Document:

Document

Exhibit 10.65

CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS OF THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

January 31, 2022

Novavax, Inc.
21 Firstfield Road
Gaithersburg, MD 20878

Attention:    [***], Senior Vice President, Commercial Strategy
Subject:    Modification No. 13 to Project Agreement No. 01; MCDC2011-001
Reference:    MCDC Base Agreement No. 2020-530
Dear [***]:
In accordance with the terms and conditions of the referenced MCDC Base Agreement, Modification No. 13 hereby amends Project Agreement No. 01 as follows:

DESCRIPTION  OF MODIFICATION

1)The Term of the Project Agreement clause of the Project Agreement is hereby amended to read as indicated in bold below:

2. TERM OF THE PROJECT AGREEMENT
The period of performance for this Project Agreement is from July 06, 2020 through December 31, 2023 (this is a 23 month no-cost extension).

2)Attachment A, Statement of Work, of the Project Agreement is hereby amended as attached herein.

Except as provided herein , all Terms and Conditions of the referenced MCDC Base Agreement, Project Agreement, and preceding modifications remain unchanged and in full force and effect.

The Project Agreement Holder is required to sign this document and return to Advanced Technology International to finalize this action.
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Novavax, Inc.

By:    /s/ John A. Herrmann III    

Name:    John A. Herrmann III    

Title:    EVP, CLO    

Date    1/31/22    

Advanced Technology International

By:    /s/ [***]    

Name:    [***]    

Title:    Sr. Contracts Administrator    

Date    2/1/22    

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Attachment A
Statement of Work
(Incorporated as of Modification No. 13)

This page is intentionally blank. See separate Attachment A.

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Attachment A
Statement of Work
(Incorporated as of Modification No. 13; Changes to Sections 3, 4 and 5 are indicated in bold italics.) 

For
Rapid (WF10) Advanced Research & Development to Large Scale Manufacturing of NVX-CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus 

RPP #: 20-11
Project Identifier: MCDC2011-001
Consortium Member: Novavax, Inc. 
Title of Proposal: Rapid (WF10) Advanced Research & Development to Large Scale Manufacturing of NVX-CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus 
Requiring Activity: Joint Mission between the Department of Health and Human Services and Department of Defense to Combat COVID-19

1.0    INTRODUCTION, SCOPE, AND OBJECTIVES

1.1    Introduction

To meet the needs of the Coronavirus Disease 2019 (COVID-19) pandemic, the United States Government (USG) is identifying and will support development and at-scale manufacturing of selected vaccine candidates, to ensure timely availability to the US population when needed. This is the primary focus of the mission being executed by the Department of Health and Human Services (HHS) and Department of Defense (DoD), in support of Operation Warp Speed (OWS).   

The USG is interested in pursuing prototype vaccines that are in an advanced stage of development, and will support companies that can, in parallel with nonclinical, clinical and regulatory development, rapidly establish the manufacturing capacity required to meet the USG’s objective of supplying a safe and effective Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2) vaccine to the entire US population.  The USG is tasked with marshaling the efforts of the US biotechnology industry to achieve this goal. 

1.2    Definition of the Prototype Project

Consistent with USG objectives, the “prototype project” under this agreement is defined as the manufacture and delivery of 100M doses of a SARS-CoV-2 vaccine, NVX-CoV-2373, which is suitable for use in humans under a sufficiently informed deployment strategy, and the advanced positioning of a stockpile of critical long lead raw materials for the Matrix-M adjuvant.  As such, the “prototype project” will effectively demonstrate Novavax’s ability to rapidly stand up large scale manufacturing and seamlessly transition into ongoing production.

The NVX-CoV-2373 vaccine is comprised of the Matrix-MTM adjuvant, and antigen (SARS-CoV-2 spike protein). The vaccine is filled into a multi-dose vial ([***]) and is stored at refrigerated temperature (2-8oC). 

Successful development of the prototype will demonstrate Novavax’s ability to rapidly stand up large scale manufacturing and seamlessly transition into ongoing production capability, in order to rapidly manufacture to meet surge requirements with little advance notification, and 
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demonstrate capability to stockpile and distribute large quantities of the vaccine to respond when needed, including in order to supply use in clinical studies, under an Emergency Use Authorization (EUA), or pursuant to other clearance from the U.S. Food and Drug Administration (FDA).

Successful completion of the prototype will require three coordinated and integrated lines of effort:

a)Large scale manufacturing, compliant with 21 CFR Parts 210 and 211, and the Drug Supply Chain Security Act (DSCA), to the extent applicable at the time of manufacturing by statute and FDA interpretive guidance thereof. 
b)Parallel nonclinical and clinical studies required to determine if the vaccine is safe and effective.
c)Compliance with all applicable U.S. regulatory requirements.

It is important to note that while results of nonclinical and clinical studies are critical to develop use case scenarios and, in turn, inform the USG’s deployment strategy as it relates to product manufactured under this agreement, successful development of the prototype is dependent only on the validity of data from these studies.  The degree to which the data are “positive” or “negative” is not a factor in demonstration of the prototype.

1.3    Follow-on Activity

This prototype project includes unpriced options for follow-on production/procurement.  During the performance of the prototype, the USG and Novavax will negotiate the scope and price of production/procurement.  If the prototype project is successful, the USG may then enter into follow-on production/procurement by executing these options through a separate stand-alone production/procurement agreement, to be negotiated in terms of scope and price as described in the following paragraph. 

In accordance with 10 U.S.C. 2371b(f), and upon demonstration of the prototype, or at the accomplishment of particularly favorable or unexpected results that would justify transitioning to production/procurement, EUA, or Biologics License Application (BLA) approved by the FDA, the USG and Novavax may enter into a non-competitive production/procurement follow-on agreement or contract for additional production/procurement, to partially or completely meet the USG objective of supplying a safe and effective SARS-CoV-2 vaccine to vaccinate up to 300M people in the targeted population (≈560M additional doses).

1.4    Scope

Novavax has defined a scope of activities in order to successfully develop the prototype, as defined above. The scope is based on the following assumptions regarding manufacturing and clinical dose:

◦Manufacturing Assumptions and Clinical Dose
▪The NVX-CoV-2373 vaccine is comprised of the Matrix-MTM adjuvant, and antigen (SARS-CoV-2 spike protein). 
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▪A dose range of 5-25 μg of antigen is under clinical study. The anticipated dose based on clinical data obtained to date is [***]μg of antigen with [***]μg of Matrix-M adjuvant.  
▪For planning purposes, the [***] ([***]μg antigen/dose) has been used and the calculations in this scope of work have been based on this dose. 
▪The antigen production is the rate-limiting step in vaccine production. The Matrix-M adjuvant will be available prior to antigen production. Dose production has been calculated based on the availability of antigen.  Novavax is planning on a batch-by-batch rapid fill/finish once antigen is manufactured and available. 
▪The estimated production schedule based on the [***]μg antigen/dose (base case) and [***] μg antigen /dose (anticipated case) is in the table below:

																		
		Estimated Schedule of Cumulative Doses Manufactured by Month
	Dosage	Oct 2020	Nov 2020	Dec 2020	Jan 2021	Feb 2021
	[***] μg/dose (base case)	[***]	[***]	[***]	[***]	[***]**
	[***] μg/dose (anticipated case)	[***]	[***]	100,000,000*		

*Actual cumulative projected production at [**] μg/dose is [***] in December 2020. Some doses may be in progress at the end of December 2020. 
**Actual cumulative projected production at [***] μg/dose is [***] in February 2021.

