Document:

<PAGE>

                                                                    EXHIBIT 10.2

               AMENDMENT NO. 5, LIMITED WAIVER AND LIMITED CONSENT

         This Amendment No. 5, Limited Waiver and Limited Consent, dated as of
November 12, 2003 (this "Amendment"), is entered into by and among Comfort
Systems USA, Inc., a Delaware corporation ("Borrower"), the other Credit
Parties, General Electric Capital Corporation ("GE Capital"), as Agent ("Agent")
for the Lenders (as defined in the Credit Agreement referred to below) and as a
Lender, and the other Lenders party to the Credit Agreement.

                                    RECITALS

         WHEREAS, Borrower, the other Credit Parties, Agent and Lenders are
parties to that certain Credit Agreement, dated as of October 11, 2002, as
amended by Amendment No. 1 to Credit Agreement, dated as of December 10, 2002,
Amendment No. 2 to Credit Agreement, dated as of December 20, 2002, Amendment
No. 3 to Credit Agreement, dated as of March 31, 2003 and Amendment No. 4 to
Credit Agreement, dated as of October 20, 2003 (as so amended to date and as the
same may be further amended, restated, supplemented or otherwise modified from
time to time hereafter, the "Credit Agreement"). Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed thereto in the Credit
Agreement and Annex A thereof;

         WHEREAS, the Borrower is in breach of Credit Agreement's Minimum EBITDA
covenant for the period ended September 30, 2003;

         WHEREAS, the Borrower is desirous of resetting its financial covenants
under the Credit Agreement on a monthly basis through and including December,
2004;

         WHEREAS, Agent and Lenders are willing to grant a waiver of the Event
of Default arising solely from the Borrower's breach of the Credit Agreement's
Minimum EBITDA covenant for the period ended September 30, 2003, subject to the
terms and conditions set forth herein and to reset the financial covenants set
forth in, and required to be set by Borrower under, the Credit Agreement on a
monthly basis through December 2004, all as and to the extent set forth herein
and subject to the terms and conditions set forth herein;

         WHEREAS, Borrower has notified Agent and Lenders that the Borrower
desires to consummate the sale of all of the capital Stock of Standard Heating
and Air Conditioning, Inc. ("Standard Heating") held by Borrower to Tom Kime or
a Person owned, beneficially and of record, and controlled by Tom Kime (the
"Standard Heating Stock Sale");

         WHEREAS, Borrower has requested that Agent and Lenders consent to the
Standard Heating Stock Sale, and Agent and Lenders are willing to do so
pursuant, and subject, to the terms and conditions set forth in this Amendment;
and

         WHEREAS, these Recitals shall be construed as part of this Amendment;

         NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for good and valuable consideration, the
receipt and sufficiency of

<PAGE>

which are hereby acknowledged by the parties, Borrower, Credit Parties, Agent
and Lenders hereby agree as follows:

         1. Definitions. Except to the extent otherwise specified herein,
capitalized terms used in this Amendment shall have the same meanings ascribed
to them in the Credit Agreement and Annex A thereto.

         2. Limited Waiver.

         2.1. Notwithstanding the provisions of Section 4.2 of the Credit
Agreement, Agent and Lenders hereby waive the requirement that Borrower and its
Subsidiaries on a consolidated basis shall have had, at the end of the period
ending September 30, 2003, EBITDA for the 12-month period then ended of not less
than $17,840,000, as well as any Event of Default that may arise solely based
upon the failure to be in compliance with such minimum EBITDA covenant at the
end of the period ending September 30, 2003.

         2.2. The execution, delivery and effect of the foregoing waiver shall
be limited precisely as written and shall not be deemed (except for the specific
limited waiver contained in Section 2.1) to (a) be a waiver of any term or
condition of the Credit Agreement or any other Loan Document or (b) prejudice
any right, power or remedy which Agent or any Lender now has or may have in the
future under or in connection with the Credit Agreement or any other Loan
Document.

