exv10w34



 





Exhibit 10.34




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.




EXCLUSIVE LICENSE AGREEMENT




     This Agreement, effective as of February 26, 2007 (the “Effective Date”), is between the
University of Massachusetts (“University”), a public institution of higher education of the
Commonwealth of Massachusetts as represented by its Worcester campus, and Novavax, Inc.
(“Company”), a publicly traded corporation having a principal location at 9920 Belward Campus
Drive, Rockville, MD, 20850.



R E C I T A L S




     WHEREAS, University is owner by assignment of the invention claimed in the United States
Patent Applications listed on Exhibit A relating to the University’s invention disclosure number *
* *; and



     WHEREAS, Company desires to obtain an exclusive license to develop and commercialize products
incorporating certain Virus-Like Particles, under the rights of University in any patent rights
claiming those inventions; and



     WHEREAS, University is willing to grant Company an exclusive license on the terms set forth in
this Agreement;



     NOW, THEREFORE, University and Company agree as follows:



1. Definitions.




     1.1. “Affiliate” means any legal entity (such as a corporation, partnership, or
limited liability company) that is controlled by Company. For the purposes of this definition, the
term “control” means (i) beneficial ownership of at least fifty percent (50%) of the voting
securities of a corporation or other business organization with voting securities or (ii) a fifty
percent (50%) or greater interest in the net assets or profits of a partnership or other business
organization without voting securities.



     1.2. “Confidential Information” means any and all information furnished by one party
(the “Disclosing Party”) to the other party (the “Receiving Party”) in connection with this
Agreement that is specifically designated as confidential in accordance with the terms of Article
7.



     1.3. “Field” means the diagnosis, prevention and/or treatment of any diseases and
conditions in humans.



     1.4. “Licensed Product” means any product that cannot be developed, manufactured,
used, or sold without infringing one or more claims under the Patent Rights.



     1.5. “Market Approval” means approval for the sale of Licensed Product by the United
States FDA or its counterpart in other countries. In Europe, this means the approval of the
European Medicines Evaluation Agency (“EMEA”).



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




     1.6. “Net Sales” means the gross amount billed or invoiced on sales of Licensed
Products by Company, its Sublicensees and Affiliates, less the following: (a) customary trade,
quantity, or cash discounts to non-affiliated brokers or agents to the extent actually allowed and
taken; (b) amounts repaid or credited by reason of rejection or return; (c) to the extent
separately stated on purchase orders, invoices, or other documents of sale, any taxes or other
governmental charges levied on the production, sale, transportation, delivery, or use of a Licensed
Product which is paid by or on behalf of Company, its Sublicensee or Affiliate; (d) outbound
transportation costs prepaid or allowed and costs of insurance in transit; and (e) chargebacks and
rebates to managed healthcare organizations or to federal, state and local governments, their
agencies, or to trade customers, including without limitation, wholesalers, hospital buying groups
and chain pharmacy buying groups.



     In any transfers of Licensed Products between Company and its Sublicensees or Affiliates, Net
Sales are calculated based on the final sale of the Licensed Product to an independent third party.
If Company, its Affiliates or Sublicensees receive non-monetary consideration for any Licensed
Products, Net Sales are calculated based on the fair market value of that consideration. If
Company or its Affiliates or Sublicensees use or dispose of a Licensed Product in the provision of
a commercial service, the Licensed Product is sold and the Net Sales are calculated based on the
sales price of the Licensed Product to an independent third party during the same Royalty Period
or, in the absence of sales, on the fair market value of the Licensed Product as determined by the
parties in good faith.



     1.7. “Patent Rights” means (i) the patent applications listed on Exhibit A and (ii)
any divisional, continuation or continuation in part of those patent applications to the extent the
claims are directed to subject matter specifically described therein (but excluding any
continuation in part application to the extent of any claim covering an invention arising from and
subject to the Sponsored Research Agreement) as well as any patents issued on these patent
applications and any reissues or, reexaminations, or substitutions of such patents or patent
applications, and any foreign counterparts to the foregoing patents and patent applications.



     1.8. “Phase I Clinical Trial” shall have the meaning ascribed by the FDA and as
promulgated under 21 C.F.R. § 312.21(a).



     1.9. “Phase II Clinical Trial” shall have the meaning ascribed by the FDA and as
promulgated under 21 C.F.R. § 312.21(b).



     1.10. “Royalty Period” means the partial calendar quarter commencing on the date on
which the first Licensed Product is sold and every complete or partial calendar quarter thereafter
during which
either (a) this Agreement remains in effect or (b) Company has the right to complete and sell
work-in-progress and inventory of Licensed Products pursuant to Section 8.6.



     1.11. “Sponsored Research Agreement” means that certain Sponsored Research Agreement
entered into by and between Company and University dated as of February 26, 2007.



     1.12. “Sublicense Income” means payments or other value that Company receives from a
Sublicensee to the extent made in consideration of the sublicense of the rights granted Company
under Section 2.1., including without limitation license fees, milestone payments, and license
maintenance



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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.



fees, but excluding the following payments: (a) royalties on Net Sales, (b) payments
for milestone events for which a milestone is payable to University under Section 4.3, (c) payments
made in consideration for the issuance of equity or debt securities of Company to the extent of
fair market value, and (d) payments specifically committed to the development of Licensed Products.




