)		/s/ John A. Herrmann III
	)	By:	John A. Herrmann III
acting by:		Title:	Senior Vice President, General Counsel and Corporate Secretary


In the presence of:

Witness Signature:			/s/ John Trizzino

Witness Name:			John Trizzino

Witness Address:			[***]





Witness Occupation:			Chief Financial Officer, Novavax, Inc.

Signature Page to the Share Purchase Agreement

Executed as a DEED by	)
BILTOVEN BIOLOGICALS BV	)		/s/ Dr. R. H. Van Dam
	)	By:	Dr. R. H. Van Dam
acting by:		Title:	Director


In the presence of:

Witness Signature:			/s/ Jorrit Van Hoorn

Witness Name:			Jorrit Van Hoorn

Witness Address:			[***]





Witness Occupation:			Executive Advisor

Signature Page to the Share Purchase Agreement

Executed as a DEED by	)
POONAWALLA SCIENCE PARK BV	)		/s/ Dr. R. H. Van Dam
	)	By:	Dr. R. H. Van Dam
acting by:		Title:	Director


In the presence of:

Witness Signature:			/s/ Jorrit Van Hoorn

Witness Name:			Jorrit Van Hoorn

Witness Address:			[***]





Witness Occupation:			Executive Advisor

Signature Page to the Share Purchase Agreement

Executed as a DEED by	)
DE BILT HOLDINGS BV	)		/s/ Dr. R. H. Van Dam
	)	By:	Dr. R. H. Van Dam
acting by:		Title:	Director


In the presence of:

Witness Signature:			/s/ Jorrit Van Hoorn

Witness Name:			Jorrit Van Hoorn

Witness Address:			[***]





Witness Occupation:			Executive Advisor

Signature Page to the Share Purchase Agreement

Executed as a DEED by	)
SERUM INTERNATIONAL BV	)		/s/ Dr. R. H. Van Dam
	)	By:	Dr. R. H. Van Dam
acting by:		Title:	Director


In the presence of:

Witness Signature:			/s/ Jorrit Van Hoorn

Witness Name:			Jorrit Van Hoorn

Witness Address:			[***]





Witness Occupation:			Executive Advisor

Signature Page to the Share Purchase Agreement

Exhibit 10.4

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.

AWARD/CONTRACT

THIS CONTRACT IS A RATED ORDER UNDER DPAS(15 CFR 700)

RATING

PAGE OF PAGES

2. CONTRACT (Proc. Inst. Ident.) NO.

3. EFFECTIVE DATE

4. REQUISITION/PURCHASE REQUEST/PROJECT NO.

W911QY 20C0077

04 Jun 2020

0011504522

5. ISSUED BY

CODE

W911 QY

6. ADMINISTERED BY (If other than Item 5)

CODE

S2101A

W6QK ACC-APG NATICK

[***]

DEFENSE CONTRACT MANAGEMENT AGENCY

DCMA BALTIMORE

217 EAST REDWOOD STREET

SUITE 1800

BALTIMORE MD 21232-3375

SCD A

7. NAME AND ADDRESS OF CONTRACTOR (No., street, city, county, state and zip code)

NOVAVAX, INC.

20 FIRSTFIELD RD

GAITHERSBURG MD 20878-1760

8. DELIVERY

[ ] [***] [ X ] OTHER (See below)

9. DISCOUNT FOR PROMPT PAYMENT

Net 30 Days

10. SUBMIT INVOICES1

ITEM

(4 copies unless otherwise specified)

TO THE ADDRESS
SHOWN IN:

Section G

CODE 1UCZ4

FACILITY CODE

11. SHIP TO/MARK FOR

CODE

W56XNH

12. PAYMENT WILL BE MADE BY

CODE

HQ0490

[***]

DEFENSE FINANCE AND ACCOUNTING SERVICE

DFAS-INDY VP GFEBS

8899 E 56TH STREET

INDIANAPOLIS IN 46249-3800

13. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION:

[ X ] 10 U.S.C. 2304(c)( 2 ) [ ] 41 U.S.C. 253(c)( )

14. ACCOUNTING AND APPROPRIATION DATA

See Schedule

15 A. ITEM

NO. 15B. SUPPLIED SERVICES

15C. QUANTITY

15D. UNIT

15E. UNIT PRICE

15F. AMOUNT

SEE SCHEDULE

15G. TOTAL AMOUNT OF CONTRACT

$60,000,000.00

16. TABLE OF CONTENTS

(X)

SEC.

DESCRIPTION

PAGE(S)

(X)

SEC.