         3. Consent to Standard Heating Stock Sale. Agent and Lenders hereby
consent to the Standard Heating Stock Sale, notwithstanding the provisions of
Section 3.7 of the Credit Agreement which prohibit the sale or transfer by any
Credit Party of any of its properties or other assets, including Stock of any of
its Subsidiaries other than sales or dispositions that satisfy certain
conditions set forth in the Credit Agreement; provided, however, that the
aggregate purchase price paid to the Borrower in the Standard Heating Stock Sale
shall be at least $730,000, with at least $450,000 of the purchase price to be
paid in cash on the closing date of the Standard Heating Stock Sale; provided,
further, that Borrower shall apply such $450,000 received by Borrower in cash in
payment of the Term Loan in the inverse order of maturity of the Scheduled
Installments; and, provided, further, that all agreements and other documents
necessary or desirable to complete the Standard Heating Stock Sale shall have
been provided to the Agent for its review and all such agreements and other
documents shall be in form and substance reasonably satisfactory to Agent. In
addition, the terms and conditions of any Instrument constituting part of the
consideration paid to Borrower in the Standard Heating Stock Sale (each, a
"Standard Heating Stock Sale Note") shall be acceptable to Agent, in its
discretion, and each such Standard Heating Stock Sale Note shall be pledged to
Agent as additional Collateral for the benefit of itself and Lenders, shall be
delivered to Agent, on behalf of itself and Lenders, and shall be duly endorsed
and accompanied by duly executed instruments of transfer in form and substance
satisfactory to Agent. In furtherance of the foregoing, Agent shall receive the
original of each and every Standard Heating Stock Sale Note, duly endorsed and
accompanied by duly executed instruments of transfer and all other instruments
and documents necessary or desirable to evidence the pledge of the Standard
Heating Stock Sale Note to the Agent, for its benefit and the benefit of
Lenders. The Agent and the Lenders agree to release the

                                       2
<PAGE>

security interests in the Standard Heating Stock upon the closing of the
Standard Heating Stock Sale in compliance with the provisions of this Section 3.

         4. Amendment. The Credit Agreement is amended as follows:

         4.1. Section 4.2 of the Credit Agreement is amended by deleting the
chart and replacing it with the following:

<Table>
<Caption>
    "Period                                                        EBITDA
------------------                                              -----------
<S>                                                             <C>
December 31, 2002                                               $23,639,000
January 31, 2003                                                $21,983,000
February 28, 2003                                               $22,745,000
March 31, 2003                                                  $19,190,000
April 30, 2003                                                  $18,010,000
May 31, 2003                                                    $16,985,000
June 30, 2003                                                   $16,420,000
July 31, 2003                                                   $16,420,000
August 30, 2003                                                 $16,420,000
September 30, 2003                                              $17,840,000
October 31, 2003                                                $14,146,000
November 30, 2003                                               $14,892,000
December 31, 2003                                               $16,775,000
January 31, 2004                                                $17,609,000
February 29, 2004                                               $18,355,000
March 31, 2004                                                  $19,811,000
April 30, 2004                                                  $20,127,000
May 31, 2004                                                    $20,631,000
June 30, 2004                                                   $19,821,000
July 31, 2004                                                   $18,451,000
August 30, 2004                                                 $17,644,000
September 30, 2004                                              $20,210,000
October 31, 2004                                                $20,210,000
November 30, 2004                                               $20,210,000
December 31, 2004                                               $21,232,000
March 31, 2005 and each Fiscal Quarter thereafter               $31,000,000"
</Table>

                                       3
<PAGE>

         4.2. Section 4.3 of the Credit Agreement is amended by deleting it in
its entirety and replacing it with the following:

         "Minimum Fixed Charge Coverage Ratio.