The scope includes the following activities:

◦Manufacturing
▪Manufacturing of 100M doses (at [***]μg/dose, ≈[***]) of NVX-CoV-2373 vaccine in 2020 for distribution to the Government upon EUA under section 564 of the Food, Drug, and Cosmetic (FD&C) Act or a biologics licensure granted under Section 351(a) of the Public Health Service Act by the U.S. FDA.
▪Establishment of large-scale current Good Manufacturing Practice (cGMP) manufacturing capacity compliant with 21 CFR Parts 210 and 211, and the DSCA to the extent applicable at the time of manufacturing by statute and FDA interpretive guidance thereof. 
▪Comparability among clinical vaccine lots and commercial lots using a comparability protocol linked to the product associated with the Phase 1 clinical study. For adjuvant components, the same raw material lot(s) will be used for the current and new Contract Manufacturing Organization (CMO) processes for the comparability protocol, and the same test lab will be used to ensure only process differences are being evaluated.
▪Validation of manufacturing processes will be performed to cGMP standards. 
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◦Clinical
▪Phase 3 pivotal clinical trial harmonized with USG clinical strategies. 
▪A Phase 3 clinical trial in pediatric populations (<18 years).
▪Phase 2 studies in at-risk subpopulations (co-morbidities, [***], immunocompromised), as well as studies to support manufacturing site comparability. 

◦Non-clinical 
▪Studies to support EUA and regulatory approval (BLA).

◦Regulatory
▪EUA submission when data supports it, while maintaining progress toward eventual BLA submission.
▪BLA submission when appropriate. 
▪Regulatory support activities (Investigational New Drug (IND) submissions) for manufacturing, clinical, non-clinical studies.
▪Meetings as-needed with regulators.   

◦Project Management
▪Mandatory reporting requirements, as described in the Base Agreement.
▪Submission of Quarterly Progress Reports. Format will be agreed on by the contractor and Agreements Officer’s Representative (AOR), and will include both technical and financial status and expenditure forecast. 
▪Facilitation of biweekly teleconferences with Novavax and USG Subject Matter Experts.
▪Final prototype project report and applicable patents report(s).
▪Work Breakdown Structure (WBS) and Integrated Master Schedule (IMS).
▪All Regulatory correspondence relevant to the scope of work proposed, including communications with the FDA, and all submissions.

1.4.1    Novavax Project Plan
This is Novavax’s plan as of the date of the submission.  Novavax desires to move quickly to large scale development as rapidly as possible, in order to meet the objectives of this proposal. As the COVID-19 pandemic is an evolving situation, 
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Novavax may need to adapt its plan in response to FDA guidance, opportunities for manufacturing efficiencies, and clinical trial data.

1.5    Resolution of Conflicting Language

If there is a conflict between the Project Agreement (of which this Statement of Work is part) and the Base Agreement (Medical CBRN Consortium (MCDC) Base Agreement No.: 2020-530), the Project Agreement language will supersede and control the relationship of the parties.

2.0    APPLICABLE REFERENCES

N/A

3.0    REQUIREMENTS

3.1    Major Task: cGMP Manufacturing of NVX-CoV-2373 compliant with 21 CFR 210 and 211
3.1.1    Subtask: Raw Materials – Obtain Critical Starting Materials for Adjuvant Manufacturing
Sufficient Saponin to manufacture up to 100M vaccine doses will be purchased (Desert King, headquartered in San Diego, CA, facilities in Chile). Long-lead, critical, and limited-supply materials ([***]) will be purchased for the additional 560M vaccine doses to meet the contact requirement, in order to ensure capability to rapidly manufacture to meet surge requirements with little advance notification and demonstrate capability to stockpile and distribute large quantities of the vaccine to respond when needed.
3.1.2    Subtask: Raw Materials – Obtain Critical Starting Materials for Antigen and Fill/Finish Manufacturing
Sufficient materials (vials, stoppers, other consumables) to manufacture up to 100M vaccine doses will be purchased (sources TBD).  
3.1.3    Subtask: Raw Materials – [***] Intermediates to Produce Matrix-M Adjuvant Matrix-M Adjuvant 
[***] to supply large-scale manufacturing of  vaccine doses will be manufactured at [***] and PolyPeptide (Torrance, CA & Malmö, Sweden). Technology transfer and start-up of the PolyPeptide facility in Torrance, CA will be completed. Long lead, critical, and limited supply materials will be purchased in order to achieve the goal of large-scale production. 
3.1.4    Subtask: Matrix-M Adjuvant Manufacturing to Supply 100M Vaccine Doses
Matrix-M Adjuvant bulk components will be manufactured at ACG Biologics (Seattle, WA) to supply 100M vaccine doses. Technology transfer and start-up of the AGC Bio facility in Seattle will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site. 
3.1.5    Subtask: Antigen Manufacturing to Supply 100M Vaccine Doses
Antigen will be manufactured at Fuji (2 sites – College Station, TX and Research Triangle Park, NC) to supply 100M vaccine doses. Technology transfer and scale-up activities will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site.  
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3.1.6    Subtask: Fill/Finish of 100M Vaccine Doses
100M doses of finished vaccine in [***] vials will be manufactured at Baxter (Bloomington, IN, USA). This will include secondary packaging. Technology transfer and scale-up activities will be completed. An analytical comparability manufacturing study and validation studies will be performed as part of the tech transfer to each manufacturing site.  
3.1.7    Subtask: Shipping and Storage
Novavax assumes that it will maintain a Vendor Managed Inventory (VMI) system for a period of 12 months, with shipments to 10 geographic zones in the USA. Novavax will perform activities to establish compliance with DSCA to the extent applicable at the time of manufacturing, by statute and FDA interpretive guidance thereof.

