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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
10.45

     

    H1N1
LICENSE AGREEMENT

     

    This
License Agreement (the “Agreement”) is executed as of
this October 6, 2009 (the “Effective Date”), by and between Novavax,
Inc., a Delaware corporation having an
address at 9920 Belward Campus Drive, Rockville, Maryland 20850, United States
of America (“Novavax”)
and
CPL Biologicals Private Limited, a limited company incorporated under the
laws of India having an address at “Cadila Corporate Campus”, Sarkhej-Dholka
Road, Bhat, Ahmedabad – 382210, Gujarat, India (“Company”).  Novavax
and Company are sometimes referred to herein each individually as a “Party” and
collectively as the “Parties.”

     

    RECITALS

     

    Whereas,
Novavax is a specialty biopharmaceutical company engaged in the research,
development and commercialization of its virus like particle technology into
vaccine products for the prevention of infectious diseases such as seasonal
influenza and other infectious diseases;

     

    Whereas,
Novavax Controls the Licensed Rights, as defined below;

     

    Whereas,
Company wishes to obtain a license under the Licensed Rights, to practice the
processes included or claimed in the Licensed Rights and to Develop and
Commercialize Licensed Product; and

     

    Whereas,
Novavax is willing to grant such license on the terms and conditions of this
Agreement.

     

    Now,
Therefore, in consideration of the foregoing premises and the mutual
covenants set forth below, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, Novavax and Company hereby agree as
follows:

     

    ARTICLE
1

     

    DEFINITIONS

     

    References
in the body of this Agreement to “Sections” will refer to the sections of this
Agreement.  In addition, as used herein, the following initially
capitalized terms will have the following meanings:

     

    1.1           “Affiliate” means any
corporation or other business entity controlled by, controlling, or under common
control with a Party, with “control” (for purposes of
this Section 1.1 only) meaning (a) direct or indirect beneficial ownership of
fifty percent (50%) or more of the voting stock (or, in the case of a
non-corporate entity, of the equity interests with the power to direct the
management and policies) of such corporation or other business entity, or (b)
possession, directly or indirectly, of the power to direct, or cause the
direction of, the management and policies of such corporation or other business
entity, whether through the ownership of voting securities, by contract, or
otherwise; provided that for purposes of this Agreement, Novavax and Cadila
Pharmaceuticals Limited shall not be deemed to be an Affiliate of
Company.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    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.

    

    1.2           “Business Day” means any day other than
a Saturday, Sunday or other day on which the principal commercial banks located
in Mumbai, India and Washington, DC, United States are not open for business
during normal business hours.

     

    1.3           “Commercialize” or “Commercialization” means
all activities that are undertaken to prepare for launch before Regulatory
Approval (including pricing and reimbursement approvals) undertaken after
Regulatory Approval for Licensed Product and that relate to the commercial
marketing and sale of Licensed Product including advertising, sales, marketing,
promotion, distribution, and phase IV clinical trials.

     

    1.4           “Control” means, with respect to
any intellectual property right, that a Party owns or has a license to such item
or right, and has the ability to grant a license or sublicense in or to such
right without violating the terms of any agreement or other arrangement with any
Third Party existing at the time that this Agreement first requires such Party
to grant the other Party such license or sublicense, provided that, for the
avoidance of doubt, if the ability to grant such license or sublicense without
violating the terms of any such agreement or other arrangement arises after such
time, the license or sublicense shall be deemed granted hereunder at such later
date.

     

    1.5           “Develop” or “Development” means the performance of
all non-clinical, pre-clinical and clinical development, manufacturing and
regulatory activities for a Licensed Product that are required to obtain
Regulatory Approval of a Licensed Product in the Territory.

     

    1.6           “Developed Know-How” has the
meaning in Section 5.1.

     

    1.7           “Effective Date” means the date
set forth in the preamble.

     

    1.8           “Governmental Authority” means any applicable
court, agency, department or other instrumentality of any foreign, federal,
state, county, city or other political subdivision.

     

    1.9           “IND” means a U.S. Food and
Drug Administration investigational new drug application, or its foreign
equivalent.

     

    1.10         “Joint Venture Agreement”
means the Amended and Restated Joint Venture Agreement by and between Novavax
and Cadila Pharmaceuticals Limited, dated June 29, 2009, as amended from time to
time.

     

    1.11         “Know-How” means all tangible
and intangible (a) techniques, technology, practices, trade secrets,
inventions (whether patentable or not), methods, protocols, processes, formulas,
knowledge, know-how, skill, experience, records, documents, data and results
(including pharmacological, toxicological, non-clinical and clinical test data
and results), analytical and quality control data, results or descriptions,
software and algorithms and (b) compositions of matter, cells, cell lines,
assays, animal models and physical, biological or chemical
material.

    
      
         

      

      
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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.

    

    1.12         “Laws” means all applicable
laws, statutes, rules, regulations, ordinances and other pronouncements having
the effect of law of any federal, national, multinational, state, provincial, or
other political subdivision, domestic or foreign. 

     

    1.13         “Licensed Product” means
Novavax’s current monovalent intra-muscular H1N1 influenza vaccine containing a
virus like particle (VLP) consisting of [* * *] designated as pandemic by the
World Health Organization (WHO) Collaborating Centers for Reference and Research
on Influenza located at the Centers for Disease Control and Prevention (CDC) in
Atlanta, Georgia, together with any minor modifications thereto including, by
way of example but not limitation, changes to any excipient, changes arising
from a change in manufacturing process, or change in dosage.  [* *
*].

     

    1.14         “Licensed Rights” means the
Novavax Patents and any and all Know-How, including any Developed Know-How,
owned or Controlled by Novavax at any time during the term of this Agreement
which is used or embodied in, or useful for developing or manufacturing, any
Licensed Product, including, without limitation, Know-How regarding Novavax’s
proprietary baculovirus insect cell expression and manufacturing system and
improvements thereto.

     

    1.15         “Novavax Patents” means any and
all Patents in the Territory owned or Controlled by Novavax at any time during
the term of this Agreement covering or claiming a Licensed Product and/or the
manufacture or use thereof including, without limitation, the Patents listed on
Schedule
1.

     

    1.16         “Patent” means any and all (a)
issued patents and inventors’ certificates and re-examinations, reissues,
renewals, extensions, registrations, substitutions, supplementary protection
certificates and term restorations with respect to any of the foregoing, and (b)
pending applications for patents and inventors’ certificates and patents that
issue therefrom, including, without limitation, provisional applications,
continuations, continuations-in-part, divisional and substitute applications
with respect to any of the foregoing.

     

    1.17         “Program Data” means (a)
research, preclinical, clinical, manufacturing and similar data, information,
material and results, (b) regulatory filings and approvals, and (c) sales and
marketing information.

     

    1.18         “Regulatory Approval” means any
and all approvals (including supplements, amendments, pre- and post-approvals,
pricing and reimbursement approvals), licenses, registrations or authorizations
of any national, supra-national, regional, state or local regulatory agency,
department, bureau, commission, council or other governmental entity, that are
necessary for the manufacture, distribution, use or widespread sale of a
Licensed Product in a regulatory jurisdiction in the Territory.

    
      
         

      

      
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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.

    

    1.19         “Regulatory Authority” means
any Governmental Authority with responsibility for granting any licenses or
approvals necessary for the marketing and sale of pharmaceutical products in the
Territory.

     

    1.20         “Regulatory Documentation”
means, with respect to a Licensed Product, all Regulatory Filings and supporting
documents created, submitted to a Regulatory Authority, and all data contained
therein, including, without limitation, any Investigational New Drug
Application, New Drug Application, Marketing Authorization Application, foreign
counterparts thereof, Investigator’s Brochures, drug master files,
correspondence to and from a Regulatory Authority, minutes from teleconferences
with Regulatory Authorities, registrations and licenses, regulatory drug lists,
advertising and promotion documents shared with Regulatory Authorities, adverse
event files, complaint files and manufacturing records.

     

    1.21         “Regulatory Filing” means the foreign
counterparts of an Investigation New Drug Application, New Drug Application,
Marketing Authorization Application and any other filings required by Regulatory
Authorities relating to the study, Development, manufacture or Commercialization
of any Licensed Product in the Territory.

     

    1.22         “Technical Services Agreement”
means that certain Amended and Restated Technical Services Agreement between
Novavax and Company dated as of the date hereof, as amended from time to
time.

     

    1.23         “Territory” means
India.

     

    1.24         “Third Party” means a person or
entity other than (a) Novavax, (b) Company, (c) an Affiliate of Novavax or (d)
an Affiliate of Company.

     

    1.25         “U.S.” means the United States
of America.

     

    ARTICLE
2

     

    LICENSES

     

    2.1           License Grant to
Company.  Novavax hereby grants to Company an exclusive, fully
paid-up, royalty-free (except as expressly set forth in Section 2.7),
non-transferable, right and license under the Licensed Rights during the term of
this Agreement to (a) research, develop, use, sell, have sold, offer to sell and
import Licensed Product in the Territory, and (b) make (and have made solely by
Cadila Pharmaceuticals Ltd., a company incorporated under the laws of India
(“Cadila”) or an Affiliate of Cadila,
subject to Novavax’s approval described below) Licensed Product in the Territory
solely to develop, use, sell, have sold, offer to sell and import Licensed
Product in the Territory.  The foregoing license shall be exclusive
for Licensed Product in the Territory, even as to Novavax, provided that Novavax
retains the right to perform its obligations under this Agreement, the Technical
Services Agreement and any other agreement between Company and
Novavax.

    
      
         

      

      
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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.

    

    Novavax
shall be reasonable in granting or withholding its approval to permit Cadila or
an Affiliate of Cadila to make Licensed Product in the
Territory.  Novavax’s approval shall be subject to its consideration
of, among other things, any documentation or agreement surrounding such
manufacturing of the Licensed Product (which, in any case, shall be solely for
the benefit of the Company), the safeguards in place with regard to any such
manufacturing, the protection of the Licensed Rights, and Novavax’s ability to
conduct reasonable due diligence on any Affiliate of Cadila.  In no
event does the license grant to the Company under this Section 2.1 permit the
Company to have Licensed Product made by a Third Party other than Cadila or an
Affiliate of Cadila, subject to the approval described above.

     

    2.2          License Grant to Novavax.
 The Company hereby grants to Novavax a fully paid-up, royalty-free
exclusive right and license under Developed Know-How owned or Controlled by the
Company, including any Patents that issue therefrom, to (a) research, develop,
use, sell, have sold, offer to sell and import (i) Licensed Product and (ii)
other influenza vaccines outside the Territory, and (b) make and have made (i)
Licensed Product and (ii) other influenza vaccines outside the Territory solely
to develop, use, sell, have sold, offer to sell and import Products outside the
Territory.

     

    2.3          Sublicenses.  Company
shall not sublicense the Licensed Rights to any Third Party without the prior
written consent of Novavax, which consent may be withheld in its sole
discretion.  Upon execution of a sublicense, after receipt of Novavax
consent, Company will notify Novavax of the execution of the sublicense and
provide a copy to Novavax promptly following execution thereof.

     

    2.4          No Implied Rights or Licenses.
No right or license, other than those expressly set forth in this
Agreement are granted to either party hereunder, and no additional rights will
be deemed granted to either party by implication, estoppel or
otherwise.  All rights not expressly granted by either party to the
other hereunder are reserved.

     

    2.5          Research
Data; Right of Reference.

     

    (a)           Company
shall keep complete and accurate notes, accounts and records of all Program Data
with respect to Licensed Product, including the manufacture
thereof.  Novavax shall have the right to access, use and reference
for its Development and Commercialization of its products outside the Territory
Program Data related to Licensed Product in the possession or control of the
Company.  The Company shall provide such cooperation and assistance as
reasonably requested by Novavax from time to time to effectuate the foregoing,
including, without limitation by providing access to and disclosure of Program
Data to Novavax and by providing such authorization and consents required for
reference to regulatory filings and approvals.

     

    (b)           Company
shall have the right to access, use and reference for its Development and
Commercialization of Licensed Product in the Territory Program Data related to
Licensed Product in the possession or control of Novavax.  Novavax
shall provide such cooperation and assistance as reasonably requested by Company
from time to time to effectuate the foregoing, including, without limitation by
providing access to and disclosure of Program Data to Company and by providing
such authorization and consents required for reference to regulatory filings and
approvals.

