Exhibit 10.3
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
CADILA NOVAVAX
 
JOINT VENTURE
AGREEMENT
 

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JOINT VENTURE AGREEMENT
This agreement (“Agreement”) is made this 31st day of March, 2009
BETWEEN
Cadila Pharmaceuticals Limited, a COMPANY incorporated under the laws of India
having its office at ‘Cadila Corporate Campus’, Sarkhej-Dholka Road, Bhat,
Ahmedabad – 382210, Gujarat, INDIA herein represented by Dr. Rajiv I. Modi in
his capacity as Managing Director (hereinafter referred to as “Cadila”).
Novavax Inc., incorporated and existing under the laws of the State of Delaware,
United States of America (USA), having its principal office at 9920 Belward
Campus Drive, Rockville, MD 20850, USA herein represented by Dr. Rahul Singhvi,
in his capacity as President and CEO (hereinafter referred to as “Novavax”)
“Cadila” and “Novavax” together are referred to as “Parties”, and individually
as a “Party”)
PREAMBLE
Whereas Cadila is engaged in research, development, manufacture and marketing of
various pharmaceutical preparations in India and in various other countries. It
possesses technical know-how and expertise in setting up manufacturing
facilities, producing pharmaceutical, herbal, biotech and medicinal products as
well as selling and marketing such products in different markets around the
world.
Whereas Novavax is engaged in manufacturing seasonal and non-seasonal influenza
vaccine Products as well as a platform for developing and manufacturing
virus-like particle based products and selling and marketing such products in
the different markets around the world;
Whereas Cadila has formed a Joint Venture Company (the “COMPANY”) in India for
developing, manufacturing, marketing and selling pharmaceutical and medicinal
Products as mentioned hereinafter to cater the needs of the market in India. The
parties intend that the COMPANY will establish US and India cGMP acceptable
manufacturing facilities in India and the structure for developing, producing,
marketing and selling pharmaceutical products either directly or through
partners / contractors as further described broadly in this Agreement;
Whereas, concurrently herewith, the Parties have approved the Amended Articles
of Incorporation and/or Statutes of the COMPANY attached as Exhibit A and other
necessary documents required for registration of the COMPANY;

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NOW, THEREFORE, the Parties hereby agree as follows:
Article 1
Conditions Precedent & Interpretations / Definitions

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

  (i)   “Ancillary Agreements” shall have the meaning assigned to such term in
Section 18.1;     (ii)   “Backup Licenses” shall collectively mean license
agreements that replicate the Licenses, substituting the Cayman JV as the
licensee therein, as attached hereto as Exhibit A.     (iii)   “Business” shall
have the meaning provided in Article 7.     (iv)   “Business Plan” shall mean a
business plan and budget that includes a plan and budget for strategy, sales,
expenses, profit and loss, capital expenditure and cash flows of the COMPANY for
the Financial Year to which it relates and the subsequent two (2) Financial
Years, and any other matters determined by the Board of Directors.         The
Business Plan shall include in particular, in relation to the Financial Year to
which it relates, the following:

  (a)   an operating budget and balance sheet forecast;     (b)   annual
projected profit and loss account and cash flow statement broken down monthly;  
  (c)   an estimate of working capital requirements and capital expenditures;  
  (d)   the amount (if any) that is considered prudent to retain for the purpose
of meeting the working capital requirements, out of those profits of the
previous Financial Year (where applicable) that are available for distribution
to Shareholders;

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

      The Business Plan shall be prepared under the guidance of the Chief
Executive Officer of the COMPANY and shall be considered official when approved
by the Board of Directors of the COMPANY.     (v)   “Cayman JV” shall mean CPL
Biologics Ltd., an exempted company organized under the laws of the Cayman
Islands.     (vi)   “Completion” means the completion of all activities set
forth in Section 3.4.     (vii)   “Completion Date” shall have the meaning
provided in Section 3.3.     (viii)   “Confidential Information” shall have the
meaning provided in Section 18.1.     (ix)   “Effective Date” means the date of
this Agreement.     (x)   “Financial Year” in relation to the COMPANY shall mean
a financial accounting period of twelve (12) months beginning on April 1;
provided that the first Financial Year will consist of period beginning on the
date of formation of the COMPANY to March 31 of next year.     (xi)   “Group” in
relation to a person or entity means any direct or indirect wholly owned
subsidiary of such person or entity, any person or entity of which such person
or entity is a direct or indirect wholly owned subsidiary (its “Holding
Company”) and any other direct or indirect wholly owned subsidiaries of any such
Holding Company. The term “Group” shall also include affiliates of Cadila
consisting of the family members of the promoters, their Hindu undivided
families (HUFs), family trust and closely held companies owned by the family
members and trusts either singly or jointly.     (xii)   “Know-How” means all
tangible and intangible (a) techniques, technology, practices, trade secrets,
inventions (whether patentable or not), methods,

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

  (a)   “Cadila License” which shall mean the Cadila Product License to be
entered into by the COMPANY and Cadila the form of which is attached hereto as
Exhibit B;     (b)   “Seasonal and Other Vaccine License” which shall mean the
Vaccine License for the current seasonal influenza vaccine and [* * *] vaccine
targets to be entered into by the COMPANY and Novavax the form of which is
attached hereto as Exhibit C; and     (c)   “Additional Vaccine License” which
shall mean a license to an additional VLP vaccine product which may be entered
into by the COMPANY and Novavax after the Completion Date.

      The Seasonal and Other Vaccine License and Additional Vaccine License
shall be referred to as the “Novavax Licenses”.     (xiv)   “Party” and
“Parties” shall mean when used in the singular either Cadila or Novavax as may
be applicable and wherever used in the plural shall mean Cadila and Novavax.    
(xv)   “Patents” shall mean any and all (a) issued patents and inventors’
certificates and re-examinations, reissues, renewals, extensions, registrations,
substitutions, supplementary protection certificates and term restorations with
respect to any of the foregoing , and (b) pending applications for patents and
inventors’ certificates, including, without limitation, provisional
applications, continuations, continuations-in-part, divisional and substitute
applications with respect to any of the foregoing.

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  (xvi)   “Products” shall collectively mean:

  (a)   “Novavax Products” which shall mean (i) seasonal influenza vaccine,
(ii) the additional vaccine that is the subject of the Additional Vaccine
License if such Additional Vaccine License is entered into, and (iii) VLP
vaccines including a viral antigen selected from a chikun gunya virus, a [* * *]
([* * *] dengue fever), a hepatitis E [* * *] (each an “Additional Novavax
Product”), all as specifically defined in the Novavax Licenses;     (b)  
“Cadila Products” which shall mean (i) Cadila’s current vaccine product known as
Cadi-05, including its use for melanoma, head and neck, small cell lung, bladder
and HRPC cancers, (ii)  Cadila’s proprietary Mycobacterium W immuvac adjuvant
for use with therapeutic vaccines against cancer, (iii) Cadila’s biogeneric
erythropoietin product, G-CSF product, hyaluronic acid product, and
streptokinase product that are generic versions of approved biologic
pharmaceutical products (excluding in any event any small molecule products,
generic or otherwise), and (iv) Cadila’s biological diagnostic products: the
Typhigen Kit, the ELIK HIV kit, the ELIK HCV kit, the CADISPOT 1&2 HIV kit and
the NEVA HIV kit, all as specifically defined in the Cadila License;     (c)  
any products developed, purchased or in-licensed by the COMPANY including,
without limitation, any vaccine, adjuvant, biosimilar diagnostic, biological
product, and a combination of (a), (b), (c) and (d) (or component(s) of any of
them); and     (d)   Any Future Contributed Products that are licensed to the
COMPANY in the future in accordance with Section 7.8.

  (xvii)   “Future Contributed Products” shall collectively mean:

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

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

  (xviii)   “Shareholder” shall mean a shareholder of the COMPANY.     (xix)  
“Shares” shall mean the equity shares of the COMPANY.     (xx)   “Supply
Agreements” shall collectively mean:

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

  (xxi)   “Technical Services Agreements” shall collectively mean:

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

  (xxii)   “Territory” shall have the meaning provided in Article 4.     (xxiii)
  “Transfer” means to transfer, grant any security interest over, or otherwise
dispose of, voluntarily or involuntarily, by operation of law or otherwise, or
grant any person any rights in or over. A “Transfer” means any such transfer,
grant or disposal.     (xxiv)   “VLP” shall mean virus-like particle.

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BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

1.2   References to “Statutes” or Statutory provisions shall be construed to
include references to those statutes or provisions as amended or re-enacted
(whether with or without modification) from time to time or as their application
is modified by other provisions (whether before or after the date of this
Agreement) and shall include any statute or provision of which they are
re-enactments (whether with or without modification) and shall also include any
orders, regulations, instruments or other subordinate legislation under the
relevant statute or statutory provision.   1.3   The headings in this Agreement
are for ease of reference only and shall not in any way affect its construction
or interpretation.   1.4   Reference to a Party to this Agreement shall include
its successors in title and permitted assigns.   1.5   Unless expressly stated
to the contrary in this Agreement:   1.5.1   words denoting the singular include
the plural and vice versa, words denoting any one gender include all genders and
vice versa;   1.5.2   a reference to a recital or clause is a reference to a
recital or clause of this Agreement and a reference to a sub-clause is a
reference to a sub-clause of the clause in which the reference appears;   1.5.3
  the words and phrases “other”, “including” and “in particular” shall not limit
the generality of any preceding words or be construed as being limited to the
same class as the preceding words where a wider construction is possible;  
1.5.4   references to persons include individuals, bodies corporate,
unincorporated associations and partnerships; and   1.5.5   all obligations,
representations and warranties on the part of two or more persons are entered
into, given or made by such persons jointly and severally.