     1.13. “Sublicensee” means any permitted sublicense of the rights granted Company under
this Agreement in accordance with the terms of Section 2.2.



2. Grant of Rights.




     2.1. License Grant. Subject to the terms of this Agreement and the University’s
retained rights under Section 2.3, University grants to Company an exclusive, worldwide,
royalty-bearing license (with the right to sublicense through multiple tiers) under the Patent
Rights to develop, make, have made, use, and sell Licensed Products in the Field.



     2.2. Sublicenses. Company may grant sublicenses of its rights under Section 2.1. with
the consent of University, which consent may not be unreasonably withheld or delayed. All
sublicense agreements executed by Company pursuant to this Article 2 shall expressly bind the
Sublicensee to the terms of this Agreement applicable to a Sublicense. Company shall promptly
furnish University with a fully executed copy of any sublicense agreement.



     2.3. Retained Rights.



     (a) University. University retains the right to practice and use the Patent Rights
for academic, non-commercial research (excluding the use with any clinical trial), teaching, and
non-commercial patient care without payment of compensation to Company. University may license its
retained rights under this Section to other academic or non-commercial research institutions (for
use by faculty members, post-doctoral fellows, and students) solely for the purpose of practicing
the rights retained under this Section and subject to terms of this Agreement, provided that
University will promptly notify Company of any such license.



     (b) Federal Government. To the extent that any invention claimed in the Patent Rights
has been funded by the federal government, this Agreement and the grant of any rights in Patent
Rights are subject to and governed by federal law as set forth in 35 U.S.C. §§ 201-211, and the
regulations promulgated thereunder, as amended, or any successor statutes or regulations. Company
acknowledges that these statutes and regulations reserve to the federal government a royalty-free,
non-exclusive, non-transferable license to practice any government-funded invention claimed in the
Patent Rights. If any term of this Agreement fails to conform with those laws and regulations, the
relevant term is an invalid provision and shall be modified by the parties pursuant to Section
11.10.



3. Company Obligations Relating to Commercialization.




     3.1. Diligence Requirements. Company shall use or shall cause its Affiliates or
Sublicensees to use diligent efforts to develop Licensed Products and to introduce Licensed
Products into the commercial market. Upon receipt of Market Approval for a Licensed Product,
Company and its



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



Affiliates or its Sublicensees shall make such Licensed Products reasonably
available to the public. Specifically, Company shall fulfill the following obligations:




     (a) On or before execution of this Agreement, Company shall furnish University with a written
research and development plan under which Company intends to develop Licensed Products (it being
understood that such obligation is achieved upon the execution of the Sponsored Research
Agreement).



     (b) Within sixty (60) days after the start of each calendar year, Company shall furnish
University with a written report on the progress of its efforts during the prior year to develop
and commercialize Licensed Products, including without limitation research and development efforts,
efforts to obtain regulatory approval, marketing efforts, and sales figures. The report shall also
contain a discussion of intended efforts and sales projections for the current year.



     (c) * * *.


If University determines that Company has not fulfilled its obligations under this Section 3.1,
University shall furnish Company with written notice of the determination. Within ninety (90) days
after receipt of the notice, Company shall either (i) cure such material breach or (ii) negotiate
with University a mutually acceptable schedule of revised diligence obligations, failing which
University may, immediately upon written notice to Company, terminate this Agreement or convert the
exclusive license into a non-exclusive license and grant additional licenses to third parties to
the Patent Rights in the Field. Any activities performed by Company’s Affiliates or Sublicensees
shall be deemed activities of Company for purposes of determining Company’s compliance with the
terms of this Section 3.1.




     3.2. Indemnification.



     (a) Indemnity. Company and its Affiliates shall indemnify, defend, and hold harmless
University and its trustees, officers, faculty, students, employees, and agents and their
respective successors, heirs and assigns (the “Indemnitees”), against any liability, damage, loss,
or expense (including reasonable attorneys fees and expenses of litigation) incurred by or imposed
upon any of the Indemnitees by third parties in connection with any claims, suits, actions, demands
or judgments arising out of any theory of liability (including without limitation actions in the
form of tort, warranty, or strict liability and regardless of whether the action has any factual
basis) to the extent caused by any product, process, or service that is made, used, or sold
pursuant to any right or license granted under this Agreement. However, indemnification does not
apply to any liability, damage, loss, or expense to
the extent attributable to (i) the gross negligence or intentional misconduct of the Indemnitees,
(ii) breach by an Indemnitee of any obligation, warranty or representation set forth in this
Agreement, or (iii) the settlement of a claim, suit, action, or demand by Indemnitees without the
prior written approval of Company.



     (b) Procedures. The Indemnitees agree to provide Company with prompt written notice
of any claim, suit, action, demand, or judgment for which indemnification is sought under this
Agreement. Company agrees, at its own expense, to provide attorneys reasonably acceptable to
University to defend against any claim. The Indemnitees shall cooperate fully with Company in the
defense and will



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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.



permit Company to conduct and control the defense and the disposition of the
claim, suit, or action (including all decisions relative to litigation, appeal, and settlement).
However, any Indemnitee may retain its own counsel, at the expense of Company, if representation of
the Indemnitee by the counsel retained by Company would be inappropriate because of actual or
potential differences in the interests of the Indemnitee and any other party represented by that
counsel. Company agrees to keep University informed of the progress in the defense and disposition
of the claim and to consult with University regarding any proposed settlement.