    
      
         

      

      
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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.

    

    2.6          Grey Market.  The
Parties reasonably cooperate to formulate and implement reasonable precautions
designed to prevent Licensed Product made or sold by or for such Party or its
respective Affiliates and permitted sublicensees from being sold outside of its
respective territory (i.e., outside the Territory for the Company and inside the
Territory for Novavax).  Further, each Party will take reasonable
measures so that its distributors, Affiliates and wholesalers to whom the
Company or Novavax provides its respective Licensed Product are aware of the
respective territorial limitations.

     

    2.7          Third Party License
Agreements.  The license granted under Section 2.1 may be
subject to applicable terms and conditions of a license agreement with a Third
Party, under which any Licensed Rights are sublicensed to the Company hereunder
by Novavax (each a “Third Party License
Agreement”).  Novavax shall be responsible for maintaining the
Third Party License Agreements and for any payments owed by Novavax thereunder;
provided, however, that if a royalty is owed on sales of Licensed Product by or
for the Company in the Territory under such Third Party License Agreement, such
payments will be paid by Company.

     

    2.8          Combination Products
Reservation.  Novavax shall not, directly or indirectly, (i)
engage in, promote, or finance the research, development, or commercialization
of, or (ii) grant any license, or any similar rights with respect to, to a Third
Party, in each case of (i) and (ii), a Licensed Product in combination with
another active ingredient, antigen or adjuvant in the Territory.

     

    ARTICLE
3

     

    LICENSED
PRODUCT DEVELOPMENT AND COMMERCIALIZATION

     

    3.1          Development
and Commercialization of Licensed Product.

     

    (a)           General.  Company
will have sole responsibility, at Company’s sole expense, for all Development
and Commercialization of Licensed Product in the Territory in accordance with
the terms of this Agreement. 

    
      
         

      

      
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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)           Development and Commercialization of
Licensed
Product.  Prior to [* * *],
Company shall present to Novavax for its written approval Development plans for
the Licensed Product which shall specify preclinical studies (including a
toxicology program and other preclinical testing), human clinical trials,
manufacturing scale up, Regulatory Approval strategy and any other significant
Development activities, that Company plans to perform to obtain Regulatory
Approval of such Licensed Product in the Territory (the “H1N1 Development
Plans”).  Novavax may reasonably request adjustments to
activities described in such Development plans as a condition to granting its
approval.  In no event shall Company materially alter a H1N1
Development Plan without Novavax’s prior written consent.  Company
shall conduct Development of such Licensed Product in a manner that is
materially consistent with the H1N1 Development Plans.  All clinical
trial protocols for Licensed Product conducted by Company shall require the
prior written approval of Novavax.  Prior to [* * *], Company shall
present to Novavax for its written approval a plan to Commercialize the Licensed
Product which shall specify a multi-year marketing and public relations
strategy, operational plans to implement such strategies and any other
significant Commercialization activities (the “H1N1 Commercialization
Plan”).  Novavax may reasonably request adjustments to the
Commercialization plan as a condition to granting its approval.  In no
event shall Company materially alter the H1N1 Commercialization Plan without
Novavax’s prior written consent.  Company shall conduct
Commercialization of such Licensed Product in a manner that is materially
consistent with the H1N1 Commercialization Plan.  Novavax acknowledges
that the Licensed Product are being contributed by Novavax to the Company in
accordance with the Joint Venture Agreement and that if the Company cannot
Develop and Commercialize such Licensed Product it will not obtain the value of
such contribution.  Company acknowledges that Novavax (or its
affiliates or licensees) are Developing and Commercializing Licensed Product
outside the Territory and Company’s activities could raise safety concerns and
have an impact on Novavax’s activities including the Regulatory Approval and
regulatory profile of an approved Licensed Product outside the
Territory.  Accordingly, taking into account Novavax’s and Company’s
respective interests including, without limitation, as provided in the two
preceding sentences, Novavax shall not unreasonably withhold, delay or condition
any of its consents or approvals hereunder.

     

    3.2          Regulatory Affairs. Company will be responsible for
developing Regulatory Documentation and preparing and submitting Regulatory
Filings, seeking Regulatory Approvals, and maintaining Regulatory Approvals for
Licensed Product in the Territory.  Novavax will cooperate with
Company in preparing and filing all such reports in accordance with the
Technical Services Agreement.  To effectuate such cooperation, the
Parties hereby agree to amend and amend Section 1.1(t) of the Technical Services
Agreement to revise the definition of “Novavax Products” to read in its entirety
as follows:

     

    3.3          “Novavax
Product” shall mean (i) the Novavax Products (as defined in the Joint Venture
Agreement), and (ii) the Licensed Product (as that term is defined in the
License Agreement by and between Novavax and Company, dated October 6, 2009).

     

    3.4          Manufacture and
Supply.  Company will be responsible for the manufacture of
Licensed Product in the Territory and for all costs associated
therewith.  Certain amount of supply of preclinical and clinical
supply of Licensed Product will be made under the Amended and Restated Supply
Agreement, dated as of June 29, 2009, between Company and Novavax, as amended
from time to time (the “Supply
Agreement”).  To effectuate such amount of supply under the
Supply Agreement, the Parties hereby agree to amend and amend Section 1.19 of
the Supply Agreement to revise the definition of “Products” to read in its
entirety as follows:

     

    “Products” means
Novavax’s pre-clinical and clinical supplies of the Novavax Seasonal Product and
the Licensed Product (as that term is defined in the License Agreement by and
between Novavax and Company, dated October 6, 2009), in each case which conform
to the Specifications.

    
      
         

      

      
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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.

    

    3.5           Adverse Event
Reporting.  Company will maintain a record of all non-medical
and medical Licensed Product-related complaints and reports of Adverse Events in
the Territory with respect to any Licensed Product Developed or Commercialized
by the Company.  At the request of either party, Novavax and the
Company shall enter into reasonable and customary pharmacovigilance agreement
with respect to sharing of adverse event data and information for Licensed
Product as required to comply with applicable laws and regulations.

     

    3.6           Development and Commercial
Reporting.  During the Term of this Agreement, Company will provide
a half-yearly written progress report to Novavax summarizing the Development and
Commercialization of Licensed Product(s) during the prior six months.  Each such progress report
will be provided to Novavax by Company no later than March 1st or
September 1st (as the
case may be) of each year following the Effective Date.

     

    3.7           Minor
Modifications.  During the Term of this Agreement, Novavax will
promptly provide Company with details of any minor modifications it makes to the
Licensed Product as Novavax develops it for Regulatory Approval.

     

    ARTICLE
4

    RESERVED

    

    ARTICLE
5

     

    INTELLECTUAL
PROPERTY

     

    5.1           Disclosure.  During
the Term, the Parties will promptly disclose to one another all Know-How
(whether patentable or not) developed, conceived or reduced to practice during
the Development, manufacture or Commercialization of a Licensed Product which is
regarding or directed to a Licensed Product (“Developed
Know-How”).  Novavax shall also disclose to the Company any
Know-How within the Licensed Rights obtained, licensed or generated after the
Effective Date which is not included within the Developed Know-How.

     

    5.2           Ownership.  Novavax
shall own all Developed Know-How and any other intellectual property that is
conceived and reduced to practice solely by Novavax.  The Company
shall own all Developed Know-How and any other intellectual property that is
conceived and reduced to practice solely by Company.  Novavax and the
Company shall jointly own in accordance with U.S. Laws regarding joint ownership
of the applicable type of intellectual property, all Developed Know-How and any
other intellectual property that is conceived or reduced to practice by Novavax
and Company jointly.

    
      
         

      

      
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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.

    

    5.3          Prosecution and Maintenance of
Patents.  Novavax shall have the sole and exclusive right and
authority to control the filing, prosecution, maintenance, and renewal of all
Novavax Patents and any Patents that result from Developed Know-How which is
owned by Novavax or jointly owned as provided in Section 5.2, at its own
expense.  Company shall have the sole and exclusive right and
authority to control the filing, prosecution, maintenance and renewal of any
Patents that result from Developed Know-How owned by Company as provided in
Section 5.2.  With respect to any such Patents in the Territory and
with respect to any such Patents that are subject to the license granted to
Novavax in Section 2.2 anywhere in the world (the “ROW Patents”), the prosecuting
party shall (i) provide the other party with copies of all material filings,
documentation and correspondence from, sent to or filed with patent offices in
the Territory or anywhere in the world for the ROW Patents, and (ii) provide the
other party with a reasonable opportunity to comment upon all filings and
actions with such patent offices in advance of submissions to such patent
offices.  For purposes of this Section ‎5.3, “filing,
prosecution and maintenance” of patents shall be deemed to include, without
limitation, appeals to administrative or judicial entities having jurisdiction
over patentability, the conduct of interferences or oppositions, and/or requests
for re-examinations, reissues or extensions of patent terms.

     

    5.4          Abandoned
Patents.  In the event the prosecuting party determines not to
initiate patent prosecution for any particular patentable Developed Know-How
invention or to cease prosecution or maintenance of, or otherwise abandon, any
Patents that are the subject of Section 5.3 in the Territory, or with respect to
ROW Patents anywhere in the world (which the prosecuting party may do in its
sole discretion), the prosecuting party shall provide reasonable prior written
notice to the other party sufficient for the other party to timely initiate or
take over the prosecution and maintenance of such Patent and timely file any
required documents and responses with the relevant government patent office in
the Territory, or with respect to ROW Patents anywhere in the world, with
respect thereto, and the other party may elect (in its sole discretion) to
prosecute and maintain such Patent, at the other party’s sole
expense.  In such event, upon the request of and, at the expense of
the other party, the prosecuting party shall assign to the other party all of
its right, title and interest in, to and under such Patent which the prosecuting
party has decided to abandon and provide reasonable cooperation to the other
party with respect thereto (including, without limitation, providing necessary
information and executing relevant documents).

     

    5.5          Enforcement
of Patents.

     

    (a)           Infringement by Third
Parties.  In the event that Novavax or the Company becomes
aware of or has reasonable suspicions of third party activities in the Territory
that could constitute infringement of the Novavax Patents or Patents that issue
from Developed Know-How in the Territory, or with respect to ROW Patents
anywhere in the world, or misappropriation of the Novavax Know-How or Developed
Know-How in the Territory, or with respect to Developed Know-How any that is
subject to the license granted to Novavax in Section 2.2 anywhere in the world
(“ROW Know-How”), then
such party shall promptly notify the other parties of such third party
activities, including identification of the third party and delineation of the
facts relating to such third party activities.  The Company shall have
the right (but shall not be obligated) to enforce the Novavax Patents, Novavax
Know-How and Developed Know-How against any actual or alleged infringement or
misappropriation thereof in the Territory by a third party (by bringing a suit,
action or proceeding against such third party), at the Company’s sole
expense.  Novavax shall have the right (but shall not be obligated) to
enforce the ROW Patents and ROW Know-How within the scope of the licenses
granted to Novavax in Section 2.2 against any actual or alleged infringement or
misappropriation thereof outside the Territory by a third party (by bringing a
suit, action or proceeding against such third party), at Novavax’s sole
expense.  If the Company does not enforce the Novavax Patents or
Know-How by (i) one hundred (100) days following the notice of alleged
infringement or (ii) thirty (30) days before the time limit, if any, set forth
in the appropriate laws and regulations for the filing of such an action,
whichever comes first, then Novavax shall have the right (but not the
obligation) to enforce the Novavax Patents and Novavax Know-How against any
actual or alleged infringement or misappropriation thereof in the Territory by a
third party (by bringing a suit, action or proceeding against such party), at
Novavax’s sole expense.  The non-prosecuting party shall reasonably
cooperate with the prosecuting party in such enforcement activities, at the
prosecuting party’s expense, including by agreeing to be named as a party to (or
bringing in its own name) such suit, action or proceeding for the benefit of the
non-prosecuting party if required for such enforcement action to
proceed.  The prosecuting party shall keep the non-prosecuting party
reasonably informed regarding any such enforcement action and shall consider in
good faith the reasonable comments and suggestions of the non-prosecuting party
related to such suit, action or proceeding.  All recoveries received
by the prosecuting party from any such enforcement action shall be retained by
the prosecuting party.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    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)           Challenge by Third
Parties.  Novavax and Company will each notify the other Party
in writing within ten (10) Business Days of learning of any alleged or
threatened opposition, reexamination request, action for declaratory judgment,
nullity action, interference or other attack upon the validity, title or
enforceability of the Licensed Rights or the ROW Patents or ROW Know-How by a
Third Party.  Owner of the subject Patent will have the right (but not
the obligation) to defend any such challenge in the Territory.  If the
owner of the subject Patent commences a defense against the alleged or
threatened challenge (i) within sixty (60) days following the detection of the
alleged challenge, or (ii) ten (10) Business Days before the time limit, if any,
set forth in appropriate Laws and regulations for making a filing in defense of
such a challenge, whichever comes first, then the owner of the subject Patent
will so notify the other party promptly.  Notwithstanding the
foregoing, if any such action for declaratory judgment, nullity action, or other
attack upon the validity, title or enforceability of the Licensed Right includes
or will include counterclaims of infringement of the Licensed Rights, ROW
Patents or ROW Know-How by the Third Party, control of such action or other
attack shall be governed by Section 5.5(a).