Article 2
Establishment of the COMPANY

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

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BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

2.2   Equity Shares. Pursuant to the amended articles of association, the issued
share capital of the COMPANY shall be Rupees [ * * *] (Rupees [ * * *]) and
authorized share capital shall be Rupees [ * * *] Rupees [ * * *]).   2.3   The
issued share capital, subject to the provisions of Article 11, shall be
subscribed as set forth on Schedule I, as amended from time to time in
accordance with the terms hereof.   2.4   Any stamp duty payable upon such issue
and allotment shall be borne by the COMPANY.

Article 3
EFFECTIVE DATE; COMPLETION

3.1   On the Effective Date the Parties shall execute the Ancillary Agreements,
which shall be effective on and from the Completion Date, and the Parties shall
have contributed, or caused to be contributed, the executed Back-up Licenses to
the Cayman JV.   3.2   Conditions Precedent: The obligation of Novavax to
subscribe to the Shares is subject to the complete satisfaction / fulfilment
(with proof of fulfilment), or waiver of the following pre-closing conditions
(“Conditions Precedent”):   3.2.1   The COMPANY shall have obtained an approval
of the foreign investment promotion board of India (“FIPB”) for issue of Shares
to Novavax in consideration of transfer of the Novavax Licenses to the COMPANY;
  3.2.2   The COMPANY shall have been converted into a private limited company
under the Companies Act, 1956; and   3.2.3   Cadila shall have caused the
shareholders of the COMPANY other than Cadila to transfer their shares to
Cadila.   3.3   Completion: Completion shall take place at a venue as shall be
agreed in writing by the Parties within fifteen (15) days of notice from the
COMPANY to the Parties that all the Conditions Precedent have been fulfilled, or
on such other date as the Parties may agree in writing (“Completion Date”). The
transactions contemplated under this Agreement to be consummated on the
Completion Date shall be deemed to occur simultaneously

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    and no such transaction shall be consummated unless all such transactions
are consummated.   3.4   On the Completion Date:   3.4.1   The COMPANY shall
hold a meeting of the Board of Directors to approve the calling of an extra
ordinary general meeting of the Shareholders for (i) issue of Shares to Cadila
and Novavax as contemplated under Section 3.4.4 of this Agreement and
(ii) adoption of the amended articles of association in the form attached to
this Agreement as Exhibit H, and (iii) appointment of the persons nominated by
Cadila and Novavax as Directors in accordance with this Agreement who have
obtained their respective Director Identification Numbers and Digital Signature
Certificates and who are otherwise qualified to act as the directors of the
Company;   3.4.2   The COMPANY shall hold a meeting of the Shareholders for
(i) issue of Shares to Cadila and Novavax as contemplated under Section 3.4.4 of
this Agreement; (ii) adoption of the amended articles of association in the form
attached to this Agreement as Exhibit H, and (iii) appointment of the persons
nominated by Cadila and Novavax as Directors in accordance with this Agreement
who have obtained their respective Director Identification Numbers and Digital
Signature Certificates and who are otherwise qualified to act as the directors
of the Company;   3.4.3   The Company shall provide certified copies of
resolutions passed at the meetings contemplated by section 3.4.1 and 3.4.2;  
3.4.4   The COMPANY shall issue to each Party the number of shares shown
opposite such Party’s name on Schedule I, free and clear from all encumbrances;
and   3.4.5   The COMPANY shall provide the Parties with share certificates in
respect of the Shares and duly register such Shares in the name of the Parties
in the COMPANY’s Register of Members.   3.5   Post Completion Events:   3.5.1  
Within five (5) business days from the Completion Date, the COMPANY shall file
all requisite forms and returns as may be required to be filed with any
government authority under applicable law, including without limitation:

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  (a)   Form 2, Form 23 and Form 32 of the Companies (Central Government’s)
General Rules & Forms with the relevant Registrar of Companies; and     (b)  
all relevant filings required to be made before the Reserve Bank of India.

3.5.2   The COMPANY shall deliver to the Parties a certified true copy of all
the acknowledged filings including those with the Ministry of Corporate Affairs
and the Reserve Bank of India and a certified true copy of the amended
memorandum and articles of association of the COMPANY.   3.6   Conduct between
Effective Date and Completion Date:   3.6.1   During the period between the
Effective Date and the Completion Date, Cadila shall ensure and shall procure
that the COMPANY does not, without the prior written consent of Novavax:

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

3.6.2   If Cadila or COMPANY becomes aware that the happening of an event has
resulted in a breach of any representations and warranties of Cadila in
Section 25.6 or there has been any event or circumstance which would cause the
representations and warranties of Cadila in Section 25.6 to be untrue or
inaccurate in any material respect, then they shall immediately notify Novavax
of that fact in writing with all relevant information in relation to that event
or, as the case may be, breach of such representations and warranties.   3.6.3  
Cadila shall cause the COMPANY to, simultaneously furnish to Novavax all such
documents and information as is provided to Directors or Shareholders, and
notice and

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    minutes of all meetings of Shareholders, the Board and any committees
thereof (including attachments and exhibits as are held, during this period)
relating to the period between Effective Date and the Completion Date.   3.7  
The Parties shall use commercially reasonable efforts in good faith to fulfil
the Conditions Precedent within 120 days after the Effective Date (the “Long
Stop Date”). If Completion in accordance with section 3.4 does not occur on or
before the Long Stop Date, the Parties shall:   3.7.1   effect the joint venture
contemplated by this Agreement and the Ancillary Agreements through the Cayman
JV, and in connection therewith the Parties shall amend and restate the
Memorandum and Articles of Association of the Cayman JV and execute and deliver
such other documents, agreements and instruments so as to replicate in the
Cayman JV as nearly as possible the terms and conditions set forth in this
Agreement and the Ancillary Agreements, and shall execute and deliver such other
documents, agreements and instruments as may be necessary and desirable to
effect the foregoing as promptly as reasonably practicable; and   3.7.2  
promptly cause the Cayman JV to take such steps as are reasonably necessary to
establish a subsidiary organized under the laws of India or ensure that the
COMPANY becomes a wholly owned subsidiary of the Cayman JV.   3.8   In the event
that Completion takes place in accordance with section 3.4, the Parties shall
cause (i) all agreements in relation to the Cayman JV to be terminated and
(ii) the Cayman JV to be dissolved and liquidated.

Article 4
Territory
The COMPANY shall carry on its business in the Territory of India (the
“Territory”). The Territory may only be changed by mutual, written agreement
between the Parties.
Article 5
Roles of the Parties

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

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

Article 6
Issue and Transfer of Shares

6.1   No Shareholder shall (a) Transfer any Share or interest in any Share in
the COMPANY or (b) permit the Transfer of any interest in the Shareholder unless
(i) it is expressly permitted under this Agreement or (ii) the other Shareholder
gives its prior written consent; provided, however, that as to the interests in
the COMPANY that are owned directly by Novavax or Cadila, the restriction set
forth in Section 6.1(b) shall not apply.   6.2   Notwithstanding Section 6.1, a
Shareholder may permit the Transfer of an interest in it to a person in its
Group without compliance with the provisions of Section 6.4 and Section 6.5 with
the prior written consent of the other Shareholder, which consent shall not be
unreasonably withheld.   6.3   Notwithstanding Section 6.1, a Shareholder may
Transfer all of its Shares in the COMPANY to a person in its Group without
compliance with the provisions of Section 6.4 and Section 6.5 with the prior
written consent of the other Shareholder, which consent shall not be
unreasonably withheld, provided that, at the time of the Transfer and in
relation to the Shares being transferred:   6.3.1   the transferring Shareholder
procures that the transferee enters into this Agreement on the same terms as
applicable to the transferring Shareholder in relation to those Shares
immediately prior to the Transfer; and   6.3.2   the transferring Shareholder
guarantees and indemnifies the other Party in respect of all the obligations and
any liability of the transferee under this Agreement.   6.3.3   if the
transferee at any time ceases to be a part of the Group of the transferring
Shareholder, that transferee shall Transfer all its Shares back to the
transferring Shareholder.   6.4   If either Shareholder (“Offeror”) wishes to
dispose of or Transfer some or all of its Shares pursuant to a bona fide written
offer (the “Proposed Offer”) from an unaffiliated third party (the “Proposed
Transferee”), it shall first offer such Shares to the other Shareholder
(“Offeree”) by notice in writing (“Transfer Notice”) at a price per Share