     (c) Insurance. Company and its Affiliates shall maintain insurance that is reasonably
adequate to fulfill any potential obligation to the Indemnitees, but not less than one million
dollars ($1,000,000) for injuries to any one person arising out of a single occurrence and five
million dollars ($5,000,000) for injuries to all persons arising out of a single occurrence.
Company shall provide University, upon request, with written evidence of insurance. Company and
its Affiliates shall continue to maintain such insurance after the expiration or termination of
this Agreement during any period in which Company, its Affiliate(s) or Sublicensee(s) continues to
make, use, or sell a product that was a Licensed Product under this Agreement.



     3.3. Use of University Name. In accordance with Section 7.3., Company and its
Affiliates and Sublicensees may not use the name “University of Massachusetts” or any variation of
that name in connection with the marketing or sale of any Licensed Products.



     3.4. Marking of Licensed Products. To the extent commercially feasible and consistent
with prevailing business and legal practices, Company shall mark and shall cause its Affiliates and
Sublicensees to mark all Licensed Products that are manufactured or sold under this Agreement with
the number of each issued patent under the Patent Rights that applies to a Licensed Product.



     3.5. Compliance with Law. Company shall comply with, and shall ensure that its
Affiliates and Sublicensees comply with, all local, state, federal, and international laws and
regulations applicable to the development, manufacture, use, and sale of Licensed Products. Company
expressly agrees to comply with the following:



     (a) Company, its Affiliates and Sublicensees shall obtain all necessary approvals from the
United States Food & Drug Administration and any similar governmental authorities of any foreign
jurisdiction in which Company, its Affiliate or Sublicensee makes, uses, or sells Licensed
Products.



     (b) Company, its Affiliates and Sublicensees shall comply with all United States laws and
regulations controlling the export of commodities and technical data applicable to the Licensed
Products, including without limitation all Export Administration Regulations of the United States
Department of Commerce. Among other things, these laws and regulations prohibit or require a
license for the export of certain types of commodities and technical data to specified countries
and foreign nationals. Company hereby gives written assurance that it will comply with and will
cause its Affiliates and Sublicensees to comply with all United States export control laws and
regulations applicable to the Licensed Products, that it bears sole responsibility for any
violation of those laws and regulations by itself, or its Affiliates or Sublicensees, and that it
will indemnify, defend, and hold



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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.



University harmless (in accordance with Section 3.2.) for the
consequences of any violation applicable to the Licensed Products.




     (c) To the extent that any invention claimed in the Patent Rights has been partially funded by
the United States government, and only to the extent required by applicable laws and regulations,
Company agrees that any Licensed Products used or sold in the United States will be manufactured
substantially in the United States or its territories. Current law provides that if domestic
manufacture is not commercially feasible under the circumstances, University may seek a waiver of
this requirement from the relevant federal agency on behalf of Company.



4. Consideration for Grant of Rights.




     4.1. License Fee. In partial consideration of the rights granted Company under this
Agreement, Company shall pay to University, within thirty (30) days of the Effective Date, a
license fee of * * *. This license fee payment is nonrefundable and is not creditable against
any other payments due to University under this Agreement.



     4.2. License Maintenance Fee. Within thirty (30) days of the beginning of each
calendar year during the term of this Agreement, Company shall pay to University an annual license
maintenance fee payment in the amount of * * *. These license maintenance fees are
nonrefundable and are not creditable against any other payments due to University under this
Agreement.



     4.3. Milestone Payments. Company shall pay University the following milestone
payments for each Licensed Product (but only once with respect to each Licensed Product,
irrespective of the number of indications for which such Licensed Product may be developed or
approved) within thirty (30) days after the occurrence of each event by Company and its Affiliates:



	 	 	 
	Milestone Event	 	Milestone Payment
	*      *      *

	 	*      *      *
	*      *      *

	 	*      *      *
	*      *      *

	 	*      *      *





These milestone payments are nonrefundable and are not creditable against any other payments due to
University under this Agreement.




     4.4. Base Royalties. In partial consideration of the rights granted Company under this
Agreement, Company shall pay to University a royalty on aggregate, annual Net Sales during each
calendar year of all Licensed Products, at the following rates:



     (a) * * * of the portion of annual, worldwide Net Sales of Licensed Products that is less
than or equal to * * *;



     (b) * * * of the portion of annual, worldwide Net Sales of Licensed Products that is
greater than * * * but less than or equal to * * *; and



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




     (c) * * * of the portion of annual, worldwide Net Sales of Licensed Products that is
greater than * * *.



     4.5. Minimum Royalty. Beginning January 1, * * *, and within thirty (30) days of
each subsequent calendar year during the term of this Agreement, Company shall pay University a
minimum royalty payment of * * *. Minimum royalty payments are creditable against royalties
payable for Net Sales during the same calendar year. If Company fails to make any minimum royalty
payment, that failure is a material breach of its obligations under this Agreement, and University
may terminate this Agreement in accordance with Section 8.3.



     4.6. Royalty Term. Royalties due under Section 4.4 shall commence upon the First
Commercial Sale of a Licensed Product in a particular country and will expire on a
country-by-country basis upon the expiration of all issued patents or the abandonment of all
pending patent applications within the Patent Rights that, absent a license, would be infringed in
such country by the use or sale of the Licensed Product in such country (“Royalty Term”). As used
in this Agreement, “First Commercial Sale” shall mean, with respect to any Licensed Product, the
first sale or other transfer of such Licensed Product by Company, its Affiliate(s) or
Sublicensee(s) to an unaffiliated customer for resale, use or consumption and not solely for
evaluation or testing.



