Document:

exv10w2

 

Exhibit 10.2

THE REGISTRANT HAS APPLIED FOR CONFIDENTIAL TREATMENT OF CERTAIN PROVISIONS OF THIS EXHIBIT
WITH THE SECURITIES AND EXCHANGE COMMISSION. THE CONFIDENTIA PORTIONS OF THIS EXHIBIT ARE MARKED
WITH ASTERISKS (***) AND HAVE BEEN OMITTED. THE OMITTED PORTIONS OF THIS EXHIBIT WILL BE FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.

SUPPLY AGREEMENT

     AGREEMENT, (this “Agreement”) is dated as of                     , 2006 by and between
NOVAVAX, Inc., a Delaware corporation having its principal place of business at 508 Lapp Road,
Malvern, Pennsylvania 19355, (“NOVAVAX” or “Supplier”) and ESPRIT Pharma, Inc., a Delaware
corporation having its principal place of business at 2 Town Center Boulevard, East Brunswick, New
Jersey 08816 (“ESPRIT” or “Buyer”). Supplier and Purchaser may be referred to individually as a
“Party” or collectively as the “Parties.”

     WHEREAS, Supplier has been engaged in the development and supply of a product, IND # 63975, to
be marketed, distributed and sold under a trademark mutually agreed upon between Buyer and
Supplier;

     WHEREAS, on the date hereof, Buyer and Supplier also entered into a license agreement for the
license by Supplier to Buyer of certain intellectual property enabling the manufacture, sale and
use by Purchaser of topically- or transdermally-administered product containing no active
ingredient other than testosterone, which utilize Supplier’s micellar nanoparticle technology in
the field of women’s health in product that is marketed under Supplier’s IND No. 63957 (the
“License Agreement”); and

 

 

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     WHEREAS, Buyer desires to have Supplier manufacture Product (as defined in Article 1
below) under a trademark mutually agreed upon between Buyer and Supplier, for sale by Buyer or its
designee.

     NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and efficiency of which are
hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1. DEFINITIONS

     As used throughout this Agreement, each of the following terms shall have the respective
meaning set forth below:

	 	1.1.	 	“Affiliate” means, with respect to any Party, any entity that directly
or indirectly controls, is controlled by, or is under common control with such
Party, and for such purpose “control” means (i) directly or indirectly owning,
controlling or holding more than fifty percent (50%) of the securities or other
ownership interests representing the equity, the voting stock or general
partnership interest in an entity or (ii) the possession, direct or indirect, of
the power to direct or cause the direction of the management or the policies of the
entity, whether through the ownership of voting securities, by contract or
otherwise. Any such corporation, entity or business structure shall only be
considered an Affiliate for so long as such ownership or control exists.
	 
	 	1.2.	 	“cGMP” means Good Manufacturing Practices according to 21 CFR Parts 210
and 211.

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	 	1.3.	 	“CPI” means United States Department of Labor, Bureau of Labor Statistics,
Consumer Price Index, All Urban Consumers, United States City Average, All Items,
(1982-84=100) excluding the food and energy components, or the successor index that
most closely approximates the CPI.
	 
	 	1.4.	 	“Damages” has the meaning ascribed to such term in Section 16.1
(Indemnification by Supplier).
	 
	 	1.5.	 	“Facility” shall mean Supplier’s manufacturing location at Red Lion
Road in Philadelphia, PA where product will be produced, packaged, and labeled.
	 
	 	1.6.	 	“FDA” means the United States Food and Drug Administration and
successor bodies.
	 
	 	1.7.	 	“Intellectual Property Rights” means the intellectual property, trade
secrets, know-how, technology and information, whether or not protected by patents,
to the extent required in the reasonable judgment of Supplier to manufacture the
Product.
	 
	 	1.8.	 	“License Agreement” means the license agreement referred to in the
second recital of this Agreement.
	 
	 	1.9.	 	“Net Sales” has the meaning ascribed to such term in the License
Agreement.
	 
	 	1.10.	 	“Permitted Raw Materials Inventory” has the meaning ascribed to such
term in Section 8.3.1 (Permitted Raw Material Inventory).

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	 	1.11.	 	“Product” means the material with IND #63975, including pre-clinical,
clinical, trade and sample lots, as more fully described on Schedule A to
this Agreement, manufactured and packaged in accordance with the Specifications.
	 
	 	1.12.	 	“Raw Materials” means the materials, components, and packaging
required to manufacture and package the Product in accordance with the
Specifications.
	 
	 	1.13.	 	“Specifications” means the specifications for the design, composition,
product safety assurance, manufacture, packaging, and/or quality control of the
Product, as set forth on Schedule B attached hereto and made a part hereof,
as the same may hereafter be modified by mutual agreement of the parties in
writing.
	 
	 	1.14.	 	“Supply Year” means each consecutive 365-day period (or 366-day period
in the event of a leap year) during the Term, commencing on the date of this
Agreement.
	 
	 	1.15.	 	“Territory” means the United States, its territories including Puerto
Rico , Mexico and Canada.
	 
	 	1.16.	 	“Term” has the meaning ascribed to such term in ARTICLE 6 (Term;
Effective Date).

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	 	1.17.	 	“Unit of Product” means a month of therapy of Product for an individual end
user.

ARTICLE 2.  SUPPLY OF PRODUCT

     During the Term, Supplier shall supply Buyer with those quantities of Product as ordered by
Buyer pursuant to this Agreement, subject to the ordering procedures set forth in ARTICLE 4
(Forecasts; Capacity; Orders) below. Supplier shall sell Product exclusively to Buyer for sale in
the Territory, and Buyer shall buy all of its requirements for Product exclusively from Supplier.
Each Product sold hereunder will conform to the Specifications for such Product. Subject to the
terms and conditions herein, Supplier will provide the facility, equipment, labor, and supervision
necessary for the production of the Product in sufficient quantities as required herein.

ARTICLE 3.  PRICES FOR PRODUCT

	 	3.1.	 	Transfer Price. The transfer price of Product, whether pre-clinical,
clinical, commercial or samples, from Supplier to Buyer will be mutually agreed
upon between the Parties, based on reasonable commercial terms. All transfer
prices for Product referred to in this Section 3.1 shall be increased (on a
compounded basis) ***. For the remainder of the Term, the transfer price of
Product from Supplier to Buyer will be *** of Supplier’s fully burdened
manufacturing cost. The estimated transfer price is set forth on Schedule D,
attached hereto.
	 
	 	3.2.	 	Payment Terms. Payment terms on all orders shall be *** from the date
of receipt of invoice by Buyer. Invoicing shall occur upon shipment.