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    not less favourable to the Offeree than that set forth in the Proposed Offer
and, to the extent the consideration in the Proposed Offer is non-cash
consideration, such non-cash consideration shall be replaced with cash
representing a fair value of the non-cash consideration if governmental approval
is needed by either of the parties to effect the purchase or sale of the Shares
which are the subject of the Proposed Offer, and on other reasonably similar and
no less favorable terms and conditions to the Offeree than, as those set forth
in the Proposed Offer. On or before expiry of thirty (30) days from the date of
receipt of the Transfer Notice, the Offeree shall notify the Offeror in writing
of its intentions to accept or reject the offer, and in the event of it
accepting the offer (“Acceptance Notice”), the Offeree shall be entitled to an
additional period of ninety (90) days or such other mutually agreed extended
period from the date of the Acceptance Notice (“Completion Period”) to obtain
the approval of the relevant government authority(ies) and to complete the
purchase of the Shares from the Offeror.   6.5   In the event that the Offeree
fails to complete the purchase of the Shares within the Completion Period or if
the Offeree has rejected the offer, the Offeror shall be entitled to dispose of
the offered shares to the Proposed Transferee, provided that the price of the
Shares is not more favourable to the Proposed Transferee than that offered to
the Offeree, and on other reasonably similar and no more favorable terms and
conditions to the Proposed Transferee than, as those offered to the Offeree. If
the Offeror fails to dispose of such Shares within one hundred twenty (120) days
after the Completion Period (or one hundred twenty (120) days after the date on
which the Offeree rejected the offer), the Offeror shall not offer to dispose of
or Transfer such Shares except pursuant to Section 6.4 and this Section 6.5.  
6.6   In the event the Offeree is unwilling or unable to purchase the Offered
Shares identified in the Transfer Notice and the Offeror proposes to proceed to
Transfer the Offered Shares to a Proposed Transferee, the Offeror may only
Transfer its Shares to the Proposed Transferee if the Offeror causes the
Proposed Transferee to give the Offeree the right, but not the obligation
(“Tag-Along Right”), to require the Proposed Transferee to purchase all of the
Shares of the Offeree (“Tag Along Shares”) simultaneously with the purchase of
the Shares from the Offeror (“Offered Shares”) at the same price per Share;
provided, however, that if the Proposed Transferee is only willing to buy less
than the Offered Shares and Tag Along Shares (such shares which the proposed
Transferee is not willing to purchase is hereinafter referred to “Excess
Shares”), then the number of Offered Shares and the Tag Along Shares shall be
reduced

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    on a pro rata basis to the extent of the Excess Shares. The Offeree shall
exercise the Tag-Along Right within ninety (90) days from date of receipt of the
Transfer Notice.   6.7   In order to be entitled to exercise its tag-along right
pursuant to Section 6.5, the Offeree must agree to make to the Proposed
Transferee on behalf of itself the same representations, warranties,
indemnities, covenants and assurances as the Offeror agrees to make in
connection with the Transfer and agree to the same conditions to the Transfer as
the Offeror (except that in the case of representations, warranties,
indemnities, covenants and assurances pertaining specifically to the Offeror,
including, without limitation, representations, warranties, indemnities,
covenants and assurances pertaining to the rights licensed by the Offeror under
the Licenses, the Offeree shall make comparable representations, warranties,
indemnities, covenants and assurances pertaining specifically to itself and its
rights licensed to the Offeror under the Licenses); provided, however, that
(a) the Offeree shall not be required to make any non-competition,
non-solicitation or similar restrictive covenants that would exceed the scope of
the covenants set forth in Article 22, and (b) the Offeree shall not be required
to make any representations, warranties, indemnities, covenants and assurances
with respect to the rights it licensed to the Offeror under the Licenses that
would exceed the scope of the corresponding representations, warranties,
indemnities, covenants and assurances in the Licenses. All such representations,
warranties, indemnities, covenants and assurances shall be made by the Offeror
and the Offeree severally and not jointly. Except with respect to individual
representations, warranties, indemnities, covenants and other assurances of the
Offeree relating to (i) the unencumbered title to its Shares and (ii) the power,
authority and legal right to transfer its Shares, the aggregate liability of the
Offeree shall not exceed the Offeree’s pro rata share of any such liability to
be determined in accordance with the Offeree’s portion of the total number of
Shares included in such transfer; provided that, in any event, the aggregate
liability of the Offeree shall not exceed the proceeds the Offeree received in
connection with the transfer.   6.8   The aggregate liability of the Offeree
under any representations, warranties, indemnities, covenants or other
assurances which it may give to a Proposed Transferee shall be limited to the
consideration payable by the Proposed Transferee to the Offeree for the number
of Shares to be sold to the Proposed Transferee.   6.9   It is expressly
clarified and agreed between the Parties that if, for any reason whatsoever, the
Proposed Transferee is unable to acquire the Tag Along Shares at a price stated
in the Transfer Notice (in accordance with this Article 6), the Proposed

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    Transferee shall not acquire any of the Offered Shares, and if any such
Transfer is not consummated before the Completion Period, then such Transfer
shall not be made without first repeating and re-extending to the Offeree the
rights set out in this Article 6.   6.10   The COMPANY shall place a legend on
all share certificates in respect of the Shares, stating as follows:       “THIS
CERTIFICATE AND THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT IN ALL
RESPECTS TO THE RESTRICTIONS CONTAINED IN THE JOINT VENTURE AGREEMENT DATED
MARCH 31, 2009 BY AND BETWEEN CADILA PHARMACEUTICALS LIMITED AND NOVAVAX, INC.
AND SHALL BE VALID DURING THE SUBSISTENCE OF THE SAID AGREEMENT.”

6.11   The COMPANY shall ensure that all share certificates in respect of the
Shares shall bear the legend as provided in Section 6.10. The COMPANY shall
further ensure that all Share certificates, as mentioned herein, issued without
the above legend shall be replaced with new Share certificates bearing the above
legend.   6.12   In the event that any of the Shares are to be dematerialised,
then prior to any such dematerialization, the Shareholders shall enter into
appropriate undertakings and documents with the Depository and the Depository
Participant to the effect that all such Shares (to be dematerialized) are
subject in all respects to the restrictions contained in this Agreement and
shall be valid during the subsistence of this Agreement.   6.13   Upon the sale
of all Shares held by a Shareholder, as may be permitted by and in accordance
with the provisions of this Article 6, the rights and obligations of such
selling Shareholder under this Agreement shall terminate; provided, however,
that the selling Shareholder shall remain liable for the following obligations
and liabilities: (i) any liabilities and obligations of the selling Shareholder
accrued as of the date of such sale; (ii) any obligations of the selling
Shareholder under Article 18; (iii) any obligations of the selling Shareholder
under Section 22.2 for a period of one (1) year after the date of such sale;
(iv) any obligations of the selling Shareholder under Section 23.3;
(v) liability for breach of any representations and warranties of the selling
Shareholder under this Agreement; and (vi) the obligations of the selling
Shareholder under Section 25.6; and provided, further, that such termination
shall not affect any Ancillary Agreements or other agreements, except to the
extent expressly stated otherwise therein.

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Article 7
Business of the COMPANY

7.1   The business of the COMPANY (the “Business”) shall include researching,
developing, manufacturing, marketing and selling of Products in the Territory.  
7.2   The Business shall be conducted in accordance with the Business Plan
prepared under the guidance of the Chief Executive Officer and approved by the
Board of Directors of the COMPANY pursuant to Article 8 hereof, as amended by
the Board of Directors from time to time. The first Business Plan shall be
proposed to the Board of Directors within ninety (90) days from the Effective
Date. At the time the first Business Plan is proposed to the Board of Directors,
the Chief Executive Officer shall also propose a schedule of development
milestones (the “Milestones”), and corresponding amounts of cash investment to
be made by Cadila, pursuant to Section 11.2, upon achievement of such
Milestones. The Milestones and corresponding investment amounts shall become
binding upon approval by unanimous approval of the Board of Directors.   7.3  
The COMPANY shall use its commercially reasonable efforts to establish a
manufacturing facility in India that complies with US and India cGMP, through
which the manufacturing part of the Business of the COMPANY shall be undertaken,
within the ‘time-frame’ set in the Business Plan. The manufacturing facility
shall be consistent with the applicable equipment, processes and procedures used
by Novavax and Cadila in their manufacturing facilities, based in part on
technology licensed to the COMPANY under the Licenses. Until the manufacturing
facility is established, Novavax and Cadila will supply the COMPANY with Novavax
Products and Cadila Products, respectively, for research and development
purposes pursuant and subject to the Supply Agreements in accordance with the
terms and conditions set forth therein.   7.4   Cadila and Novavax, pursuant and
subject to the respective Technical Services Agreements, shall provide
reasonable assistance to COMPANY in establishing such manufacturing facility.  
7.5   Except as may be otherwise provided herein, the COMPANY shall be operated
as an independent entity.

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7.6   The COMPANY shall use its commercially reasonable efforts to obtain at its
own expense regulatory approvals and registration for licensing of Products in
the Territory. Cadila and Novavax, pursuant and subject to the Technical
Services Agreement, shall provide reasonable assistance to the COMPANY in
obtaining such regulatory approvals and registrations.   7.7   The COMPANY shall
use its commercially reasonable efforts to establish within 12 months from the
date of this agreement, a commercialization plan for each Product in the
Territory either directly or with help of a commercial partner as approved by
the Board of Directors of the COMPANY.   7.8   The COMPANY, Cadila and Novavax
shall grant certain negotiation rights to each other for certain future products
as follows:   7.8.1   The COMPANY and Cadila hereby grant to Novavax a first
right of refusal for Future Novavax Products that are (a) vaccines corresponding
to the type of vaccine provided under (iii) of Novavax Products (as the same may
be amended under Section 23.3 of this Agreement) developed by or within the
COMPANY for development and exploitation outside the Territory, and (b) vaccines
included in Cadila Products developed by or within the COMPANY for development
and exploitation in the United States, Spain, China and any other country in the
world excluding those countries set forth in Schedule IV, in each case as
provided in 7.8.3 below. For the avoidance of doubt and notwithstanding anything
to the contrary, no such right of first negotiation or similar restriction shall
apply to (I) Cadila’s own development, manufacture or commercialization of
Cadila Products developed by or within the COMPANY (by itself or through its
affiliates) for development and exploitation in the countries set forth in
Schedule IV, (II) the adjuvant described in (ii) of Cadila Products (including,
without limitation, combinations of the adjuvant with one or more antigens, but
excluding the Cadi-05 products described in (i) of Cadila Products), or
(III) any vaccine products developed by the Company which are not described in
(a) or (b) above.   7.8.2   Novavax hereby grants to COMPANY a first right of
refusal for Novavax Future Products developed by or within Novavax for
exploitation in the Territory as provided in Section 7.8.3 below. Cadila hereby
grants to the COMPANY a first right of refusal for Cadila Future Products
developed by or within Cadila for exploitation in the Territory as provided in
Section 7.8.3 below.