     4.7. Other Payments to University. In the event Company is legally required to make
base royalty payments to University for a Licensed Product under any license agreement between the
Parties other than this Agreement (whether directly or on behalf of a Sublicensee), Company may
offset a total of * * * of such other base royalty against payments due to University under
Sections 4.4 in the same Royalty Period under this Agreement. However, such offset may not reduce
the royalty payments payable under Section 4.4 to less than * * * in the Royalty Period.



     4.8. Third-Party Royalties. In the event Company or any of its Affiliates or
Sublicensees makes royalty payments to one or more third parties in connection with the
manufacture, use or sale of Licensed Products, then Company may offset a total of * * * of such
payments against any royalty payments that are due to University in the same Royalty Period.
However, such offset may not reduce the royalty payments under Section 4.4 to less than * * *
in the Royalty Period.



     4.9. Sublicense Income. Company shall pay University a total of * * * of all
Sublicense Income pursuant to any sublicense agreement entered into between Company and a
Sublicensee within the first twelve (12) months after the Effective Date of this Agreement,
provided that the Sponsored Research Agreement is not voluntarily terminated by Company prior to the expiration thereof.
If Company voluntarily terminates the Sponsored Research Agreement, Company shall pay University *
* * of all Sublicense Income for the remaining term of this Agreement. Sublicense Income is due
and payable within sixty (60) days after Company receives the relevant payment from the
Sublicensee.



5. Royalty Reports; Payments; Records.




     5.1. First Sale. Company shall report to University the date of First Commercial Sale
of each Licensed Product within thirty (30) days after occurrence in each country.



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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.




     5.2. Reports and Payments. Within sixty (60) days after the conclusion of each
Royalty Period, Company shall deliver to University a report containing the following information:



     (a) the number of Licensed Products sold to independent third parties in each country;



     (b) the gross sales price for each Licensed Product during the applicable Royalty Period in
each country;



     (c) calculation of Net Sales for the applicable Royalty Period in each country, including a
listing of applicable deductions;



     (d) total royalty payable on Net Sales in United States dollars, together with the exchange
rates used for conversion; and


If no royalties are due to University for any Royalty Period, the report shall so state.
Concurrent with this report, Company shall remit to University any payment due for the applicable
Royalty Period.




     5.3. Payments in United States Dollars. All payments due under this Agreement are
payable in United States dollars. Conversion of foreign currency to United States dollars shall be
made at the conversion rate existing in the United States (as reported in the Wall Street Journal)
on the last working day of the calendar quarter preceding the applicable Royalty Period. Payments
shall be without deduction of exchange, collection, or other charges relating to such currency
conversion.



     5.4. Payments in Other Currencies. If by law, regulation, or fiscal policy of a
particular country, conversion into United States dollars or transfer of funds of a convertible
currency to the United States is restricted or forbidden, Company shall give University prompt
written notice of the restriction, within the sixty-day payment deadline described in Section 5.2.
Company shall pay any amounts due University through whatever lawful methods University reasonably
designates. However, if University fails to designate a payment method within thirty (30) days
after University is notified of the restriction, Company may deposit payment in local currency to
the credit of University in a recognized banking institution selected by Company and identified by
written notice to University, and that deposit fulfills all obligations of Company to University
with respect to that payment.



     5.5. Records. Company shall maintain and shall cause its Affiliates and Sublicensees
to maintain complete and accurate records of Licensed Products that are made, used, or sold under
this Agreement and any amounts payable to University in relation to Licensed Products, which records
shall contain sufficient information to permit University to confirm the accuracy of any reports
delivered to University under Section 5.2. The relevant party shall retain records relating to a
given Royalty Period for at least three (3) years after the conclusion of that Royalty Period,
during which time University shall have the right, at its expense, to cause its internal
accountants or an independent, certified public accountant to inspect records during normal
business hours for the sole purpose of verifying any reports and payments delivered under this
Agreement. The accountant may not disclose to University any information other than information
relating to accuracy of reports and payments delivered under this Agreement. The parties shall
reconcile any underpayment or overpayment within



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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.



thirty (30) days after the accountant delivers the
results of the audit. If any audit performed under this Section reveals an underpayment in excess
of ten percent (10%) in any Royalty Period, Company shall bear the full cost of the audit.
University may exercise its rights under this Section only once every year, only once with respect
to any particular Royalty Period, and only with reasonable prior notice to Company.




     5.6. Late Payments. Any payments by Company that are not paid on or before the date
payments are due under this Agreement bear interest, to the extent permitted by law, at one and one
half percent (1.5%) per month calculated based on the number of days that payment is delinquent.



     5.7. Method of Payment. All payments under this Agreement should be made to the
“University of Massachusetts” and sent to the address identified below in Section 11.9. Each
payment should reference this Agreement and identify the obligation under this Agreement that the
payment satisfies.



     5.8. Withholding and Similar Taxes. Royalty payments and other payments due to
University under this Agreement may not be reduced by reason of any withholding or similar taxes
applicable to payments to University.