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ARTICLE 4. FORECASTS, CAPACITY; ORDERS

	 	4.1.	 	Forecasts; Capacity; Capital Expenditures. Beginning six (6) months
prior to the date of which Buyer anticipates first taking delivery of commercial
Product, and at the beginning of each calendar quarter thereafter, during the Term,
Buyer shall provide Supplier with a binding written forecast of Buyer’s
requirements for Product for the shorter of the following twelve (12) months or the
remainder of the Term (each, a “Rolling 12 Month Forecast”). Each Rolling 12 Month
Forecast will be binding within a range of *** of the stated amount within such
Rolling 12 Month Forecast; provided that the first three months of the each Rolling
12 Month Forecast will be binding without reference to the foregoing range.
Beginning six (6) months prior to submission of Buyer’s first order of commercial
Product, Buyer will provide Supplier with a statement which shall set forth the
capacity expectation for Buyer’s requirements during the Term on a monthly basis
(“Capacity”). The parties understand and agree that any capital expenditures,
incurred by Supplier in connection with the performance of its obligations under
this Agreement will be borne by Buyer, it being understood that Supplier and Buyer
will consult in good faith regarding any such capital expenditure prior to its
incurrence. The parties further understand that the foregoing forecasts and
Capacity shall include both sample and trade quantities of Product.
	 
	 	4.2.	 	Supplier will use commercially reasonable efforts to meet Buyers demand
for Product.

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	 	4.3.	 	Change Orders. Quarterly requirements contained in any 12 Month Rolling
Forecast may be changed with *** prior written notice from Buyer to Supplier
provided that Supplier consents to such change order in writing (which consent may
be withheld by Supplier in its sole discretion).
	 
	 	4.4.	 	Conflicts. To the extent of any conflict or inconsistency between this
Agreement and any purchase order, purchase order release, confirmation, acceptance
or any similar document, the terms of this Agreement shall govern.

ARTICLE 5.  ADDITIONAL UNDERSTANDINGS OF THE PARTIES

	 	5.1.	 	Chemistry, Manufacturing, and Control. Supplier will be responsible,
at Buyer’s expense, for all work associated with initial chemistry, manufacturing
and controls in accordance with Schedule C attached to this Agreement.
Buyer shall reimburse Supplier for all its costs and expenses incurred in
connection with such work. Schedule C represents Supplier’s best estimate, in 2006
pricing, of the projected, anticipated costs for the CMC set forth therein.
Supplier anticipates, but cannot guarantee, that such reasonable costs and
expenses will not exceed be greater than *** of the total estimated costs and
expenses set forth in Schedule C, ***. If the Costs in Schedule C exceed
***, as adjusted by the CPI, Supplier and Buyer shall refer the pricing issues to
the Joint Steering Committee, established under the License Agreement, for a fair
and equitable resolution based on reasonable commercial terms under the
circumstances. Supplier shall invoice Buyer for such costs and expenses on a
Calendar Quarterly basis within *** of the end of each Calendar Quarter and

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	 	 	 	Buyer shall pay Supplier the invoiced amount within *** of receiving such invoice.

	 	5.2.	 	Other Affiliates. If any other Affiliate of Buyer desires to purchase
the Product from Supplier under the terms of this Agreement, then, upon the
execution of a copy of this Agreement by such Affiliate, Supplier shall accord such
Affiliate all of the benefits hereof and treat such affiliate as a “Buyer” for the
purposes of this Agreement; provided, however, that this section will not be
construed to relieve Buyer of any of its obligations hereunder.
	 
	 	5.3.	 	Exclusive Rights. During the Term, Supplier shall supply Buyer, on an
exclusive basis, with the Product for sale in the Territory and neither Supplier
nor any of its Affiliates shall sell or distribute the Product. Furthermore,
during the Term Buyer shall purchase all of its requirements for the Product
exclusively from Supplier.
	 
	 	5.4.	 	Insurance. Each of Supplier and Buyer agrees to procure and maintain
in full force and effect during the Term valid and collectible insurance policies
of a type and coverage amount consistent with Supplier’s and Buyer’s past practice
prior to the date hereof. Should Supplier require additional insurance to be
carried by Buyer, any incremental cost will be for the account of Buyer. Upon
request, Buyer and Supplier shall provide the other Party with appropriate
Certificates of Insurance or other written evidence reasonably satisfactory
evidencing such insurance coverage.

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	 	5.5.	 	During the Term, Supplier shall maintain a workforce of appropriate size,
training and experience sufficient in the reasonable judgment of Supplier for
manufacturing the Product in an amount not to exceed Capacity. If Buyer requires
additional personnel for maintaining its equipment and facilities and otherwise
necessary to fulfill Supplier’s other obligations hereunder, the incremental cost
thereof will be borne solely by Buyer.

ARTICLE 6. TERM; EFFECTIVE DATE

     The term of this Agreement shall commence on the date hereof and remain in effect until ***
(the “Expiration Date”), unless sooner terminated as expressly provided under this Agreement (the
“Term”). Notwithstanding anything to the contrary contained herein, this Agreement will be
effective the date of this Agreement.

ARTICLE 7. TERMINATION

	 	7.1.	 	Breach. This Agreement may be terminated, prior to the Expiration
Date, by either Party by giving ninety (90) days written notice of its intent to
terminate and stating the grounds therefor if the other Party shall materially
breach or materially fail in the observance or performance of any representation,
warranty, guarantee, covenant or obligation under this Agreement. The Party
receiving the notice shall have seventy-five (75) days from the date of receipt
thereof to cure the breach or failure. Notwithstanding anything to the contrary
contained herein, payment defaults will have a ten (10) day cure period. In the
event such breach or failure is cured, the notice shall be of no effect.

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	 	7.2.	 	Termination of License Agreement. Subject to earlier expiration or
termination, this Agreement will terminate simultaneously with the termination of
the License Agreement.
	 
	 	7.3.	 	Insolvency, Etc. This Agreement may be terminated, prior to the
Expiration Date, upon thirty (30) days written notice by either Party: (i) in the
event that the other Party hereto shall (a) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property, (b) make a general
assignment for the benefit of its creditors, (c) commence a voluntary case under
the United States Bankruptcy Code, as now or hereafter in effect (the “Bankruptcy
Code”), (d) file a petition seeking to take advantage of any law (the “Bankruptcy
Laws”) relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or readjustment of debts, or (e) take any corporate action for the
purpose of effecting any of the foregoing; or (ii) if a proceeding or case shall
be commenced against the other Party hereto in any court of competent jurisdiction,
seeking (a) its liquidation, reorganization, dissolution or winding-up, or the
composition or readjustment of its debts, (b) the
appointment of a trustee, receiver, custodian, liquidator or the like of the
Party or of all or any substantial part of its assets, or (c) similar relief
under any Bankruptcy Laws, or an order, judgment or decree approving any of the
foregoing shall be entered and continue unstayed for a period of sixty (60 days;
or (iii) an order for relief against the other Party hereto shall be entered in
an involuntary case under the Bankruptcy Code.

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	 	7.4.	 	Effect of Termination. Notwithstanding the termination of this
Agreement for any reason, each Party hereto shall be entitled to recover any and
all Damages which such Party shall have sustained by reason of the breach by the
other Party hereto of any of the terms of this Agreement. Termination of this
Agreement for any reason shall not release either Party hereto from any liability
which at such time has already accrued or which thereafter accrues from a breach or
default prior to such expiration or termination, nor affect in any way the survival
of any other right, duty or obligation of either Party hereto which is expressly
stated elsewhere in this Agreement to survive such termination. In the case of a
termination under Section 7.1 (Breach) above, the non-defaulting Party may pursue
any remedy available in law or in equity with respect to such breach, subject to
the terms of Section 17.1 (Arbitration).