DESCRIPTION

PAGE(S)

PART I – THE SCHEDULE

PART II – CONTRACT CLAUSES

SOLICITATION/CONTRACT FORM

1 - 2

CONTRACT CLAUSES

13-19

SUPPLIES OR SERVICES AND PRICES/COSTS

3 - 4

PART III – LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.

DESCRIPTION/SPECS./WORK STATEMENT

LIST OF ATTACHMENTS

PACKAGING AND MARKING

PART IV – REPRESENTATIONS AND INSTRUCTIONS

INSPECTION AND ACCEPTANCE

REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFERORS

DELIVERIES OR PERFORMANCE

CONTRACT ADMINISTRATION DATA

9 – 11

INSTRS., CONDS., AND NOTICES TO OFFERORS

SPECIAL CONTRACT REQUIREMENTS

EVALUATION FACTORS FOR AWARD

CONTRACTING OFFICER WILL COMPLETE ITEM 17 (SEALED-BID OR NEGOTIATED PROCUREMENT) OR 18 (SEALED-BID PROCUREMENT) AS APPLICABLE

17. [X] CONTRACTOR’S NEGOTIATED AGREEMENT Contractor is required to sign this document and return 1 copies to issuing office.) Contractor agrees to furnish and deliver all items or perform all the services set forth or otherwise identified above and on any continuation sheets for the consideration stated herein. The rights and obligations of the parties to this contract shall be subject to and governed by the following documents: (a) this award/contract, (b) the solicitation, if any, and (c) such provisions, representations, certifications, and specifications, as are attached or incorporated by reference herein. (Attachments are listed herein.)

18. [ ] SEALED-BID AWARD (Contractor is not required to sign this document.)

Your bid on Solicitation Number ________________________________________

including the additions or changes made by you which additions or changes are set forth in full above, is hereby accepted as to the terms listed above and on any continuation sheets. This award consummates the contract which consists of the following documents: (a) the Government s solicitation and your bid, and (b) this award/contract. No further contractual document is necessary. (Block 18 should be checked only when awarding a sealed-bid contract.)

19A. NAME AND TITLE OF SIGNER (Type or print)

John A. Herrmann III SVP, General Counsel and Corp. Secretary

20A. NAME OF CONTRACTING OFFICER

[***] / CONTRACTING OFFICER

TEL: [***] EMAIL: [***]

19B. NAME OF CONTRACTOR

19C. DATE SIGNED

20B. UNITED STATES OF AMERICA

20C. DATE SIGNED

BY: /s/ John. A. Herrmann III

(Signature of person authorized to sign)

June 8 2020

BY: [***]

(Signature of Contracting Officer)

04-Jun-2020

AUTHORIZED FOR LOCAL REPRODUCTION	STANDARD FORM 26 (REV. 5/2011)
Previous edition is NOT usable	Prescribed by GSA – FAR (48 CFR) 53.214(a)

Page 2 of 18

Section A - Solicitation/Contract Form

LETTER CONTRACT

a. This document constitutes a contract on the terms and conditions set forth herein and signifies the intention of the U.S. Army Contracting Command (ACC-APG), Natick Contracting Division (NCD) - Ft. Detrick Branch to execute a cost type contract for the performance of the effort as set forth herein.

b. In accordance with Federal Acquisition Regulation (FAR) Clause 52.216-23 entitled “Execution and Commencement of Work,” you are directed to proceed immediately to commence performance of the work, and to pursue such work with all diligence to the end that the effort may be performed within the time specified in Section F hereof. You are reminded that, pending definitization, the maximum liability of the Government is as stated in FAR Clause 52.216-24, “Limitation of Government Liability,” incorporated in full text in Section I herein.

c. In accordance with Defense FAR Supplement (DFARS) 252.217-7027 entitled “Contract Definitization,” you shall submit a cost proposal for the effort covered by this document. Your proposal should be supported by a cost breakdown reflecting the factors outlined in FAR 15.408, Table 15-2, “Instructions for Submitting Cost/Price Proposals when Cost or Pricing Data are Required,” and such other information as may be specified herein. A Certificate of Current Cost or Pricing Data shall be submitted upon agreement on contract price.

d. The definitive contract resulting from this undefinitized action shall not exceed $60,000,000.00. Prior to definitization the Contractor shall not be authorized to make expenditures or incur obligations exceeding $21,952,384.00 in the performance of this effort.

e. Equipment purchases shall require KO approval prior to authorization.

f. Note: any purchase of Software licenses become Government property upon payment and in the event of contract completion or termination, license agreements shall transfer to the Government.

g. Equipment and material purchases from Prime and Sub contractors shall not include fee.

h. PDUFA, if applicable, shall be pass through only, no additional contractor charges shall apply.

i. Clauses requiring entries have in several cases been left incomplete for the purposes of entering into this Letter Contract, and will be completed during the definitization process.

j. Please indicate your acceptance of the foregoing by signing the attached Standard Form 26 and returning it with all supporting documentation to the issuing office.