3.2    Major Task: Clinical Studies
Novavax will perform these clinical trials and deliver the results in an interim Clinical Study Report (CSR) at the completion of enrollment, and the final CSR when available. These trials will be conducted using a Clinical Research Organization (CRO) that is to be determined. 
3.2.1    Subtask: Phase 3 Global Efficacy Study, Adults ≥ 18 and < 75 years
Study: Phase 3 – Global Efficacy Study (to be harmonized with other USG studies), 2019nCoV-301. This includes a “crossover” component where patients that received placebo were offered the vaccine after [***].
Population: Adults ≥ 18 years, inclusive of subjects with more severe co-morbid conditions.    
Locations: North America, Europe; may include Africa, Asia, Oceania, South America.    
Primary Objectives: Clinical efficacy, safety, immunogenicity.     
Design: Randomized, observer-blinded, placebo-controlled.    
Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M – dose determined by Phase 2 dose confirmation study, Placebo; ~0.5 mL dose Intramuscular (IM) injection, up to 2 doses at Day 0 and Day 21.
Enrollment: TOTAL N: ~30,000 (adjusted for expected endpoint incidence). [***].
3.2.1.1    Subtask: Phase 3 Global Efficacy Study, Adults ≥ 18 and < 75 years, Booster Study
Study: Phase 3 – Global Efficacy Study (to be harmonized with other USG studies), 2019nCoV-301. This includes a booster component where patients will receive a booster dose of vaccine approximately [***] after completion of the dose regimen.
Enrollment: TOTAL N: ~25,000 (adjusted for expected enrollment) 
3.2.1.2    Subtask: Phase 3 Global Efficacy Study, Adolescents ≥ 12 and < 18 years, Adolescent/ Adolescent Booster Study
Study: Phase 3 – Global Efficacy Study (to be harmonized with other USG studies), 2019nCoV-301. This includes a booster component where patients will receive a booster dose of vaccine approximately [***] after completion of the dose regimen.
Enrollment: TOTAL N: ~2500 (adjusted for expected enrollment)
3.2.2    Subtask: Phase 2 Efficacy Expansion (US), Adults ≥ 18 and < 75 years
Study: Phase 2 - Part 3 efficacy expansion (US), 2019nCoV-204.
Population: Adults ≥ 18 and < 75 years.     
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Locations: USA.
Primary Objectives: Clinical efficacy, safety, immunogenicity.     
Design: Randomized, observer-blinded, placebo-controlled.    
Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M – [***]; not greater than 25 μg antigen + 50 μg adjuvant, [***] to allow for rapid initiation. Placebo.  ~0.5 mL dose IM injection, up to 2 doses at Day 0 and Day 21.
Enrollment: TOTAL: [***].  [***]. Adjusted for expected event occurrence. Event driven analysis. Initiation of study gated on completion of Phase 1 study, dose-selection and regulatory approval.
3.2.3    Subtask: Phase 2 Study in Immunocompromised Persons (HIV-positive adult subjects) (Africa) 
Study: Phase 2 study in immunocompromised persons (HIV-positive adult subjects) (Africa).
Population: Adults ≥ 18 and < 65 years.     
Locations: Republic of South Africa (RSA)
Primary Objectives: Safety, immunogenicity (serum and cellular).
Design: Randomized, observer-blinded, placebo-controlled.    
Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M; Placebo, 0.5 mL dose IM injection, up to 2 doses at Day 0 and Day 21.
Enrollment: Total N = 2,640 – 2,880 (with n=240 - 480 HIV+); 1:1 Vaccine to placebo. Initiation gated on completion of Phase 1 study, dose selection, and regulatory approval.
3.2.4    Subtask: [***]
Study: [***].  
Population: [***].    
Locations: [***].    
Primary Objectives: [***].
Design: Randomized, observer-blinded, placebo-controlled.    
Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M [***].
Enrollment: [***]. Initiation gated on benefit:risk assessment (derived from Task 2.3.1 and/or 2.3.2 and/or other Phase 2 studies) and regulatory approval to conduct studies in this vulnerable population. 
3.2.5    Subtask: Phase 2 Manufacturing Site Lot Consistency/Comparability Study (US or other)
Study: Phase 2 manufacturing site lot consistency/comparability study (US or other), 2019nCoV-201.
Population: Adults ≥ 18 to < 50 years.    
Locations: USA.
Primary Objectives: Safety, immunogenicity.
Design: Randomized, observer-blinded, placebo-controlled.    
Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M; [***].
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Enrollment: ~600 per cohort, each cohort having [***]. Study size may be adjusted to allow non-inferiority testing.
3.2.6    Subtask: [***]
Study: [***].
Population: [***].    
Locations: [***].
Primary Objectives: [***].
Design: Randomized, observer-blinded, placebo-controlled.    
Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M; [***].
Enrollment: Total = 800 mothers + baby. Initiation gated on benefit:risk assessment (derived from Task 2.3.1 and/or 2.3.2 and/or other Phase 2 studies) and regulatory approval to conduct studies in this vulnerable population. 
3.2.7    Subtask: Pharmacovigilance; Establishment of Registration Safety Database
A registration safety database will be established to comply with FDA requirements for product safety and licensure.
3.2.8    Subtask: [***]
Study: [***].
Population: [***].
Location: [***].
Primary Objective: [***].
Design: Randomized, observer-blinded, placebo (or active vaccine) control.
Test Product(s); Dose Regimen; Route of Administration: Vaccine + Matrix-M – [***].
Enrollment: TOTAL: N ~12,500 (based on agreed VE, power, and LBCI). [***]. Adjusted for expected event occurrence if robust demonstration of clinical efficacy is required by the FDA.  Event driven analysis for study termination.