         Borrower and its Subsidiaries shall have on a consolidated basis at the
end of each period set forth below, a Fixed Charge Coverage Ratio for the
12-month period then ended of not less than the following:

         2.30 to 1.0 for the Fiscal Quarter ending September 30, 2002;

         2.30 to 1.0 for the Fiscal Quarter ending December 31, 2002;

         2.30 to 1.0 for the month ending January 31, 2003;

         2.30 to 1.0 for the month ending February 28, 2003;

         2.50 to 1.0 for the month ending March 31, 2003;

         2.50 to 1.0 for the month ending April 30, 2003;

         2.50 to 1.0 for the month ending May 31, 2003;

         2.50 to 1.0 for the month ending June 30, 2003;

         2.50 to 1.0 for the month ending July 31, 2003;

         2.50 to 1.0 for the month ending August 31, 2003;

         2.60 to 1.0 for the month ending September 30, 2003;

         2.25 to 1.0 for the month ending October 31, 2003;

         2.25 to 1.0 for the month ending November 30, 2003;

         2.25 to 1.0 for the month ending December 31, 2003

         2.25 to 1.0 for the month ending January 31, 2004;

         2.25 to 1.0 for the month ending February 29, 2004;

         2.25 to 1.0 for the month ending March 31, 2004;

         2.25 to 1.0 for the month ending April 30, 2004;

         2.25 to 1.0 for the month ending May 31, 2004;

         2.25 to 1.0 for the month ending June 30, 2004;

         2.25 to 1.0 for the month ending July 31, 2004;

         2.25 to 1.0 for the month ending August 31, 2004;

         2.25 to 1.0 for the month ending September 30, 2004;

         2.25 to 1.0 for the month ending October 31, 2004;

         2.25 to 1.0 for the month ending November 30, 2004;

         2.25 to 1.0 for the month ending December 31, 2004; and

         2.25 to 1.0 for March 31, 2005 and each Fiscal Quarter ending
         thereafter."

                                       4
<PAGE>

         4.3. Section 4.4 of the Credit Agreement is amended by deleting it in
its entirety and replacing it with the following:

         "Minimum Interest Coverage Ratio.

         Borrower and its Subsidiaries on a consolidated basis shall have at the
end of each period set forth below, an Interest Coverage Ratio for the 12-month
period then ended of not less than 3.0 to 1.0:

                                       5
<PAGE>

         month ending September 30, 2002;

         month ending October 31, 2002;

         month ending November 30, 2002;

         month ending December 31, 2002;

         month ending January 31, 2003;

         month ending February 28, 2003;

         month ending March 31, 2003;

         month ending April 30, 2003;

         month ending May 31, 2003;

         month ending June 30, 2003;

         month ending July 31, 2003;

         month ending August 31, 2003;

         month ending September 30, 2003;

         month ending October 31, 2003;

         month ending November 30, 2003;

         month ending December 31, 2003

         month ending January 31, 2004;

         month ending February 29, 2004;

         month ending March 31, 2004;

         month ending April 30, 2004;

         month ending May 31, 2004;

         month ending June 30, 2004;

         month ending July 31, 2004;

         month ending August 31, 2004;

         month ending September 30, 2004;

         month ending October 31, 2004;

         month ending November 30, 2004;

         month ending December 31, 2004; and

         March 31, 2005 and each Fiscal Quarter ending thereafter."

         4.4. Section 4.5 of the Credit Agreement is amended by deleting it in
its entirety and replacing it with the following:

         "Maximum Leverage Ratio.

                                       6
<PAGE>

         Borrower and its Subsidiaries on a consolidated basis shall have, at
the end of each period set forth below, a Leverage Ratio as of the last day of
such period and for the 12-month period then ended of not more than the
following:

         1.75 to 1.0 for the month ending December 31, 2002;

         1.75 to 1.0 for the month ending January 31, 2003;

         1.75 to 1.0 for the month ending February 28, 2003;

         1.75 to 1.0 for the month ending March 31, 2003;

         2.20 to 1.0 for the month ending April 30, 2003;

         2.20 to 1.0 for the month ending May 31, 2003;

         2.20 to 1.0 for the month ending June 30, 2003;

         2.20 to 1.0 for the month ending July 31, 2003;

         2.20 to 1.0 for the month ending August 31, 2003;

         2.10 to 1.0 for the month ending September 30, 2003;

         2.30 to 1.0 for the month ending October 31, 2003;