	 	7.4.1.	 	Buyer’s Commitment to Purchase. In the event that this Agreement
expires or is terminated for any reason (other than
Supplier’s material breach, gross negligence or willful misconduct),
***. Buyer shall accept delivery of any such Permitted Raw Materials
Inventory within *** after such expiration or termination at the
location designated by Buyer. If Buyer instructs Supplier to scrap
any such Permitted Raw Material Inventory, ***.

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ARTICLE 8. DELIVERY; INVENTORY

	 	8.1.	 	Delivery. All charges for packing, hauling, storage, bar coding, and
transportation to point of delivery are not included in the Transfer Price and
Transfer Price shall be F.O.B. the Facility (i.e., Buyer will pay for shipment).
All shipments must be accompanied by a packing slip which describes the articles,
states the purchase order number and shows the shipment’s destination. Supplier
agrees to promptly forward the original bill of lading or other shipping receipt
for each shipment in accordance with Buyer’s instructions. Supplier further agrees
to promptly render, after delivery of goods or performance of services, correct and
complete invoices to Buyer, and to accept payment by check or at Buyer’s
discretion, other cash equivalent (including electronic transfer of funds).
	 
	 	8.2.	 	Shipment. The risk of loss with respect to Product shall remain with
Supplier until the point at which any such Product is delivered to the loading dock
at the Facility. Supplier will pack all Product ordered hereunder in a manner
suitable
for shipment and sufficient to enable the Product to withstand the effects of
shipping, including handling during loading and unloading.
	 
	 	8.3.	 	Product Inventory. Supplier will maintain inventory of commercial
Product on a first-in, first-out basis. In no event shall Supplier be required to,
and Supplier will not, order more than *** Raw Materials at Capacity and Supplier
will use commercially reasonable efforts to manage such inventory as efficiently as
possible.

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	 	8.3.1.	 	Permitted Raw Material Inventory. To shorten lead times
hereunder and to support variations in demand, as and if necessary,
Supplier shall during the Term maintain such inventory of Raw Materials
as are reasonably required to manufacture and package Product in
accordance with the Specifications in a quantity equivalent to *** of
Buyer’s forecasted purchase volume (the foregoing amount of inventory
which conforms to the Specifications being hereinafter referred to
collectively as the “Permitted Raw Material Inventory”) or such other
specific amount of Permitted Raw Material Inventory as may be agreed to
by both parties in writing in advance. Supplier’s purchase price and
the cost of carrying Permitted Raw Material Inventory shall be for the
account of Buyer. The quantity of Permitted Raw Material
Inventory shall be adjusted by Supplier as needed based upon ***. In
the event that Buyer’s requirements for Product materially exceed
Buyer’s current forecasted needs, Supplier shall draw from the
Permitted Raw Material Inventory to meet such excess requirements.
Supplier shall then replenish the Permitted Raw Material Inventory
within ***.

ARTICLE 9.  INSPECTION

     Buyer shall have the right, upon reasonable notice to Supplier and during regular business
hours, to inspect and audit not more than *** per *** period the facilities being used by Supplier
for production and storage of the Product to assure compliance by Supplier with cGMP

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and applicable
FDA and other rules and regulations and with other provisions of this Agreement. Supplier shall
notify Buyer as promptly as practicable of any audit, review or inspection by any regulatory
authority relating, directly or indirectly, to the Product, and shall in any event notify Buyer of
any such audit, review or inspection within 24 hours of Supplier’s first being informed of any such
event. Supplier and Buyer will work together to remedy or cause the remedy of any deficiencies
which may be noted in any such audit or, if any such deficiencies can not reasonably be remedied
within such seven (7) day period, develop a written plan to remedy such deficiencies as soon as
possible; and the costs of such remedy shall be borne by the Supplier.

ARTICLE 10. DEFECTIVE PRODUCT/INSPECTIONS/TESTING

	 	10.1.	 	Disposition of Defective Product. Buyer shall notify Supplier of the
existence and nature of any non-compliance or defect and Supplier shall have a
reasonable opportunity, not to exceed *** from receipt of notification, to
inspect such defective Product and provide Buyer with detailed written
instructions to return or dispose of such defective Product. Buyer shall have
no obligation to pay for any Product that is subject to such a claim of
non-compliance or defect. If Supplier fails to so inspect and instruct Buyer as
to the disposition of such defective Product, Buyer may dispose of such
defective Product as it sees fit and Supplier shall promptly (i) reimburse Buyer
for all direct, out-of-pocket costs incurred by Buyer in such disposition, and
(ii) replace such defective Product at its own cost and expense.
	 
	 	10.2.	 	Independent Testing. If, after Supplier’s inspections of such
Product, the parties disagree as to the Product’s conformance to the Specifications
or

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	 	 	 	whether the Product has such a defect, either Party may deliver the Product to
an independent third-Party laboratory, mutually and reasonably acceptable to both
parties, for analytical testing to confirm the Product’s conformance to the
Specifications or the presence or absence of defects. All costs associated with
such third-Party testing shall be at Supplier’s expense. No inspection or testing
of or payment for Product by Buyer or any third-Party agent of Buyer shall
constitute acceptance by Buyer thereof, nor shall any such inspection or testing be
in lieu or substitution of any obligation of Supplier for testing, inspection and
quality control as provided in the Specifications or under applicable local, state,
or federal laws, rules, regulations, standards, codes or statutes.

	 	10.3.	 	Reports. Promptly after Buyer’s reasonable written request, Supplier
shall provide Buyer written reports relating to any aspects of the Product that are
identified in the Specifications.
	 
	 	10.4.	 	Complaint Handling. Supplier and Buyer each, shall promptly convey
to and inform the other of any customer or user complaints received by Buyer or
Supplier in connection with Product.
	 
	 	10.5.	 	Quality Control. Prior to each shipment of Product to Buyer, Supplier
shall conduct or have conducted quality control testing of Product in accordance
with the Specifications and such other Supplier approved quality control testing
procedures that are consistent with FDA cGMPs. Supplier shall retain or have
retained accurate and complete records pertaining to such testing.

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	 	 	 	Supplier shall
notify Buyer in writing at least ten (10) days prior to any change in the testing
methods and shall provide Buyer a copy of the revised testing methods within ten
(10) days of implementation of the changes. Each shipment of Product hereunder
shall be accompanied by a certificate of analysis for each lot of Licensed Product
therein.

ARTICLE 11. FAILURE TO SUPPLY; FORCE MAJEURE

	 	11.1.	 	Force Majeure Events. If either Party is prevented from performing
any of its obligations hereunder due to any cause which is beyond the
non-performing Party’s reasonable control, including fire, explosion, flood, or
other acts of God; acts, regulations, or laws of any government; war or civil
commotion; strike, lock-out or labor disturbances; or failure of public utilities
or common
carriers (a “Force Majeure Event”), such non-performing Party shall not be
liable for breach of this Agreement with respect to such non-performance to the
extent any such non-performance is due to a Force Majeure Event. Such
non-performance will be excused for six (6) months or as long as such event
shall be continuing (whichever occurs sooner), provided that the non-performing
Party gives prompt written notice to the other Party of the Force Majeure Event.
Such non-performing Party shall exercise all commercially reasonable efforts to
eliminate the Force Majeure Event and to resume performance of its affected
obligations as soon as practicable.
	 