     

    ARTICLE
6

     

    CONFIDENTIALITY;
PUBLICATION

     

    6.1          Confidentiality.  The
Parties anticipate that under this Agreement each Party will provide
confidential and/or proprietary information to the other Party and that the use
and disclosure of such information shall be governed by Article 18 of the Joint
Venture Agreement which is hereby incorporated by reference.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    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.

    

    6.2          Publication.

     

    (a)           Each
Party shall have the right to publish the data and results related to Licensed
Product, subject to the rest of this Section 6.2.  Prior to public
disclosure or submission for publication of a proposed publication describing
the results of any scientific or clinical activity relating to a Licensed
Product, the Party proposing such publication shall send the other Party by
expedited delivery a copy of the proposed publication to be submitted and shall
allow the other Party a reasonable time period (but not more than sixty (60)
days from the date of confirmed receipt) in which to determine whether the
proposed publication contains subject matter for which patent protection should
be sought (prior to publication of such proposed publication) for the purpose of
protecting an invention, or whether the proposed publication contains the
Confidential Information of such other Party, or whether the proposed
publication contains information that is reasonably likely to have a material
adverse impact on the development or commercialization of Licensed
Product.  Following the expiration of applicable time period for
review, the Party proposing such publication shall be free to submit such
proposed publication for publication and publish or otherwise disclose to the
public such scientific or clinical results, subject to the procedures set forth
in Section 6.2(b).

     

    (b)           If
the Party reviewing such publication believes that the subject matter of the
proposed publication by the other Party contains Confidential Information of the
Party or a patentable invention owned by the Party or in which it otherwise has
exclusive rights hereunder, then prior to the expiration of the applicable time
period for review, such Party shall notify the Party proposing such publication
in writing of such belief.  On receipt of written notice from the
other Party that such proposed publication contains its Confidential
Information, the Party proposing publication shall remove such Confidential
Information from such proposed publication prior to any publication thereof,
unless the other Party agrees otherwise in writing.  On receipt of
written notice from the other Party that such proposed publication contains a
patentable invention owned by it or in which it otherwise has exclusive rights
hereunder, the Party proposing publication shall delay public disclosure of such
information or submission of the proposed publication for an additional period
of thirty (30) days to permit preparation and filing of a patent application on
such invention.  The Party proposing publication shall thereafter be
free to publish or disclose such information.

     

    ARTICLE
7

     

    REPRESENTATIONS AND
WARRANTIES

     

    7.1          Mutual
Warranties.  Each of Novavax and Company hereby represents,
warrants and covenants to the other as of the Effective Date that:

     

    (a)           it
has full corporate power and authority to enter into this Agreement and to carry
out the provisions hereof, and this Agreement is legally binding upon it and
enforceable in accordance with its terms.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    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)           the
execution, delivery and performance of this Agreement by it does not conflict
with any agreement, instrument or understanding, oral or written, to which it is
a party or by which it may be bound, nor violate any Law of any governmental
authority having jurisdiction over it;

     

    (c)           it
has not granted, and during the Term it will not grant, any right to any Third
Party that would conflict with the rights granted to the other Party
hereunder.  It has (or will have at the time performance is due)
maintained and will maintain and keep in full force and effect all agreements
necessary to perform its obligations hereunder; and

     

    (d)           all
necessary consents, approvals and authorizations of all governmental authorities
and other persons required to be obtained by such Party to enter into, or
perform its obligations under, this Agreement have been obtained.

     

    7.2          Representations by
Novavax.  In addition to the representations and warranties
made in Section 7.1, Novavax hereby represents, warrants and covenants to
Company as of the Effective Date that:

     

    (a)           the
Licensed Rights are subsisting and are not the subject of any interference,
re-issue, re-exam, opposition or appeal proceedings;

     

    (b)           no
Third Party has filed, pursued or maintained or, to the best of its knowledge,
threatened in writing to file, pursue or maintain any claim, lawsuit, charge or
other action involving any Licensed Right including any claim, lawsuit, charge,
or action alleging that any Licensed Right is invalid or
unenforceable;

     

    (c)           and
to the best of its knowledge, all employees and agents of Novavax who have
performed any activities on its behalf in connection with research regarding the
Licensed Rights have properly assigned to Novavax the whole of their rights in
any intellectual property made, discovered or developed by them as a result of
such research, and no Third Party has any rights to any such intellectual
property;

     

    (d)           the
Licensed Rights are free and clear of any liens, charges, encumbrances or rights
of others, to possession or use that may interfere with Novavax’s possession or
use under this Agreement;

     

    (e)   
        it has sufficient rights to
grant the licenses granted to the Company hereunder; and

     

    (f)  
         all third party agreements
licensing any Licensed Rights to Novavax, which are sublicensed to the Company
hereunder, are currently in full force and effect, and it has not received
notice of material breach or termination thereof.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    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.

    

    7.3           DISCLAIMER OF
WARRANTIES.  Except as expressly set forth herein, EACH PARTY
EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE
PRACTICES, IN ALL CASES WITH RESPECT THERETO.  Without limiting the
generality of the foregoing, each Party expressly does not warrant, and
disclaims any warranties with regards to:  (a) the success of any
study or test commenced under this Agreement, (b) the safety or usefulness
for any purpose of the technology or Materials it provides or discovers under
this Agreement; and/or (c) the validity, enforceability, or non-infringement of
any intellectual property rights or technology it provides or licenses to the
other Party under this Agreement.

     

    ARTICLE
8

     

    INDEMNIFICATION

     

    8.1           Indemnification by
Company.  Company will indemnify, defend and hold harmless
Novavax, its affiliates, directors, officers and employees (each a “Novavax Indemnitee”) from and
against any and all liability, loss, damage or expense (including without
limitation reasonable attorneys fees) it may suffer as the result of Third Party
claims, demands, actions and proceedings brought against it (collectively,
“Losses”) to the extent
such Losses result from the (a) negligence or willful misconduct by Company, its
Affiliates, employees, agents, or Third Party contractors, or (b) manufacture,
use, sale, or offer for sale of a Licensed Product in the Territory due to a
design defect or a manufacturing defect, including but not limited to, a Loss
related to the death of or injury to a Third Party.  Company’s
obligation to indemnify Novavax pursuant to this Section 8.1 will not apply to
the extent of any Loss that arises from the (i) material breach by Novavax of
its representations, warranties or covenants contained within this Agreement,
(ii) negligence or willful misconduct of any Novavax Indemnitee, or (iii) a
manufacturing defect of Licensed Product supplied by Novavax under the Supply
Agreement.

     

    8.2           Indemnification by
Novavax.   Novavax will indemnify, defend and hold harmless
Company, its affiliates, directors, officers and employees (each a “Company Indemnitee”) from and
against any and all Losses to the extent such Losses result from the (a)
negligence or willful misconduct by Novavax, its Affiliates, employees, agents
or Third Party contractors, or (b) manufacture, use, sale, or offer for sale of
a Licensed Product outside the Territory due to a design defect or a
manufacturing defect, including but not limited to, a Loss related to the death
of or injury to a Third Party.  Novavax’s obligation to indemnify the
Company Indemnitee pursuant to this Section 8.2 will not apply to the extent of
any Loss that arises from the (i) material breach by Company of its
representations, warranties or covenants contained within this Agreement or (ii)
negligence or willful misconduct of any Company Indemnitee.

     

    8.3           Procedures.  Indemnitor’s
agreement to indemnify, defend and hold harmless an Indemnitee is conditioned on
Indemnitee (a) providing prompt written notice of any claim giving rise to an
indemnification obligation hereunder but only if a failure to so notify causes
prejudicial harm to the Indemnitor’s ability to defend, (b) permitting
Indemnitor to assume full responsibility to investigate, prepare for and defend
against any such claim, (c) providing reasonable assistance in the defense of
such claim at Indemnitor’s reasonable expense, and (d) not compromising or
settling such claim without Indemnitor’s advance written
consent.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    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.

    

    8.4          Insurance.  Each Party
will maintain comprehensive general liability insurance coverage, including
products liability, in amounts it reasonably determines are appropriate with
respect to the Development and Commercialization of Licensed Product in its
respective territory.

     

    8.5          Limitation of
Liability. EXCEPT TO THE EXTENT (A) SUCH PARTY MAY BE REQUIRED TO
INDEMNIFY THE OTHER PARTY UNDER THIS ARTICLE 8, OR (B) AS REGARDS A BREACH OF A
PARTY’S RESPONSIBILITIES PURSUANT TO ARTICLE 6, NEITHER PARTY NOR ITS RESPECTIVE
AFFILIATES WILL BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF PROFITS, LOSS OF
BUSINESS OR INTERRUPTION OF BUSINESS, OR FOR ANY OTHER INDIRECT, INCIDENTAL,
SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES UNDER THIS AGREEMENT,
WHETHER IN CONTRACT, WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES.

     

    ARTICLE
9

     

    TERM; BREACH

     

    9.1          Term and
Termination.  The term of this Agreement will commence on the
Effective Date and will continue until (a) the Company provides sixty (60) days
prior written notice of termination to Novavax, (b) the Parties mutually agree
in writing to terminate the Agreement, or (c) Novavax terminates the Joint
Venture Agreement by providing a Notice of Termination under and pursuant to
Section 11.2 of the Joint Venture Agreement.  In no event shall either
Party have the right to terminate this Agreement based upon any breach by the
other Party, and to the extent that any right to terminate is provided under any
Laws, the Parties hereby waive such right.

     

    9.2          Breach and
Remedies.  In addition to any remedies available under any
laws, the following remedies shall be available to a party in the event of the
following breaches

     

    (a)           In
the event that Section 2.6 is materially breached by either party, the
non-breaching party shall be entitled to damages equal to its lost profit from
lost sales of Licensed Product in or out of the Territory (as applicable) due to
the “grey market” breach.

     

    (b)           In
the event that Company (i) materially alters an H1N1 Development Plan or H1N1
Commercialization Plan for Licensed Product without Novavax’s prior written
consent, or (ii) initiates a clinical trial of Licensed Product without
Novavax’s approval or materially deviates from an approved clinical trial
protocol for Licensed Product without the prior written consent of Novavax, then
Novavax shall have right to obtain injunctive relief with respect to such breach
before any court of competent jurisdiction in accordance with Section
10.3.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

    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.

    

    9.3           Survival.  The
following provisions of this Agreement shall survive expiration or termination
of this Agreement for any reason:  Article 8 and Sections 6.1 and
7.3.  In the event that this Agreement is terminated under 9.1(c), the
license grant under Section 2.2 shall survive as a fully paid, exclusive license
solely under Developed Know-how owned or Controlled by Company, including any
Patents that issue therefrom, as of the effective date of termination (i.e.,
excluding any intellectual property developed or acquired after such date of
termination).

     

    ARTICLE
10

     

    DISPUTE
RESOLUTION

     

    10.1         Disputes.  The
Parties recognize that disputes as to certain matters may from time to time
arise during the Term which relate to either Party’s rights and/or obligations
hereunder.  It is the objective of the Parties to establish procedures
to facilitate the resolution of disputes arising under this Agreement in an
expedient manner by mutual cooperation and without resort to
litigation.  To accomplish this objective, the Parties agree to follow
the procedures set forth in this Article 10 if and when a dispute arises under
this Agreement.