         2.20 to 1.0 for the month ending November 30, 2003;

         2.00 to 1.0 for the month ending December 31, 2003

         1.80 to 1.0 for the month ending January 31, 2004;

         1.80 to 1.0 for the month ending February 29, 2004;

         1.80 to 1.0 for the month ending March 31, 2004;

         1.80 to 1.0 for the month ending April 30, 2004;

         1.80 to 1.0 for the month ending May 31, 2004;

         1.80 to 1.0 for the month ending June 30, 2004;

         1.80 to 1.0 for the month ending July 31, 2004;

         1.80 to 1.0 for the month ending August 31, 2004;

         1.80 to 1.0 for the month ending September 30, 2004;

         1.80 to 1.0 for the month ending October 31, 2004;

         1.50 to 1.0 for the month ending November 30, 2004;

         1.50 to 1.0 for the month ending December 31, 2004; and

         1.50 to 1.0 for March 31, 2005 and each Fiscal Quarter ending
         thereafter."

                                       7
<PAGE>

         5. Conditions Precedent to Effectiveness. The effectiveness of this
Amendment is subject to the satisfaction of each of the following conditions
precedent in a manner acceptable to Agent:

         5.1. Agent's receipt of counterparts of this Amendment, duly executed
by the Borrower, each of the other Credit Parties, Agent and Lenders.

         5.2. No Default or Event of Default shall have occurred and be
continuing, other than the Event of Default waived in Section 2.1 of this
Amendment.

         5.3. After giving effect to this Amendment, each of the representations
and warranties set forth in the Credit Agreement and the other Loan Documents is
true and correct in all material respects.

         5.4. Agent shall have received any and all such other certificates,
instruments and documents as Agent or any Lender may request.

         6. Reference to and Effect Upon the Credit Agreement and other Loan
Agreements.

         6.1. Except for the specific limited waiver provided for in Section
2.1, the specific consent provided for in Section 3 above and the specific
amendments set forth in Section 4 above, the Credit Agreement, the Notes and
each other Loan Document shall remain in full force and effect and each is
hereby ratified and confirmed.

         6.2. The execution, delivery and effect of this Amendment shall be
limited precisely as written and shall not be deemed to (i) be a consent to any
waiver of any term or condition (except for the specific consent in Section 3
above and the limited waiver in Section 2 above), or to any amendment or
modification of any term or condition (except as specifically consented to,
waived by or amended in Sections 3, 2 and 4, respectively, above), of the Credit
Agreement or any other Loan Document or (ii) prejudice any right, power or
remedy which the Agent or any Lender now has or may have in the future under or
in connection with the Credit Agreement, the Notes or any other Loan Document.

         6.3. Each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or any other word or words of similar import
shall mean and be a reference to the Credit Agreement as modified hereby, and
each reference in any other Loan Document to the Credit Agreement or any word or
words of similar import shall be and mean a reference to the Credit Agreement as
modified hereby.

         6.4. Nothing contained herein nor in any other communication between or
among Agent, any Lender, Borrower or any other Credit Party shall be deemed to
constitute or be construed as (i) a waiver or release of any of Agent's or any
Lender's rights or remedies against Borrower, any other Credit Party or any
other party to the Loan Documents or pursuant to applicable law, (ii) a course
of dealing obligating Agent or any Lender to provide any accommodations,
financial or otherwise, to Borrower or any other Credit Party either now or at
any future time or (iii) a commitment or any agreement to make a commitment with
respect to

                                       8
<PAGE>

any possible waiver or other modification of the terms provided in the Credit
Agreement or any other Loan Document.

         7. General Release. In consideration of, among other things, the
accommodations set forth in this Amendment, the Borrower and each of the other
Credit Parties hereby waives, releases, remises and forever discharges Agent,
each Lender and each other Indemnitee from any and all actions, causes of
action, suits or other claims of any kind or character, known or unknown, which
any Credit Party ever had, now has or might hereafter have against Agent, any
Lender or any other Indemnitee which relate, directly or indirectly, to any acts
or omissions of Agent, any Lender or any other Indemnitee on or prior to the
date hereof.