Page 3 of 18

Section B - Supplies or Services and Prices

ITEM NO	SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
0001		1	Job		$60,000,000.00
	Vaccine Development and Production

	COST

	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:

	1. [***]

	2. [***] Production of Matrix M Adjuvant (non US or US based) to produce ten million (10M) doses

	3. [***]

	4. December 2020: Final drug product (ten million (10M) doses)

	5. [***]

	6. [***]

	[***] PSC CD: AJ45
	ESTIMATED COST				$60,000,000.00

Page 4 of 18


ITEM NO	SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
000101					[***]
	FUNDING ONLY
	FFP
	PURCHASE REQUEST NUMBER: 0011504522



		NET AMT			[***]

	ACRN AA				[***]
	CIN: GFEBS001150452200001


ITEM NO	SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
000102					[***]
	FUNDING ONLY
	FFP
	PURCHASE REQUEST NUMBER: 0011504522



		NET AMT			[***]

	ACRN AB				$[***]
	CIN: GFEBS001150452200002

The Contractor shall maintain a most favored customer provision for the product once authorized or licensed by the FDA, such that the Contractor shall not give any entity a better price than the DoD for a period of five (5) years from the award of this contract, limited to customers in the U.S. and purchases made in the U.S to include sale prices as compared to commercial clients with respect to quantity, location of delivery, fundamental differences in deliverable formulation, and material differences in terms and conditions for commercial contracts.

Page 5 of 18

Section C - Descriptions and Specifications

PERFORMANCE WORK STATEMENT (PWS)

PRODUCTION OF NOVAVAX MATRIX-M ADJUVANTED VACCINE AGAINST SARS-COV-2 IN
RESPONSE TO THE COVID-19 PANDEMIC

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.

2. Requirements:

Contractor shall conduct tech transfer of the production of the recombinant antigen component of NVX-CoV2373.

The Contractor shall manufacture enough bulk drug substance to produce ten million doses of vaccine drug product, all under Good Manufacturing practices and compatible with use in a late stage development clinical evaluation or Emergency Use Authorization.

The Contractor shall produce Matrix-M vaccine adjuvant for formulation of ten million doses of bulk drug substance (non US or US based).

The Contractor shall execute the fill/finish portion of vaccine development to meet the dose requirements listed above.

The Contractor shall ensure all quality control/assurance adhere to phase appropriate Good Manufacturing Practices., to ensure product quality and availability for use of the doses produced.

The Contractor shall establish within the United States large scale production of the Matrix-M adjuvant.

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.

The Contractor shall prepare all regulatory documentation needed for late stage clinical evaluation efforts for this vaccine.

Page 6 of 18

Section D - Packaging and Marking

PACKAGING AND MARKING

D.1. Packaging and marking of any deliverables pursuant to the provisions of this contract shall be in accordance with the contractor’s standard commercial practices.

D.2. Technical data items shipped shall be marked as follows:

[***], M.S. Contracting Officer’s Representative (COR)

Assistant Product Manager

[***]

Email: [***]

Phone: [***]

Page 7 of 18

Section E - Inspection and Acceptance

INSPECTION AND ACCEPTANCE TERMS

Supplies/services will be inspected/accepted at:

CLIN	INSPECT AT	INSPECT BY	ACCEPT AT	ACCEPT BY
0001	[***]	[***]	[***]	[***]
000101	N/A	N/A	N/A	N/A
000102	N/A	N/A	N/A	N/A

CLAUSES INCORPORATED BY REFERENCE


52.246-3	Inspection Of Supplies Cost-Reimbursement	MAY 2001
52.246-5	Inspection Of Services Cost-Reimbursement	APR 1984
52.246-8	Inspection Of Research And Development Cost Reimbursement	MAY 2001
52.246-16	Responsibility For Supplies	APR 1984

Page 8 of 18

Section F - Deliveries or Performance

DELIVERY INFORMATION


CLIN	DELIVERY DATE	QUANTITY	SHIP TO ADDRESS	DODAAC / CAGE

0001	POP 04-JUN-2020 TO	N/A	[***]	W56XNH
	03-JUN-2021
			[***]
			[***]

000101	N/A	N/A	N/A	N/A

000102	N/A	N/A	N/A	N/A

CLAUSES INCORPORATED BY REFERENCE


52.242-15	Stop-Work Order	AUG 1989
52.242-15 Alt I	Stop-Work Order (Aug 1989) - Alternate I	APR 1984
52.247-34	F.O.B. Destination	NOV 1991