     

    10.2         Arbitration.  Any
dispute arising between the Parties out of or in connection with the
implementation or interpretation of this Agreement shall, if not settled
amicably within ninety (90) days from the date that the dispute arose, be
finally settled by three (3) arbitrators. Each Party shall be entitled to
appoint one (1) arbitrator and the two (2) so appointed shall appoint the third
arbitrator in accordance with the Indian Arbitration and Conciliation Act,
1996.  It is hereby agreed that Part I of the Indian Arbitration and
Conciliation Act, 1996 (except for the provisions of Section 9 thereof) shall
not apply to the arbitration under this Agreement. The language of the
arbitration proceedings shall be English and its place shall be
Singapore.  The arbitral award or determination shall be final and
subject to no appeal and shall deal with the question of costs of arbitration
and all matters related thereto.

     

    The
Parties agree that it would be impossible or inadequate to measure and calculate
their damages from any breach of the Agreement though great and
irreparable.  Accordingly, each Party agrees that if the other Party
breaches this Agreement, the non-breaching party will have available, in
addition to any other right or remedy available, the right to obtain an
injunction from a court of competent jurisdiction restraining such breach or
threatened breach and specific performance of any provision of this
Agreement. 

     

    10.3         Equitable
Claims.  Notwithstanding anything to the contrary in this
Article 10, either Party has the right to seek temporary injunctive relief
or any other interim equitable remedy in any court of competent jurisdiction as
may be available to such Party under the laws applicable to such jurisdiction
that may be necessary to protect the rights or property of that Party until such
time as any dispute underlying such temporary injunctive relief or any other
interim equitable remedy has been resolved in accordance with Section
10.2.

     

    10.4         Governing Law.  The
substantive laws of India will govern the resolution of all disputes,
controversies and claims under, arising out of or relating to the validity,
construction, enforceability or performance of this Agreement and any related
remedies, without giving effect to any choice of law rules.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    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.

    

    10.5         Award.  Each Party
will abide by any arbitral award rendered pursuant to this Article
10.  If a Party resists enforcement of an arbitral award, any costs,
fees or taxes incident to enforcement will be charged against that Party to the
extent permitted by Law.  Each Party will bear its own legal fees for
arbitration, and the arbitrator(s) will assess their costs, fees and expenses
against the Party losing the arbitration.

     

    10.6         Injunctive
Relief.  If a Party makes a sufficient showing under the rules
and standards set forth in the rules of civil procedure and applicable Law, the
arbitrator may, and the Parties will abide by, injunctive measures after either
Party submits in writing for arbitration claims requiring immediate
relief.  Notwithstanding the foregoing, and in accordance with Section
10.3, a Party will also be free at any time to bring an Equitable Claim to any
court of competent jurisdiction without submitting such request to an
arbitrator.

     

    10.7         Confidentiality.  Any
arbitration proceeding, including without limitation the existence of any
dispute submitted to arbitration and any arbitral award or decision, will be
Confidential Information of both Parties, and the arbitrator(s) will issue
appropriate protective orders to safeguard each Party’s Confidential
Information, provided that such Confidential Information may be disclosed solely
as necessary in connection with the enforcement of an arbitral award or as
otherwise required by Law (subject to Article 6).

     

    ARTICLE
11

     

    MISCELLANEOUS

     

    11.1         Entire
Agreement.  This Agreement (including its Exhibits) sets forth
all the covenants, promises, agreements, warranties, representations, conditions
and understandings between the Parties with respect to the subject matter hereof
and supersedes and terminates all prior agreements and understanding between the
Parties with respect to such subject matter.  No subsequent
alteration, amendment, change or addition to this Agreement will be binding upon
the Parties unless reduced to writing and signed by the respective authorized
officers of the Parties.

     

    11.2         Third Party
Contractors.  The Parties will perform their obligations under
this Agreement as Third Party contractors and nothing contained in this
Agreement will be construed to be inconsistent with such relationship or
status.  This Agreement will not constitute, create or in any way be
interpreted as a joint venture or partnership of any kind.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    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.

    

    11.3        Notices. Any notice,
request, demand, waiver, consent, approval or other communication permitted or
required under this Agreement (“Notice”) will be in writing,
will refer specifically to this Agreement and will be deemed given only if sent
by electronic mail (with receipt confirmed), facsimile transmission (with
transmission confirmed) or by an internationally recognized delivery service
that maintains records of delivery, addressed to the Parties at their respective
addresses specified in this Section 11.3 or to such other address as the Party
to whom notice is to be given may have provided to the other Party in accordance
with this Section 11.3.  Any notice delivered by electronic mail or
facsimile will be confirmed by a hard copy delivered as soon as practicable
thereafter by an internationally recognized overnight delivery
service.  Such Notice will be deemed to have been given on the second
Business Day (at the place of delivery) after deposit with an internationally
recognized delivery service.  This Section 11.3 is not intended to
govern the day-to-day business communications necessary between the Parties in
performing their obligations under the terms of this Agreement.

     

    
      
        	
                If
      to Novavax:

              	
                Novavax,
      Inc.

              
	 
      	
                9920
      Belaward Campus Drive

              
	 
      	
                Rockville
      Maryland 20850

              
	 
      	
                Attn:  Ray
      Hage, Senior Vice President

              
	 
      	
                Email:
      Rhage@Novavax.com

              
	 
      	
                Facsimile
      No.: 240-268-2122

              
	 
      	 
      
	
                If
      to Company:

              	
                CPL
      Biologicals Private Limited

              
	 
      	
                Cadila
      Corporate Campus

              
	 
      	
                Sarkhej-Dholka
      Road

              
	 
      	
                Bhat,
      Ahmedabad – 382210

              
	 
      	
                Gujarat,
      India

              
	 
      	
                Attn:
      Dr. Rajiv I. Modi, Managing Director

              
	 
      	
                Email:
      rimodi@cadilapharma.co.in

              
	 
      	
                Facsimile
      No.: +91 (02718) 225031

              

      

    

    

    11.4        Assignment.

     

    (a)           Novavax
may not assign this Agreement, in whole or in part, without the advance written
consent of the Company; provided, however, that this Agreement shall be
automatically assigned to Novavax’s successor in connection with the
acquisition, merger or sale of Novavax or the sale, transfer, lease, assignment
or disposal of all or substantially all of the property or assets of Novavax,
whether by way of a single transaction or a series of related transactions, and
such successor shall be fully bound by the terms and conditions
hereof.

     

    (b)           The
Company may not assign this Agreement, in whole or in part, without the advance
written consent of Novavax; provided, however, that this Agreement shall be
automatically assigned to the Company’s successor in connection with the sale,
transfer, lease, assignment or disposal of all or substantially all of the
property or assets of the Company , whether by way of a single transaction or a
series of related transactions, including a Change in Control of the Company (as
that term is defined in Schedule II of the Joint Venture Agreement), and such
successor shall be fully bound by the terms and conditions hereof; provided that
any such automatic assignment by Company within the scope of Schedule II of the
Joint Venture Agreement shall only be effective if such transaction was approved
by Novavax under and pursuant to the Joint Venture Agreement for so long as such
approval rights of Novavax under the Joint Venture Agreement have not been
terminated.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    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)           Any
assignment or purported assignment by either Party in violation of this Section
11.4 will be null and void.

     

    11.5        Force Majeure.  Both
Parties will be excused from the performance of their obligations under this
Agreement (except for the obligation to pay money) to the extent that such
performance is prevented by force majeure and the nonperforming Party promptly
provides notice of the prevention to the other Party.  Such excuse
will be continued so long as the condition constituting force majeure continues
and the nonperforming Party takes reasonable efforts to remove the
condition.  For purposes of this Agreement, force majeure will include
conditions beyond the control of the Parties, including without limitation, an
act of God, voluntary or involuntary compliance with any regulation, Law or
order of any government, war, civil commotion, labor strike or lock-out, acts of
terrorism, epidemic, failure or default of public utilities or common carriers,
destruction of production facilities or materials by fire, earthquake, storm or
like catastrophe.

     

    11.6        Headings.  The
headings for each article and section in this Agreement have been inserted for
convenience of reference only and are not intended to limit or expand on the
meaning of the language contained in the particular article or
section.

     

    11.7        No Strict
Construction.  This Agreement has been prepared jointly and
will not be strictly construed against either Party.

     

    11.8        Ambiguities.  Ambiguities
and uncertainties in this Agreement, if any, will not be interpreted against
either Party, irrespective of which Party may be deemed to have caused the
ambiguity or uncertainty to exist.

     

    11.9        English
Language.  All notices required or permitted to be given
hereunder, and all written, electronic, oral or other communications between the
Parties regarding this Agreement will be in the English
language.  This Agreement is in the English language only, which
language will be controlling in all respects, and all versions hereof in any
other language will be for accommodation only and will not be binding upon the
Parties.

     

    11.10      No Waiver.  Any delay in
enforcing a Party’s rights under this Agreement or any waiver as to a particular
default or other matter will not constitute a waiver of such Party’s rights to
the future enforcement of its rights under this Agreement, excepting only as to
an express written and signed waiver as to a particular matter for a particular
period of time.

     

    11.11      Severability.  If
one or more of the provisions in this Agreement are deemed unenforceable by Law,
then such provision will be deemed stricken from this Agreement and the
remaining provisions will continue in full force and effect and shall be
interpreted to give full effect to the commercial agreement between the
Parties.

     

    11.12      Counterparts.  This
Agreement may be executed in one or more identical counterparts, each of which
will be deemed to be an original, and which collectively will be deemed to be
one and the same instrument.

     

    [Signature
Page to Follow]

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

    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.

    

    In Witness
Whereof, the Parties have by duly authorized persons executed this
Agreement as of the Effective Date.

     

    
      
        	
                Novavax,
      Inc.

              	 
      	
                CPL
      Biologicals Private Limited

              
	 
      	 
      	 
      	 
      	 
      
	
                By: 

              	
                /s/ Rahul Singhvi

              	 
      	
                By: 

              	
                /s/ Rajiv I. Modi

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Rahul
      Singhvi

              	 
      	 
      	
                Rajiv
      I. Modi

              
	 
      	
                President
      and CEO

              	 
      	 
      	
                Director

              

      

    

     

    [Signature
Page to H1N1 License Agreement]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    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.

    

    Schedule
1

    [* *
*]STOCK
PURCHASE AGREEMENT

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       

      
        
          
            
              
                
                  	 
      	 
      	 
      	
                          Page

                        
	 	 	 	 
	
                          1.

                        	
                          Purchase
      and Sale of Common Stock and Preferred Stock.

                        	
                          1

                        
	 
      	
                          1.1.

                        	
                          Sale
      and Issuance of Common Stock and Preferred Stock.

                        	
                          1

                        
	 
      	
                          1.2.

                        	
                          Closing;
      Delivery.

                        	
                          1

                        
	 
      	
                          1.4

                        	
                          Use
      of Proceeds.

                        	
                          3

                        
	 
      	
                          1.5

                        	
                          Defined
      Terms Used in this Agreement.

                        	
                          3

                        
	
                          2.

                        	
                          Representations
      and Warranties of the Company.

                        	
                          4

                        
	 
      	
                          2.1.

                        	
                          Organization,
      Good Standing, Corporate Power and Qualification.

                        	
                          4

                        
	 
      	
                          2.2.

                        	
                          Capitalization.

                        	
                          4

                        
	 
      	
                          2.3.

                        	
                          Subsidiaries.

                        	
                          5

                        
	 
      	
                          2.4.

                        	
                          Authorization.

                        	
                          5

                        
	 
      	
                          2.5.

                        	
                          Valid
      Issuance of Shares.

                        	
                          5

                        
	 
      	
                          2.6.

                        	
                          Governmental
      Consents and Filings.

                        	
                          5

                        
	 
      	
                          2.7.

                        	
                          Litigation.

                        	
                          6

                        
	 
      	
                          2.8.

                        	
                          Compliance
      with Other Instruments.

                        	
                          6

                        
	 
      	
                          2.9.

                        	
                          Agreements;
      Actions.

                        	
                          6

                        
	 
      	
                          2.10.

                        	
                          Certain
      Transactions.

                        	
                          7

                        
	 
      	
                          2.11.

                        	
                          Rights
      of Registration and Voting Rights.

                        	
                          7

                        
	 
      	
                          2.12.

                        	
                          Absence
      of Liens.

                        	
                          7

                        
	 
      	
                          2.13.

                        	
                          Material
      Liabilities.