         8. Acknowledgment and Consent of Credit Parties. Each Credit Party
hereby consents to this Amendment and hereby confirms and agrees that (a) each
of the Guaranties and each other Loan Document to which it is a party is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects, and (b) the Collateral Documents to which such Credit
Party is a party and all of the Collateral described therein do, and shall
continue to, secure the payment of all of the Obligations.

         9. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed an original but all
such counterparts shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Amendment by telecopier shall
be as effective as delivery of a manually executed counterpart signature page to
this Amendment.

         10. Costs and Expenses. As provided in the Credit Agreement, Borrower
shall pay the fees, costs and expenses of Agent in connection with the
preparation, execution and delivery of this Amendment (including, without
limitation, attorneys' fees).

         11. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF
LAW PROVISIONS) OF THE STATE OF NEW YORK.

         12. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.

                            [Signature Pages Follow]

                                       9
<PAGE>

         IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.

                                            BORROWER:

                                            COMFORT SYSTEMS USA, INC.

                                            By:
                                                --------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                      LIMITED WAIVER: ISG CREDIT AGREEMENT
<PAGE>

                     CREDIT PARTIES:

                         ACI MECHANICAL, INC.

                         ACI MECHANICAL USA, INC.

                         ARC COMFORT SYSTEMS USA, INC.

                         ACCURATE AIR SYSTEMS, L.P., by
                           Atlas-Accurate Holdings, L.L.C.,
                           as General Partner

                         ACCU-TEMP GP, INC.

                         ACCU-TEMP LP, INC.

                         ACCU-TEMP LLC,
                           by Accu-Temp GP, Inc., as acting member

                         AIR SOLUTIONS USA, INC.

                         AIR TEMP, INC.

                         ATLAS-ACCURATE HOLDINGS, L.L.C.,
                           by CS53 Acquisition Corp.,
                           as acting member

                         ATLAS AIR CONDITIONING
                          COMPANY, L.P., by Atlas-Accurate
                           Holdings, L.L.C., as general partner

                         BATCHELOR'S MECHANICAL CONTRACTORS, INC.

                         BCM CONTROLS CORPORATION

                         CALIFORNIA COMFORT SYSTEMS USA, INC.

                         CEL, INC.

                         CENTRAL MECHANICAL, INC.

                         CLIMATE CONTROL, INC.

                         LIMITED WAIVER: ISG CREDIT AGREEMENT

<PAGE>

                        COMFORT SYSTEMS USA (ARKANSAS), INC.

                        COMFORT SYSTEMS USA (BALTIMORE), INC.

                        COMFORT SYSTEMS USA (BOWLING GREEN), INC.

                        COMFORT SYSTEMS USA (BRISTOL), INC.

                        COMFORT SYSTEMS USA (CLEVELAND), INC.

                        COMFORT SYSTEMS USA (FLORIDA), INC.

                        COMFORT SYSTEMS USA G.P., INC.

                        COMFORT SYSTEMS US (HARTFORD), INC.

                        COMFORT SYSTEMS USA (INTERMOUNTAIN), INC.

                        COMFORT SYSTEMS USA (SYRACUSE), INC.

                        COMFORT SYSTEMS USA (TEXAS), L.P.,
                          by Comfort Systems USA G.P., Inc.,
                          as general partner

                        COMFORT SYSTEMS USA (TWIN CITIES), INC.

                        COMFORT SYSTEMS USA (WESTERN MICHIGAN), INC.

                        CS44 ACQUISITION CORP.

                        CS53 ACQUISITION CORP.

                        DESIGN MECHANICAL INCORPORATED

                        EASTERN HEATING & COOLING, INC.

                      LIMITED WAIVER: ISG CREDIT AGREEMENT

<PAGE>

                        ESS ENGINEERING, INC.

                        GULFSIDE MECHANICAL, INC.

                        H & M MECHANICAL, INC.

                        HELM CORPORATION

                        HESS MECHANICAL CORPORATION

                        INDUSTRIAL COOLING INC.