	 	11.2.	 	Failure to Supply. Notwithstanding the provisions of Section 11.1
(Force Majeure Events), in the event that Supplier shall be unable or unwilling or

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	 	 	 	shall fail to supply any Product in such quantities as Buyer shall request and in
compliance with the delivery periods set forth in Section 4.3 (Change Orders)
(whether due to the occurrence of a Force Majeure Event, following the commencement
of a case by or against Supplier under the Bankruptcy Code or otherwise
(hereinafter referred to as a “Failure to Supply”), then Buyer shall be permitted
(after the expiration of a *** cure period following written notice from Buyer to
supplier of such Failure to Supply and such Failure to Supply has not been cured by
Supplier) to (i) to obtain such Product from another supplier including Cardinal,
or (ii) to use, sell, and make Product itself in the Cardinal Red Lion facility or
at another location. In this regard, Supplier shall (at no cost to Supplier) take
all actions and provide all such cooperation and
support reasonably necessary and reasonably within its control to give Buyer the
right to enter, upon reasonable notice and during regular business hours, and
shall be given access to, the Facility (or any other location where the
Equipment is used or stored) so that Buyer may use or retrieve all records
maintained in connection with the manufacturing equipment. Supplier’s
obligations under this Section shall survive the termination of this Agreement
for a period of ***. Upon the occurrence of any such Failure to Supply and
through and until such time as Supplier fully resumes its supply obligations
hereunder: (a) Supplier shall (at no cost to Supplier) take all reasonable
actions within its control, execute and deliver all documents, and provide all
such assistance as Buyer reasonably requests to enable Buyer to obtain Product
from another supplier or to manufacture

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	 	 	 	Product itself; (b) Supplier shall (at
no cost to Supplier) make available to Buyer or its designee access to any and
all Intellectual Property Rights (to the extent not already granted pursuant to
the License Agreement) and any other technical and proprietary materials,
information and techniques necessary or helpful for Buyer to procure required
Raw Materials or produce or arrange an alternative supplier of Product; (c)
Supplier shall (at no cost to Supplier) provide advice and consultation in
connection therewith; (d) Buyer shall purchase Product from Supplier once
Supplier has cured the failure to supply; and (e) Buyer shall terminate any
contractual arrangements contemplated by clause (a) of this sentence once
Supplier has cured the failure to supply. As soon as reasonably practicable
after an uncured Failure to Supply, Supplier shall furnish Buyer with Licensed
Know-How (as defined in the License Agreement) which is necessary to enable
Buyer to manufacture or have manufactured Product as contemplated by this
Agreement. In the event either party hereto believes it to be in the best
interest of both parties, as the licensor and licensee of the Licensed Product
in the Territory, to designate and qualify an alternate contract manufacturer of
the Licensed Product, each party shall consider in good faith the views of the
other party as to the advisability of engaging an alternate contract
manufacturer. If agreed by the parties that an alternate contract manufacturer
should be designated and qualified, the parties shall cooperate to ensure the
transition of the Licensed Product manufacturing to a third party in a manner
that minimizes any interruption of supply of Licensed Product within the
Territory.

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ARTICLE 12. LABELING; ARTWORK

     Buyer shall have the right to determine the appearance and text of any labeling, packaging and
promotional material used in connection with the Product or any finished product containing or
contained in the Product (“Packaging and Promotional Material”). All costs and expenses relating
to Packaging and Promotional Material used in connection with the Product will be borne by Buyer.

ARTICLE 13. CONFIDENTIALITY

	 	13.1.	 	Confidential Information. All information disclosed by one Party to
the other(s) or developed by the parties pursuant to the terms of this Agreement
(the “Confidential Information”) shall be maintained strictly confidential and used
only for the purposes of this Agreement in accordance with this
ARTICLE 13 (Confidentiality) (“Purposes”). Each Party may also disclose the
other’s information to an Affiliate, agent or consultant, who is under a written
obligation of confidentiality and non-use at least substantially equivalent to
the obligations of this ARTICLE 13 (Confidentiality), with the exceptions that
the Parties shall each be free to disclose the existence of this Agreement and
the nature of the Product being manufactured hereunder and the terms to its
prospective licensees and sub-licensees, investors or prospective investors,
lenders and other potential funding sources, or to a third party in connection
with a merger or acquisition or proposed merger or acquisition, subject to an
obligation of confidentiality and non-use, and provided that such Party shall
have used commercially reasonable efforts to obtain a written confidentiality
agreement from such third Party contemplated

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	 	 	 	by this sentence. Each Party shall
guard any confidential information of the other Party with the same level of
diligence as it normally guards any of its own internal confidential,
proprietary information. Each Party shall be responsible for the breach of any
of the provisions of this Article 13 by a person or entity to whom such Party
discloses information contemplated hereby. Notwithstanding the foregoing, each
Party shall be relieved of the confidentiality and limited use obligations of
this Agreement if:

(a) the information was previously known to the receiving Party as evidenced
by the prior written records of such Party without disclosure by the
disclosing Party;

(b) the information is or becomes generally available to the public through
no fault of the receiving Party;

(c) the information is acquired in good faith in the future by the receiving
Party from a third Party not under an obligation of confidence to the
disclosing Party with respect to such information; or

(d) the information is independently developed by the receiving Party
without reliance on, reference to, or knowledge of, the information
disclosed by the disclosing Party. The parties understand and agree that it
shall be the receiving Party’s burden of proof to show the applicability of
any of the exceptions set forth in clauses (a), (b) (c) or (d) above.

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	 	13.2.	 	Exclusions. Notwithstanding the above obligations of confidentiality
and non-use a Party may:

(a) disclose information to a regulatory agency that is necessary to obtain
regulatory approval in a particular jurisdiction; or

(b) disclose information to a government agency if the disclosure is
necessary to protect the health and safety of the Party’s workers or the
public or as required by law; or

(c) disclose information as and to the extent required to comply with
applicable laws and regulations, including the rules and regulations of the
U.S. Securities and Exchange Commission.

     In making such disclosures as set forth in this Section 13.2 (Exclusions), the
disclosing Party shall use reasonable efforts to promptly first notify the owner of the
Confidential Information so as to allow the owner of the confidential information an
opportunity to seek a protective order or otherwise limit any such disclosure. In any
event, the disclosing Party shall use reasonable efforts to only disclose such information
as is required to be disclosed pursuant to the law, regulation, rule or order, and shall use
its reasonable efforts to obligate the recipient to secrecy on the same terms as set forth
herein. Each Party shall restrict the disclosure of confidential information of the other
so that only the persons that need to know it shall be informed and the disclosure be
limited to only such portions as necessary for the purposes of this Agreement.

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	 	13.3.	 	Use of Names. Neither Party shall state or imply, in any publication,
advertisement, sales promotional material, or other medium (a) the name of the
other Party or the name(s) of any employee(s) of the other Party; or (b) the name
of any Affiliate of the other Party or the name(s) of any employee(s) of such
Affiliate without the prior written consent of the other Party.
	 