6. Patents and Infringement.




     6.1. Responsibility for Patent Rights. University shall, at the expense of Company,
prepare, file, prosecute, and maintain all Patent Rights, using patent counsel reasonably
acceptable to Company. University shall consult with Company as to the preparation, filing,
prosecution, and maintenance of all Patent Rights reasonably prior to any deadline or action with
the United States Patent & Trademark Office or any foreign patent office and shall incorporate all
reasonable comments and requests of Company, including without limitation the countries and
territories in which University shall file and maintain such Patent Rights. University shall
furnish Company with copies of relevant documents reasonably in advance of consultation.



     6.2. Cooperation. Company shall cooperate fully in the preparation, filing,
prosecution, and maintenance of all Patent Rights. Cooperation includes, without limitation, (a)
promptly executing all papers and instruments or requiring employees of Company to execute papers
and instruments as reasonable and appropriate to enable University to file, prosecute, and maintain
Patent Rights in any country; and (b) promptly informing the University of matters that may affect
the preparation, filing, prosecution, or maintenance of Patent Rights (such as, becoming aware of an additional inventor who
is not listed as an inventor in a patent application).



     6.3. Payment of Expenses.



     (a) Within thirty (30) days of the Effective Date, Company shall pay University * * * to
reimburse University for patent expenses incurred through December 31, 2006 in connection with
obtaining the Patent Rights, which amount shall be payable together with the Company’s payment
pursuant to Section 4.1.



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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.




     (b) Within thirty (30) days after University invoices Company, Company shall reimburse
University for all patent-related expenses incurred by University as of December 31, 2006 and after
December 31, 2006 for patent expenses incurred pursuant to Section 6.1.



     (c) Company may elect, upon sixty (60) days written notice to University, to cease payment
of the expenses associated with obtaining or maintaining patent protection for one or more Patent
Rights in one or more countries. If Company elects to cease payment of any patent expenses,
Company loses all rights under this Agreement with respect to the particular Patent Rights.



     6.4. Infringement.



     (a) Notification of Infringement. Each party agrees to provide written notice to the
other party promptly after becoming aware of any infringement of the Patent Rights.



     (b) Company Right to Prosecute. Company may, under its own control and at its own
expense, prosecute any third party infringement of the Patent Rights in the Field or, together with
licensees of the Patent Rights in other fields (if any), defend the Patent Rights in any
declaratory judgment action brought by a third party which alleges invalidity, unenforceability, or
infringement of the Patent Rights. Prior to commencing any action, Company shall consult with
University and shall consider the views of University regarding the advisability of the proposed
action and its effect on the public interest. Company may not enter into any settlement, consent
judgment, or other voluntary final disposition of any infringement action under this Subsection
without the prior written consent of University, which consent may not be unreasonably withheld or
delayed. Any recovery obtained in an action under this Subsection shall be distributed as follows:
(i) each party shall be reimbursed for any expenses incurred in the action (including the amount of
any royalty payments withheld from University as described below); (ii) as to ordinary damages,
Company shall receive an amount equal to its lost profits or a reasonable royalty on the infringing
sales (whichever measure of damages the court applied), less a reasonable approximation of the
royalties that Company would have paid to University if Company had sold the infringing products
and services rather than the infringer; and (iii) as to special or punitive damages, the parties
shall share equally in any award. Company may offset a total of * * * of any expenses incurred
under this Subsection against any royalty payments due to University under this Agreement in
accordance with the terms of Article 4. However, royalty payments under Article 4 may never be
reduced by more than * * * in any Royalty Period.



     (c) University as Indispensable Party. University shall permit any action under this
Section to be brought in its name if required by law, provided that Company, its Affiliates and
Sublicensees shall hold University harmless from, and if necessary indemnify University against,
any costs, expenses, or liability that University may incur in connection with the action.



     (d) University Right to Prosecute. If Company fails to initiate an infringement
action within a reasonable time after it first becomes aware of the basis for the action, or to
answer a declaratory judgment action within a reasonable time after the action is filed, University
may prosecute the infringement or answer the declaratory judgment action under its sole control and
at its sole expense, and any recovery obtained shall be given to University.



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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.




     (e) Cooperation. Both parties shall to cooperate fully in any action under this
Section 6.4. which is controlled by the other party, provided that the controlling party reimburses
the cooperating party promptly for any costs and expenses incurred by the cooperating party in
connection with providing assistance.



7. Confidential Information; Publications; Publicity.




     7.1. Confidential Information.



     (a) Designation. Confidential Information that is disclosed in writing shall be
marked with a legend indicating its confidential status (such as, “Confidential” or “Proprietary”).
Confidential Information that is disclosed orally or visually shall be documented in a written
notice prepared by the Disclosing Party and delivered to the Receiving Party within thirty (30)
days of the date of disclosure. The notice shall summarize the Confidential Information disclosed
to the Receiving Party and reference the time and place of disclosure.



     (b) Obligations. During the term of this Agreement and for a period of five (5) years
thereafter, the Receiving Party shall (i) maintain Confidential Information in confidence, except
that the Receiving Party may disclose or permit the disclosure of any Confidential Information to
its trustees or directors, officers, employees, consultants, advisors, Sublicensees or acquirors
(including potential sublicensees or acquirors) who are obligated to maintain the confidential
nature of Confidential Information and who need to know Confidential Information for the purposes
of this Agreement; (ii) use Confidential Information solely for the purposes of this Agreement; and
(iii) allow its trustees or directors, officers, employees, consultants, and advisors to reproduce
the Confidential Information only to the extent necessary for the purposes of this Agreement, with
all reproductions being Confidential Information.