Page 9 of 18

Section G - Contract Administration Data

ACCOUNTING AND APPROPRIATION DATA

AA: 09720202021013000018170551519252	S.0025760.7.5.4.5	6100.9000021001
COST CODE: AHPII
AMOUNT: [***]

AB: 09720202021013000018170446463252	S.0025760.7.5.1	6100.9000021001
COST CODE: AHPII
AMOUNT: [***]


ACRN	CLIN/SLIN	CIN	AMOUNT

AA	000101	GFEBS001150452200001	[***]
AB	000102	GFEBS001150452200002	[***]

CLAUSES INCORPORATED BY REFERENCE

252.232-7003 Electronic Submission of Payment Requests and Receiving DEC 2018 Reports

CLAUSES INCORPORATED BY FULL TEXT

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) 252.232-7003, Electronic Submission of Payment Requests and Receiving Reports.

(1)Have a designated electronic business point of contact in the System for Award Management at https://www.sam.gov: and

(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.

Page 10 of 18

(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*

Field Name in WAWF	Data to be entered in WAWF
Pay Official DoDAAC	HQ0490
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.

Page 11 of 18

(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)

CONTRACT ADMINISTRATION

G.1. Contract Administration:

a. In no event shall any understanding or agreement, contract modification, change order, or other matter in deviation from the terms of this contract between the contractor and a person other than the Contracting Officer be effective or binding upon the Government. All such actions must be formalized by a proper contractual document executed by the Contracting Officer.

b. The telephone, and E-mail address of the Contract Specialist (KS) and Procuring Contracting Officer (PCO) are:

Contract Specialist: [***]

Telephone Number: [***]

E-mail: [***]

Contracting Officer Name: [***]

Telephone Number: [***]

E-mail: [***]

c. The telephone number and E-mail address of the Contracting Officer’s Representative (COR) are:

Contracting Officer’s Representative: [***]

Telephone Number: [***]

E-mail: [***]

Section H - Special Contract Requirements

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. 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 provide at the following web site:

https://mrmc.amedd.army.mil/index.cfm?pageid=research_protections.acuro

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

Page 12 of 18

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

Section I - Contract Clauses

CLAUSES INCORPORATED BY REFERENCE

52.202-1	Definitions	NOV 2013
52.203-3	Gratuities	APR 1984
52.203-5	Covenant Against Contingent Fees	MAY 2014
52.203-6	Restrictions On Subcontractor Sales To The Government	SEP 2006
52.203-7	Anti-Kickback Procedures	MAY 2014
52.203-8	Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity	MAY 2014
52.203-10	Price Or Fee Adjustment For Illegal Or Improper Activity	MAY 2014
52.203-12	Limitation On Payments To Influence Certain Federal Transactions	OCT 2010
52.204-4	Printed or Copied Double-Sided on Postconsumer Fiber Content Paper	MAY 2011
52.204-7	System for Award Management	OCT 2018
52.204-19	Incorporation by Reference of Representations and Certifications	DEC 2014
52.204-23	Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab and Other Covered Entities	JUL 2018
52.204-25	Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment	AUG 2019
52.209-6	Protecting the Government’s Interest When Subcontracting With Contractors Debarred, Suspended, or Proposed for Debarment	OCT 2015
52.209-9	Updates of Publicly Available Information Regarding Responsibility Matters	OCT 2018
52.209-10	Prohibition on Contracting With Inverted Domestic Corporations	NOV 2015
52.215-10	Price Reduction for Defective Certified Cost or Pricing Data	AUG 2011
52.215-14	Integrity of Unit Prices	OCT 2010
52.215-15	Pension Adjustments and Asset Reversions	OCT 2010
52.215-18	Reversion or Adjustment of Plans for Postretirement Benefits (PRB) Other than Pensions	JUL 2005
52.215-19	Notification of Ownership Changes	OCT 1997
52.215-19	Notification of Ownership Changes	OCT 1997
52.215-22	Limitations on Pass-Through Charges-Identification of Subcontract Effort	OCT 2009
52.216-7	Allowable Cost And Payment	AUG 2018
52.216-24	Limitation Of Government Liability	APR 1984
52.219-28	Post-Award Small Business Program Rerepresentation	MAY 2020
52.222-3	Convict Labor	JUN 2003
52.222-19	Child Labor - Cooperation with Authorities and Remedies	JAN 2020