3.3    Major Task: Non-Clinical Studies
Novavax will perform these non-clinical studies and deliver the results in a study report at completion. 
3.3.1    Mouse Study, Immunogenicity 
Study 702-100. [***] in mice for vaccine efficacy profile to comply with FDA guidelines.
3.3.2    Rhesus Study, Immunogenicity
Study 702-099. [***] in rhesus monkeys for vaccine efficacy profile to comply with FDA guidelines.
3.3.3    Hamster Study, Immunogenicity
Study 702-102. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines.
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3.3.4    Mouse Study, T-Cell Immunogenicity
Study 702-103. T-cell immunogenicity/challenge study in mice [***] for vaccine efficacy profile to comply with FDA guidelines.
3.3.5    Hamster Study, T-Cell Immunogenicity
Study 702-105. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines.
3.3.6    Mouse Study, T-Cell Immunogenicity
Study 702-104. Immunogenicity/challenge study in hamster [***] for vaccine efficacy profile to comply with FDA guidelines.
3.3.7    Non-Clinical Studies: Collaboration with Univ. of Maryland School of Medicine
Three studies to study enhancement/inhibition and neutralization, and virus challenge of vaccinated mice: 
1.Validation of Spike nanoparticles in cell inhibition studies: In vitro inhibition studies on cell line permissive to r2019-nCoV, readout TBD. 
2.Neutralization studies with virus against bleeds from mice, In vitro microneutralization studies on cell line permissive to r2019-nCoV, TCID50 or fluorescence readout (TBD).
3.Virus challenge of vaccinated mice (mice vaccinated outside and shipped to UM for challenge), Challenge of vaccinated mice (shipped in for infection from Novavax), Lung pathology, Titer, viral Ribonucleic Acid (RNA) quantitation, pathology scoring and reports.
3.3.8    Structural Study of COVID-19 Spike Protein and its Complex with Host Receptor (cooperation with Baylor College of Medicine) 
Study to determine the structures of recombinant COVID-19.  Spike protein in nanoparticles used in Novavax’s human vaccine and in complex with its host receptor ACE2. Will obtain a high-resolution cryoEM structure of full-length COVID-19 Spike protein and a high-resolution cryoEM structure of full-length COVID-19 Spike protein in complex with human receptor ACE2. 
3.3.9    Neutralizing Assay Histopathology for On-going [***]
Histopathology readings for current neutralization studies in [***]. This will support the safety profile of the vaccine for FDA approval. 
3.3.10    Mouse Study, Immunogenicity [***] Studies
Individual immunogenicity studies [***] in mice for vaccine efficacy profile in different sub-populations to comply with FDA guidelines.
3.3.11    Durability of NVX-CoV-2373 Vaccine Immunity and SARS-CoV-2 Protection at [***] in Rhesus Macaques
Study 702-110. This study is designed to evaluate the long-term immunogenicity and protective efficacy of NVX-CoV-2373 nanoparticle vaccine when administered with Matrix-MTM by IM injections on Study Days 0 and 21, to Non-Human Primates (NHP). Each study group will contain [***] NHPs ([***] per sex). Blood samples will be collected prior to vaccination and at multiple time points following vaccination as outlined below. Samples will be shipped to Novavax Inc. for performance of assays to determine the vaccine immunogenicity. Animals from 
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placebo and active treatment groups will be challenged with SARS-CoV-2 virus at [***] following last treatment and monitored for clinical illness, viral RNA and sgRNA (nasal swabs, BAL) to assess the protective efficacy of the vaccine.
3.3.12    Immunogenicity and Protective Efficacy of Sub-Protective Doses of NVX-CoV-2373 in Rhesus Macaques
Study 702-111. This study is designed to evaluate the immunogenicity and protective efficacy of sub-optimal doses of NVX-CoV-2373 nanoparticle vaccine administered with a fixed dose of Matrix-MTM by IM injections on Study Days 0 and 21, to NHPs. Each study group will contain [***] NHPs ([***] per sex). Blood samples will be collected prior to vaccination and at various time points following vaccination as outlined below. Samples will be shipped to Novavax Inc. for performance of assays to determine the vaccine immunogenicity. Animals from placebo and active treatment groups will be challenged with SARS-CoV-2 virus at [***] following last treatment and monitored for clinical illness, viral RNA and sgRNA (nasal swabs, BAL) to assess the protective efficacy of the vaccine.
3.4    Major Task: Regulatory Affairs
Novavax will conduct the regulatory activities below, including BLA prep and submission, and provide the meeting minutes and applications to the USG.  
3.4.1    Subtask: EUA Submission and Supporting Meetings and Regulatory Filings 
An EUA will be submitted to the FDA upon obtaining sufficient clinical data. EUA, FDA meetings to support EUA, submission planning support for the Chemistry, Manufacturing, and Controls (CMC) team, EUA strategy and meeting support, and submission preparation support activities, will all be completed. 
3.4.2    Subtask: IND Submission Updates and FDA Meetings
This task will include submissions to the IND and possible FDA meetings that will be required prior to the BLA submission.  
3.4.3    Subtask: BLA Submission 
A BLA will be submitted to the FDA upon obtaining sufficient clinical data, FDA meetings to support BLA, submission planning support for the CMC team, BLA strategy and meeting support, and submission preparation support activities, will all be completed. 

3.5    Major Task: Project Management and Reporting
3.5.1    Subtask: Kick-Off Meeting and Initial Baseline Review of IMS
Novavax shall conduct a Kick-Off Meeting and an initial review with the USG of the IMS, upon initiation of the program.
3.5.2    Subtask: Biweekly Meetings with OWS
Novavax shall submit the agenda in advance.  Any technical updates shall be provided in advance for the Government team to review.   Minutes shall be submitted after the biweekly meeting to the USG. 
3.5.3    Subtask: Written Quarterly Reports
Novavax shall submit quarterly reports to the USG.
3.5.4    Subtask: Written Annual Reports
Novavax shall submit the annual reports to the USG.
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3.5.5    Subtask: Written Final Report
Novavax shall submit the final report to the USG.

3.6    Optional Task: Follow-On Production
Follow-on production of finished doses of vaccine up to 560M doses.

4.0    DELIVERABLES

																					
	Del. #	Deliverable Description	Due Date	Milestone Reference	SOW Reference	Government Role	Data Type/Data Rights
		Manufacturing					
	4.01	[***]	[***]	5.1	3.1.1	Reviewer	[***]
	4.02	[***]	[***]	5.2	3.1.2	Reviewer	[***]
	4.03	[***]	[***]	5.3	3.1.3	Reviewer	[***]
	4.04	[***]	[***]	5.4	3.1.4	Reviewer	[***]
	4.05	[***]	[***]	5.5	3.1.5	Reviewer	[***]
	4.06	[***]	[***]	5.6	3.1.6	Reviewer	[***]
	4.07	[***]	[***]	5.7	3.1.7	Reviewer	[***]
		Clinical					
	4.08	[***]	[***]	5.8	3.2.1	Reviewer	[***]1
	4.09	[***]	[***]	5.9	3.2.2	Reviewer	[***]
	4.10	[***]	[***]	5.10	3.2.3	Reviewer	[***]
	4.11	[***]	[***]	5.11	3.2.4	Reviewer	[***]
	4.12	[***]	[***]	5.12	3.2.5	Reviewer	[***]
	4.13	[***]	[***]	5.13	3.2.6	Reviewer	[***]
	4.14	[***]	[***]	5.14	3.2.7	Reviewer	[***]
	4.15	[***]	[***]	5.15	3.2.8	Reviewer	[***]
		Non- Clinical					
	4.16	[***]	[***]	5.16	3.3.1	Reviewer	[***]
	4.17	[***]	[***]	5.17	3.3.2	Reviewer	[***]
	4.18	[***]	[***]	5.18	3.3.3	Reviewer	[***]
	4.19	[***]	[***]	5.19	3.3.4	Reviewer	[***]
	4.20	[***]	[***]	5.20	3.3.5	Reviewer	[***]
	4.21	[***]	[***]	5.21	3.3.6	Reviewer	[***]
	4.22	[***]	[***]	5.22	3.3.7	Reviewer	[***]
	4.23	[***]	[***]	5.23	3.3.8	Reviewer	[***]
	4.24	[***]	[***]	5.24	3.3.9	Reviewer	[***]
	4.25	[***]	[***]	5.25	3.3.10	Reviewer	[***]
	4.26	[***]	[***]	5.26	3.3.11	Reviewer	[***]
	4.27	[***]	[***]	5.27	3.3.12	Reviewer	[***]

1 As used herein, “Government Purpose Rights“ has the meaning set forth in Article XI, Section 11.01(9) of the Base Agreement, as modified by Section 8.2(b) below.
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		Regulatory Affairs					
	4.28	[***]	[***]	5.28	3.4.1	Reviewer	[***]
	4.29	[***]	[***]	5.29	3.4.2	Reviewer	[***]
	4.30	[***]	[***]	5.30	3.4.3	Reviewer	[***]
		Project Management					
	4.31	[***]	[***]	5.31	3.5	Reviewer	[***]
	4.32	[***]	[***]	5.32	3.5.1	Reviewer	[***]
	4.33	[***]	[***]	5.33	3.5.2	Reviewer	[***]
	4.34	[***]	[***]	5.34	3.5.3	Reviewer	[***]
	4.35	[***]	[***]	5.35	3.5.4	Reviewer	[***]
	4.36	[***]	[***]	5.36	3.5.4	Reviewer	[***]
	4.36a	[***]	[***]	5.36a	3.5.4	Reviewer	[***]
	4.36b	[***]	[***]	5.36b	3.5.4	Reviewer	[***]
	4.37	[***]	[***]	5.37	3.5.5	Reviewer	[***]
	4.38	[***]	[***]	5.35	N/A	Reviewer	[***]
	TBD	[***]	[***]	Option 1	3.6	Reviewer	[***]

Note 1: Attachment D of the Project Agreement shall be referenced for supplemental security requirements associated with deliverables under this project.