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7.8.3   Prior to entering into any agreement with a third party granting a
license or other right to develop or commercialize any product described in
7.8.1 and 7.8.2 above (each, an “RFR Product”), the Party, or COMPANY, as the
case may be, subject to the right of first negotiation with respect to its
applicable RFR Product under Sections 7.8.1 or 7.8.2 above (“Owner”) shall first
notify the beneficiary of such right of first negotiation (the “RFR Holder”) of
its desire to do so and thereupon enter into good faith negotiations with the
RFR Holder for a period of at least one hundred twenty (120) days from the date
of such notice, for terms of an agreement governing the development and
commercialization of such RFR Product under mutually acceptable terms and
conditions. If the parties cannot reach agreement on terms by the end of such
120 day period (or, if earlier, upon notice from the RFR Holder that it does not
desire to exercise its negotiation rights hereunder), despite each party’s good
faith efforts to do so, then the Owner shall be free to enter into license
agreements with Third Parties with respect to such RFR Product with respect to
the development and/or commercialization thereof (or otherwise develop or
commercialize such RFR Product itself or through one of its Affiliates);
provided, however, that for six months after the end of such one hundred twenty
(120) day period, the Owner shall not enter into any agreement with a Third
Party on business terms (e.g., financial terms, scope of rights granted, and
similar terms typically found in a term sheet for such a transaction) more
favorable to such Third Party than the business terms of the last written
proposal (if any) made by the RFR Holder. For the avoidance of doubt, the Owner
shall be free to conduct discussions and negotiations with Third Parties for any
RFR Product before and/or during the 120 day period described above so long as
no agreement is entered into for such RFR Product prior to the end of such
120 day period (or earlier if the RFR Holder provides notice of its desire not
to exercise its negotiation rights) and the Owner otherwise complies with its
negotiation obligations described above.   7.9   Agreements Regarding
Development of Products. The COMPANY, at its own expense, shall be responsible
for the preclinical and clinical development, and regulatory activities,
necessary for the development and regulatory approval of the Products in the
Territory, in addition to any clinical development work already completed by
Cadila and Novavax (or subsequently completed by Cadila and Novavax outside the
Territory). Cadila and Novavax, pursuant and subject to the Technical Services
Agreements, shall provide the COMPANY reasonable cooperation and assistance with
respect to such development and regulatory activities of the COMPANY. Pursuant
and subject to the Novavax Licenses, Novavax has certain

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

Article 8
Board of Directors

8.1   The Board of Directors of the COMPANY (the “Board”) shall consist of 5
(five) members (“Directors”).   8.2   Cadila shall nominate three (3) of the
Directors, including the Chairman of the Board (the “Cadila Directors”), and
Novavax shall nominate two (2) Directors (the “Novavax Directors”). Each of
Cadila and Novavax shall have the right to appoint an alternate director who can
attend meetings of the Board of Directors if the director cannot attend.   8.3  
The required quorum for any meeting of the Board shall be a quorum with a
minimum of one (1) Cadila Director and a minimum of one (1) Novavax Director.
Each Director shall have one vote. No business shall be conducted at any meeting
of Directors unless a quorum is present at the beginning of the meeting and at
the time when there is to be voting on any business. In case of Board Meeting
could not be conducted in spite of notices being issued on account of non
availability of either Novavax or Cadila Directors, notices shall be again
issued to all the Directors for conducting such meeting and if either Novavax or
Cadila Directors are still unable to attend the same then the available
Directors shall proceed and conduct such Board Meeting; provided that in each
case, the other requirements of Article 8 are complied with.   8.4   In the
event that that the Board does not reach a unanimous decision with respect to a
matter, the matter shall be referred to the Chief Executive Officers of Cadila
and Novavax. The Chief Executive Officers, each acting in his sole discretion,
shall seek to resolve the issue. If the Chief Executive Officers are unable to
resolve the issue within five (5) business days after the matter is referred to
them, then a majority of the Board of Directors, including the Chairman of the
Board shall determine the matter; except for

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    the matters specified in Schedule II. Matters specified in Schedule II shall
require unanimous approval of the Shareholders and the Directors.   8.5  
Subject to the limitations provided in the Companies Act, 1956, the Board shall
be entitled to adopt resolutions without convening a meeting, and such
resolutions shall in all respects have the same effect as resolutions adopted in
a convened meeting, provided that all Directors were notified of the proposed
resolution(s) in writing and approved such resolution(s) in writing. Such
resolution(s) shall be produced and recorded at the next convened meeting of the
Board.   8.6   The Board shall meet at least four times a year. Meeting dates
including continued, adjourned and replacement meetings shall be set after
reasonably considering the schedules of all board members. Thirty (30) days
prior written notice of each meeting of the Board shall be sent with the agenda
to each Director at his/her address as supplied to the COMPANY. A meeting of the
Board may be convened on notice shorter than thirty (30) days but at least six
(6) days in advance in cases where all Directors so agree in writing. Notices of
Board meetings shall be sent by facsimile and confirmed by letter except that in
the case of Directors not residing in India notices shall be given by courier or
registered letter against receipt. Minutes of each meeting shall be dispatched
by the COMPANY to all Directors within three (3) weeks after the meeting. For
the initial 24 months, it is expected that the Directors will meet more
frequently on an informal, unofficial basis by teleconference.   8.7  
[Reserved.]   8.8   The directors shall not be required to hold any shares in
the COMPANY.   8.9   Each Party may nominate a Director, and may seek removal of
a Director whom it nominated, by giving notice to the COMPANY and the other
Party. The appointment or removal of Directors under Sections 8.2 and this 8.9
takes effect on the date on which such Director is appointed or his resignation
is accepted at the meeting of the Board of Directors.       If any nomination or
removal of a Director is to be approved by the Board and/or the Shareholders in
a meeting, the COMPANY shall include the approval of the nomination or removal
of a Director in the agenda for the immediately following Shareholders meeting
or, if required, convene an extraordinary Shareholders meeting to approve such
nomination or removal.

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8.10   The Party seeking removal of a director pursuant to Section 8.9 shall
indemnify and keep indemnified the COMPANY against any claim connected with the
Director’s removal from office.   8.11   [Reserved.]   8.12   If a quorum is not
present within 30 minutes after the time specified for a Directors’ meeting in
the notice of the meeting then it shall be adjourned to such date as shall be
agreed by the Directors, provided that such date shall not be more than 30 days
from the date of the adjournment. The meetings of the Board of Directors will be
held in Ahmedabad, India, or at such other place as the Board of Directors may
determine. The COMPANY shall give a notice of at least seven (7) days in advance
of the date, time and place of the adjourned meeting to all the Directors.  
8.13   A meeting of directors shall be adjourned to another time or date at the
request of the majority of the Directors present at the meeting. No business may
be conducted at a meeting after such an adjournment has been made. No more than
one such adjournment may be made in respect of a meeting.   8.14   The Directors
shall be permitted to invite to attend a meeting of Directors any person who is
not a Director, but is required to attend in order to fully brief the Directors
on the operational and financial status of or other matters of significance to
the COMPANY.   8.15   No Director, Shareholder or director, officer, greater
than 10% shareholder, or subsidiary, sister, parent or other affiliated entity
of a Shareholder, or any person acting on behalf of any of the foregoing may
directly or indirectly engage in any transaction (including without limitation
the purchase, sale, lease, license, or exchange of any property, lending of
funds, rendering of any service, establishment of any salary, other compensation
or other terms of employment, purchase of any stock or security, or any business
combination) with the COMPANY (a “Related Party Transaction”); provided,
however, notwithstanding that it may constitute a conflict of interest, that a
Related Party Transaction may be consummated if each of the following conditions
are met:   8.15.1   the Related Party Transaction is not expressly prohibited by
this Agreement; and   8.15.2   the Related Party Transaction is on terms that
are on an arm’s length basis; and

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8.15.3   if the Related Party Transaction is a purchase, sale, lease, license or
exchange of any personal or intellectual property and the aggregate value of
property transferred under the transaction exceeds [* * *], the other
Shareholder has consented to the Related Party Transaction; and   8.15.4   if
the Related Party Transaction is a purchase, sale, lease, license or exchange of
any real property and the aggregate value of property or payments to be made by
the COMPANY over the term of the arrangement exceeds [* * *] and such additional
amounts as reasonably agreed by the Parties, the other Shareholder has consented
to the Related Party Transaction; and   8.15.5   if the Related Party
Transaction is to loan cash or property to or by the COMPANY and the total value
of the loan exceeds [* * *], the other Shareholder has consented to the Related
Party Transaction, which consent can be withheld in such Shareholder’s sole
discretion; and   8.15.6   if the Related Party Transaction is for services to
or by the COMPANY and the aggregate annual amount of services to or by the
COMPANY exceeds [* * *], the other Shareholder has consented to the Related
Party Transaction; and   8.15.6.1   if the Related Party Transaction is for
providing marketing services to or by the COMPANY and the aggregate amount of
service to or by the COMPANY exceeds an annual amount to be reasonably agreed by
the Parties, the other Shareholder has consented to the Related Party
Transaction; and   8.15.7   if the Related Party Transaction is to establish
salary, or other compensation or employment arrangements, and the aggregate
annual amount per employee exceeds [* * *], the other Shareholder has consented
to the Related Party Transaction; and   8.15.8   if the Related Party
Transaction is any transaction for the sale to a Shareholder or director,
officer, greater than 10% shareholder, or subsidiary, sister, parent or other
affiliated entity of a Shareholder, or any person acting on behalf of any of the
foregoing, by the COMPANY of stock or any other security of the COMPANY or any
right, convertible or otherwise, related to the sale of stock or any other
security of the COMPANY, either (A) the per share consideration for such sale
for all parties is no lower than the price Novavax can subscribe to without any
governmental approval and the COMPANY has provided to the other Shareholder
twenty (20) business days’ prior written notice of the right to purchase its Pro
Rata Portion of such stock, security or