	 	13.4.	 	Disclosure Agreement. Except for the filing of a copy of this
Agreement with the Securities and Exchange Commission or other securities
commission of such other jurisdictions whose laws may apply to either Party to the
extent required by law and such other public announcements as may hereafter become
required by law, regulation or rule due to changes from the facts and circumstances
in existence as of the date hereof, no Party hereunder shall disclose this
Agreement or make any public announcement or filing concerning
this Agreement or the subject matter hereof without the prior written consent of
the other. In the event that pursuant to the foregoing a Party shall file a
copy of this Agreement with the Securities and Exchange Commission or other
securities commission of such other jurisdictions whose laws may apply to either
Party, it shall use reasonable efforts to seek confidential treatment for all
portions thereof reasonably requested by the other Party. Any proposed
announcement or filing by a Party shall be made available to the other Party in
advance of publication or filing, as the case may be, for review and comment.
If a Party decides to make an announcement or disclosure required by law or as
otherwise permitted under this section of this Agreement, it will provide the
other Party with at least ten (10) days, where

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	 	 	 	possible, advance written notice
of the text of any such written announcement or disclosure or content of any
non-written disclosure or announcement, except to the extent applicable law
requiring disclosure would not permit such advance notice (such as in the case
of certain securities filings), in which case the disclosing Party will give the
maximum notice possible under the circumstances, so that the other Party will
have an opportunity to comment upon the announcement or disclosure.

	 	13.5.	 	Publication. Except for permissible publications under this Article
13 neither Party will publish any information based upon or derived from the work
performed under this Agreement without the prior review and consent of the Parties
pursuant to this ARTICLE 13 (Confidentiality).

	 	13.6.	 	Other Confidentiality Obligations. With respect to information
disclosed on or after the date hereof between Buyer and Supplier under the
provisions of this Agreement, the provisions of this Agreement shall govern and
prevail. In the event of any conflict between this Agreement and any other pending
confidentiality agreement between Buyer and Supplier, with respect to information
disclosed on or after the date hereof, the terms of this Agreement shall govern and
prevail.

ARTICLE 14. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS

	 	14.1.	 	Product Warranties. Supplier warrants to Buyer that all Product
supplied in connection with this Agreement shall be of merchantable quality, fit
for the purpose intended by this Agreement and shall be manufactured and provided

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	 	 	 	in accordance and conformity with the Specifications including cGMP standards.
	 
	 	14.2.	 	Execution and Performance of Agreement. Each of Supplier and Buyer
represents to the other that (i) it has full right, power and authority to enter
into and perform its obligations under this Agreement; (ii) the entry into and
performance of this Agreement has been duly authorized, executed and delivered by
it and each party has obtained all necessary consents and provided all necessary
notices, as the case may be, required in connection with this Agreement; and (iii)
this Agreement is the valid binding obligation of it enforceable against it in
accordance with its terms subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general principles of equity.
Supplier and Buyer further represent and warrants to the other that the
performance of its obligations under this Agreement will not result in a
violation or breach of, and will not conflict with or constitute a default under
any agreement, contract, commitment or obligation to which such Party or any of
its Affiliates is a Party or by which it is bound.
	 
	 	14.3.	 	DISCLAIMER. THE FOREGOING WARRANTIES OF EACH PARTY ARE IN LIEU OF ANY
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES
OF MERCHANTABILITY OR ANY WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, VALIDITY,
OR NON-INFRINGEMENT, ALL

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	 	 	 	OF WHICH ARE HEREBY SPECIFICALLY EXCLUDED AND DISCLAIMED.

	 	14.4.	 	LIMITATION OF LIABILITY. EXCEPT FOR THEIR RESPECTIVE OBLIGATIONS
UNDER ARTICLE 16 (INDEMNIFICATION) ARISING OUT OF THIRD PARTY CLAIMS, SUITS OR
DEMANDS OR FOR ANY BREACH OF CONFIDENTIALITY OBLIGATIONS OWED UNDER THIS AGREEMENT,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY PUNITIVE, SPECIAL, INCIDENTAL,
OR INDIRECT DAMAGES UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL
OR EQUITABLE THEORY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS
SUBJECT MATTER.

ARTICLE 15. COMPLIANCE

     Supplier agrees to comply with the applicable provisions of any Federal or State law and all
executive orders, rules and regulations issued thereunder, whether now or hereafter in force,
including Executive Order 11246, as amended, Chapter 60 of Title 41 of the Code of Federal
Regulations, as amended, prohibiting discrimination against any employee or applicant for
employment because of race, color, religion, sex or national origin; Section 60-741.1 of Chapter 60
of 41 Code of Federal

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Regulations, as amended, prohibiting discrimination against any employee or
applicant for employment because of physical or mental handicap; Section 60.250.4 of Chapter 60 of
41 Code of Federal Regulations, as amended, providing for the employment of disabled veterans and
veterans of the Vietnam era; Chapter 1 of Title 48 of the Code of Federal Regulations, as Amended,
Federal Acquisition Regulations; Sections 6, 7 and 12 of the Fair Labor Standards Act, as amended,
and the regulations and orders of the United States Department of Labor promulgated in connection
therewith. Supplier agrees that it shall comply with all present and future statutes, laws,
ordinances and regulations relating to the manufacture and supply of the Product being provided
hereunder, including, without limitation, those enforced by the FDA (including compliance with good
manufacturing practices) and International Standards Organization Rules 9,000 et seq.

ARTICLE 16. INDEMNIFICATION

	 	16.1.	 	Generally. Buyer and Supplier will each defend as the case may be (each an
“Indemnifying Party”), at its own expense, indemnify and hold harmless the other Party
and its Affiliates (each an “Indemnified Party”) from and against any and all damages,
liabilities, losses, costs, and expenses, including attorneys fees
(collectively, “Liabilities”), arising out of any claim, suit or proceeding brought
against the Indemnified Party (each a “Claim”) to the extent such Claim is based
upon a claim arising out of or relating to (i) any breach or violation of, or
failure to perform, any covenant or agreement made by such Indemnifying Party in
this Agreement, unless waived in writing by the Indemnified Party; (ii) any breach
of the representations or warranties made by such Indemnifying Party in this
Agreement; or (iii) the negligence or willful misconduct of the indemnifying Party,
except, under clause (ii), to the extent arising out of the breach, violation,
failure, negligence or willful misconduct of the Indemnified Party.

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	 	16.2.	 	Product Liability. Except as otherwise provided herein, Buyer (as the
Indemnifying Party) will defend, at its own expense, indemnify and hold harmless
Supplier and its Affiliates (as the Indemnified Parties) from and against all
Liabilities arising out of any Claim to the extent such Claim is based upon a claim
arising out of or relating to any personal injury or death of any Person as a result of
the use of any Product sold by Buyer, its Affiliates or Sub-licensees, except to the
extent such Claim is due to the manufacture of Product supplied by Supplier other than
in accordance with Specifications as provided in this Agreement or the negligent,
grossly negligent, or intentional act or omission of Supplier and its Affiliates.
Similarly, Supplier (as the Indemnifying Party) will defend, at its own expense,
indemnify and hold harmless Buyer and its Affiliates (as Indemnified Parties) from and
against any and all Liabilities arising out of any Claim brought against Buyer or any
such Affiliate to the extent such Claim is based upon a claim
arises out of a Third Party claim or suit or demand based on bodily injury or
property damage resulting from the manufacture of Product supplied by Supplier other
than in accordance with Specifications as provided in this Agreement, unless such
claim is due to the negligent, grossly negligent or intentional act or omission of
Buyer.
	 