     (c) Exceptions. The obligations of the Receiving Party under Subsection 7.1.(b) above
do not apply to the extent that the Receiving Party can demonstrate that Confidential Information
(i) was in the public domain prior to the time of its disclosure under this Agreement; (ii) entered
the public domain after the time of its disclosure under this Agreement through means other than an
unauthorized disclosure resulting from an act or omission by the Receiving Party; (iii) was already
known or independently developed or discovered by employees, agents or contractors of the Receiving
Party who did not have access to the Disclosing Party’s Confidential Information; (iv) is or was
disclosed to the Receiving Party at any time, whether prior to or after the time of its disclosure under this
Agreement, by a third party having no fiduciary relationship with the Disclosing Party and having
no obligation of confidentiality with respect to the Confidential Information; or (v) is required
to be disclosed to comply with applicable laws or regulations (including the rules of any
nationally recognized securities exchange) or with a court or administrative order, provided that
the Disclosing Party receives reasonable prior written notice of disclosure and that the Receiving
Party cooperates with any efforts of the Disclosing Party to prevent or limit such disclosure.



     (d) Ownership and Return. The Receiving Party acknowledges that the Disclosing Party
(or a third party entrusting its own information to the Disclosing Party) owns the Confidential
Information in the possession of the Receiving Party. Upon expiration or termination of this
Agreement, or at the



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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.



request of the Disclosing Party, the Receiving Party shall return to the
Disclosing Party all originals, copies, and summaries of documents, materials, and other tangible
manifestations of Confidential Information in the possession or control of the Receiving Party,
except that the Receiving Party may retain one copy of the Confidential Information in the
possession of its legal counsel solely for the purpose of monitoring its obligations under this
Agreement.




     7.2. Publications. University and its employees are free to disclose publicly
(through journals, lectures, or otherwise) the results of any research relating to the Field or the
subject matter of the Patent Rights, except as otherwise provided by written agreement between
University and Company (e.g. a sponsored research agreement).



     7.3. Publicity Restrictions. Company, its Affiliates and Sublicensees may not use the
name of University or any of its trustees, officers, faculty, students, employees, or agents, or
any adaptation of their names, or any terms of this Agreement in any promotional material or other
public announcement or disclosure without the prior written consent of University. The foregoing
notwithstanding, Company may disclose that information without the consent of University in any
prospectus, offering memorandum, or other document or filing required by applicable securities laws
or other applicable law or regulation, provided that Company provides University at least ten (10)
days prior written notice of the proposed text for the purpose of giving University the opportunity
to comment on the text.



8. Term and Termination.




     8.1. Term. This Agreement commences on the Effective Date and expires, on a
country-by-country basis, upon expiration of the Royalty Term in each country, unless earlier
terminated in accordance with the provisions of this Agreement.



     8.2. Voluntary Termination by Company. Company may terminate this Agreement for any
reason upon sixty (60) days prior written notice to University.



     8.3. Termination for Default. If either party commits a material breach of its
obligations under this Agreement and fails to cure that breach within ninety (90) days after
receiving written notice of the breach, the other party may terminate this Agreement immediately
upon written notice to the party in breach. If the alleged breach involves nonpayment of any
amounts due University under this Agreement, Company has only one opportunity to cure a material breach for which it receives notice
as described above. Any subsequent material breach by Company for such payment will entitle
University to terminate this Agreement immediately upon written notice to Company, without the
ninety-day cure period.



     8.4. Change in Ownership or Control. In the event of a change in ownership in or
control of Company, Company shall immediately inform University of the change.



     8.5. Force Majeure. Neither party is responsible for delays resulting from causes
beyond its reasonable control, including without limitation fire, explosion, flood, war, strike,
terrorist attack, or riot, provided that the nonperforming party uses commercially reasonable
efforts to avoid or remove



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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.



those causes of nonperformance and continues performance under this
Agreement with reasonable dispatch whenever the causes are removed.




     8.6. Effect of Termination. The following provisions survive the expiration or
termination of this Agreement: Articles 1 and 9; Sections 3.2, 3.5 (as applicable to any sales of
Licensed Products after the date of termination), 4.4-4.8 (as applicable to any sales of Licensed
Products after the date of termination), 5.2 (obligation to provide final report and payment), 5.5,
6.3 (as to any unpaid amounts), 6.4, 7.1, 7.3, 8.6, and 11. Upon the early termination of this
Agreement, Company, its Affiliates and Sublicensees may complete and sell any work-in-progress and
inventory of Licensed Products that exist as of the effective date of termination, provided that
(a) Company is current in payment of all amounts due University under this Agreement, (b) Company
pays University the applicable royalty on sales of Licensed Products in accordance with the terms
of this Agreement, and (c) Company, its Affiliates and Sublicensees complete and sell all
work-in-progress and inventory of Licensed Products within six (6) months after the effective date
of termination. During this six month period, the license grant to Company shall revert to a
non-exclusive license and Company’s rights shall be limited to the enumerated activities. Upon
expiration of this Agreement pursuant to Section 8.1 in a particular country, Licensee will have an
irrevocable, perpetual, fully-paid license, with the right to sublicense through multiple tiers of
sublicenses, under the Patent Rights to research, develop, make, use, sell, offer for sale, and
import Licensed Products in the Field in such country. Upon termination of this Agreement for any
reason, any Sublicensee not then in default shall have the right to maintain such license; provided
that (a) such Sublicensee agrees in writing to assume all obligations of Company under this
Agreement and continues to fully perform all obligations under this Agreement, and (b) University
continues to receive from such Sublicensee all payments set forth in this Agreement on account of
the development and sale of Licensed Products by such Sublicensee.