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    right at the same price (as it shall be so determined) and on the same terms
and conditions, which right such Shareholder (or a wholly owned subsidiary of
such Shareholder) may exercise by notice to COMPANY within such 20-day period,
where the “Pro Rata Portion” of a Shareholder means the percentage interest in
the COMPANY held by the Shareholder or (B) the consideration for such sale
(i) is non-cash consideration, or (ii) is lower than as set forth in clause (A),
and in each case the other Shareholder has consented to the Related Party
Transaction, which consent can be withheld in such Shareholder’s sole
discretion; and   8.15.9   if the Related Party Transaction is any merger,
consolidation, recapitalization, or business combination, or the sale or
disposition or all or substantially all of the Company’s assets, the other
Shareholder has consented to the Related Party Transaction, which consent can be
withheld in such Shareholder’s sole discretion; and   8.15.10   if the Related
Party Transaction does not fall within the transactions set forth in the
preceding Sections 8.15.3 through 8.15.9 and the value of such transaction
exceeds [* * *], the other Shareholder has consented to the Related Party
Transaction.   8.16   The restrictions on Related Party Transactions set forth
in this Agreement shall not apply to the funding of the Cadila Commitment (as
defined in Section 11.2) toward the subscription to the Cadila Notes (as defined
in Section 11.2) in accordance with Section 11.2.

Article 9
General Meetings and Resolutions
General Meetings of the COMPANY shall be held in Ahmedabad, India and shall be
convened by the Chairman of the Board or a majority of the Directors or as set
out in the Articles of Association of the COMPANY. The Chairman of the Board
shall notify the Shareholders of the COMPANY of the meeting at least twenty-one
days (21) days in advance, by facsimile and letter to their address on the
records of the COMPANY.
Article 10
Chief Executive Officer and Employees

10.1   The COMPANY shall employ its own staff.

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10.2   The Board shall appoint the senior management of the COMPANY, including a
Chief Executive Officer. Novavax shall use its commercially reasonable efforts
to assist in the recruitment of the senior management. The Chief Executive
Officer shall be responsible for the day-to-day business of the COMPANY and
shall represent the COMPANY in accordance with the Management Policies as may be
decided and agreed by the Board of Directors. The Chief Executive Officer will
be based in Ahmedabad, India and shall report to the Board of Directors. His
terms of appointment, remunerations, powers, duties, obligations, restrictions
and authorities will be as per the agreement to be entered into by the COMPANY
and the Chief Executive Officer.   10.3   [Reserved.]   10.4   The COMPANY shall
be responsible for the salaries or wages paid to, and business expenses incurred
by, the employees of the COMPANY and for the actions or omissions of such
employees in their capacity as employees of the COMPANY. The COMPANY shall fully
indemnify and keep indemnified the Shareholders against all losses, damages,
actions, proceedings, costs, claims, demands, awards, fines, orders, expenses
and liabilities whatsoever (including but not limited to salaries, wages,
bonuses and other emoluments, all statutory contributions and all income tax and
national insurance contributions) in relation to the employees arising directly
or indirectly out of or in connection with their employment by the COMPANY.

Article 11
Financing/Capital Increase

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

  (a)   Cadila shall contribute, by execution and delivery of, the Cadila
License; and     (b)   Novavax shall contribute, by execution and delivery of,
the Novavax Licenses.

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

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

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BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

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

11.3   Pre-emptive Right. Except with respect to Exempt Issuances, for so long
as a Shareholder holds an aggregate number of Shares equal to or greater than
five percent (5%) of the then issued and outstanding Shares (the “Threshold
Amount”), the Shareholder shall have the right to purchase its Pro-Rata Portion
of any new Shares that the Company may from time to time propose to issue or
sell to any party.   11.3.1   Additional Issuance Notices. The COMPANY shall
give written notice (an “Issuance Notice”) of any proposed issuance or sale
described in Section 11.3 to the Shareholders. The Issuance Notice shall, if
applicable, be accompanied by a written offer from any prospective purchaser
seeking to purchase Shares, to the extent known to the Company at the time, and
shall set forth the material terms and conditions of the proposed issuance,
including, without limitation:

  (i)   the number and description of the new Shares proposed to be issued and
the percentage of the COMPANY’s outstanding equity interests such issuance would
represent;     (ii)   the proposed issuance date; and     (iii)   the proposed
purchase price per share.

11.3.2   The COMPANY shall provide written notice to Shareholders if the terms
set forth in the Issuance Notice are updated or changed in any material respect
(a “Material Update”) as the details listed in Section 11.3.1 (i), (ii) and
(iii) are known.   11.3.3   Exercise of Pre-emptive Rights. A Shareholder shall,
for a period of fifteen (15) business days following the initial receipt of an
Issuance Notice (the “Exercise Period”), have the right to elect irrevocably to
purchase up to its Pro Rata Portion of the new Shares at the purchase price and
on the other terms set forth in the Issuance Notice by delivering a written
notice to the Company. If the Company provides a Material Update, the Exercise
Period shall be extended by five calendar days from the date of receipt of the
Material Update, if such extension is longer than the expiration of the Exercise
Period. The closing of any purchase by a Shareholder shall be consummated
concurrently with the consummation of the issuance or sale described in the
Issuance Notice; provided, however that, the closing of any purchase by
Shareholder may be extended beyond the closing of the transaction described in
the Issuance Notice to the

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    extent necessary to obtain required government approvals and other required
third party approvals or consents (and the Company shall use its reasonable best
efforts to obtain such approvals and consents). A Shareholder may purchase
Shares under this Section 11.3 indirectly through a member of the Shareholder’s
Group that is a wholly owned subsidiary.   11.3.4   Sales to the Prospective
Buyer. If the Shareholder fails to elect to purchase all or part of its Pro Rata
Portion allotment of the new Shares described in the Issuance Notice within the
time period described in Section 11.3.3, the Company shall be free to complete
the proposed issuance or sale of new Shares described in the Issuance Notice at
a price and on other terms no less favorable to the Company than those set forth
in the Issuance Notice. If the Company does not enter into an agreement for the
sale of such new Shares within forty (40) business days after the expiration of
the time period described in Section 11.3.3, or if such agreement is not
consummated within sixty (60) days after the execution thereof, the pre-emptive
right provided hereunder shall be deemed to be revived and such new Shares shall
not be issued or sold unless first reoffered to the Shareholders in accordance
with this Section 11.3.   11.3.5   “Exempt Issuances” means issuances in which
Shares are issued (i) as a dividend, stock split or other distribution payable
pro rata to all holders of Shares, (ii) to employees, officers, directors or
consultants of the Company pursuant to any employee benefit plans or programs
approved by the Board or any committee thereof, to the extent that the total
number of Shares issuable pursuant to such plans or programs does not exceed 15%
of the Shares outstanding on the date hereof, (iii) upon the conversion or
exercise of any options, warrants or other rights to purchase Shares
(A) outstanding on the date hereof or (B) issued in accordance with the
foregoing clause (ii), (iv) as consideration for a merger, consolidation or
purchase of assets; (v) in connection with any strategic partnership or joint
venture (the primary purpose of which is not to raise equity capital), and (vi)
issuances for a per share consideration that is lower than the price Novavax can
subscribe to without any governmental approval unless Novavax is able to, and
does, obtain such approval without causing a delay to the transaction
contemplated by the Issuance Notice; provided, further that if Novavax timely
provides an irrevocable election notice, Novavax may participate in the
transaction on the same terms and conditions as if it had participated at the
closing of the transaction described in the Issuance Notice except that Novavax
will participate upon (and only if) it receives the appropriate governmental
approval within 90 days of such closing and shall use commercially reasonable
efforts to obtain such approval promptly.

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11.3.6   “Pro Rata Portion” with respect to a Party means the proportion that
the number of shares of the COMPANY issued and held by the Party, and any wholly
owned subsidiaries of such Party, bears to the total number of shares of the
COMPANY then issued and outstanding.   11.4   Except as otherwise provided for
herein, the COMPANY shall be responsible for procuring any additional funds
needed other than the issued and paid-up share capital.   11.5   No Party shall
be under any obligation to guarantee the repayment of borrowings contracted by
the COMPANY.   11.6   A separate Bank account in the name of the COMPANY will be
opened in one or more banks and the Board shall authorize the Chief Executive
Officer or any Director or other official of the COMPANY to operate the same
with prescribed limits.   11.7   Subject to the express terms and conditions of
this Agreement, the Chief Executive Officer may be authorized by the Board to
make decisions on any expenses, purchases or commitments on behalf of the
COMPANY and will have the freedom to sign cheques up to the limit that may be
decided by the Board as per the Standard Operating Procedure (SOP) of the
COMPANY in the said context. However if any transactions or commitments are
above the aforesaid limit, specific approval of the Board will be required. The
Board may also decide sub limits of financial authorities for such other key
officials of the COMPANY who may be authorized to operate Bank accounts of the
COMPANY.