	 	16.3.	 	Claims. If any claim is made by a Third Party (a “Third Party Claim”) against
a party entitled to indemnification hereunder (an “Indemnified Party”) that, if
sustained, would give rise to a Liability to a party (the “Indemnifying Party”) under
this Agreement, the Indemnified Party shall promptly cause notice of the claim to be
delivered to the Indemnifying Party along with all of the facts,

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	 	 	 	information or
materials relating to such claim of which the Indemnified Party is aware; provided,
however, that failure to give such notification shall not affect the indemnification
provided for hereunder except to the extent that the Indemnifying Party shall have been
actually prejudiced as a result of such failure. The Indemnified Party shall deliver
to the Indemnifying Party, within five (5) days after the Indemnified Party’s receipt
thereof, copies of all notices and documents (including court papers) received by the
Indemnified Party relating to such Third Party Claim. If a Third Party Claim is made
against an Indemnified Party, the Indemnifying Party will be entitled to participate in
the defense thereof and, if it so chooses, to assume the defense thereof with counsel
selected by the Indemnifying Party and reasonably satisfactory to the Indemnified
Party. Should the Indemnifying Party so elect to assume the defense of a Third Party
Claim, the
Indemnifying Party will not be liable to the Indemnified Party for legal expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof, unless the Third Party Claim involves potential conflicts of interest or
substantially different defenses for the Indemnified Party and the Indemnifying
Party. If the Indemnifying Party assumes such defense, the Indemnified Party shall
have the right to participate in the defense thereof and to employ counsel, at its
own expense (except as provided in the immediately preceding sentence), separate
from the counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party shall control such defense. The Indemnifying Party shall be
liable for the reasonable fees and expenses of counsel employed by the Indemnified
Party for any period during which the Indemnifying

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	 	 	 	Party has not assumed the defense
of any Third Party Claim that, if sustained, would give rise to a Liability of the
Indemnifying Party under this Agreement. The parties shall cooperate in the defense
or prosecution of any Third Party Claim. Such cooperation shall include the
retention and (upon the Indemnifying Party’s request) the provision to the
Indemnifying Party of records and information that are reasonably relevant to such
Third Party Claim, and reasonable efforts to make employees available on a mutually
convenient basis to provide additional information and explanation of any material
provided hereunder. Whether or not the Indemnifying Party shall have assumed the
defense of a Third Party Claim, the Indemnified Party shall not admit any Liability
with respect to, or settle or compromise a Third Party Claim without the
Indemnifying Party’s prior written consent (which consent shall not be unreasonably
withheld). The Indemnifying Party may pay, settle or compromise a
Third Party Claim (i) with the written consent of the Indemnified Party, not to be
unreasonably withheld or delayed or (ii) without the written consent of the
Indemnified Party, so long as such settlement includes (A) an unconditional release
of the Indemnified Party from all Liability in respect of such Third Party Claim and
(B) does not subject the Indemnified Party to any injunctive relief or other
equitable remedy. In the event an Indemnified Party has a claim against an
Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party
shall promptly cause notice of such claim to be delivered to the Indemnifying Party.
If the Indemnifying Party disputes such claim, the Indemnifying Party and the
Indemnified Party shall attempt in good faith for a

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	 	 	 	period of ten (10) days to
settle any such dispute. If the parties are unable to resolve such dispute, the
Indemnified Party may pursue any and all courses of action available against the
Indemnifying Party.

ARTICLE 17. MISCELLANEOUS

	 	17.1.	 	Arbitration. Any dispute, controversy or claim arising out of or relating to
this Agreement or the validity, inducement, or breach thereof, shall be settled by
arbitration in accordance with Article 11 (Arbitration) of the License Agreement.
EXCEPT WITH RESPECT TO THEIR RESPECTIVE OBLIGATIONS UNDER ARTICLE 16 (INDEMNIFICATION)
ARISING OUT OF THIRD PARTY CLAIMS, SUITS OR DEMANDS OR FOR ANY BREACH OF
CONFIDENTIALITY OBLIGATIONS OWED UNDER THIS AGREEMENT, THE ARBITRATOR SHALL NOT AWARD
ANY PARTY PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES, AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT TO SEEK SUCH DAMAGES.
	 
	 	17.2.	 	Relationship of the Parties. The relationship of Buyer and Supplier
established by this Agreement is that of independent contractors, and nothing contained
herein shall be construed to (i) give either Party any right or authority to create or
assume any obligation of any kind on behalf of the other or (ii) constitute the parties
as partners, joint venturers, co-owners or otherwise as participants in a joint or
common undertaking.

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	 	17.3.	 	Entire Agreement. It is the mutual desire and intent of the parties to
provide certainty as to their respective future rights and remedies against each other
by defining the extent of their mutual undertakings as provided herein. The parties
have, in this Agreement, incorporated all representations, warranties, covenants,
commitments and understandings on which they have relied in entering into this
Agreement, and, except as provided for herein, neither Party makes any covenant or
other commitment to the other concerning its future action. Accordingly, this
Agreement and the License Agreement (i) constitute the entire agreement and
understanding between the parties with respect to the subject matter hereof and there
are no promises, representations, conditions, provisions or Terms related thereto other
than those set forth in this Agreement and (ii) supersede all previous understandings,
agreements and representations between the parties, written or
oral. No modification, change or amendment to this Agreement shall be effective
unless in writing signed by each of the parties hereto.
	 
	 	17.4.	 	Construction. Unless otherwise expressly provided for herein (i) financial
and accounting terms will have the meaning ascribed to such terms in accordance with
U.S. generally accepted accounting principles, consistently applied, (ii) the word,
“including”, will mean “including but not limited to” and the word “day” will mean
“calendar day”, (iii) references to the singular will include the plural and vice
versa, (iv) the use of any pronoun will include the neuter and both genders, and (v)
references to Sections, Articles, Schedules and Exhibits will be references to
Sections, Articles, Schedules and Exhibits to this Agreement and the word, “herein” and
words of similar import will be construed to refer to this Agreement,

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	 	 	 	and (vi) headings
and titles of Sections and Articles herein will be construed to be descriptive only and
without any substantive or interpretive effect.

	 	17.5.	 	Notices. All notices and other communications hereunder shall be in writing.
All notices hereunder of an Indemnity Claim, a Force Majeure Event, default or breach
hereunder, or, if applicable, Termination or renewal of the Term hereof, or any other
notice of any event or development material to this Agreement taken as a whole, shall
be delivered personally, or sent by national overnight delivery service or postage
pre-paid registered or certified U.S. mail, and shall be deemed given: when delivered,
if by personal delivery or overnight delivery service; or if so sent by U.S. mail,
three business days after deposit in the mail, and shall be addressed:

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	 	 	If to Supplier:	 	Attention: Chief Executive Officer
	 

	 	 	 	 	 	NOVAVAX, Inc.
	 