                        	
                          7

                        
	 
      	
                          2.14.

                        	
                          Changes.

                        	
                          8

                        
	 
      	
                          2.15.

                        	
                          Tax
      Returns and Payments.

                        	
                          8

                        
	 
      	
                          2.16.

                        	
                          Permits.

                        	
                          8

                        
	 
      	
                          2.17.

                        	
                          Corporate
      Documents.

                        	
                          8

                        
	 
      	
                          2.18.

                        	
                          Disclosure.

                        	
                          8

                        
	
                          3.

                        	
                          Representations
      and Warranties of the Purchasers.

                        	
                          8

                        
	 
      	
                          3.1.

                        	
                          Authorization.

                        	
                          8

                        
	 
      	
                          3.2.

                        	
                          Purchase
      Entirely for Own Account.

                        	
                          9

                        
	 
      	
                          3.3.

                        	
                          Disclosure
      of Information.

                        	
                          9

                        
	 
      	
                          3.4.

                        	
                          Restricted
      Securities.

                        	
                          9

                        
	 
      	
                          3.5.

                        	
                          No
      Public Market.

                        	
                          9

                        
	 
      	
                          3.6.

                        	
                          Legends.

                        	
                          10

                        
	 
      	
                          3.7.

                        	
                          Accredited
      Investor.

                        	
                          10

                        
	 
      	
                          3.8.

                        	
                          Foreign
      Investors.

                        	
                          10

                        
	 
      	
                          3.9.

                        	
                          No
      General Solicitation.

                        	
                          10

                        
	 
      	
                          3.10.

                        	
                          Exculpation
      Among Purchasers.

                        	
                          10

                        

                

              

            

          

        

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      TABLE OF
CONTENTS

      (continued)

      

      
        
          
            
              
                
                  	 
      	 
      	 
      	
                          Page

                        
	 	 	 	 
	 
      	
                          3.11.

                        	
                          Residence.

                        	
                          10

                        
	
                          4.

                        	
                          Conditions
      to the Purchasers’ Obligations at Closing.

                        	
                          10

                        
	 
      	
                          4.1

                        	
                          Closing
      Under the Acquisition Agreement or Board Expense Funding.

                        	
                          11

                        
	 
      	
                          4.2

                        	
                          Representations
      and Warranties.

                        	
                          11

                        
	 
      	
                          4.3

                        	
                          Performance.

                        	
                          11

                        
	 
      	
                          4.4

                        	
                          Compliance
      Certificate.

                        	
                          11

                        
	 
      	
                          4.5

                        	
                          Qualifications.

                        	
                          11

                        
	 
      	
                          4.7

                        	
                          Stockholders
      Agreement.

                        	
                          11

                        
	 
      	
                          4.8

                        	
                          Registration
      Rights Agreement.

                        	
                          11

                        
	 
      	
                          4.9

                        	
                          Restated
      Certificate.

                        	
                          12

                        
	 
      	
                          4.10

                        	
                          Proceedings
      and Documents.

                        	
                          12

                        
	
                          5.

                        	
                          Conditions
      of the Company’s Obligations at Closing.

                        	
                          12

                        
	 
      	
                          5.1

                        	
                          Representations
      and Warranties.

                        	
                          12

                        
	 
      	
                          5.2

                        	
                          Performance.

                        	
                          12

                        
	 
      	
                          5.3

                        	
                          Qualifications.

                        	
                          12

                        
	 
      	
                          5.4

                        	
                          Registration
      Rights Agreement.

                        	
                          12

                        
	 
      	
                          5.5

                        	
                          Stockholders
      Agreement.

                        	
                          12

                        
	
                          6.

                        	
                          Miscellaneous.

                        	
                          12

                        
	 
      	
                          6.1

                        	
                          Survival
      of Warranties.

                        	
                          12

                        
	 
      	
                          6.2

                        	
                          Successors
      and Assigns.

                        	
                          12

                        
	 
      	
                          6.3

                        	
                          Governing
      Law.

                        	
                          13

                        
	 
      	
                          6.4

                        	
                          Counterparts;
      Facsimile.

                        	
                          13

                        
	 
      	
                          6.5

                        	
                          Titles
      and Subtitles.

                        	
                          13

                        
	 
      	
                          6.6

                        	
                          Notices.

                        	
                          13

                        
	 
      	
                          6.8

                        	
                          Fees
      and Expenses.

                        	
                          14

                        
	 
      	
                          6.9

                        	
                          Attorneys’
      Fees.

                        	
                          15

                        
	 
      	
                          6.10

                        	
                          Amendments
      and Waivers.

                        	
                          15

                        
	 
      	
                          6.11

                        	
                          Severability.

                        	
                          15

                        
	 
      	
                          6.12

                        	
                          Delays
      or Omissions.

                        	
                          15

                        
	 
      	
                          6.13

                        	
                          Entire
      Agreement.

                        	
                          15

                        
	 
      	
                          6.14

                        	
                          Dispute
      Resolution.

                        	
                          15

                        
	 
      	
                          6.15

                        	
                          No
      Commitment for Additional Financing.

                        	
                          16

                        
	 
      	
                          6.16

                        	
                          Waiver
      of Conflicts.

                        	
                          16

                        
	 
      	
                          6.17

                        	
                          Equitable
      Remedies.

                        	
                          16

                        

                

              

            

          

        

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      TABLE OF
CONTENTS

      (continued)

      

      
        
          
            
              
                
                  	 
      	 
      	 
      	
                          Page

                        
	 	 	 	 
	 
      	
                          6.18

                        	
                          Construction.

                        	
                          16

                        
	 
      	
                          6.19

                        	
                          Time
      of Essence.

                        	
                          17

                        
	 
      	
                          6.20

                        	
                          Business
      Plan and Budget.

                        	
                          17

                        

                

              

            

          

        

      

      

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      TABLE OF
CONTENTS

      (continued)

       

      
        
          
            
              	 
      	
                      Exhibit
      A -

                    	
                      SCHEDULE
      OF PURCHASERS

                    
	 
      	 
      	 
      
	 
      	
                      Exhibit
      B -

                    	
                      FORM
      OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

                    
	 
      	 
      	 
      
	 
      	
                      Exhibit
      C -

                    	
                      DISCLOSURE
      SCHEDULE

                    
	 
      	 
      	 
      
	 
      	
                      Exhibit
      D -

                    	
                      FORM
      OF STOCKHOLDERS AGREEMENT

                    
	 
      	 
      	 
      
	 
      	
                      Exhibit
      E -

                    	
                      FORM
      OF REGISTRATION RIGHTS
AGREEMENT

                    

            

          

        

      

      

        
          
             

          

          
            iv

            
              

            

          

          
             

          

        

STOCK
PURCHASE AGREEMENT

    

     

    THIS
STOCK PURCHASE AGREEMENT  is made as of the 16th day of
October, 2009 by and among American Capital Acquisition Corporation, a Delaware
corporation (the “Company”), The Michael
Karfunkel 2005 Grantor Retained Annuity Trust (“MKG”) and AmTrust Financial
Services, Inc., a Delaware corporation (“AFSI”, and together with MKG,
each a “Purchaser” and
together the “Purchasers”).

     

    The
parties hereby agree as follows:

     

    1.           Purchase and Sale of Common
Stock and Preferred Stock.

     

    1.1.            
Sale and Issuance of
Common Stock and Preferred Stock.

     

    (a)           The
Company shall adopt and file with the Secretary of State of the State of
Delaware on or before the Initial Closing (as defined below) the Amended and
Restated  Certificate of Incorporation in the form of Exhibit B attached to
this Agreement (the “Restated
Certificate”).

     

    (b)           Subject
to the terms and conditions of this Agreement, each Purchaser agrees to invest
in the Company in exchange for equity securities as provided herein an aggregate
amount (with respect to each Purchaser, its “Investment Commitment Amount”)
determined as follows:  (i) (A) the aggregate amount of “Purchase
Price” (as defined in the Acquisition Agreement) that the Company is required to
pay from time to time under the Acquisition Agreement, including any adjustments
thereto plus
(B) the aggregate amount of expenses approved by the Board of Directors of the
Company to be paid with respect to the transactions contemplated by this
Agreement and the Acquisition Agreement multiplied by (ii)
such Purchaser’s “Commitment Percentage” set forth opposite such Purchaser’s
name on Exhibit
A attached hereto (with
respect to each Purchaser, its “Commitment
Percentage”).  In exchange for any portion of its Investment
Commitment Amount, (i) MKG shall receive from the Company shares of Common Stock
of the Company, $0.01 par value per share (the “Common Stock”) at a price per
share of $1000 and (ii) AFSI shall receive from the Company shares of Series A
Preferred Stock of the Company, $0.01 par value per share (the “Preferred Stock”) at a price
per share of $1000.  The shares of Common Stock and Preferred Stock
issued to the Purchasers pursuant to this Agreement (including any shares issued
at the Initial Closing and any  additional shares of Common Stock and
Preferred Stock sold at subsequent Closings (the “Additional Shares”) shall be
referred to in this Agreement as the “Shares.”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.2.             Closing;
Delivery.

     

    (a)           The
purchase and sale of the aggregate number Shares contemplated to be sold under
Section 1.1(b) will take place on multiple occasions as provided in this
Agreement.  The initial purchase and
sale of the Shares shall take place remotely via the exchange of documents and
signatures, at 10:00 a.m. on the earlier to occur of (i) the Closing Date under
the Acquisition Agreement and (ii) a date determined by the Board of Directors
of the Company on which Shares will be sold in order to raise funds necessary to
pay expenses as contemplated by Section 1.1(b)(ii)(B) (which time and place are
designated as the “Initial
Closing”).  The term “Closing” shall apply to the
Initial Closing and each subsequent Closing held in accordance with this
Agreement unless otherwise specified.  The Company shall only be
entitled to require a Closing, and each Purchaser shall only be obligated to
satisfy its obligations to purchase Shares at any Closing, (i) in the case of
the Company’s need to raise funds to satisfy any payment obligations described
in Section 1.1(b)(i)(A), when an actual need to make such payments arises under
the Acquisition Agreement and (ii) in the case of  the Company’s need
to raise funds to satisfy any payment obligations described in Section
1.1(b)(ii)(B), upon the determination by the Board of Directors of the Company
that the Company shall make such expense payments.

     

    (b)           No
less than five (5) business days prior to the anticipated date of any Closing
(including the Initial Closing), the Company shall send a written notice to each
Purchaser (each, a “Closing
Notice”) that sets forth (i) the anticipated date of such Closing, (ii)
the purpose of such Closing (i.e., the Company’s intended use of proceeds raised
in connection with such Closing, which use must be contemplated by Section
1.1(b)(i) of this Agreement),  (iii) the number of Shares that such
Purchaser shall be obligated to purchase at such Closing (determined in
accordance with such Purchaser’s Commitment Percentage), (iv) the aggregate
purchase price that such Purchaser is obligated to deliver to the Company in
exchange for such number of Shares, and (v) the wire instructions to which such
Purchaser shall deliver such aggregate purchase price.  The Closing
Notice that the Company delivers to each Purchaser shall be accompanied by a
copy of the Closing Notice that is being delivered to the other Purchaser in
connection with such Closing.

     

    (c)           On
the fifth (5th)
Business Day following the delivery of any Closing Notice (or, if it is
determined that the applicable Closing will not occur on such fifth (5th)
Business Day as anticipated, on such later date that the Company communicates to
the Purchaser in the Closing Notice or any other written communication relating
thereto), each Purchaser shall be required to deliver to the Company's account
(or to such other account designated by the Company or its designee) the amount
set forth in the Closing Notice delivered to such Purchaser.

     

    (d)           Interest
will accrue at the Default Rate on any outstanding unpaid balance of any amount
required to be paid to the Company by a Purchaser under Section 1.2(c) from and
including the date such amount was due until the date of payment of such amount
by such Purchaser.  The Company may pursue and enforce all of its
rights and remedies under applicable law against a Purchaser which fails to make
a payment when due, including but not limited to the commencement of a lawsuit
to collect the unpaid amount, interest, costs, and reimbursement (with interest
at the Default Rate) for any other damages suffered by the
Company.  Without in any way limiting the generality of the foregoing,
if a Purchaser fails to make a payment required under a Closing Notice (which
failure is not cured within five (5) Business Days following the date such
payment was due), then the Company shall be entitled to sell the number of
Shares that the defaulting Purchaser was required to purchase to another Person
(for clarity, without regard to any preemptive rights set forth in the
Stockholders Agreement) including the other Purchaser, and, in its sole
discretion and without in any way reducing its remedies against the defaulting
Purchaser the Company shall no longer be obligated to sell any Shares to such
defaulting Purchaser, notwithstanding the commitments set forth in this Section
1.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (e)           At
each Closing, the Company shall deliver to each Purchaser a certificate
representing the Shares being purchased by such Purchaser at such Closing
against payment of the purchase price therefor by wire transfer to a bank
account designated by the Company in the Closing Notice. Exhibit
A to this Agreement shall be
updated to reflect the number of Shares purchased and the aggregate purchase
price therefor at each Closing.