Note 2: The USG agrees to permanently transfer USG material, in the form of mutually agreed upon quantities of Clinical Drug Substance/Product, to Novavax for its own use in related drug trials. To enable the foregoing, the USG transfers all its right, title and interest in and to the Clinical Drug Substance/Product to Novavax. In consideration of such right, Novavax agrees (a) that Novavax shall [***]; (b) that Novavax agrees to [***]; and, (c) Novavax will, upon reasonable request from the USG, obtain and share data from the use of the Clinical Drug Substance/Product, in a mutually agreed upon format. All transfers of material produced under the project, shall obtain prior written approval by the Government, with material quantities, destinations, applications, and USG benefits clearly delineated in a mutually agreed upon format.

5.0    MILESTONE PAYMENT SCHEDULE
The milestones below are for reference and costs for the project will be invoiced monthly on a cost reimbursable basis as the work progresses. 

												
	MS #	Milestone Description
(Deliverable Reference)
	Due Date	Total Program Funds
		Manufacturing		[***]
	5.01	[***]	[***]	[***]
	5.02	[***]	[***]	[***]
	5.03	[***]	[***]	[***]
	5.04	[***]	[***]	[***]
	5.05	[***]	[***]	[***]
	5.06	[***]	[***]	[***]
	5.07	[***]	[***]	[***]

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		Clinical		[***]
	5.08	[***]	[***]	[***]
	5.09	[***]	[***]	[***]
	5.10	[***]	[***]	[***]
	5.11	[***]	[***]	[***]
	5.12	[***]	[***]	[***]
	5.13	[***]	[***]	[***]
	5.14	[***]	[***]	[***]
	5.15	[***]	[***]	[***]
		Non-Clinical		[***]
	5.16	[***]	[***]	[***]
	5.17	[***]	[***]	[***]
	5.18	[***]	[***]	[***]
	5.19	[***]	[***]	[***]
	5.20	[***]	[***]	[***]
	5.21	[***]	[***]	[***]
	5.22	[***]	[***]	[***]
	5.23	[***]	[***]	[***]
	5.24	[***]	[***]	[***]
	5.25	[***]	[***]	[***]
	5.26	[***]	[***]	[***]
	5.27	[***]	[***]	[***]
		Regulatory Affairs		[***]
	5.28	[***]	[***]	[***]
	5.29	[***]	[***]	[***]
	5.30	[***]	[***]	[***]
		Project Management		[***]
	5.31	[***]	[***]	[***]
	5.32	[***]	[***]	[***]
	5.33	[***]	[***]	[***]
	5.34	[***]	[***]	[***]
	5.35	[***]	[***]	[***]
	5.36	[***]	[***]	[***]
	5.36a	[***]	[***]	[***]
	5.36b	[***]	[***]	[***]
	5.37	[***]	[***]	[***]
	5.38	[***]	[***]	[***]
		Reservation Fees		

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	5.39	[***]	[***]	[***]
	5.40	[***]	[***]	[***]
	5.41	[***]	[***]	[***]
	Total (Cost Plus Fixed Fee)	$1,800,670,981
	Period of Performance (July 6, 2020 – December 31, 2023) 
	42 Months (Base)

	Option 1: Follow-On Production	Cost: [***]

6.0    SHIPPING PROVISIONS

The shipment of physical deliverables shall be coordinated with the AOR. Data deliverables shall be provided in accordance with the agreement, and in coordination with the AOR.

7.0    INTELLECTUAL PROPERTY, DATA RIGHTS, AND COPYRIGHTS

7.1    BACKGROUND IP

(a)    Ownership.  Prior to June 8, 2020, Novavax had funded the development of NVX-CoV-2373, and other antecedent vaccine programs relevant to Novavax’ proprietary position in the development of NVX-CoV-2373, as well as its sf9/baculovirus manufacturing platform, (all “Background IP”) through private funding or in collaboration with a funding partner other than the U.S. Government. Such private and non-governmental funding has continued since June 8, 2020 and is expected to continue during the performance of the Project Agreement. A list of all patents and patent applications included in the Background IP is provided below as Enclosure 4.  Background IP also consists of (a) manufacturing know-how, including, without limitation, the NVAX-Cov-2373 manufacturing process definitions, process development/characterization reports, laboratory scale process procedures, manufacturing records, analytical test methods, product quality target ranges/specifications, quality target product profile, critical quality attributes (collectively “Background Know-How”), (b) data from pre-clinical and clinical research studies, analytical and process development research, and data related to, or generated using, the Background Know-How (collectively, “Background Data”), and (c) proprietary manufacturing materials, including, without limitation, sf9 cell banks (master and working), baculovirus virus stock (master and working), product standards, reference standards, and critical reagents (“Background Materials”). On June 8, 2020, Novavax and the U.S. Department of Defense entered into a Letter Contract for specified U.S.-based clinical and manufacturing development of NVX-CoV-2373 which acknowledged Background IP and made no explicit U.S. Government claims to Background IP or subsequent data arising therefrom. The U.S. Government hereby acknowledges such Background IP in full and further acknowledges that it has no ownership rights to Novavax Background IP under this Project Agreement. 

(b)     Background IP Limited License to Government.  Subject to the terms of the Project Agreement, Novavax grants the U.S. Government a nonexclusive, worldwide, nontransferable, non-sublicenseable license to use the Background IP to the limited extent necessary for the U.S. Government to review and use the Deliverables tendered by Novavax under this Agreement identified in Section 4.0 above, and for no other purpose; provided that the U.S. Government agrees that it may not disclose the Background IP to third parties, or allow third parties to have access to, use, practice or have practiced the Background IP, without Novavax’s prior written consent.  To the extent that a Deliverable with Foreground IP incorporates or uses Background IP, the Deliverable shall be deemed and considered to comprise Background IP and shall be used by the U.S. Government in accordance with this Background IP Limited License. 

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(c)     Background IP License to Novavax.  Subject to the terms of the Project Agreement, the U.S. Government grants to Novavax a nonexclusive, worldwide, nontransferable, irrevocable, paid-up license to any intellectual property (including patents and patent applications) to which the U.S. Government has rights thereto, provided that such license is limited to such intellectual property rights necessary to perform Novavax’s obligations under the Project Agreement. 