9. Dispute Resolution.




     9.1. Procedures Mandatory. The parties agree to resolve any dispute arising out of or
relating to this Agreement solely by means of the procedures set forth in this Article, and that
these procedures constitute legally binding obligations that are an essential provision of this
Agreement. However, all procedures and deadlines specified in this Article may be modified by
written agreement of the parties. If either party fails to observe the procedures of this Article,
as modified by their written agreement, the other party may bring an action for specific
performance in any court of competent jurisdiction.



     9.2. Dispute Resolution Procedures.



     (a) Negotiation. In the event of any dispute arising out of or relating to this
Agreement, the affected party shall notify the other party, and the parties shall attempt in good
faith to resolve the matter within ten (10) days after the date of notice (the “Notice Date”). Any
disputes not resolved by good faith discussions shall be referred to senior executives of each
party, who shall meet at a mutually acceptable time and location within thirty (30) days after the
Notice Date and attempt to negotiate a settlement.



     (b) Mediation. If the matter remains unresolved within sixty (60) days after the
Notice Date, or if the senior executives fail to meet within thirty (30) days after the Notice
Date, either party may



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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.



initiate non-binding mediation upon written notice to the other party,
whereupon both parties shall engage in a mediation proceeding under the then current CPR Institute
for Dispute Resolution (“CPR”) Model Procedure for Mediation of Business Disputes, except that
specific provisions of this Section override inconsistent provisions of the CPR Model Procedure.
The mediator will be selected from the CPR Panels of Neutrals. If the parties cannot agree upon
the selection of a mediator within ninety (90) days after the Notice Date, then upon the request of
either party, the CPR shall appoint the mediator. The parties shall attempt to resolve the dispute
through mediation until one of the following occurs: (i) the parties reach a written settlement;
(ii) the mediator notifies the parties in writing that they have reached an impasse; (iii) the
parties agree in writing that they have reached an impasse; or (iv) the parties have not reached a
settlement within one hundred twenty (120) days after the Notice Date.




     (c) Trial Without Jury. If the parties fail to resolve the dispute through mediation,
or if neither party elects to initiate mediation, each party may pursue any other remedies legally
available to resolve the dispute. However, the parties expressly waive the right to a jury trial
in the legal proceeding under this Section.



     9.3. Preservation of Rights Pending Resolution.



     (a) Performance to Continue. Each party shall continue to perform its obligations
under this Agreement pending final resolution of any dispute arising out of or relating to this
Agreement. However, a party may suspend performance of its obligations during any period in which
the other party fails or refuses to perform its obligations.



     (b) Provisional Remedies. Although the procedures specified in this Article are the
exclusive procedures for resolution of disputes arising out of or relating to this Agreement,
either party may seek a preliminary injunction or other provisional equitable relief if, in its
reasonable judgment, that action is necessary to avoid irreparable harm to itself or to preserve
its rights under this Agreement.



     (c) Statute of Limitations. The parties agree that all applicable statutes of
limitation and time-based defenses (such as, estoppel and laches) are tolled while the procedures
set forth in Subsections 9.2 (a) and 9.2(b) are pending. The parties shall take any actions
necessary to effectuate this result.



10. Representations and Warranties; Limitation of Liability.




     10.1 Mutual Representations and Warranties. Each party hereby represents and warrants
to the other party that, as of the Effective Date:



     (a) Such party is a corporation or entity duly organized and validly existing under the laws
of the state or other jurisdiction of its incorporation or formation;



     (b) The execution, delivery and performance of this Agreement by such party has been duly
authorized by all requisite corporate action;



     (c) Such party has the corporate power and authority to execute and deliver this Agreement
and the performance of such party’s obligations hereunder do not conflict with or violate such
party’s



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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.



corporate charter and bylaws or any requirement of applicable laws or regulations and to
perform its obligations hereunder, and such performance does not conflict with or constitute a
breach of any agreement of such party with a third party; and




     (d) Such party has the right to grant the rights and licenses described in this Agreement.



     10.2. University Representations and Warranties. University hereby represents and
warrants to Company that, as of the Effective Date:



     (a) University is the exclusive owner or licensee of the Patent Rights listed on Exhibit A,
all of which are owned by University free and clear of any liens, charges, claims and encumbrances,
and no other person, corporate or other private entity, or governmental or university entity or
subdivision thereof has any claim of ownership or right to obtain compensation with respect to such
patents;



     (b) University’s employees have assigned to University their entire right, title, and
interest in the Patent Rights;



     (c) To University’s knowledge, the conception, development and reduction to practice of the
Patent Rights and Licensed Know-How has not constituted or involved the misappropriation of trade
secrets of any third party;



     (d) No claim has been made against University asserting the invalidity, misuse,
unregisterability, unenforceability or non-infringement of any of the Patent Rights or challenging
its rights to use or ownership of any of the Patent Rights or making any adverse claim of ownership
thereof; and



     (e) University has complied with all applicable laws, rules and regulations during the course
of its filing and prosecution of the Patent Right, including without limitation all rules of the
United States Patent and Trademark Office (“USPTO”) and any regulations applicable to the filing
and prosecution of patents before the USPTO.