     

    1.4         Use of
Proceeds.  In accordance with the directions of the Company’s
Board of Directors, the Company will use the proceeds from the sale of the
Shares for the purposes described in Section 1.1(b)(i) and other general
corporate purposes (as directed by the Company’s Board of
Directors).

     

    1.5         Defined Terms Used in this
Agreement.  In addition to the terms defined above, the
following terms used in this Agreement shall be construed to have the meanings
set forth or referenced below.

     

    “Acquisition Agreement” means
that certain Securities Purchase Agreement, dated as of October 16, 2009,
between the Company, GMAC Inc., GMAC Insurance Holdings Inc. and Motors
Insurance Corporation, as amended from time to time.

     

    “Affiliate” means, with respect
to any specified Person, any other Person who, directly or indirectly, controls,
is controlled by, or is under common control with such Person, including,
without limitation, any general partner, managing member, officer or director of
such Person or any venture capital fund now or hereafter existing that is
controlled by one or more general partners or managing members of, or shares the
same management company with, such Person.

     

    “Business Day” ” means any day
other than a Saturday, Sunday or a day on which banks in New York City are
authorized by law or executive order to be closed.

     

    “Code” means the Internal
Revenue Code of 1986, as amended.

     

    “Default Rate” means with
respect to any period the lesser of (a) a variable rate equal to the Prime
Rate as published in the Wall
Street Journal in effect, from time to time, during such period plus 6%
or (b) the highest interest rate for such period permitted by applicable
law.

     

    “Knowledge,” including the
phrase “to the Company’s knowledge,” shall mean the actual knowledge of the
President, Chief Executive Officer or Chief Financial officer
of  officers of the Company. 

     

    “Material Adverse Effect” means
a material adverse effect on the business, assets (including intangible assets),
liabilities, financial condition, property, or results of operations of the
Company.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “Person” means any individual,
corporation, partnership, trust, limited liability company, association or other
entity.

     

    “Registration Rights Agreement”
means the agreement among the Company and the Purchasers and other holders of
the Company’s equity securities from time to time, dated as of the date of the
Initial Closing, in the form of Exhibit E attached to
this Agreement, as amended from time to time.

     

    “Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.

     

    “Stockholders Agreement” means
the agreement between the Company, the Purchasers and other holders of the
Company’s equity securities from time to time, to be dated as of the date of the
Initial Closing, in the form of Exhibit D attached to
this Agreement, as amended from time to time.

     

    “Transaction Agreements” means
this Agreement, the Registration Rights Agreement, the Stockholders Agreement
and the Amended and Restated Certificate of Incorporation of the Company.

     

    2.           Representations and
Warranties of the Company.  The Company hereby represents and
warrants to each Purchaser that, except as set forth on the Disclosure Schedule
attached as Exhibit C to this Agreement, which exceptions shall be deemed to be
part of the representations and warranties made hereunder, the following
representations are true and complete as of the date of each Closing, except as
otherwise indicated.  The Disclosure Schedule shall be arranged in
sections corresponding to the numbered and lettered sections and subsections
contained in this Section 2,
and the disclosures in any section or subsection of the Disclosure Schedule
shall qualify other sections and subsections in this Section 2 only to the extent it is readily apparent from
a reading of the disclosure that such disclosure is applicable to such other
sections and subsections.

     

    For
purposes of these representations and warranties, the term “the Company” shall
not include any subsidiaries of the Company, unless otherwise noted
herein.

     

    2.1.           
 Organization,
Good Standing, Corporate Power and Qualification.  The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as presently conducted and as proposed to be
conducted.  The Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the failure to so qualify would
have a Material Adverse Effect.

     

    2.2.           
Capitalization.  The
authorized capital of the Company consists, immediately prior to the Initial
Closing, of 300,000 shares of Common Stock, 4 shares of which are issued and
outstanding immediately prior to the Initial Closing and 71,000 shares of
Preferred Stock, 0 shares of which are issued and outstanding immediately prior
to the Initial Closing.  All of the outstanding shares of Common Stock
and Preferred Stock have been duly authorized, are fully paid and nonassessable
and were issued in compliance with all applicable federal and state securities
laws.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (a)           Except
for the rights and obligations of the Purchasers to purchase Additional Shares
hereunder, there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal or similar rights)
or agreements, orally or in writing, to purchase or acquire from the Company any
shares of Common Stock or Preferred Stock or any other equity security of the
Company, or any securities convertible into or exchangeable for shares of Common
Stock or Preferred Stock.  

     

    2.3.             Subsidiaries.  Prior
to the Closing under the Acquisition Agreement, the Company does not currently
own or control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, limited liability company, association, or
other business entity.  The Company is not a participant in any joint
venture, partnership or similar arrangement.

     

    2.4.             Authorization.  All
corporate action required to be taken by the Company’s Board of Directors and
stockholders in order to authorize the Company to enter into the Transaction
Agreements, and to issue the Shares at the Closing, has been taken or will be
taken prior to the Closing.  All action on the part of the officers of
the Company necessary for the execution and delivery of the Transaction
Agreements, the performance of all obligations of the Company under the
Transaction Agreements to be performed as of the Closing, and the issuance and
delivery of the Shares has been taken or will be taken prior to the
Closing.  The Transaction Agreements, when executed and delivered by
the Company, shall constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, or (iii) to
the extent the indemnification provisions contained in the Registration Rights
Agreement and the Stockholders Agreement may be limited by applicable federal or
state securities laws.

     

    2.5.             Valid Issuance
of Shares.  The
Shares, when issued, sold and delivered in accordance with the terms and for the
consideration set forth in this Agreement, will be validly issued, fully paid
and nonassessable and free of restrictions on transfer other than restrictions
on transfer under the Transaction Agreements, applicable state and federal
securities laws and liens or encumbrances created by or imposed by a
Purchaser.  Assuming the accuracy of the representations of the
Purchasers in Section
3 of this Agreement and subject to the filings described in Section 2.6(ii)
below, the Shares will be issued in compliance with all applicable federal and
state securities laws.

     

    2.6.             Governmental Consents and
Filings.  Assuming
the accuracy of the representations made by the Purchasers in Section 3 of this
Agreement, no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority is required on the part of the Company in
connection with the consummation of the transactions contemplated by this
Agreement, except for (i) the filing of the Restated Certificate, which will
have been filed as of the Initial Closing, and (ii) filings pursuant to
Regulation D of the Securities Act, and applicable state securities laws,
which have been made or will be made in a timely manner.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    2.7.             Litigation.  There
is no claim, action, suit, proceeding, arbitration, complaint, charge or
investigation pending or to the Company’s knowledge, currently threatened (i)
against the Company or any officer or  director; (ii) to the Company’s
knowledge, that questions the validity of the Transaction Agreements or the
right of the Company to enter into them, or to consummate the transactions
contemplated by the Transaction Agreements, or (iii) to the Company’s knowledge,
that would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.  Neither the Company nor, to the
Company’s knowledge, any of its officers or directors is a party or is named as
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality (in the case of officers or
directors, such as would affect the Company).  There is no action,
suit, proceeding or investigation by the Company pending or which the Company
intends to initiate.  

     

    2.8.             Compliance with Other
Instruments.  The
Company is not in violation or default (i) of any provisions of its Restated
Certificate or Bylaws, (ii) of any instrument, judgment, order, writ or decree,
(iii) under any note, indenture or mortgage, or (iv) under any lease, agreement,
contract or purchase order to which it is a party or by which it is bound that
is required to be listed on the Disclosure Schedule, or, to its knowledge,
of any provision of federal or state statute, rule or regulation applicable to
the Company, the violation of which would have a Material Adverse
Effect.  The execution, delivery and performance of the Transaction
Agreements and the consummation of the transactions contemplated by the
Transaction Agreements will not result in any such violation or be in conflict
with or constitute, with or without the passage of time and giving of notice,
either (i) a default under any such provision, instrument, judgment, order,
writ, decree, contract or agreement or (ii) an event which results in the
creation of any lien, charge or encumbrance upon any assets of the Company or
the suspension, revocation, forfeiture, or nonrenewal of any material permit or
license applicable to the Company.

     

    2.9.             Agreements;
Actions. Except
for the Transaction Agreements, the Acquisition Agreement or any agreements
contemplated by the Acquisition Agreement, there are no material agreements,
understandings, instruments, contracts or proposed transactions to which the
Company is a party or by which it is bound.

     

    (a)           The
Company has not (i) declared or paid any dividends, or authorized or made
any distribution upon or with respect to any class or series of its capital
stock, (ii) other than pursuant to the Acquisition Agreement, the other
Transaction Agreements or any agreements contemplated thereby, incurred any
indebtedness for money borrowed or incurred any other material liabilities,
(iii) made any loans or advances to any Person, other than ordinary
advances for travel expenses, or (iv) sold, exchanged or otherwise disposed
of any of its assets or rights, other than the sale of its inventory in the
ordinary course of business. For the purposes of subsections (a) and (b) of this
Section
2.9, all indebtedness, liabilities, agreements,
understandings, instruments, contracts and proposed transactions involving the
same Person (including Persons the Company has reason to believe are affiliated
with each other) shall be aggregated for the purpose of meeting the individual
minimum dollar amounts of such subsection.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b)          The
Company is not a guarantor or indemnitor of any indebtedness of any other
Person.

     

    2.10.           Certain
Transactions.

     

    (a)           Other
than (i) the Acquisition Agreement and the Transaction Agreements, (ii) standard
employee benefits generally made available to all employees, (iii) standard
director and officer indemnification agreements approved by the Board of
Directors, (iv) the purchase of shares of the Company’s capital stock and the
issuance of options to purchase shares of the Company’s Common Stock, and (v)
the agreements set forth on Schedule 2.10 of the Disclosure Schedule, there are
no agreements, understandings or proposed transactions between the Company and
any of its officers, directors, or consultants, or any Affiliate
thereof.

     

    (b)          The
Company is not indebted, directly or indirectly, to any of its directors,
officers or employees or to their respective spouses or children or to any
Affiliate of any of the foregoing, other than in connection with expenses or
advances of expenses incurred in the ordinary course of business or employee
relocation expenses and for other customary employee benefits made generally
available to all employees.

     

    2.11.           Rights of Registration and
Voting Rights.  Except
as provided in the Registration Rights Agreement, the Company is not under any
obligation to register under the Securities Act any of its currently outstanding
securities or any securities issuable upon exercise or conversion of its
currently outstanding securities.  To the Company’s knowledge, except
as contemplated in the Stockholders Agreement, no stockholder of the Company has
entered into any agreements with respect to the voting of capital shares of the
Company.

     

    2.12.           Absence of
Liens.  The
property and assets that the Company owns are free and clear of all mortgages,
deeds of trust, liens, loans and encumbrances, except for statutory liens for
the payment of current taxes that are not yet delinquent and encumbrances and
liens that arise in the ordinary course of business and do not materially impair
the Company’s ownership or use of such property or
assets.  

     

    2.13.           Material
Liabilities.  The
Company has no liability or obligation, absolute or contingent (individually or
in the aggregate), except (i) obligations and liabilities incurred after the
date of incorporation in the ordinary course of business that are not material,
individually or in the aggregate, (ii) obligations under contracts made in the
ordinary course of business that would not be required to be reflected in
financial statements prepared in accordance with generally accepted accounting
principles and (iii) obligations under the Acquisition Agreement and the
Transaction Agreements.