                        J & J MECHANICAL, INC.

                        JAMES AIR CONDITIONING ENTERPRISE INC.

                        MARTIN HEATING, INC.

                        MECHANICAL SERVICE GROUP, INC.

                        MECHANICAL TECHNICAL
                        SERVICES, L.P., by Atlas-Accurate
                          Holdings, L.L.C., as general partner

                        MJ MECHANICAL SERVICES, INC.

                        NEEL MECHANICAL CONTRACTORS, INC.

                        NORTH AMERICAN MECHANICAL, INC.

                        QUALITY AIR HEATING & COOLING, INC.

                        S&K AIR CONDITIONING CO., INC.

                        S. I. GOLDMAN COMPANY, INC.

                        S.M. LAWRENCE COMPANY, INC.

                        SA ASSOCIATES, INC.

                        SEASONAIR, INC.

                        SHEREN PLUMBING & HEATING, INC.

                      LIMITED WAIVER: ISG CREDIT AGREEMENT

<PAGE>

                        STANDARD HEATING & AIR CONDITIONING COMPANY

                        TARGET CONSTRUCTION, INC.

                        TEMP-RIGHT SERVICE, INC.

                        THE CAPITAL REFRIGERATION COMPANY

                        TRI-CITY MECHANICAL, INC.

                        UNITED ENVIRONMENTAL
                        SERVICES, L.P., by Atlas-Accurate Holdings, L.L.C.,
                        as general partner

                        WESTERN BUILDING SERVICES, INC.

                        By:
                            -------------------------------------------
                        Name:
                              -----------------------------------------
                        Title:
                               ----------------------------------------

                      LIMITED WAIVER: ISG CREDIT AGREEMENT

<PAGE>

                        GENERAL ELECTRIC CAPITAL CORPORATION,
                        as Agent and a Lender

                        By:
                            -------------------------------------------
                            Its Duly Authorized Signatory

                      LIMITED WAIVER: ISG CREDIT AGREEMENT

<PAGE>

                        BANK OF TEXAS, NA, as a Lender

                        By:
                            -------------------------------------------
                        Name:
                              -----------------------------------------
                        Title:
                               ----------------------------------------

                      LIMITED WAIVER: ISG CREDIT AGREEMENTexv10w1

 

	 	September 24, 2003

Ford R. Lynch

2 Aspetuck Lane

Westport, CT 06880

Dear Ford:

I am pleased to extend an offer of full time employment to you as Senior Vice
President of Sales and Marketing, contingent on the approval of the Novavax
Board of Directors (or such committee of the Board of Directors authorized to
make such approval) and completion of a background check. As discussed, you
will report to me, as President and Chief Executive Officer with a start date
of September 24, 2003. This letter will confirm our understanding of your
acceptance of this position.

SALARY: Your salary will be an annual rate of $220,000 per year, paid in
accordance with the Company’s payroll policies in effect from time to time.
Currently, the Company pays salaries semi-monthly. You will be eligible for a
salary adjustment at the time the Company reviews and adjusts salaries
following the close of fiscal year 2004. All compensation payments are reduced
for applicable payroll taxes and authorized deductions. You will be classified
as a salaried exempt employee.

BONUS PROGRAM: You will be entitled to participate in the Company’s bonus
program, under which award payments, if any, will be based on performance
criteria and milestones to be mutually determined by the Company and you. Any
bonus for 2003 will be prorated for the period of your employment in 2003.
Your target/maximum bonus for each of 2003 (before adjustment for the period
worked) and for 2004 is $100,000.