Article 12
Bookkeeping, Accounting and Reporting

12.1   The books and records of the COMPANY shall at all times be accurately,
completely and consistently maintained in English in accordance with Institute
of Chartered Accountants of India (ICAI). Each of the Parties or their duly
authorized representatives shall have the right, to review and examine the books
and records of the COMPANY for any legitimate purpose related to the Business or
this Agreement at any time during normal business hours in a manner not
disruptive to the COMPANY.   12.2   The COMPANY shall provide to each of the
Parties, quarterly (within 10 (ten) days after the end of each quarter) or upon
request, reports on the financial status of the COMPANY including balance sheet,
profit and loss statement and cash flow

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    statements. The Chief Executive Officer shall provide a monthly report
containing performance of the COMPANY during the month along with data
pertaining to manufacturing, sales, cash flow, profit and other critical areas
to all the Directors of the COMPANY. Such a report shall be submitted within 10
(ten) days after the end of each quarter to all the Directors of the COMPANY.
Upon request of Novavax, the COMPANY will provide financial statements based on
International Accounting Standards.   12.3   Unless otherwise agreed by the
Parties, the COMPANY shall have 1 (one) or more statutory auditor/s. The
statutory auditor shall have the powers and duties specified under the relevant
Indian laws and regulations and the Statutes. The Parties agree to vote their
shares in the COMPANY so as to cause the appointment of mutually decided
nominated auditor.

Article 13
Steering Committee

13.1   Within thirty (30) days after the Effective Date, the Parties shall form
a Steering Committee for the development of products by the COMPANY. The
Steering Committee shall consist of an equal number of representatives of each
Party and the COMPANY and shall be responsible for overall direction and
management of the development program. The Steering Committee shall report to
the Board of Directors. The operation and authority of the Steering Committee
shall be as follows:   13.2   Development Plans. The Steering Committee shall
work with the management of the COMPANY in the development and commercialization
of Products. The Steering Committee shall periodically review development and
commercialization plans and progress made under such plans from a strategic and
operational perspective and suggest modifications.   13.3   Review of
Activities. The Steering Committee shall periodically review the results of each
development plan to monitor the COMPANY’s progress and whether the Parties are
providing their commitments, if any, of both human and financial support for the
research and development of Products and the fulfillment of all contractual
obligations between the Parties.   13.4   Representation. Cadila, Novavax and
COMPANY shall each appoint three (3) representatives as their representatives to
serve on the Steering Committee. It is the

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    intent that such representatives will be relevant function heads in the
respective organizations. The representatives of a Party may be changed from
time to time at the discretion of that Party upon written notification by the
Party making such change to the other.   13.5   Meetings. The Steering Committee
shall meet from time to time as determined by the Steering Committee members. It
is expected that the Steering Committee shall meet at least monthly for the
first nine months by conference call, bimonthly thereafter and, in any case, in
person at least once in each calendar quarter. Consultants and non-member
employees of the Parties may attend meetings of the Steering Committee as
required to further the development program. COMPANY will bear all expenses
associated with attendance of its employees at any in person meetings. Any
conference call meeting will be held by means of telephone conference or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.   13.6   Decisions. Decisions of the Steering
Committee shall be made by unanimous vote, with the representatives of each
Party having one collective vote. If the Steering Committee is unable to reach a
unanimous vote on any issue, then the issue shall be referred to the Board of
Directors, whose decision shall control the matter in accordance with the terms
of this Agreement.

Article 14
Profits
The Board will consider the following before recommending any dividends:

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

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Article 15
Environmental and Health and Safety (EHS) Matters
The COMPANY shall at all times comply with EHS and / or any such equivalent law
in existence in respect of EHS Matters and keep all the required EHS Permits in
full force and effect.
Article 16
Term and Termination

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

Article 17
Taxes
All income taxes payable under the applicable laws required to be paid by a
Party arising out of or in connection with this Agreement shall be for the
account of that Party. Any sum required under Indian tax laws to be withheld by
the COMPANY for the account of the relevant Party from payments due to that
Party hereunder shall be withheld and promptly paid by such COMPANY to the
competent tax authorities.
Article 18
Confidentiality

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

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    Agreements, use, publish or disclose to any third party any “Confidential
Information” of any other Party or of the COMPANY (with respect to any Parties)
disclosed to it by such other Party or the COMPANY, as the case may be, except
as and to the extent expressly authorized under this Agreement. For purposes of
this Agreement and the Ancillary Agreements, and subject to the exclusions set
forth below, “Confidential Information” shall mean any confidential and/or
proprietary information or other Know-How to the extent (A) marked or identified
in writing as Confidential Information by the disclosing party (upon or within
thirty (30) days of initial disclosure) or is of a type, and is disclosed under
circumstances, for which the recipient would reasonably be expected to know such
information or other Know-How was confidential in nature, and (B) relating to
the Business or disclosed for the purpose of entering into the Business, forming
the COMPANY or conducting the Business. The provisions of this Agreement and the
Ancillary Agreements shall be considered Confidential Information of each Party.
Confidential Information shall in any event exclude any information or other
Know-How which (i) is or becomes publicly available through no fault of the
receiving party; (ii) is lawfully obtained from third parties who received the
information or other Know-How from a person or entity that was not bound by an
obligation not to disclose such information or Know-How; or (iii) is or becomes
known or developed by the receiving party independently of (and without use of
or reference to) the Confidential Information of the disclosing party.   18.2  
Protection of Confidential Information. Each Party and the COMPANY agree to
maintain the confidential nature of any Confidential Information of the
disclosing party disclosed to it hereunder, and to use the same degree of care
to protect the confidentiality such Confidential Information which such party
uses to protect its own confidential or proprietary information of a similar
nature, but in no event less than reasonable care. Disclosures of Confidential
Information to and between each Party shall be restricted to those having a need
or right to know.   18.3   Permitted Use and Disclosure. Each Party and the
COMPANY shall have the right to use any Confidential Information disclosed to it
hereunder for purposes of exercising any rights or licenses granted to it
hereunder and under the Ancillary Agreements and for purposes of performing any
of its obligations hereunder and thereunder (which, for the COMPANY, shall
include the right of the COMPANY to use such Confidential information for the
Business). Furthermore, each Party and the COMPANY shall have the right to
disclose Confidential Information (i) to applicable patent offices solely for
the purpose of filing, prosecuting and maintaining Patents, (ii) to applicable
regulatory

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

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

Article 19
Reserved
Article 20
Events of Default

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

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    to purchase such shares in accordance with the procedures set forth in
Section 6.4, upon happening of any of the following events of default:   20.1.1
  It commits a material breach of any obligation under this Agreement and fails
to remedy such breach within sixty (60) business days of notice to remedy the
breach delivered by the other Shareholder;   20.1.2   A receiver, manager,
administrative receiver, trustee, custodian or administrator (or such other
similar thing in any other jurisdiction) being appointed for such Shareholder or
over all or any part of its undertaking or assets;   20.1.3   An insolvency or
bankruptcy proceeding being commenced against such Shareholder, or such
Shareholder commencing such proceeding, or such Shareholder ceasing to conduct
business in the normal course or making an assignment for the benefit of its
creditors;   20.1.4   Such Shareholder entering into liquidation or dissolution
(or such other similar thing in any other jurisdiction) (other than a Voluntary
Liquidation for the purpose of a bona fide scheme of solvent, amalgamate or
reconstruction); or   20.1.5   unless otherwise agreed by all the Shareholders,
any Change in Control of any Shareholder. “Change in Control” means (a) the sale
of all or substantially all of the assets or business of the Shareholder, or
(b) any merger, consolidation, recapitalization, or business combination of the
Shareholder, or (c) the sale of capital stock or other equity securities of the
Shareholder, or (d) any other transaction or series of transactions; provided
that for each of (b) through (d), the result of which is that the stockholders
of the Shareholder prior to such transaction do not, immediately following any
such transaction(s), directly or indirectly hold voting securities of the
surviving or purchasing entity sufficient to elect a majority of the board of
directors of such surviving or purchasing entity.   20.2   The deemed Transfer
Notice has the same effect as a Transfer Notice, except that:   20.2.1   The
valuation of the shares held by the defaulting Shareholder, and the price to
paid by the other Shareholder if such Shareholder exercises its right to buy
such shares, shall be determined in accordance with Article 21;   20.2.2   The
defaulting Shareholder does not have a right of withdrawal following a
valuation; and

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

Article 21
Valuation of Shares

21.1   The valuation of shares to be transferred under Article 20 to the other
Shareholder shall be determined as follows: Each Shareholder shall select one
investment bank of international reputation, and each investment bank shall
determine the fair market value of the shares and deliver its written valuation
to the Shareholders within thirty (30) days after the date of the deemed
delivery of the Transfer Notice under Section 20.1. In the event the two
investment banks do not agree on a fair market value, the fair market value
shall be the average of the two valuations, except that if one valuation is
higher than the other valuation by an amount greater than ten percent (10%) of
the lower valuation, the two investment banks shall select a third investment
bank of international reputation, which shall determine the fair market value
independently of the other two investment banks and without knowledge of the
valuation of the other two investment banks within thirty (30) days of
appointment, and the fair market value of the shares shall be the average of the
two valuations that are closest to each other (whether such valuations are the
two highest valuations or the lowest two valuations), and the third valuation
shall be disregarded. The third investment bank shall not have performed
services for either party within the five (5) years preceding its appointment.
Each Shareholder shall pay the fees and expenses incurred in connection with the
valuation by the investment bank selected by it. The Shareholder who appointed
the investment bank whose valuation was disregarded shall pay the fees and
expenses incurred in connection with the valuation by the third investment bank,
unless the valuation of the third investment bank was disregarded, in which case
each Shareholder shall pay one-half of the fees and expenses incurred in
connection with the valuation by the third investment bank.   21.2   Each
investment bank shall base its valuation on the following assumptions:   21.2.1
  The sale is between a willing seller and a willing buyer;   21.2.2   The
shares are sold free of all restrictions, liens, charges and other encumbrances;
and   21.2.3   The sale is taking place on the date on which the valuation of
the shares in determined.