7.2    FOREGROUND IP

(a)    Ownership.    Notwithstanding anything in the Base Agreement to the contrary, Novavax owns all rights, title and interest in and to any development, modification, discovery, invention or improvement, whether or not patentable, conceived, made, reduced to practice, or created in connection with activities funded under the Project Agreement, including, without limitation, all data and inventions, and intellectual property rights in any of the foregoing (“Foreground IP”). 

(b)    Foreground IP Special License.  Subject to the terms of the Project Agreement, Novavax grants the U.S. Government a nonexclusive, worldwide, nontransferable, irrevocable, paid-up license to practice or have practiced the Foreground IP for or on behalf of the U.S. Government (“Foreground IP Special License”).

8.0     DATA RIGHTS 

Article XI, §11.03 of the Base Agreement is hereby amended, consistent with the “Specifically Negotiated License Rights” capability at Article XI, §§11.01(12) and 11.03(4), as follows:

8.1 Data Ownership.  

Novavax owns all rights, title and interest to all Data (as defined in Article XI, Section 11.01(7) of the Base Agreement) generated as a result of the work performed under this Project Agreement, including Subject Data.  

 8.2 Rights to Data.

(a)    Subject Data.  Subject to the terms of the Project Agreement, Novavax grants to the U.S. Government a Government purpose rights license to Subject Data that will convert to an unlimited rights license (as the term is defined in Article XI, Section 11.01(14) of the Base Agreement)2 after three (3) years from the date of delivery.  As used herein, “Subject Data” shall mean Technical Data under Article XI, §11.01(13) of the Base Agreement  Deliverables that are considered Subject Data are identified in the Deliverable Table set forth in Section 4.0 above.

(b)    Transfer of Data.  Each party, upon written request to the other party, shall have the right to review and to request delivery of Subject Data, and delivery of such Data shall be made to the requesting party within two weeks of the request, except to the extent that such Data are subject to a claim of confidentiality or privilege by a third party.  

(c)    Background IP Limited License.  To the extent that Subject Data incorporates or uses Background IP, the data shall be deemed and considered to comprise Background IP and shall be used by the U.S. Government in accordance with the Background IP Limited License set forth in Section 7.3 above.

2 As used herein, “Government Use” as used “Purpose Rights“ has the meaning set forth in this Section 4.0 means Government purpose rights as defined in the Base Agreement, Article XI, Section 11.01(9).) of the Base Agreement, as modified by Section 8.2(b) below.
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8.3 Background Technical Data Rights Assertions.  

Novavax asserts background technical data rights as follows:

The Background Data, as defined in Section 7.1 above, was developed through private funding or in collaboration with a funding partner other than the U.S. Government.  Such funding is expected to continue; accordingly, Novavax asserts Background Data as Category A Data pursuant to section 11.02(1) of the Base Agreement and the U.S. Government shall have no rights therein.

9.0     REGULATORY RIGHTS

This agreement includes research with an investigational drug, biologic or medical device that is regulated by the U.S. Food and Drug Administration (FDA) and requires FDA pre-market approval or clearance before commercial marketing may begin.  It is expected that this agreement will result in the FDA authorization, clearance and commercialization of NVX-CoV-2373 as a Vaccine for SARS-CoV-2 Coronavirus (the “Technology”).  Novavax is the Sponsor of the Regulatory Application (an investigational new drug application (IND), investigational device exemption (IDE), emergency use authorization (EUA), new drug application (NDA), biologics license application (BLA), premarket approval application (PMA), or 510(k) pre-market notification filing (510(k)) or another regulatory filing submitted to the FDA) that controls research under this contract.  As the Sponsor of the Regulatory Application to the FDA (as the terms “sponsor” and “applicant” are defined or used in at 21 CFR §§3.2(c), 312.5, 600.3(t), 812.2(b), 812 Subpart C, or 814.20), Novavax has certain standing before the FDA that entitles it to exclusive communications related to the Regulatory Application.  This clause protects the return on research and development investment made by the U.S. Government in the event of certain regulatory product development failures related to the Technology.

Novavax agrees to the following: 

a. Communications. Novavax will provide the U.S. Government with all communications and summaries thereof, both formal and informal, to or from FDA regarding the Technology and ensure that the U.S. Government representatives are invited to participate in any formal or informal Sponsor meetings with FDA;

b. Rights of Reference.  The U.S. Government is hereby granted a right of reference as that term is defined in 21 C.F.R. § 314.3(b) (or any successor rule or analogous applicable law recognized outside of the U.S.) to any Regulatory Application submitted in support of the statement of work for the Project Agreement. When it desires to exercise this right, the U.S. Government agrees to notify Novavax in writing describing the request along with sufficient details for Novavax to generate a letter of cross-reference for the U.S. Government to file with the appropriate FDA office.  The U.S. Government agrees that such letters of cross-reference may contain reporting requirements to enable Novavax to comply with its own pharmacovigilance reporting obligations to the FDA and other regulatory agencies. Nothing in this paragraph reduces the U.S. Government’s data rights as articulated in other provisions of the Project Agreement.

c. DoD Medical Product Priority. PL-115-92 allows the DoD to request, and FDA to provide, assistance to expedite development and the FDA’s review of products to diagnose, treat, or prevent serious or life-threatening diseases or conditions facing American military personnel. Novavax recognizes that only the DoD can utilize PL 115-92.  As such, Novavax will work proactively with the DoD to leverage this this law to its maximal potential under this Project 
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Agreement.  Novavax shall submit a mutually agreed upon Public Law 115-92 Sponsor Authorization Letter to the U.S. Government within 30 days of award.

10.0    ENSURING SUFFICIENT SUPPLY OF THE PRODUCT

a. In recognition of the Government’s significant funding for the development and manufacturing of the product in this Project Agreement and the Government’s need to provide sufficient quantities of a safe and effective COVID-19 vaccine to protect the United States population, the Government shall have the remedy described in this section to ensure sufficient supply of the product to meet the needs of the public health or national security. This remedy is not available to the Government unless and until both of the following conditions are met:

i.Novavax gives written notice, required to be submitted to the Government no later than 15 business days, of:
a.any formal management decision to terminate manufacturing of the NVX-CoV-2373 vaccine prior to delivery of 100 million doses to USG;
b.any formal management decision to discontinue sale of the NVX-CoV-2373 vaccine to the Government prior to delivery of 100 million doses to USG; or 
c.any filing that anticipates Federal bankruptcy protection; and
ii.Novavax has submitted an Emergency Use Authorization under §564 of the FD&C Act or a biologics license application provisions of §351(a) of the Public Health Service Act (PHSA).

b. If both conditions listed in section (a) occur, Novavax, upon the request of the Government, shall provide the following items necessary for the Government to pursue manufacturing of the NVX-CoV-2373 vaccine with a third party for exclusive sale to the U.S. Government:

i.a writing evidencing a non-exclusive, nontransferable, irrevocable (except for cause), royalty-free paid-up license to practice or have practiced for or on behalf of the U.S. Government any Background IP as defined in clause 7.1 necessary to manufacture or have manufactured the NVX-CoV-2373 vaccine;
ii.necessary FDA regulatory filings or authorizations owned or controlled by Novavax related to NVX-CoV-2373 and any confirmatory instrument pertaining thereto; and
iii.any outstanding Deliverables contemplated or materials purchased under this Project Agreement.  

c. This Article shall be incorporated into any contract for follow-on activities for the Government to acquire and use additional doses of the product.  Per section 1.3, the estimated quantity for follow-on production/procurement is approximately 560 million doses.