Page 13 of 18

52.222-20	Contracts for Materials, Supplies, Articles, and Equipment Exceeding $15,000	MAY 2014
52.222-21	Prohibition Of Segregated Facilities	APR 2015
52.222-26	Equal Opportunity	SEP 2016
52.222-35	Equal Opportunity for Veterans	OCT 2015
52.222-36	Equal Opportunity for Workers with Disabilities	JUL 2014
52.222-37	Employment Reports on Veterans	FEB 2016
52.222-40	Notification of Employee Rights Under the National Labor Relations Act	DEC 2010
52.222-50	Combating Trafficking in Persons	JAN 2019
52.223-3	Hazardous Material Identification And Material Safety Data	JAN 1997
52.223-6	Drug-Free Workplace	MAY 2001
52.223-18	Encouraging Contractor Policies To Ban Text Messaging While Driving	AUG 2011
52.225-8	Duty-Free Entry	OCT 2010
52.225-13	Restrictions on Certain Foreign Purchases	JUN 2008
52.227-1	Authorization and Consent	DEC 2007
52.227-1 Alt I	Authorization And Consent (Dec 2007) - Alternate I	APR 1984
52.227-2	Notice And Assistance Regarding Patent And Copyright Infringement	DEC 2007
52.227-3	Patent Indemnity	APR 1984
52.228-7	Insurance-Liability To Third Persons	MAR 1996
52.232-17	Interest	MAY 2014
52.232-23	Assignment Of Claims	MAY 2014
52.232-23 Alt I	Assignment of Claims (May 2014) - Alternate I	APR 1984
52.232-25	Prompt Payment	JAN 2017
52.232-33	Payment by Electronic Funds Transfer-System for Award Management	OCT 2018
52.232-39	Unenforceability of Unauthorized Obligations	JUN 2013
52.232-40	Providing Accelerated Payments to Small Business Subcontractors	DEC 2013
52.233-1	Disputes	MAY 2014
52.233-3	Protest After Award	AUG 1996
52.233-3 Alt I	Protest After Award (Aug 1996) - Alternate I	JUN 1985
52.233-4	Applicable Law for Breach of Contract Claim	OCT 2004
52.242-1	Notice of Intent to Disallow Costs	APR 1984
52.242-3	Penalties for Unallowable Costs	MAY 2014
52.242-4	Certification of Final Indirect Costs	JAN 1997
52.242-13	Bankruptcy	JUL 1995
52.244-2	Subcontracts	OCT 2010
52.244-2 Alt I	Subcontracts (Oct 2010) - Alternate I	JUN 2007
52.244-5	Competition In Subcontracting	DEC 1996
52.244-6	Subcontracts for Commercial Items	AUG 2019
52.245-1	Government Property	JAN 2017
52.246-25	Limitation Of Liability-Services	FEB 1997
52.249-6	Termination (Cost Reimbursement)	MAY 2004
52.249-14	Excusable Delays	APR 1984
52.253-1	Computer Generated Forms	JAN 1991
252.201-7000	Contracting Officer’s Representative	DEC 1991
252.203-7000	Requirements Relating to Compensation of Former DoD Officials	SEP 2011
252.203-7001	Prohibition On Persons Convicted of Fraud or Other Defense-Contract-Related Felonies	DEC 2008
252.203-7002	Requirement to Inform Employees of Whistleblower Rights	SEP 2013
252.204-7000	Disclosure Of Information	OCT 2016
252.204-7003	Control Of Government Personnel Work Product	APR 1992
252.204-7012	Safeguarding Covered Defense Information and Cyber Incident Reporting	DEC 2019

Page 14 of 18

252.209-7004	Subcontracting With Finns That Are Owned or Controlled By The Government of a Country that is a State Sponsor of Terrorism	MAY 2019
252.222-7006	Restrictions on the Use of Mandatory Arbitration Agreements	DEC 2010
252.225-7002	Qualifying Country Sources As Subcontractors	DEC 2017
252.225-7012	Preference For Certain Domestic Commodities	DEC 2017
252.225-7048	Export-Controlled Items	JUN 2013
252.226-7001	Utilization of Indian Organizations and Indian-Owned Economic Enterprises, and Native Hawaiian Small Business Concerns	APR 2019
252.227-7013	Rights in Technical Data—Noncommercial Items	FEB 2014¹
252.227-7016	Rights in Bid or Proposal Information	JAN 2011
252.227-7030	Technical Data-Withholding Of Payment	MAR 2000
252.227-7037	Validation of Restrictive Markings on Technical Data	SEP 2016
252.231-7000	Supplemental Cost Principles	DEC 1991
252.232-7003	Electronic Submission of Payment Requests and Receiving Reports	DEC 2018
252.232-7010	Levies on Contract Payments	DEC 2006
252.235-7002	Animal Welfare	DEC 2014
252.235-7004	Protection of Human Subjects	JUL 2009
252.235-7011	Final Scientific or Technical Report	DEC 2019
252.242-7006	Accounting System Administration	FEB 2012
252.243-7002	Requests for Equitable Adjustment	DEC 2012
252.244-7000	Subcontracts for Commercial Items	JUN 2013