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Article 22
Restrictions on the Parties

22.1   Each Party hereby further agrees and undertakes that during the Term it
shall not, and shall procure that its affiliates shall not, whether directly or
indirectly, by themselves or in association with or through any person, in any
manner whatsoever do or undertake or attempt to do or undertake any of the
following activities:   22.1.1   Tender for, canvass, solicit, entice away or
attempt to canvass, solicit or entice away from the Company, any employee of the
Company and/or any of its affiliates, whether or not such employee would commit
a breach of contract by reason of such act; or   22.1.2   Induce, procure or
endeavour to induce any person who was an employee of the Company and/or any of
its affiliates to leave the service of, or cease to provide service to, the
Company or such affiliate; or   22.1.3   Provide or offer positions of
employment/consultancy or any managerial, financial participation to any of the
employee of the Company and/or any of its affiliates; or   22.1.4   Otherwise
interfere in any manner with the contractual, employment or other relationship
of the employee of the Company and/or any of its affiliates on the one hand and
the Company and/or any of its affiliates on the other hand; or   22.1.5   Accept
into employment or otherwise engage or use the services of any employee of the
Company and/or any of its affiliates who is or was in the twelve (12) months
preceding the date of termination of this Agreement, an employee of, or under
contract of services to, the Company and/or any of its affiliates; or   22.1.6  
Solicit or endeavour to entice away from dealing with the Company, any person
who is or was at any time a customer or supplier of the Company.   22.2   Other
than engaging in the Business through the COMPANY, during the term of this
Agreement and for one year thereafter, Cadila shall not, directly or indirectly
(including, without limitation, by the granting of licenses or similar rights),
engage in, promote, finance or manage research, development, manufacturing or
commercialization in any other vaccine products for seasonal or non-seasonal
influenza in the Territory. Other than engaging in the Business through the
COMPANY, for the term of the Agreement and for one year thereafter, Novavax
shall not, directly or indirectly (including, without limitation, by the
granting of licenses or similar rights),

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    engage in, promote, finance or manage research, development, manufacturing
or commercialization in any therapeutic vaccine products for hepatitis or cancer
in the Territory.   22.3   The undertakings in this Article are given by each
Shareholder to the other and to the COMPANY and apply to actions carried out by
each Shareholder (or any persons in its Group) in any capacity and whether
directly or indirectly, on behalf of the Shareholder (or any persons in its
Group), on behalf of any other person or jointly with any other person.   22.4  
Each of the covenants in this Article 22 is considered fair and reasonable by
the Parties, but if any such restriction shall be found to be unenforceable but
would be valid if any part of it were deleted or the period or area of
application reduced, the restriction shall apply with such modifications as may
be necessary to make it valid and effective.   22.5   Each Party shall, to the
extent that it is able to do so, exercise all voting rights and other powers in
relation to persons in its Group to procure that such persons comply with the
terms of this Article 22.   22.6   Notwithstanding any provision to the contrary
in this Agreement, the provisions of this Article 22 shall not apply to a party
with respect to any former employee of such party.

Article 23
Licenses

23.1   Licenses from Novavax to COMPANY. Novavax shall execute and deliver the
Novavax Licenses on the Completion Date.   23.2   License from Cadila to
COMPANY. Cadila shall execute and deliver the Cadila License on the Completion
Date.   23.3   Election to Change Additional Novavax Products. The COMPANY may
elect to change one or more of the targeted viruses of the Additional Novavax
Products that COMPANY desires to develop and commercialize, by providing a
written notice to Novavax, identifying the new desired targeted virus and
disease indication and the targeted virus to be removed. The requested change
requires the approval of Novavax which it can grant or withhold in its sole
discretion. Upon receipt of Novavax’s written approval, the Seasonal and Other
Vaccine License shall be amended to change the definition of Licensed Product
accordingly. COMPANY will be solely responsible for

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    all research, development, manufacturing and commercialization of all
Additional Novavax Products in the Territory and Novavax will not be obligated
to provide any assistance or services related to such products.   23.4  
Technical Services. Novavax and Cadila will execute and deliver the Technical
Services Agreements pursuant to which each will provide certain technical
services to the COMPANY related to the Novavax Products and Cadila Products.  
23.5   Trademark License. Each Party shall grant and hereby grants to the
COMPANY a non-exclusive license to use its trademark “Cadila” or “Novavax” (the
“Marks”) solely upon Products (and materials relating thereto) to indicate that
the COMPANY is a joint venture between Cadila and Novavax. The license granted
under this Section 23.5 shall include the right to grant sublicenses solely in
connection with the grant of an approved sublicense under a License to
commercialize a Product, and any attempt to otherwise grant or authorize any
sublicense shall be null and void. Novavax shall not use the trademark “Cadila”
in isolation during the term of this Agreement and thereafter. Cadila shall not
use the trademark “Novavax” in isolation during the term of this Agreement and
thereafter. All uses of the Marks by the COMPANY shall comply with all
applicable laws and regulations (including, without limitation, those laws and
regulations particularly applying to the proper use and designation of
trademarks in the applicable countries). The ownership and all goodwill accruing
to the Marks arising directly from its use by the COMPANY shall vest in and
inure to the benefit of the respective owner of the Mark. The COMPANY and each
Party hereby acknowledges the other Party’s ownership rights in their respective
corporate logo owned in the form existing as of the Effective Date, and
accordingly, agrees that at no time during the term to challenge or assist
others to challenge such corporate logo owned in the form existing as of the
Effective Date, or the registration thereof or attempt to register any
trademarks, marks or trade names confusingly similar to such corporate logo
owned in the form existing as of the Effective Date.

Article 24
Intellectual Property Matters

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

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

Article 25
Warranties and Representations
Each Party hereby represents and warrants to the other Party and the COMPANY
that:

25.1   It is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has the corporate power to enter
into this Agreement and to perform its obligations hereunder;   25.2   It has
obtained all corporate authorisations and approvals necessary to execute and to
deliver this Agreement and to perform its obligations hereunder;   25.3   It has
duly executed and delivered this Agreement;   25.4   The execution and delivery
of this Agreement, any Ancillary Agreements (and any other agreements between
the Parties or between either Party and the Company in connection with this
Agreement) and the performance of its obligations, and exercise of its rights,
hereunder or under any such Ancillary Agreement or other agreement do not and
will not:

  (a)   Conflict with any of the provisions of its constitutive documents or of
any resolutions made thereunder; or     (b)   Result in a breach of any of the
provisions of, or constitute a default under, or conflict with any agreement to
which it is a party; or

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

25.5   As of the Effective Date, it has sufficient rights to grant the licenses
granted to the COMPANY hereunder.   25.6   Cadila hereby represents and warrants
to Novavax that, as of the Effective Date and immediately prior to the
Completion:   25.6.1   The COMPANY is duly organized, validly existing and in
good standing under the laws of India and has the corporate power to own its
property and to conduct the Business and is duly qualified to do business in the
jurisdiction where it operates and enter into the Ancillary Agreements (and any
other agreements between the COMPANY and one or more of the parties contemplated
by this Agreement) and perform the transactions and activities contemplated
hereby and thereby;   25.6.2   The COMPANY has obtained all material licenses,
permissions, authorisations and consents required for carrying on the business
effectively in the places and in the manner in which such business is carried on
prior to the Completion. Such licenses, permissions, authorisations and consents
are in full force and effect, are not limited in duration or subject to any
unusual or onerous conditions and have been complied with in all respects. There
are no circumstances which indicate that any such licenses, permissions,
authorisations or consents will or are likely to be revoked or not renewed, in
whole or in part, in the ordinary course of events (whether as a result of the
Agreement or otherwise);   25.6.3   The COMPANY has not conducted any business,
entered into any contracts or incurred or assumed any liabilities or obligations
before the Effective Date. There are no other commitments or contracts or
arrangements entered into by Cadila or the COMPANY, which may be in breach of
the terms of this Agreement or the obligations of Cadila hereunder;   25.6.4  
The COMPANY is not engaged in any activity in which foreign investment by a
non-resident is restricted or prohibited.   25.6.5   The COMPANY does not have
any subsidiaries within the meaning of Section 4 of the Companies Act, 1956 nor
own any direct or indirect shareholding interest in any other entity or body
corporate.