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d. This Article will survive the acquisition or merger of the Contractor by or with a third party.  This Article will survive the expiration of this agreement.

11.    SECURITY

The security classification level for this effort is UNCLASSIFIED. Attachment D of the Project Agreement shall be referenced for supplemental security requirements associated with the execution of this project.

12.0     MISCELLANEOUS REQUIREMENTS (SAFETY, ENVIRONMENTAL, ETC.)
    
N/A

13.0     GOVERNMENT FURNISHED PROPERTY/MATERIAL/INFORMATION

14.0    AGREEMENTS OFFICER’S REPRESENTATIVE (AOR) AND ALTERNATE AOR CONTACT INFORMATION 

AOR

NAME: [***]                
EMAIL: [***]            
PHONE: [***]    
AGENCY NAME/DIVISION/SECTION: Joint Program Executive Office, Joint Program Lead-Enabling Biotechnologies

Alternate AOR

NAME: [***]                 
EMAIL: [***]            
PHONE: [***]            
AGENCY NAME/DIVISION/SECTION: HHS

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ENCLOSURE 3: (SUPERSEDED)

N/A – this enclosure has been superseded from the original and is no longer applicable. 

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ENCLOSURE 4: PATENT LISTING
[Pursuant to Regulation S-K, Item 601(a)(5), this enclosure setting forth the patent listing has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted exhibits to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]

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Exhibit 4.2

DESCRIPTION OF FORWARD AIR’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

Description of Capital Stock

The following description sets forth certain material terms and provisions Forward Air Corporation’s securities that are registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As of the date of the Annual Report on Form 10-K of which this exhibit is a part, Forward Air Corporation (the “Company”) has one class of securities registered under Section 12 of the Exchange Act: Forward Air, Inc.’s common stock, par value $0.01 per share.

General

The following description summarizes the rights of holders of the Company’s capital stock. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description of the matters set forth in this “Description of Capital Stock,” you should refer to our Restated Charter (the “Restated Charter”) and Amended and Restated Bylaws, (“Amended and Restated Bylaws”), which are included, or incorporated by reference, as exhibits to our Annual Report on Form 10-K, and to the applicable provisions of Tennessee law. Our authorized capital stock consists of 55,000,000 shares, of which 50,000,000 shares are designated common stock, $0.01 par value and 5,000,000 shares are designated preferred stock, $0.01 par value. As of December 31, 2019, 27,850,233 shares of our common stock were outstanding. We had no outstanding preferred stock. Our common stock is listed on the Nasdaq Stock Market LLC under the symbol “FWRD.”
 
Description of Common Stock

Rights Related to Dividends and Distributions

    Subject to preferences that may apply to any shares of preferred stock that are outstanding at the time, the holders of our common stock are entitled to receive, to the extent permitted by law and to the extent the Board of Directors shall determine, such dividends as may be declared from time to time by the Board of Directors. Further, subject to preferences that may apply to any shares of preferred stock that are outstanding at the time, in the event of the voluntary or involuntary liquidation, dissolution or winding-up of the Company, the holders of the common stock shall be entitled to receive such of the remaining assets of the Company of whatever kind available for distribution to the extent the Board of Directors shall determine.

Voting Rights

    Except as may be otherwise required by law or by the Restated Charter, each holder of common stock has one vote in respect of each share of such stock held by such shareholder on all matters voted upon by the shareholders.

Preemptive Rights

    No holder of our common stock has any preferential or preemptive right to subscribe for, purchase or receive any shares of stock of the Company of any class, now or hereafter authorized, or any options or warrants for such shares, or any rights to subscribe to or purchase such shares, or any securities convertible into or exchangeable for such shares, which may at any time or from time to time be issued, sold or offered for sale by the Company.

Description of Preferred Stock

Shares of our preferred stock may be divided and issued in one or more series at such time or times and for such consideration as the Board of Directors may determine, all shares of any one series is of equal rank and identical in all respects. The Board of Directors may determine the powers, preferences, and rights of the shares of such series, and the qualifications, limitations or restrictions, thereof, to the full extent permitted by the laws of the State of Tennessee, which might include some or all of:

•the rate of dividends, if any, and whether such dividends shall be noncumulative, cumulative to the extent earned, or cumulative and, if cumulative, from which date or dates;

•whether the shares will be redeemable and, if so, the terms and conditions of such redemption; 
•whether there shall be a sinking fund for the redemption; 
•the rights to which the holders of the shares shall be entitled in the event of voluntary or involuntary liquidation, dissolution or winding-up of the Company, and the priority of payment of shares in any such event; 
•whether the shares shall be convertible into or exchangeable for shares of any other class or any other series and the terms thereof; and 
•all other preferences of any series of preferred stock in the same manner as provided for in the issuance of preferred stock, so long as no shares of such series are outstanding at such time.

The shares of preferred stock will have no voting power or voting rights with respect to any matter whatsoever, except as may be otherwise required by law or may be provided in any amendment to our Restated Charter creating the series of which such shares are a part. The Board of Directors is authorized to make any change in the designations, terms, limitations or relative rights or preferences of any series of preferred stock in the same manner as provided for in the issuance of preferred stock, so long as no shares of such series are outstanding at such time. 
Election of Directors
Our Amended and Restated Bylaws, provide that each member of our board of directors is elected annually to a one year term and shall hold office until the next annual meeting of shareholders and until such person’s successor is elected and qualified. 
Our Amended and Restated Bylaws also provide that the number of directors may be increased or decreased by action of the board of directors or shareholders.  Vacancies on the board of directors may be filled by vote of the board of directors. The overall effect of these provisions may be to prevent a person or entity from seeking to acquire control of us through an increase in the number of directors on our board of directors and the election of designated nominees to fill newly created vacancies.

Anti-Takeover Effects of our Restated Charter and Amended and Restated Bylaws

Our Restated Charter and Amended and Restated Bylaws have provisions that could have the effect of making it more difficult for somebody who wanted to take control of us to do so. They include:

Advance Notice Requirements. A requirement that shareholders give advance notice of their intention to nominate candidates for election as directors (and produce the required information as set forth in our Amended and Restated Bylaws) or to bring other business before a meeting of shareholders.

Limit on Shareholder Ability to Nominate Candidates for Election as Directors or Call a Special Meeting of Shareholders. In order to be able to nominate a candidate for election or re-election to our Board of Directors or call a special meeting of shareholders, a person must prove eligibility to submit a shareholder proposal under paragraph (b) of Rule 14a-8 under the Securities Act of 1934, as amended, or any successor rule. 