¹Contractor’s vaccine candidate and sf9/baculovirus manufacturing platform have been developed with private funding (“Background IP”). No rights or license to Background IP are implied or granted to Government under this Contract.

CLAUSES INCORPORATED BY FULL TEXT

52.216-23 EXECUTION AND COMMENCEMENT OF WORK (APR 1984)

The Contractor shall indicate acceptance of this letter contract by signing three copies of the contract and returning them to the Contracting Officer not later than two (2) business days from award. Upon acceptance by both parties, the Contractor shall proceed with performance of the work, including purchase of necessary materials.

(End of clause)

52.216-25 CONTRACT DEFINITIZATION (OCT 2010)

(a) A Cost definitive contract is contemplated. The Contractor agrees to begin promptly negotiating with the Contracting Officer the terms of a definitive contract that will include (1) all clauses required by the Federal Acquisition Regulation (FAR) on the date of execution of the letter contract, (2) all clauses required by law on the date of execution of the definitive contract, and (3) any other mutually agreeable clauses, terms, and conditions. The Contractor agrees to submit a Cost proposal, including data other than certified cost or pricing data, and certified cost or pricing data, in accordance with FAR 15.408, Table 15-2, supporting its proposal.

(b) The schedule for definitizing this contract is December 2020 (150 Days After Award).

(c) If agreement on a definitive contract to supersede this letter contract is not reached by the target date in paragraph (b) above, or within any extension of it granted by the Contracting Officer, the Contracting Officer may, with the approval of the head of the contracting activity, determine a reasonable price or fee in accordance with

Page 15 of 18

Subpart 15.4 and Part 31 of the FAR, subject to Contractor appeal as provided with completion of the contract, subject only to the Limitation of Government Liability clause.

(1)After the Contracting Officer’s determination of price or fee, the contract shall be governed by—

(i)All clauses required by the FAR on the date of execution of this letter contract for either fixed-price or cost-reimbursement contracts, as determined by the Contracting Officer under this paragraph (c);

(ii) All clauses required by law as of the date of the Contracting Officer’s determination; and

(iii) Any other clauses, terms, and conditions mutually agreed upon.

(2)To the extent consistent with subparagraph (c)(1) above, all clauses, terms, and conditions included in this letter contract shall continue in effect, except those that by their nature apply only to a letter contract.

(End of clause)

52.216-26PAYMENTS OF ALLOWABLE COSTS BEFORE DEFINITIZATION (DEC 2002)

(a) Reimbursement rate. Pending the placing of the definitive contract referred to in this letter contract, the Government will promptly reimburse the Contractor for all allowable costs under this contract at the following rates:

(1) [***] of approved costs representing financing payments to subcontractors under fixed-price subcontracts, provided that the Government’s payments to the Contractor will not exceed [***] of the allowable costs of those subcontractors.

(2) [***] of approved costs representing cost-reimbursement subcontracts; provided, that the Government’s payments to the Contractor shall not exceed [***] of the allowable costs of those subcontractors.

(3) [***] of all other approved costs.

(b) Limitation of reimbursement. To determine the amounts payable to the Contractor under this letter contract, the Contracting Officer shall determine allowable costs in accordance with the applicable cost principles in Part 31 of the Federal Acquisition Regulation (FAR). The total reimbursement made under this paragraph shall not exceed [***] of the maximum amount of the Government’s liability, as stated in this contract.

(c) Invoicing. Payments shall be made [***] to the Contractor when requested as work progresses, but (except for small business concerns) not more often than every [***], in amounts approved by the Contracting Officer. The Contractor may submit to an authorized representative of the Contracting Officer, in such form and reasonable detail as the representative may require, an invoice or voucher supported by a statement of the claimed allowable cost incurred by the Contractor in the performance of this contract.