     (f) University has made all timely elections of ownership of all inventions claimed under the
Patent Rights and will comply with all federal laws applicable to the Patent Rights, including
without limitation, as set forth in 35 U.S.C. §§ 201-211, and the regulations promulgated thereunder, as
amended, or any successor statutes or regulations.



     10.3. Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 10, UNIVERSITY MAKES
NO OTHER WARRANTIES CONCERNING THE PATENT RIGHTS INCLUDING WITHOUT LIMITATION ANY EXPRESS OR
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Specifically, University
makes no warranty or representation (a) regarding the validity or scope of the Patent Rights, (b)
that the exploitation of the Patent Rights or any Licensed Product will not infringe any patents or
other intellectual property rights of a third party, and (c) that any third party is not currently
infringing or will not infringe the Patent Rights.



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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.




     10.4. Limitation of Liability. NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE
OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS
AGREEMENT, EACH PARTY’S PERFORMANCE OR LACK OF PERFORMANCE HEREUNDER, OR ANY LICENSE GRANTED
HEREUNDER.



11. Miscellaneous.




     11.1. Compliance with Law and Policies. Company agrees to comply with applicable law
and the policies of University in the area of technology transfer and shall promptly notify
University of any violation that Company knows or has reason to believe has occurred or is likely
to occur. The University policies currently in effect at the Worcester campus are the Intellectual
Property Policy, Policy on Conflicts of Interest Relating to Intellectual Property and Commercial
Ventures, and Policy on Faculty Consulting and Outside Activities. University will provide Company
with access to or a written copy of such policies, including any updates thereto.



     11.2. Tax-Exempt Status. Company acknowledges that University, as a public
institution of the Commonwealth of Massachusetts, is an exempt organization under the United States
Internal Revenue Code of 1986, as amended. Company also acknowledges that certain facilities in
which the licensed inventions were developed may have been financed through offerings of tax-exempt
bonds. If the Internal Revenue Service determines, or if counsel to University reasonably
determines, that any term of this Agreement jeopardizes the tax-exempt status of University or the
bonds used to finance University facilities, the parties shall promptly discuss such determination
in order to modify or remove the relevant provisions(s) (modified in accordance with Section 11.10)
while preserving the rights granted to the Parties hereunder.



     11.3. Counterparts. This Agreement may be executed in one or more counterparts, each
of which is an original, and all of which together are one instrument.



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



     11.5. Binding Effect. This Agreement is binding upon and inures to the benefit of the
parties and their respective permitted successors and assigns.



     11.6. Assignment. This Agreement may not be assigned by either party without the
prior written consent of the other party. Notwithstanding the foregoing, Company may assign this
Agreement without the consent of University (i) to a purchaser, merging, or consolidating
corporation, or acquirer of all or substantially all of the Company’s assets or business (or that
portion thereof to which this Agreement relates) and/or pursuant to any reorganization of the
Company or (ii) to an Affiliate of Company.



     11.7. Amendment and Waiver. This Agreement may be amended, supplemented, or otherwise
modified only by means of a written instrument signed by both parties. Any waiver of any rights or
failure to act in a specific instance relates only to that instance and is not an agreement to
waive any rights or fail to act in any other instance.



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




     11.8. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts irrespective of any conflicts of law principles.



     11.9. Notice. Any notices required or permitted under this Agreement shall be in
writing, shall specifically refer to this Agreement, and shall be sent by recognized national
overnight courier, or registered or certified mail, postage prepaid, return receipt requested, to
the following addresses:



If to University:

Office of Technology Management

University of Massachusetts Medical School

333 South Street, Suite 400

Shrewsbury, MA 01545

Attention: James P. McNamara, Ph.D., Executive Director




If to Company:

Novavax, Inc.

9920 Belward Campus Drive

Rockville, MD 20850

Attention: Business Development



A party may change its contact information immediately upon written notice to the other party in
the manner provided in this Section.




     11.10. Severability. If any provision of this Agreement is held invalid or
unenforceable for any reason, the invalidity or unenforceability does not affect any other
provision of this Agreement, and the parties shall negotiate in good faith to modify the Agreement
to preserve (to the extent possible) their original intent. If the parties fail to reach a
modified agreement within sixty (60) days after the relevant provision is held invalid or
unenforceable, then the dispute shall be resolved in accordance with the procedures set forth in
Article 9. While the dispute is pending resolution, this Agreement shall be construed as if the
provision were deleted by agreement of the parties.



     11.11. Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to its subject matter and supersedes all prior agreements or understandings
between the parties relating to its subject matter.


The parties have caused this Agreement to be executed by their duly authorized representatives as
of the Effective Date.




	 	 	 	 	 	 	 	 	 	 	 
	UNIVERSITY OF MASSACHUSETTS	 	 	 	NOVAVAX INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ James P. McNamara
	 	 	 	By:
	 	/s/ Rahul Singhvi
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name: James P. McNamara, Ph.D.	 	 	 	Name: Rahul Singhvi	 	 
	Title: Executive Director, OTM	 	 	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: February 26, 2007	 	 	 	Date: February 26, 2007	 	 






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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.




EXHIBIT A




PATENT RIGHTS




* * *





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