STOCK OPTIONS: Contingent on the approval of the Novavax Board of Directors
(or such committee of the Board of Directors authorized to make such approval)
the Company will grant you stock options to purchase 175,000 shares of the
Company’s Common Stock ($.01 par value) at an exercise price equal to the
closing price of the Company’s Common Stock on the date of grant (which is the
date of the Board’s, or its committee’s as applicable, approval). The options
will vest as to one-third of the shares on the first anniversary of the date of
grant, as to an additional one-third of the shares on the second anniversary of
the date of grant and as to the final one-third of the shares on the third
anniversary of the date of grant; provided that all unvested options shall
become vested in the event of a consolidation, merger, combination,
reorganization or sale of all or substantially all of the assets of the Company
(as described in the Company’s form of Stock Option Agreement and the Company’s
Stock Option Plan) which would otherwise result in the termination of such
options and/or your employment with the Company, to the extent permitted by the
Internal Revenue Code and the Company’s Stock Option Plan.

 

 

Ford R. Lynch

September 24, 2003

Page -2-

BENEFITS: Eligibility to participate in our corporate health insurance
(including vision), dental plan and prescription drug card program begins on
the first day of the month after 30 days of employment.

After 90 days of employment you are eligible to participate in our group life
insurance (double your annual salary up to $250,000) and the short-term and
long-term disability policies. Novavax currently pays 100% of the premiums for
these benefits. The Company has agreed to contribute up to $25,000 per year
for each of the first two years of the term of your employment, to be used only
for the purchase of a life insurance policy on your life, payable to a
beneficiary of your choosing, with a maximum policy benefit of $500,000. You
will arrange for such policy, that you will own, upon the commencement of your
employment. The Company will reimburse you for one half of the total premium
for such policy, to a maximum of $25,000, within one week of receipt by the
Company of a copy of a binder for such insurance and will reimburse you an
additional one half of the total premium for such policy, to a maximum of
$25,000, on the first anniversary date of the commencement of your employment
with the Company. In the event of the termination of your employment with the
Company, prior to the date the reimbursement set forth in this paragraph is
made, other than a termination by the Company for Cause or a termination by you
without Good Reason, the Company will, upon the effectiveness of such
termination, pay to you the amount equal to $50,000 less that amount paid to
such date pursuant to this paragraph.

Novavax Inc. provides a 401(k) retirement savings plan for all interested and
eligible employees, after 90 days of service, commencing only on an open
enrollment date. For participants in the 401(k) plan the Company matches 25%
up to 6%, with a three-year vesting, accumulating at 33% per year, on the
Company match contribution.

VACATION: You will be entitled to five weeks of vacation time during each
year, calculated on a calendar year basis in accordance with the Company’s
policies in effect from time to time.

EMPLOYMENT REQUIREMENTS AND TERM: You are required as a condition to your
employment, to comply at all times after your employment commences, with the
Company’s policies affecting employees, including the Company’s published Code
of Ethics, as in effect from time to time. You will also be required by the
Company to sign the Company’s standard form of Non-Disclosure and
Non-Competition Agreement as a condition to your employment by the Company.

Your employment with the Company is on at “at will” basis. Either you or the
Company may terminate your employment at any time and for any reason, subject
to the Company’s obligation to pay separation pay as set forth in the matrix
set forth below; provided that in each instance you execute and deliver to the
Company an executed Separation and Release Agreement in the Company’s then
current form.

 

 

Ford R. Lynch

September 24, 2003

Page -3-

	 	 	 
	Termination Event	 	Separation Pay
	
	 	

	By you for Good Reason	 	
Six months base salary at
time of termination, paid
in accordance with Novavax
payroll.
	By you or the Company due to Change of Control	 	
A lump sum payment of 24
months base salary at time
of termination.
	By the Company without Cause	 	
Six months salary at time
of termination, paid in
accordance with Novavax
payroll.
	By the Company due to Regulatory Event	 	
A lump sum payment of three
months of then effective
salary.

“Cause” shall mean (i) your willful failure or refusal to perform in all
material respects the services reasonably required of you in light of your
position with the Company, (ii) your willful failure or refusal to carry out
any proper direction of the President and Chief Executive Officer with respect
to the services to be rendered or the manner of rendering such services, (iii)
your willful misconduct in the performance of his duties hereunder, (iv) your
commission of an act of fraud, embezzlement or theft or a felony involving
moral turpitude, (v) your use or disclosure of any Company confidential
information other than for the benefit of the Company in the course of
rendering services to the Company or (vi) your engagement in any activity for
or on behalf of a competitor of the Company.