(d) Allowable costs. For the purpose of determining allowable costs, the term “costs” includes-

(1) Those recorded costs that result, at the time of the request for reimbursement, from payment by cash, check, or other form of actual payment for items or services purchased directly for the contract;

(2) When the Contractor is not delinquent in payment of costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid, for-

(i) Supplies and services purchased directly for the contract and associated financing payments to subcontractors, provided payments determined due will be made—

Page 16 of 18

(A) In accordance with the terms and conditions of a subcontract or invoice; and

(B) Ordinarily within [***] of the submission of the Contractor’s payment request to the Government;

(ii) Materials issued from the Contractor’s stores inventory and placed in the production process for use on the contract;

(iii) Direct labor;

(iv) Direct travel;

(v) Other direct in-house costs; and

(vi) Properly allocable and allowable indirect costs as shown on the records maintained by the Contractor for purposes of obtaining reimbursement under Government contracts; and

(3)The amount of financing payments that the Contractor has paid by cash, check, or other forms of payment to subcontractors.

(e) Small business concerns. A small business concern may receive more frequent payments than every [***].

(f) Audit. At any time before final payment, the Contracting Officer may have the Contractor’s invoices or vouchers and statements of costs audited. Any payment may be (1) reduced by any amounts found by the Contracting Officer not to constitute allowable costs or (2) adjusted for overpayments or underpayments made on preceding invoices or vouchers.

(End of clause)

52.232-22 LIMITATION OF FUNDS (APR 1984)

(a) The parties estimate that performance of this contract will not cost the Government more than (1) the estimated cost specified in the Schedule or, (2) if this is a cost-sharing contract, the Government’s share of the estimated cost specified in the Schedule. The Contractor agrees to use [***] to perform the work specified in the Schedule and all obligations under this contract within the estimated cost, which, if this is a cost-sharing contract, includes both the Government’s and the Contractor’s share of the cost.

(b) The Schedule specifies the amount presently available for payment by the Government and allotted to this contract, the items covered, the Government’s share of the cost if this is a cost-sharing contract, and the period of performance it is estimated the allotted amount will cover. The parties contemplate that the Government will allot additional funds incrementally to the contract up to the full estimated cost to the Government specified in the Schedule, exclusive of any fee. The Contractor agrees to perform, or have performed, work on the contract up to the point at which the total amount paid and payable by the Government under the contract approximates but does not exceed the total amount actually allotted by the Government to the contract.

(c) The Contractor shall notify the Contracting Officer in writing whenever it has reason to believe that the costs it expects to incur under this contract in the next [***], when added to all costs previously incurred, will exceed [***] of (1) the total amount so far allotted to the contract by the Government or, (2) if this is a cost-sharing contract, the amount then allotted to the contract by the Government plus the Contractor’s corresponding share. The notice shall state the estimated amount of additional funds required to continue performance for the period specified in the Schedule.

(d) [***] before the end of the period specified in the Schedule, the Contractor shall notify the Contracting Officer in writing of the estimated amount of additional funds, if any, required to continue timely performance under the

Page 17 of 18

contract or for any further period specified in the Schedule or otherwise agreed upon, and when the funds will be required.

(e) If, after notification, additional funds are not allotted by the end of the period specified in the Schedule or another agreed-upon date, upon the Contractor’s written request the Contracting Officer will terminate this contract on that date in accordance with the provisions of the Termination clause of this contract. If the Contractor estimates that the funds available will allow it to continue to discharge its obligations beyond that date, it may specify a later date in its request, and the Contracting Officer may terminate this contract on that later date.

(f) Except as required by other provisions of this contract, specifically citing and stated to be an exception to this clause-

(1) The Government is not obligated to reimburse the Contractor for costs incurred in excess of the total amount allotted by the Government to this contract; and

(2) The Contractor is not obligated to continue performance under this contract (including actions under the Termination clause of this contract) or otherwise incur costs in excess of (i) the amount then allotted to the contract by the Government or, (ii) if this is a cost-sharing contract, the amount then allotted by the Government to the contract plus the Contractor’s corresponding share, until the Contracting Officer notifies the Contractor in writing that the amount allotted by the Government has been increased and specifies an increased amount, which shall then constitute the total amount allotted by the Government to this contract.

(g) The estimated cost shall be increased to the extent that (1) the amount allotted by the Government or, (2) if this is a cost-sharing contract, the amount then allotted by the Government to the contract plus the Contractor’s corresponding share, exceeds the estimated cost specified in the Schedule. If this is a cost-sharing contract, the increase shall be allocated in accordance with the formula specified in the Schedule.

(h) No notice, communication, or representation in any form other than that specified in subparagraph (f)(2) above, or from any person other than the Contracting Officer, shall affect the amount allotted by the Government to this contract. In the absence of the specified notice, the Government is not obligated to reimburse the Contractor for any costs in excess of the total amount allotted by the Government to this contract, whether incurred during the course of the contract or as a result of termination.