	 	 	 	 	 	508 Lapp Road
	 

	 	 	 	 	 	Malvern, PA 19355
	 
	 	 	 	 	 	 
	 

	 	 	 	With a copy to:
	 	Attention: Legal Department
	 

	 	 	 	 	 	NOVAVAX, Inc.
	 

	 	 	 	 	 	508 Lapp Road
	 

	 	 	 	 	 	Malvern, PA 19355
	 
	 	 	 	 	 	 
	 	 	If to Buyer:	 	Attention: Chief Executive Officer
	 

	 	 	 	 	 	ESPRIT Pharma, Inc.
	 

	 	 	 	 	 	Two Tower Blvd.
	 

	 	 	 	 	 	East Brunswick, NJ 08816
	 
	 	 	 	 	 	 
	 

	 	 	 	With a copy to:
	 	Attention: Steven M. Bosacki, General Counsel
	 

	 	 	 	 	 	ESPRIT Pharma, Inc.
	 

	 	 	 	 	 	Two Tower Blvd.
	 

	 	 	 	 	 	East Brunswick, NJ 08816

or to such other place as either Party may designate by written notice to the other in
accordance with the Terms hereof.

	 	17.6.	 	Failure to Exercise. The failure of either Party to enforce at any time for
any period any provision hereof shall not be construed to be a waiver of such provision
or of the right of such Party thereafter to enforce each such provision, nor shall any
single or partial exercise of any right or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right or remedy. Remedies
provided herein are cumulative and not exclusive of any remedies provided at law.
	 
	 	17.7.	 	Assignment. This Agreement may not be assigned by either Party without the
prior written consent of the other which will not be unreasonably withheld or

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	 	 	 	delayed, except that either Party may assign its rights and/or obligations hereunder
to any of its wholly-owned Affiliates or to a successor to its business in a sale of
all or substantially all of the assets of such Party. Subject to the foregoing
sentence, this Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns. This Section 17.07 shall not be deemed
to prohibit or otherwise apply to a change in control of Supplier (whether by merger
of sale of capital stock or otherwise) at the shareholder or Board of Director
levels or otherwise.
	 
	 	17.8.	 	Severability. In the event that any one or more of the provisions (or any
part thereof) contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or any other
such instrument. Any Term or provision of this Agreement which is invalid, illegal or
unenforceable in any jurisdiction shall, to the extent the economic benefits conferred
by this Agreement to both parties remain substantially unimpaired, not affect the
validity, legality or enforceability of any of the Terms or provisions of this
Agreement in any other jurisdiction.
	 
	 	17.9.	 	Further Assurances. Upon reasonable request from Buyer, Supplier shall
provide to Buyer, promptly, any product samples, manufacturing information and other
information as is necessary for Buyer to complete or obtain U.S. or foreign

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	 	 	 	registration (including reimbursement arrangements) or approval in any territory
where Buyer is allowed to sell product or use technology.

	 	17.10.	 	Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and
the same instrument.
	 
	 	17.11.	 	Expenses. Each Party shall pay all of its own fees and expenses (including all
legal, accounting and other advisory fees) incurred in connection with the negotiation
and execution of this Agreement and the arrangements contemplated hereby.
	 
	 	17.12.	 	Survival. Sections 7.4 (Effect of Termination) and 11.2 (Failure to Supply) and
ARTICLE 12 (Labeling; Artwork; Proprietary Rights), ARTICLE 13 (Confidentiality),
ARTICLE 16 (Indemnification) and ARTICLE 17 (Miscellaneous) shall survive the
termination of this Agreement in accordance with the respective Terms thereof.

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

	 	 	 	 	 	 	 	 	 	 	 
	ESPRIT PHARMA, INC.	 	 	 	NOVAVAX, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

4 21, 06
Novavax Esprit Supply Agreement

Execution Copy

 

 

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SUPPLY AGREEMENT

Schedule A – Product

A topically- or transdermally-administered product developed under Seller’s IND No. 63957 of sold
under a trademark upon which Supplier and Buyer shall mutually agree, of the following formulation:

	 	 	 
	Ingredient Description	 	Percent w/w
	Testosterone USP/Ph. Eur.

	 	***
	 
	 	 
	Soybean Oil USP

	 	***
	 
	 	 
	Polysorbate 80 NF

	 	***
	 
	 	 
	190 Proof Ethyl Alcohol USP

	 	***
	 
	 	 
	Purified Water USP

	 	***
	 
	 	 

 

 

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SUPPLY AGREEMENT

Schedule B – Specifications

1. Formula

	 	 	 	 	 
	Ingredient Description	 	Percent w/w	 	Theoretical Weight
	Testosterone USP/EP
	 	***	 	***
	Soybean Oil USP
	 	***	 	***
	Polysorbate 80 NF
	 	***	 	***
	190 Proof Ethyl Alcohol USP
	 	***	 	***
	Purified Water USP
	 	***	 	***
	TOTAL
	 	***	 	***

2. Specifications

	 	 	 	 	 
	Test	 	Test Method	 	Specification
	Appearance
	 	Visual observation	 	***
	Testosterone Identity
	 	HPLC	 	***
	Testosterone Assay
	 	HPLC	 	***
	Particle Size
	 	Coulter Laser	 	***
	Viscosity
	 	Viscometer	 	***
	pH
	 	pH Meter	 	***
	Microbial Limits Test
	 	USP	 	***
	Related Substances
	 	HPLC	 	***
	Crystal Count Analysis
	 	Polarized light microscopy	 	***
	Quantitative Crystal Analysis
	 	HPLC	 	***
	Ethanol assay
	 	GC	 	***
	In vitro release
	 	VanKel diffusion cell	 	***

 

 

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3. Packaging Specifications

Component Specifications

Current Master Label

 

 

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Schedule C

CMC Support from Novavax, Inc.

Novavax Activities:

Novavax will provide full chemistry and manufacturing controls support for development and
commercialization of Product (testosterone topical emulsion for female sexual dysfunction). The
activities include:

	 	1.	 	***
	 
	 	2.	 	***
	 
	 	3.	 	***
	 
	 	4.	 	***

Description of Activities

	 	1.	 	***

	 	1.1.	 	Assumptions are as follows:

	 	 	 	1.1.1.***
	 
	 	 	 	1.1.2.***
	 
	 	 	 	1.1.3.***
	 
	 	 	 	1.1.4.***
	 
	 	 	 	1.1.5.***

	 	1.2.	 	Analytical testing will consist of the following:

	 	 	 	1.2.1.***

	 	 	 	1.2.2.***
	 
	 	 	 	1.2.3.***
	 
	 	 	 	1.2.4.***
	 
	 	 	 	1.2.5.***
	 
	 	 	 	1.2.6.***
	 
	 	 	 	1.2.7.***
	 
	 	 	 	1.2.8.***
	 
	 	 	 	1.2.9.***
	 
	 	 	 	1.2.10.***
	 
	 	 	 	1.2.11.***
	 
	 	 	 	1.2.12.***

	 	 	 	1.2.13.***

 

 