“Change of Control” shall mean that

     (i) the Company, is merged, consolidated or reorganized into or with
another corporation or other legal person (an “Acquiring Person”) or securities
of the Company are exchanged for securities of an Acquiring Person, and
immediately after such merger, consolidation, reorganization or exchange less
than a majority of the combined voting power of the then outstanding securities
of the Acquiring Person immediately after such transaction are held, directly
or indirectly, in the aggregate by the holders of voting stock of the Company
immediately prior to such transaction;

     (ii) the Company, in any transaction or series of related transactions,
sells or otherwise transfers all or substantially all of its assets to an
Acquiring Person; or

     (iii) the Company files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing that a change
in control of the Company has occurred.

Notwithstanding anything in this Offer Letter, unless otherwise determined in a
specific case by majority vote of the Board of Directors, a Change in Control
shall not be deemed to have occurred for purposes of this Agreement solely
because (i) the Company, (ii) an entity in which the Company directly or
indirectly beneficially owns 50 percent or more of the voting securities, or
(iii) any Company-sponsored employee stock ownership plan, or any other
employee benefit

 

 

Ford R. Lynch

September 24, 2003

Page -4-

plan of the Company, either files or becomes obligated to file a report or a
proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K
or Schedule 14A (or any successor schedule, form or report or item therein)
under the Exchange Act, disclosing beneficial ownership by it of shares of
stock of the Company, or because the Company reports that a Change in Control
of the Company has or may have occurred or will or may occur in the future by
reason of such beneficial ownership.

In order for a termination of employment in the event of a Change of Control to
result in the payment set forth above, notice of termination by you must given
during the period between your receipt of notice or actual knowledge of such
Change of Control and the effectiveness of such Change of Control and notice of
termination by the Company must be given within 60 days of the Change of
Control.

“Good Reason” shall mean the Company’s significant reduction or diminution of
your material responsibilities and authority other than for “Cause”, without
your consent.

“Regulatory Event” shall mean the rejection by the US Food and Drug
Administration (“FDA”) of the Company’s application for marketing approval of
its Estrasorb® product during the period from the commencement of your
employment to the one year anniversary of such commencement.

RELOCATION: You will be expected to relocate to the Company headquarters (or
such other Company facility as is designated by the Company) within a three
month period commencing upon the Company’s notice to you of the location of the
Company’s headquarters. The Company will reimburse your actual documented
moving expenses, in an amount not to exceed $5,000, which may not include
expenses related to the sale and purchase of a residence. In addition, the
Company will reimburse actual documented reasonable travel and living expenses
incurred by you and your family in connection with your relocation, in an
amount not to exceed $10,000.

ENTIRE AGREEMENT: This agreement sets forth the entire agreement and
understanding between you and the Company regarding all subjects covered
herein, the terms of which may not be changed or modified except by agreement
in writing signed by you and the Company.

SEVERABILITY: Should any provision of this agreement, or portion thereof, be
found invalid and unenforceable, the remaining provisions shall continue in
full force and effect.

GOVERNING LAW: This agreement shall be governed, construed and enforced in
accordance with the laws of Maryland, without regard to principles of conflict
of law.

CONFLICT: You hereby acknowledge that you are not a party to any agreement
that in any way prohibits or imposes any restriction on your employment with
the Company, and your acceptance hereof will not breach any agreement to which
you are a party.

 

 

Ford R. Lynch

September 24, 2003

Page -5-

Ford, if you agree with and accept the terms of this offer of employment,
please sign below and return this letter to our office. We are confident your
employment with Novavax will prove mutually beneficial, and we look forward to
you joining the Novavax team.

Sincerely,

NOVAVAX, INC.

	 	 	 	 	 
	By:	 	
/s/ Nelson M. Sims

Nelson M. Sims

President & Chief Executive Officer
	 	 

Accepted by:

	 	 	 
	/s/ Ford R. Lynch

	Date  	
09/2403

	Ford R. Lynch

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