Requirement for Calling of Special Meetings of Shareholders. Special meetings of our shareholders may be called by shareholders only upon the proper written request of the holders of at least ten percent of all the issued and outstanding shares of any class entitled to vote on the action proposed to be taken.

Preferred Stock. Our Board of Directors is authorized to cause us to issue, without a shareholder vote, preferred stock, which could entitle holders to voting or other rights or preferences that could impede the success of any attempt to acquire us.

Board Authority to Amend Bylaws. Our Board of Directors has the authority to make, alter, amend or repeal our Amended and Restated Bylaws without the approval of our shareholders, but our Amended and Restated Bylaws adopted by our Board of Directors may be altered, amended or repealed by the affirmative vote of a majority of our shareholders entitled to vote in the election of directors.

Limitations on Liability and Indemnification of Officers and Directors

The Tennessee Business Corporation Act authorizes corporations to limit or eliminate the personal liability of directors to companies and their shareholders for monetary damages for breaches of directors’ fiduciary duties, under certain circumstances and subject to certain exceptions.  Our Restated Charter includes a provision that eliminates the personal liability 

of directors for monetary damages to us or our shareholders for any breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the Tennessee Business Corporation Act. Our Restated Charter provides that we shall have the power to indemnify any director, officer, employee, agent or any other person who is serving at our request in that capacity for another entity to the fullest extent permitted by Tennessee law.  Our Amended and Restated Bylaws generally provide that we shall indemnify and pay or reimburse certain expenses, to our directors and officers and any person that served as a director, officer or employee of any other enterprise at our request, to the fullest extent permitted by law. We also are authorized to carry insurance to protect the Company and any director, officer and employee, to the fullest extent permitted by law.  

The Tennessee Business Corporation Act provides that a corporation may indemnify any of its directors and officers against liability incurred in connection with a proceeding if: (a) such person acted in good faith; (b) in the case of conduct in an official capacity with the corporation, the person reasonably believed such conduct was in the corporation’s best interests; (c) in all other cases, the person reasonably believed that the person’s conduct was at least not opposed to the best interests of the corporation; and (d) in connection with any criminal proceeding, such person had no reasonable cause to believe the person’s conduct was unlawful.

In actions brought by or in the right of the corporation, however, the Tennessee Business Corporation Act provides that no indemnification may be made if the director or officer was adjudged to be liable to the corporation. The Tennessee Business Corporation Act also provides that in connection with any proceeding charging improper personal benefit to an officer or director, no indemnification may be made if such officer or director is adjudged liable on the basis that such personal benefit was improperly received.

Tennessee Anti-Takeover Statutes
Under the Tennessee Business Combination Act and subject to certain exceptions, corporations that have elected to be subject to the Tennessee Business Combination Act may not engage in any "business combination" with an "interested shareholder" for a period of five years after the date on which the person became an interested shareholder unless the "business combination" or the transaction which resulted in the shareholder becoming an "interested shareholder" is approved by the corporation's board of directors prior to the date the "interested shareholder" attained that status.
        "Business combinations" for this purpose generally include:
•mergers, consolidations, or share exchanges;
•sales, leases, exchanges, mortgages, pledges, or other transfers of assets representing 10% or more of the aggregate market value of consolidated assets, the aggregate market value of our outstanding shares, or our consolidated net income;
•transactions which result in the issuances or transfers of shares from us to the interested shareholder;
•the adoption of plans of liquidation or dissolution proposed by the interested shareholder;
•transactions in which the interested shareholder's proportionate share of the outstanding shares of any class of securities is increased; or
•financing arrangements pursuant to which the interested shareholder, directly or indirectly, receives a benefit, except proportionately as a shareholder.
            Subject to certain exceptions, an "interested shareholder" generally is a person who, together with his or her affiliates and associates, owns, or within five years did own, 10% or more of our outstanding voting stock.
            After the five-year moratorium, a corporation subject to the foregoing may complete a business combination if the transaction complies with all applicable requirements of our Restated Charter and Amended and Restated Bylaws and applicable Tennessee law and:
•is approved by the holders of at least two-thirds of the outstanding voting stock not beneficially owned by the interested shareholder; or
•meets certain fair price criteria set forth in the Tennessee Business Combination Act
            We have elected to not be subject to the Tennessee Business Combination Act. We can give no assurance that we will or will not elect, through a charter or bylaw amendment, to be governed by the Tennessee Business Combination Act in the future.
            We also have not elected to be governed by the Tennessee Control Share Acquisition Act which prohibits certain shareholders from exercising in excess of 20% of the voting power in a corporation acquired in a "control share acquisition" unless such voting rights have been previously approved by the disinterested shareholders. We can give no assurance that we will or will not elect, through a charter or bylaw amendment, to be governed by the Tennessee Control Share Acquisition Act in the future.

            The Tennessee Greenmail Act prohibits us from purchasing or agreeing to purchase any of our securities, at a price in excess of fair market value, from a holder of 3% or more of our securities who has beneficially owned such securities for less than two years, unless the purchase has been approved by a majority of the outstanding shares of each class of our voting stock or we make an offer of at least equal value per share to all holders of shares of such class. The Tennessee Greenmail Act may make a change of control more difficult.
            The Tennessee Investor Protection Act applies to tender offers directed at corporations that have "substantial assets" in Tennessee and that are either incorporated in or have a principal office in Tennessee. Pursuant to the Investor Protection Act, no offeror shall make a takeover offer for an offeree company if the offeror beneficially owns 5% or more of any class of equity securities of the offeree company, any of which was purchased within one year prior to the proposed tender offer, unless the offeror, before making such purchase: (1) makes a public announcement of his or her intention with respect to changing or influencing the management or control of the offeree company; (2) makes a full, fair and effective disclosure of such intention to the person from whom he or she intends to acquire such securities; and (3) files with the Tennessee Commissioner of Commerce and Insurance (the “Commissioner”), and the offeree company a statement signifying such intentions and containing such additional information as may be prescribed by the Commissioner. When the offeror intends to gain control of the offeree company, the registration statement must indicate any plans the offeror has for the offeree. The Commissioner may require additional information concerning the takeover offer and may call for hearings. The Investor Protection Act does not apply to an offer that the offeree company's board of directors recommends to shareholders.
          In addition to requiring the offeror to file a registration statement with the Commissioner, the Tennessee Investor Protection Act requires the offeror and the offeree company to deliver to the Commissioner all solicitation materials used in connection with the tender offer. The Investor Protection Act prohibits fraudulent, deceptive, or manipulative acts or practices by either side and gives the Commissioner standing to apply for equitable relief to the Chancery Court of Davidson County, Tennessee, or to any other chancery court having jurisdiction whenever it appears to the Commissioner that the offeror, the offeree company or any of their respective affiliates has engaged in or is about to engage in a violation of the Investor Protection Act. Upon proper showing, the chancery court may grant injunctive relief. The Investor Protection Act further provides civil and criminal penalties for violations.

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