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25.6.6   The statutory books, minute books, register of members and other
registers of the COMPANY, as required under any applicable law, have been
properly and accurately maintained in all material respects and contain full and
accurate records of all matters required to be entered under applicable law,
including all issuances and transfers of shares or other securities of the
COMPANY and, as regards minutes books, all resolutions passed by the directors
and the shareholders of the COMPANY.   25.6.7   Immediately after the Completion
Date, the only Shareholders of the COMPANY will be Cadila and Novavax; and  
25.6.8   The execution and delivery of any Ancillary Agreement by COMPANY and
any other agreement to which it is a party that is contemplated by this
Agreement and the performance of its obligations under such Ancillary Agreements
and other agreements in accordance with the terms thereof have been approved by
all requisite corporate and applicable government approvals and do not and will
not conflict with any of the provisions of its constitutive documents or of any
resolutions made thereunder; result in any breach of any of the provisions of,
or constitute a default under, or conflict with any agreements to which it is a
party.   25.7   The COMPANY is entitled and authorised to issue the Shares in
the manner and upon the terms and conditions contained in this Agreement. There
are no options, agreements or understandings (exercisable now or in the future
and contingent or otherwise) which entitle or may entitle any person to create
or require to be created any encumbrance over any of the Shares once issued by
the COMPANY. Other than as contemplated by this Agreement, there is no
agreement, arrangement, scheme or obligation requiring the creation, allotment,
issue, transfer, redemption or repayment of, or the grant to a person of the
right (conditional or not) to require the allotment, issue, transfer, redemption
or repayment of, any Shares in the share capital of COMPANY (including an option
or right of pre-emption).   25.8   Novavax shall acquire a valid and marketable
title to the Shares to be issued pursuant to this Agreement and will be, when
delivered, duly authorised, validly issued, and will be free and clear of all
encumbrances and third party rights and interests.   25.9   All of the issued
and paid-up Shares are, and when issued, sold and delivered in accordance with
the terms of this Agreement will be, duly authorized, validly issued, and free
of pre-emptive rights (except as expressly set forth herein). The issuance, sale
and delivery of the Shares to Novavax will be duly authorized on or prior to the

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

EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES
(AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS) ANY OTHER REPRESENTATIONS OR
WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT, OR
FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTIES THAT MAY ARISE FROM COURSE
OF PERFORMANCE, COURSE OF DEALING, OR USAGE OF TRADE.
Article 26
Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
India.
Article 27
Dispute Resolution
Any dispute arising between the Parties out of or in connection with the
implementation or interpretation of this Agreement shall, if not settled
amicably within ninety (90) days from the date that the dispute arose, be
finally settled by three (3) arbitrators. Each Party shall be entitled to
appoint one (1) arbitrator and the two (2) so appointed shall appoint the third
arbitrator in accordance with the Indian Arbitration and Conciliation Act, 1996.
It is hereby agreed that Part I of the Indian Arbitration and Conciliation Act,
1996 shall not apply to the arbitration under this Agreement. The language of
the arbitration proceedings shall be English and its place shall be Singapore.
The arbitral award or determination shall be final and subject to no appeal and
shall deal with the question of costs of arbitration and all matters related
thereto.
The Parties agree that it would be impossible or inadequate to measure and
calculate their

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damages from any breach of the Agreement though great and irreparable.
Accordingly, each Party agrees that if the other Party breaches this Agreement,
the non-breaching party will have available, in addition to any other right or
remedy available, the right to obtain an injunction from a court of competent
jurisdiction restraining such breach or threatened breach and specific
performance of any provision of this Agreement.
Article 28
Force Majeure
Neither Party shall be in default of this Agreement by reason of its failure or
delay in complying with its obligations under this Agreement if such failure or
delay is caused by matters out of its reasonable control, including but not
limited to acts of God, change in laws and regulations, strikes, lock-outs,
fire, riots, or civil war or civil commotion; provided that such Party gives the
other Party prompt written notice of the failure or delay in performance and the
reason therefor and uses its reasonable efforts to limit the resulting failure
or delay in its performance.
Article 29
Miscellaneous

29.1   In no event shall either Party be liable under any theory of liability
(whether in contract, tort, statute or otherwise) for any indirect, special,
exemplary, punitive, incidental or consequential damages of any kind, or for any
loss of profits, loss of revenue, loss resulting from interruption of business
or loss of use or data, arising out of or relating to this Agreement or the
subject matter hereof, however caused, even if the other Party has been advised
of or should have known of the possibility of such damages.   29.2   Except as
expressly stated in this Agreement, whether or not the transactions contemplated
hereby are consummated, each of the Parties shall pay the fees and expenses of
its own counsel, accountants or other experts, and all other expenses incurred
by such Party in connection with the negotiation, preparation and execution of
this Agreement and the transactions contemplated hereby, except that the cost
(other than attorneys’ fees) of the preparation of this Agreement and its
Annexes if any shall be equally shared by Cadila and Novavax. The COMPANY shall
bear the expenses of its formation.   29.3   Any notice, request, demand,
waiver, consent, approval or other communication permitted or required under
this Agreement (“Notice”) will be in writing, will refer

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    specifically to this Agreement and will be deemed given only if sent by
electronic mail (with receipt confirmed), facsimile transmission (with
transmission confirmed) or by an internationally recognized delivery service
that maintains records of delivery, addressed to the Parties at their respective
addresses specified on the signature page hereto or to such other address as the
Party to whom notice is to be given may have provided to the other Party in
accordance with this Section 29.3. Any notice delivered by electronic mail or
facsimile will be confirmed by a hard copy delivered as soon as practicable
thereafter by an internationally recognized overnight delivery service. Such
Notice will be deemed to have been given on the second Business Day (at the
place of delivery) after deposit with an internationally recognized delivery
service. This Section 29.3 is not intended to govern the day-to-day business
communications necessary between the Parties in performing their obligations
under the terms of this Agreement.   29.4   No amendment or waiver of any
provision of this Agreement, and no consent to any departure therefrom, shall be
effective unless the same shall be in writing and signed by an authorized
representative of each Party, and such waiver or consent shall be effective only
for the specific purpose for which it is given. No failure on the part of a
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies provided for in this Agreement are cumulative and are
not exclusive of any remedies provided for by law.   29.5   If any of the
provisions of this Agreement are found to be inconsistent with, or void under,
applicable laws, the validity of the remaining provisions shall not thereby be
affected. In such a case the Parties shall re-negotiate the ineffective
provision in good faith in order to replace it with a provision affording the
same rights, obligations and economic benefits to the Parties and the COMPANY as
the ineffective provision.   29.6   This Agreement and the documents executed
and delivered on the date hereof pursuant hereto or in connection herewith,
contain the entire agreement among the Parties with respect to the matters
addressed herein and therein and supersede all prior representations,
inducements, promises or agreements, oral or otherwise, which are not embodied
herein or therein.   29.7   Except in connection with a transfer of shares of
the COMPANY expressly permitted hereunder, this Agreement and all rights and
obligations hereunder may not be transferred or assigned by any Party to any
person without the prior written consent of

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    the other Party. Any transfer or assignment without such consent shall be
null and void. Notwithstanding the foregoing, the Parties expressly agree that
Satellite Overseas (Holdings) Limited or any other member of Cadila’s Group that
holds shares of the COMPANY are intended third-party beneficiaries with the
right to enforce the terms and conditions of Section 11.2.   29.8   (a) Any
acts, deeds or anything which is not covered under this Agreement pertaining to
the COMPANY and its technical, commercial or any other activities shall be
discussed by the Parties separately at the relevant point of time and shall be
reduced to writing and signed by way of separate agreement, wherein such
agreement shall form part of this Agreement.       (b) The Parties will have the
right to amend, modify and change the terms and conditions of this Agreement by
way of a separate or supplementary agreement wherein such additional agreement
will be part of the this Agreement; provided, however, that this Agreement may
be amended from time to time without such separate or supplementary agreement as
necessary to reflect (1) the admission to the COMPANY of one or more new
Shareholders in accordance with this Agreement, or any other adjustments in the
ownership interests of the Shareholders in connection with capital contributions
or as otherwise appropriate in accordance with the terms and conditions of this
Agreement or (2) any decrease in the authorized share capital or any increase in
the authorized share capital to a number not in excess of three times the issued
share capital..       (c) Nothing in this Agreement shall confer upon any person
any right to be employed or to continue employment by the COMPANY or any person
in its Group or to interfere in any manner in any right of the COMPANY or any
person in its Group to terminate such employment at any time.   29.9   Each
Party agrees to execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments, and to obtain such consents,
authorizations and approvals from governmental authorities and other third
parties, as may be reasonably required in order to effectuate the terms and
conditions of this Agreement.   29.10   The Shareholders hereby agreed and
undertake to ensure that they, their representatives, proxies and agents
representing them at meetings of the Shareholders shall at all times

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

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

     
Cadila Pharmaceuticals Limited
  Novavax Inc.
Cadila Corporate Campus, Sarkhej-Dholka
  9920 Belward Campus Drive, Rockville,
Road, Bhat, Ahmedabad – 382 210
  MD 20850, USA
Fax No. +91 – 2718 – 225031
  Fax No. +1 240-268-2128
Email: rimodi@cadilapharma.co.in
  Email: rsinghvi@novavax.com
 
   
For Cadila Pharmaceuticals Limited
  For Novavax, Inc.
/s/ Rajiv I Modi
  /s/ Rahul Singhvi
Dr. Rajiv I. Modi
  Dr. Rahul Singhvi
Managing Director
  President and Chief Executive Officer
 
   
/s/ Dr. Bakulesh Khamar
  /s/ Thomas Johnston
Witness 1
  Witness 1
 
   
/s/ Chinubhai R. Shah
  /s/ James Robinson
Witness 2
  Witness 2

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

1.   The sale, transfer, lease, assignment or disposal of all or substantially
all of the property or assets of the COMPANY, whether by way of a single
transaction or a series of related transactions.   2.   A Change in Control of
the COMPANY. “Change in Control” means (a) the sale of all or substantially all
of the assets or business of COMPANY, or (b) any merger, consolidation,
recapitalization, or business combination of COMPANY, or (c) the sale of capital
stock or other equity securities of the COMPANY, or (d) any other transaction or
series of transactions; provided that for each of (b) through (d), the result of
which is that the Shareholders of the COMPANY prior to such transaction do not,
immediately following any such transaction(s), directly or indirectly hold
voting securities of the surviving or purchasing entity sufficient to elect a
majority of the board of directors of such surviving or purchasing entity.   3.
  The liquidation, dissolution or winding-up of the COMPANY.   4.   Any
incurrence of indebtedness of the COMPANY that would result in the COMPANY
having a debt-to-equity ratio of 3-to-1 or greater.   5.   Other than as set
forth in Section 29.8(b), the amendment or waiver of any provision of this
Agreement, the Articles of Association or the Stockholders Agreement.   6.   Any
change to or deviation from the Dividend Policy set forth in Article 14.

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