     

    2.14.           Changes.  To
the Company’s knowledge, there have been no events or circumstances of any kind
that have had or could reasonably be expected to result in a Material Adverse
Effect.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    2.15.           Tax Returns and
Payments.  There
are no federal, state, county, local or foreign taxes dues and payable by the
Company that have not been timely paid.  There are no accrued and
unpaid federal, state, country, local or foreign taxes of the Company that are
due, whether or not assessed or disputed.  There have been no
examinations or audits of any tax returns or reports by any applicable federal,
state, local or foreign governmental agency.  The Company has duly and
timely filed all federal, state, county, local and foreign tax returns required
to have been filed by it and there are in effect no waivers of applicable
statutes of limitations with respect to taxes for any year.

     

    2.16.           Permits.  Other
than those regulatory notices, approvals and consents necessary for the Company
to consummate the transactions contemplated by the Acquisition Agreement, the
Company has all franchises, permits, licenses and any similar authority
necessary for the conduct of its business, the lack of which could reasonably be
expected to have a Material Adverse Effect.  The Company is not in
default in any material respect under any of such franchises, permits, licenses
or other similar authority.

     

    2.17.           Corporate
Documents.  The
Restated Certificate and Bylaws of the Company are in the form provided to the
Purchasers.  The copy of the minute books of the Company provided to
the Purchasers contains minutes of all meetings of directors and stockholders
and all actions by written consent without a meeting by the directors and
stockholders since the date of incorporation and accurately reflects in all
material respects all actions by the directors (and any committee of directors)
and stockholders with respect to all transactions referred to in such
minutes.

     

    2.18.           Disclosure.  The
Company has made available to the Purchasers all the information reasonably
available to the Company that the Purchasers have requested for deciding whether
to acquire the Shares.  No representation
or warranty of the Company contained in this Agreement, as qualified by the
Disclosure Schedule, and no certificate furnished or to be furnished to
Purchasers at the Closing contains any untrue statement of a material fact or ,
to the Company’s knowledge, omits to state a material fact necessary in order to
make the statements contained herein or therein not misleading in light of the
circumstances under which they were made.  It is understood that this
representation is qualified by the fact that the Company has not delivered to
the Purchasers, and has not been requested to deliver, a private placement or
similar memorandum or any written disclosure of the types of information
customarily furnished to purchasers of securities.

     

    3.           Representations and
Warranties of the Purchasers.  Each
Purchaser hereby represents and warrants to the Company, severally and not
jointly, that:

     

    3.1.             Authorization.  The
Purchaser has full power and authority to enter into the Transaction
Agreements.  The Transaction Agreements to which the Purchaser is a
party, when executed and delivered by the Purchaser, will constitute valid and
legally binding obligations of the Purchaser, enforceable in accordance with
their terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and any other laws of general
application affecting enforcement of creditors’ rights generally, and as limited
by laws relating to the availability of specific performance, injunctive relief,
or other equitable remedies, or (b) to the extent the indemnification
provisions contained in the Registration Rights Agreement may be limited by
applicable federal or state securities laws.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    3.2.             Purchase Entirely for Own
Account.  This
Agreement is made with the Purchaser in reliance upon the Purchaser’s
representation to the Company, which by the Purchaser’s execution of this
Agreement, the Purchaser hereby confirms, that the Shares to be acquired by the
Purchaser will be acquired for investment for the Purchaser’s own account, not
as a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and that the Purchaser has no present intention of selling,
granting any participation in, or otherwise distributing the same.  By
executing this Agreement, the Purchaser further represents that the Purchaser
does not presently have any contract, undertaking, agreement or arrangement with
any Person to sell, transfer or grant participations to such Person or to any
third Person, with respect to any of the Shares, except as provided in the
Transaction Agreements. The Purchaser has not been formed for the specific
purpose of acquiring the Shares.

     

    3.3.             Disclosure of
Information.  The
Purchaser has had an opportunity to discuss the Company’s business, management,
financial affairs and the terms and conditions of the offering of the Shares
with the Company’s management and has had an opportunity to review the Company’s
facilities. The foregoing, however, does not limit or modify the representations
and warranties of the Company in Section 2 of this
Agreement or the right of the Purchasers to rely thereon.

     

    3.4.             Restricted
Securities.  The
Purchaser understands that the Shares have not been, and will not be, registered
under the Securities Act, by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of the
Purchaser’s representations as expressed herein.  The Purchaser
understands that the Shares are “restricted securities” under applicable U.S.
federal and state securities laws and that, pursuant to these laws, the
Purchaser must hold the Shares indefinitely
unless they are registered with the Securities and Exchange Commission and
qualified by state authorities, or an exemption from such registration and
qualification requirements is available.  The Purchaser acknowledges
that the Company has no obligation to register or qualify the Shares, or the
Common Stock into which any Preferred Stock may be converted, for resale except
as set forth in the Registration Rights Agreement.  The Purchaser
further acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
on requirements relating to the Company which are outside of the Purchaser’s
control, and which the Company is under no obligation and may not be able to
satisfy.

     

    3.5.             No Public
Market.  The
Purchaser understands that no public market now exists for the Shares, and that
the Company has made no assurances that a public market will ever exist for the
Shares.

     

    3.6.             Legends.  The
Purchaser understands that the Shares and any securities issued in respect of or
exchange for the Shares, may bear one or all of the following
legends:

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (a)           “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO
SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.”

     

    (b)          Any
legend set forth in, or required by, the other Transaction
Agreements.

     

    (c)          Any
legend required by the securities laws of any state to the extent such laws are
applicable to the Shares represented by the certificate so
legended.

     

    3.7.             Accredited
Investor.  The
Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act.

     

    3.8.             Foreign
Investors.  If
the Purchaser is not a United States person (as defined by
Section 7701(a)(30) of the Code), the Purchaser hereby represents that it
has satisfied itself as to the full observance of the laws of its jurisdiction
in connection with any invitation to subscribe for the Shares or any use of this
Agreement, including (i) the legal requirements within its jurisdiction for
the purchase of the Shares, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents that
may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale, or transfer of the Shares.  The Purchaser’s subscription and
payment for and continued beneficial ownership of the Shares will not violate
any applicable securities or other laws of the Purchaser’s
jurisdiction.

     

    3.9.             No General
Solicitation.  Neither
the Purchaser, nor any of its officers, directors, employees, agents,
stockholders or partners has either directly or indirectly, including through a
broker or finder (a) engaged in any general solicitation, or
(b) published any advertisement in connection with the offer and sale of
the Shares.

     

    3.10.           Exculpation Among
Purchasers.  The
Purchaser acknowledges that it is not relying upon any Person, other than the
Company and its officers and directors, in making its investment or decision to
invest in the Company.  The Purchaser agrees that neither any
Purchaser nor the respective controlling Persons, officers, directors, partners,
agents, or employees of any Purchaser shall be liable to any other Purchaser for
any action heretofore taken or omitted to be taken by any of them in connection
with the purchase of the Shares.

     

    3.11.           Residence. The
office or offices of the Purchaser in which its principal place of business is
identified in the address or addresses of the Purchaser set forth on Exhibit
A.

     

    4.           Conditions to the
Purchasers’ Obligations at Closing.  The
obligations of each Purchaser to purchase Shares at the Initial Closing or any
subsequent Closing are subject to the fulfillment, on or before such Closing, of
each of the following conditions, unless otherwise waived:

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    4.1           Closing Under the
Acquisition Agreement or Board Expense Funding.  The
Closing under the Acquisition Agreement shall have occurred or the Board of
Directors of the Company shall have determined to have a Closing in order to
raise funds to pay expenses as contemplated by Section
1.1(b)(i)(B).

     

    4.2           Representations and
Warranties.  The
representations and warranties of the Company contained in Section 2  shall be true and
correct in all respects as of such Closing.

     

    4.3           Performance.  The
Company shall have performed and complied with all covenants, agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by the Company on or before such
Closing.

     

    4.4           Compliance
Certificate.  The
President of the Company shall deliver to the Purchasers at such Closing a
certificate certifying that the conditions specified in Sections 4.2 and 4.3
have been fulfilled.

     

    4.5           Qualifications.  All
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Shares pursuant to this
Agreement shall be obtained and effective as of such Closing.

     

    4.6           Board of
Directors.  As
of the Initial Closing, the authorized size of the Board shall be three (3), and
the Board shall be comprised of two (2) individuals designated by MKG and one
(1) individual designated by AFSI; provided that this Section 4.6 may not be
relied upon by either Purchaser if the condition is not satisfied solely because
such Purchaser failed to appoint a designee to the Board or such Purchaser’s
designee to the Board is  no longer a member as a result of voluntary
resignation or otherwise.

     

    4.7           Stockholders
Agreement.  The
Company and each director designated by a Purchaser (other than the Purchaser
relying upon this condition to excuse such Purchaser’s performance hereunder)
and each other Purchaser shall have executed and delivered the Stockholders
Agreement, and the Stockholders Agreement shall be in full force and effect as
of the Closing.

     

    4.8           Registration Rights
Agreement.  The
Company and each
Purchaser (other than the Purchaser relying upon this condition to excuse such
Purchaser’s performance hereunder) and the other stockholders of the Company
named as parties thereto shall have executed and delivered the Registration
Rights Agreement, and the Registration Rights Agreement shall be in full force
and effect as of the Closing.

     

    4.9           Restated
Certificate.  The
Company shall have filed the Restated Certificate with the Secretary of State of
Delaware on or prior to the Closing, which shall continue to be in full force
and effect as of the Closing.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    4.10           Proceedings and
Documents.  All
corporate and other proceedings in connection with the transactions contemplated
at the Closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to each Purchaser, and each Purchaser (or its
counsel) shall have received all such counterpart original and certified or
other copies of such documents as reasonably requested.  Such
documents may include good standing certificates.

     

    5.           Conditions of the Company’s
Obligations at Closing.  The
obligations of the Company to sell Shares to the Purchasers at the Initial
Closing or any subsequent Closing are subject to the fulfillment, on or before
the Closing, of each of the following conditions, unless otherwise
waived:

     

    5.1           Representations and
Warranties.  The
representations and warranties of each Purchaser contained in Section 3 shall
be true and correct in all respects as of such Closing.

     

    5.2           Performance.  The
Purchasers shall have performed and complied with all covenants, agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by them on or before such Closing.

     

    5.3           Qualifications.  All
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Share pursuant to this
Agreement shall be obtained and effective as of the Closing.

     

    5.4           Registration Rights
Agreement.  Each
Purchaser shall have executed and delivered the Registration Rights
Agreement.

     

    5.5           Stockholders
Agreement.  Each
Purchaser and the other stockholders of the Company named as parties thereto
shall have executed and delivered the Stockholder Agreement.

     

    6.           Miscellaneous.

     

    6.1           Survival of
Warranties.  Unless
otherwise set forth in this Agreement, the representations and warranties of the
Company and the Purchasers contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and each Closing and shall
in no way be affected by any investigation or knowledge of the subject matter
thereof made by or on behalf of the Purchasers or the Company.

     

    6.2           Successors and
Assigns.  The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the
parties.  Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly provided in this
Agreement.

     

    
      
        
        

      

      
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    6.3           Governing
Law.  This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law.

     

    6.4           Counterparts;
Facsimile.  This
Agreement may be executed and delivered by facsimile signature and in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     

    6.5           Titles and
Subtitles.  The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.

     

    6.6           Notices.  Any
notice provided for in this Agreement shall be in writing and shall be either
personally delivered, or sent by reputable overnight courier service (charges
prepaid) or sent by telecopy to the Company at the address set forth below and
to any other recipient at the address indicated on Schedule A
attached hereto or at such address or to the attention of such other Person as
the recipient party has specified by prior written notice to the sending party,
or by electronic transmission to the Email address set forth
below.  Notices shall be deemed to have been given hereunder when
delivered personally, when answer back is confirmed and sent by telecopy, and
one day after deposit with a reputable overnight courier service.

     

    
      	
              (i)

            	
              If
      to the Company to:

            

    

    

    American Capital Acquisition
Corporation

    59 Maiden Lane

    New York, New York 10038

    Attn:  Barry
Karfunkel

    Tel: 646-458-7962

    Fax:
212-220-7130

    Email:

     

    
      	
              (ii)

            	
              If
      to the Purchasers to:

            

    

    

    Michael Karfunkel,
Trustee

    Michael Karfunkel 2005
G.R.A.T.

    59 Maiden Lane, 6th
Floor

    New York, New York 10038

    Tel: 646-458-7962

    Fax:
212-220-7130

    Email:

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    Stephen Ungar

    General Counsel

    AmTrust Financial Services,
Inc.