(i) When and to the extent that the amount allotted by the Government to the contract is increased, any costs the Contractor incurs before the increase that are in excess of (1) the amount previously allotted by the Government or,

(2)if this is a cost-sharing contract, the amount previously allotted by the Government to the contract plus the Contractor’s corresponding share, shall be allowable to the same extent as if incurred afterward, unless the Contracting Officer issues a termination or other notice and directs that the increase is solely to cover termination or other specified expenses.

(j) Change orders shall not be considered an authorization to exceed the amount allotted by the Government specified in the Schedule, unless they contain a statement increasing the amount allotted.

(k) Nothing in this clause shall affect the right of the Government to terminate this contract. If this contract is terminated, the Government and the Contractor shall negotiate an equitable distribution of all property produced or purchased under the contract, based upon the share of costs incurred by each.

(1)If the Government does not allot sufficient funds to allow completion of the work, the Contractor is entitled to a percentage of the fee specified in the Schedule equalling the percentage of completion of the work contemplated by this contract.

(End of clause)

Page 18 of 18

52.252-2 CLAUSES INCORPORATED BY REFERENCE (FEB 1998)

This contract incorporates one or more clauses by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available. Also, the full text of a clause may be accessed electronically at this/these address(es):

https://www.acquisition.gov/content/regulations

(End of clause)

252.217-7027 CONTRACT DEFINITIZATION (DEC 2012)

(a) A cost contract is contemplated. The Contractor agrees to begin promptly negotiating with the Contracting Officer the terms of a definitive contract that will include (1) all clauses required by the Federal Acquisition Regulation (FAR) on the date of execution of the undefinitized contract action, (2) all clauses required by law on the date of execution of the definitive contract action, and (3) any other mutually agreeable clauses, terms, and conditions. The Contractor agrees to submit a cost proposal and certified cost or pricing data supporting its proposal.

(b) The schedule for definitizing this contract is as follows (insert target date for definitization of the contract action and dates for submission of proposal, beginning of negotiations, and, if appropriate, submission of the make-or-buy and subcontracting plans and certified cost or pricing data).

Target Date for Definitization: December 2020 (150 Days After Award)

Submission of Final Proposal: [***]

Begin Negotiations: [***]

Certificate of Cost or Pricing Data: [***]

(c) If agreement on a definitive contract action to supersede this undefinitized contract action is not reached by the target date in paragraph (b) of this clause, or within any extension of it granted by the Contracting Officer, the Contracting Officer may, with the approval of the head of the contracting activity, determine a reasonable price or fee in accordance with subpart 15.4 and part 31 of the FAR, subject to Contractor appeal as provided in the Disputes clause. In any event, the Contractor shall proceed with completion of the contract, subject only to the Limitation of Government Liability clause.

(1) After the Contracting Officer’s determination of price or fee, the contract shall be governed by—

(1) All clauses required by the FAR on the date of execution of this undefinitized contract action for either fixed-price or cost-reimbursement contracts, as determined by the Contracting Officer under this paragraph (c);

(ii) All clauses required by law as of the date of the Contracting Officer’s determination; and

(iii) Any other clauses, terms, and conditions mutually agreed upon.

(2) To the extent consistent with paragraph (c)(1) of this clause, all clauses, terms, and conditions included in this undefinitized contract action shall continue in effect, except those that by their nature apply only to an undefinitized contract action.

(d) The definitive contract resulting from this undefinitized contract action will include a negotiated cost/price ceiling in no event to exceed $60,000,000.00.

(End of clause)

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Stanley C. Erck, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Novavax, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and 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:	August 10, 2020	By:	/s/ Stanley C. Erck
			Stanley C. Erck
			President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, John J. Trizzino, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Novavax, Inc.;

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:	August 10, 2020	By:	/s/ John J. Trizzino
			John J. Trizzino
			Executive Vice President,
			Chief Business Officer,
			Chief Financial Officer and Treasurer

Exhibit 32.1

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 Quarterly Report of Novavax, Inc. (the “Company”) on Form 10-Q for the fiscal period ended June 30, 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:	August 10, 2020	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 Quarterly Report of Novavax, Inc. (the “Company”) on Form 10-Q for the fiscal period ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John J. Trizzino, Executive Vice President, Chief Business Officer 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


Date:	August 10, 2020	By:	/s/ John J. Trizzino
			John J. Trizzino
			Executive Vice President,
			Chief Business Officer,
			Chief Financial Officer and Treasurer