    59 Maiden Lane, 6th Floor

    New York, New York 10038

    Tel: 646.458.7913

    Fax: 212.220.7130

    Email:  sungar@amtrustgroup.com

    

    With a
concurrent copy, which shall not constitute notice, to:

    

    Geoffrey Etherington

    Edwards Angell Palmer & Dodge
LLP

    750 Lexington Avenue

    New York, NY 10022

    Phone:  212.912.2740

    Fax:    
212.308.4844

    Email:  getherington@eapdlaw.com

     

    Spiro Bantis

    London Fischer LLP

    59 Maiden Lane, 41st
Floor

    New York, NY 10038

    Phone: 212-972-1000

    Fax:           212-972-1030

    Email:  SBantis@londonfischer.com

    

    6.7         No Finder’s
Fees.  Each
party represents that it neither is nor will be obligated for any finder’s fee
or commission in connection with the transactions contemplated hereby or by the
Acquisition Agreement.  Each Purchaser agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finder’s or broker’s fee arising out of this transaction
(and the costs and expenses of defending against such liability or asserted
liability) for which each Purchaser or any of its officers, employees, or
representatives is responsible.  The Company agrees to indemnify and
hold harmless each Purchaser from any liability for any commission or
compensation in the nature of a finder’s or broker’s fee arising out of
this transaction (and the costs and expenses of defending against such liability
or asserted liability) for which the Company or any of its officers, employees
or representatives is responsible.

     

    6.8         Fees and
Expenses.  The
Company shall pay the reasonable and documented fees and expenses of the
Purchasers in connection with the negotiation and preparation of the Acquisition
Agreement, the Transaction Documents (as defined in the Acquisition Agreement),
this Agreement and the other Transaction Agreements, including without
limitation (i) all the legal expenses of MKG, AFSI and the special committee of
AFSI’s Board of Directors tasked with reviewing the transactions contemplated by
the agreements referenced above (the “Special Committee”), (ii) all fees paid to
FBR Capital Markets, the investment banking firm engaged by the Special
Committee and (iii) the due diligence related expenses incurred by MKG in
relation to the transactions contemplated by the Acquisition
Agreement.

     

    
      
        
        

      

      
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    6.9           Attorneys’
Fees.  If
any action at law or in equity (including arbitration) is necessary to enforce
or interpret the terms of any of the Transaction Agreements, the prevailing
party shall be entitled to reasonable attorneys’ fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.

     

    6.10           Amendments and
Waivers.  Any
term of this Agreement may be amended, terminated or waived only with the
written consent of the Company and the Purchaser against which the enforcement
is such amendment, waiver or termination is sought.  Any amendment or
waiver effected in accordance with this Section 6.10
shall be binding upon consenting Purchaser(s) and each transferee of such
Purchaser’s Shares and the Company.

     

    6.11           Severability.  The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.

     

    6.12           Delays or
Omissions.  No
delay or omission to exercise any right, power or remedy accruing to any party
under this Agreement, upon any breach or default of any other party under this
Agreement, shall impair any such right, power or remedy of such non-breaching or
non-defaulting party nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring.  Any waiver, permit, consent or approval of any
kind or character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing.  All remedies,
either under this Agreement or by law or otherwise afforded to any party, shall
be cumulative and not alternative.

     

    6.13           Entire
Agreement.  This
Agreement (including the Exhibits hereto), the Restated Certificate and the
other Transaction Agreements constitute the full and entire understanding and
agreement between the parties with respect to the subject matter hereof, and any
other written or oral agreement relating to the subject matter hereof existing
between the parties are expressly canceled.

     

    6.14           Dispute
Resolution.  The
parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of
the federal and state courts located within the geographic boundaries
of  the State of New York for the purpose of any suit, action or other
proceeding arising out of or based upon this Agreement, (b) agree not to
commence any suit, action or other proceeding arising out of or based upon this
Agreement except in the federal and state courts located within the geographic
boundaries of the State of New York, and (c) hereby waive, and agree not to
assert, by way of motion, as a defense, or otherwise, in any such suit, action
or proceeding, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment
or execution, that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this
Agreement or the subject matter hereof may not be enforced in or by such
court.

     

    
      
        
        

      

      
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    6.15           No Commitment for Additional
Financing.  The
Company acknowledges and agrees that no Purchaser has made any representation,
undertaking, commitment or agreement to provide or assist the Company in
obtaining any financing, investment or other assistance, other than the purchase
of the Shares as set forth in Section 1 of this
Agreement and subject to the conditions set forth herein and other than with
respect to any guaranty that a Purchaser expressly executes and delivers in
connection with the Acquisition Agreement.  Each Purchaser shall have
the right, in it sole and absolute discretion, to refuse or decline to
participate in any other financing of or investment in the Company, and shall
have no obligation to assist or cooperate with the Company in obtaining any
financing, investment or other assistance.

     

    6.16           Waiver of
Conflicts.  Each
party to this Agreement acknowledges that Edwards Angell Palmer & Dodge LLP,
counsel for the Company, has in the past performed and may continue to perform
legal services for the Purchasers in matters unrelated to the transactions
described in this Agreement.  Accordingly, each party to this Agreement
hereby (a) acknowledges that they have had an opportunity to ask for
information relevant to this disclosure; and (b) gives its informed consent
to Edwards Angell Palmer & Dodge LLP’s representation of the Purchasers in
such unrelated matters and to Edwards Angell Palmer & Dodge LLP’s
representation of the Company in connection with this Agreement and the
transactions contemplated hereby.

     

    6.17           Equitable
Remedies.  The
parties hereto agree that irreparable harm would occur in the event that any of
the agreements and provisions of this Agreement were not performed fully by the
parties hereto in accordance with their specific terms or conditions or were
otherwise breached, and that money damages are an inadequate remedy for breach
of this Agreement because of the difficulty of ascertaining and quantifying the
amount of damage that will be suffered by the parties in the event that this
Agreement is not performed in accordance with its terms or conditions or is
otherwise breached.  It is accordingly hereby agreed that the parties
shall be entitled to an injunction or injunctions to restrain, without the
necessity of posting a bond, enjoin and prevent breaches of this Agreement by
the other parties and to enforce specifically such terms and provisions of this
Agreement, such remedy being in addition to and not in lieu of, any other rights
and remedies to which the parties may be entitled to at law or in
equity.

     

    6.18           Construction.  This
Agreement has been negotiated by each Purchaser and the Company and their
respective legal counsel, and legal or equitable principles that might require
the construction of this Agreement or any provision of this Agreement against
the party drafting this Agreement shall not apply in any construction or
interpretation of this Agreement.

     

    
      
        
        

      

      
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    6.19           Time of
Essence.  With
regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence.

     

    6.20           Business Plan and
Budget.  The
Purchasers and the Company agree to use best efforts to prepare and adopt a
three (3) year budget and business plan with respect to the Company as soon as
practicable, and preferably prior to the Initial Closing. Notwithstanding the
foregoing, the Purchasers and the Company agree that no party shall be entitled
to be excused from its obligations under this Agreement under Section 4.2 or
Section 5.2 because of another party’s breach of this Section 6.20.

     

    *     *     *     *     *

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as of
the date first written above.

     

    
      
        	 
      	
                COMPANY:

              
	 
      	 
      
	 
      	
                AMERICAN
      CAPITAL ACQUISITION

                CORPORATION

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /S/ BARRY KARFUNKEL

              
	 
      	 
      	 
      
	 
      	
                Name:

              	
                BARRY KARFUNKEL

              
	 
      	 
      	
                (print)

              
	 
      	 
      	 
      
	 
      	
                Title:

              	
                PRESIDENT

              
	 
      	 
      	 
      
	 
      	
                PURCHASERS:

              
	 
      	 
      
	 
      	
                THE
      MICHAEL KARFUNKEL 2005

                GRANTOR
      RETAINED ANNUITY

                TRUST

              
	 
      	 
      
	 
      	
                By:

              	
                /S/ MICHAEL KARFUNKEL

              
	 
      	 
      	 
      
	 
      	
                Name:

              	
                MICHAEL KARFUNKEL

              
	 
      	 
      	
                (print)

              
	 
      	 
      	 
      
	 
      	
                Title:

              	
                TRUSTEE

              
	 
      	 
      	 
      
	 
      	
                AMTRUST
      FINANCIAL SERVICES,

                INC.

              
	 
      	 
      
	 
      	
                By:

              	
                /S/BARRY ZYSKIND

              
	 
      	 
      	 
      
	 
      	
                Name:

              	
                BARRY ZYSKIND

              
	 
      	 
      	
                (print)

              
	 
      	 
      	 
      
	 
      	
                Title:

              	
                CHIEF EXECUTIVE
  OFFICER

              

      

    

     

    
      SIGNATURE
PAGE TO PURCHASE AGREEMENT

        

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBITS

     

    
      	
               
      

            	
              Exhibit A
      -

            	
              SCHEDULE OF
      PURCHASERS

            

    

     

    
      	
               
      

            	
              Exhibit B
      -

            	
              FORM OF AMENDED AND RESTATED
      CERTIFICATE OF INCORPORATION

            

    

     

    
      	
               
      

            	
              Exhibit C
      -

            	
              DISCLOSURE
      SCHEDULE

            

    

     

    
      	
               
      

            	
              Exhibit D
      -

            	
              FORM OF STOCKHOLDERS
      AGREEMENT

            

    

     

    
      	
               
      

            	
              Exhibit E
      -

            	
              FORM OF REGISTRATION RIGHTS
      AGREEMENT

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    SCHEDULE
OF PURCHASERS

     

    
      
        
          
            
              
                
                  	
                          PURCHASER

                        	 	
                          COMMITMENT

                          PERCENTAGE

                        	 	
                          ADDRESS

                        
	 	 	 	 	 	 
	
                          The
      Michael Karfunkel 2005 Grantor Retained Annuity Trust

                        	    	 	75	%  	
                          Michael
      Karfunkel, Trustee

                          Michael
      Karfunkel 2005 G.R.A.T.

                          59
      Maiden Lane, 6th
      Floor

                          New
      York, NY 10038

                        
	 
      	 	 	 	 	 
      
	
                          AmTrust
      Financial Services, Inc.

                        	 	 	25	%	
                          AmTrust
      Financial Services, Inc.

                           

                          59
      Maiden Lane

                          6th
      Floor

                          New
      York, NY  10038

                          Phone: 
      212.220.7120

                          Fax:      
      212.220.7130

                        

                

              

            

          

        

      

    

     

    SHARES
PURCHASED

     

    (Last
Updated: ____, 2009)

     

    
      
        
          
            
              	
                      PURCHASER

                    	 
      	
                      INITIAL CLOSING

                    	 
      	
                      SUBSEQUENT CLOSINGS

                    
	 
      	 
      	 
      	 
      	 
      
	
                      The
      Michael Karfunkel 2005 Grantor Retained Annuity Trust

                       

                    	 
      	
                      Date:______

                       

                      Number
      of Shares of Common Stock:_____

                       

                      Aggregate Purchase
      Price:____

                    	 
      	
                      1)
      [insert
      date]

                       

                           Number
      of Shares of Common Stock:_____

                       

                           Aggregate
      Purchase Price:____

                       

                      2)
      [insert
      date]

                       

                           Number
      of Shares of Common Stock:_____

                       

                           Aggregate
      Purchase Price:____

                    
	 
      	 
      	 
      	 
      	 
      
	
                      AmTrust
      Financial Services, Inc.

                       

                    	 
      	
                      Date:_____

                       

                      Number
      of Shares of Preferred Stock:_____

                       

                      Aggregate Purchase
      Price:____

                    	 
      	
                      1)
      [insert
      date]

                       

                           Number
      of Shares of Preferred Stock:_____

                       

                           Aggregate
      Purchase Price:____

                       

                      2)
      [insert
      date]

                       

                           Number
      of Shares of Preferred Stock:_____

                       

                           Aggregate
      Purchase
Price:____

                    

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    FORM
OF AMENDED AND RESTATED

    CERTIFICATE
OF INCORPORATION

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
C

     

    DISCLOSURE
SCHEDULE

     

    Schedule
2.10: None

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
D

     

    FORM
OF STOCKHOLDERS AGREEMENT

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
E

     

    FORM
OF REGISTRATION RIGHTS AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}]]