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	 	1.3.	 	Stability testing

	 	1.3.1.	 	***

	 	1.3.1.1.	 	***
	 
	 	1.3.1.2.	 	***

	 	1.3.2.	 	***

	 	1.3.2.1.	 	***
	 
	 	1.3.2.2.	 	***

	 	1.4.	 	Cost: ***

	 	2.	 	***

	 	2.1.	 	Assumptions are as follows:

	 	2.1.1.	 	***
	 
	 	2.1.2.	 	***
	 
	 	2.1.3.	 	***
	 
	 	2.1.4.	 	***
	 
	 	2.1.5.	 	***

	 	2.2.	 	Analytical testing will consist of the following [analytical
tests will be validated as required]:

	 	2.2.1.	 	***
	 
	 	2.2.2.	 	***
	 
	 	2.2.3.	 	***
	 
	 	2.2.4.	 	***
	 
	 	2.2.5.	 	***
	 
	 	2.2.6.	 	***
	 
	 	2.2.7.	 	***
	 
	 	2.2.8.	 	***
	 
	 	2.2.9.	 	***
	 
	 	2.2.10.	 	***
	 
	 	2.2.11.	 	***
	 
	 	2.2.12.	 	***
	 
	 	2.2.13.	 	***

	 	2.3.	 	Stability testing

	 	2.3.1.	 	***

 

 

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	 	2.3.1.1.	 	***
	 
	 	2.3.1.2.	 	***

	 	2.3.2.	 	***

	 	2.3.2.1.	 	***
	 
	 	2.3.2.2.	 	***

	 	2.4.	 	Additional analytical testing

	 	2.4.1.	 	***testing

	 	2.5.	 	Cost:

	 	2.5.1.	 	***

	 	2.5.1.1.	 	***
	 
	 	2.5.1.2.	 	***

	 	2.5.2.	 	***
	 
	 	2.5.3.	 	***
	 
	 	2.5.4.	 	***
	 
	 	2.5.5.	 	***
	 
	 	2.5.6.	 	***
	 
	 	2.5.7.	 	***
	 
	 	2.5.8.	 	***

	 	3.	 	Documentation

	 	3.1.	 	***
	 
	 	3.2.	 	***
	 
	 	3.3.	 	***
	 
	 	3.4.	 	***
	 
	 	3.5.	 	***
	 
	 	3.6.	 	***

Total cost of CMC support summary:

1. ***

2. ***

3. ***

4. TOTAL: ***

 

 

EXECUTION COPY

Schedule D

***

 

 

Confidential Treatmentexv10w3

 

Exhibit
10.3

SUBLEASE AGREEMENT

     This Sublease Agreement (“Sublease”) is made on April ___, 2006 by and between Novavax, Inc., a
Delaware corporation (“Sublandlord”) and Sterilox Technologies, Inc., a Delaware corporation
(“Subtenant”).

BACKGROUND

     A. Pursuant to a Lease Agreement dated July 15, 2004 (“Prime Lease”), Sublandlord leased from
Liberty Property Limited Partnership, a Pennsylvania limited partnership (“Prime Landlord”),
approximately 32,908 rentable square feet of space on the first and second floor, currently known
as 508 Lapp Road (the “Premises”), in the building located at 508 Lapp Road, Malvern, Pennsylvania
19355 (the “Property”); and

     B. Subtenant desires to sublease from Sublandlord a portion of Premises, consisting of
approximately 20,469 rentable square feet on the first floor of the Premises as shown on the
attached Exhibit “A” (the “Sublease Premises”); and

     C. A true, correct and complete copy of the Prime Lease is attached to and made a part of this
Sublease as Exhibit “B”; and

     D. Sublandlord has agreed to sublet the Premises to Subtenant, and Subtenant has agreed to
sublet the same from Sublandlord, all upon the terms and subject to the conditions set forth in
this Sublease.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual agreements contained herein, the parties
hereto, each intending to be legally bound and to bind its respective successors and assigns, agree
as follows:

     1. Sublease.

          a. For the Term (defined in Section 5 below) and upon the terms, covenants and conditions
herein set forth, Sublandlord hereby subleases to Subtenant, and Subtenant hereby subleases from
Sublandlord, the Sublease Premises, together with the non-exclusive right with Prime Landlord and
any other occupants of the Building to use all of the Common Areas. During the Term, Subtenant
shall have the right to receive and enjoy the benefit of the services required to be provided by
Prime Landlord under the Prime Lease.

     2. Sublandord’s Representations, Warranties and Agreements.

          a. To induce Subtenant to enter into this Sublease, Sublandlord represents and warrants to
Subtenant that: (i) Exhibit “B” hereto constitutes a true, correct and complete copy of the Prime
Lease; (ii) the Prime Lease comprises the entire understanding and agreement of Prime Landlord and
Sublandlord with respect to the Sublease Premises and remains in full force and effect as of the
date of this Sublease;

 

 

(iii) the term of the Prime Lease expires on September 30, 2014, subject to any and all
extension rights and early termination rights, including without limitation, the Early Termination
Option contained in Section 31, in the Prime Lease; (iv) Sublandlord has paid to Prime Landlord any
and all sums owed to Prime Landlord under the Prime Lease as of the date of this Sublease; (v)
neither Prime Landlord nor Sublandlord is in default under the Prime Lease, and there exists no
state of facts and no event has occurred which, with the passage of time or the giving of notice,
or both, would constitute a default by either Prime Landlord or Sublandlord under the Prime Lease;
(vi) no part of the Security Deposit has been applied by Prime Landlord to satisfy Sublandlord’s
obligations under the Prime Lease; (vii) to Sublandlord’s knowledge, the Sublease Premises is in
good condition and repair; and (viii) Sublandlord has no knowledge of any environmental condition
that affects the use or operation of the Sublease Premises in any way. Other than the foregoing
representations and warranties concerning the Sublease Premises, Subtenant hereby acknowledges that
Subtenant is accepting the Sublease Premises in its “as is” condition, without any representations
and warranties by Sublandlord.

          b. Except to the extent to be performed by Subtenant pursuant to Sections 3 and 4 below,
Sublandlord shall timely pay and perform all covenants, agreements and obligations of “Tenant”
under the Prime Lease, including without limitation the payment of all rent and additional rent to
Prime Landlord under the Prime Lease. Sublandlord agrees that it will not (i) amend or modify the
Prime Lease without the prior written consent of Subtenant, which consent shall not be unreasonably
withheld, conditioned or delayed so long as the amendment or modification does not diminish the
rights and privileges of Subtenant under this Sublease (including without limitation those
provisions of this Sublease which are incorporated by reference from the Prime Lease) or impose
greater duties and obligations on Subtenant under this Sublease, or (ii) agree to a termination of
the Prime Lease unless, in connection therewith, Prime Landlord accepts this Sublease as a direct
lease between Prime Landlord and Subtenant.

     3. Incorporation of Prime Lease

          a. This Sublease is made subject to and subordinate to all of the terms and conditions of the
Prime Lease and is conditioned upon the written approval of Prime Landlord. Except as expressly
set forth below, (i) every provision of the Prime Lease shall be deemed incorporated into, and made
a part of, this Sublease by reference notwithstanding that such provisions are not restated herein,
(ii) each reference in the Prime Lease to “Lease” shall be deemed a reference to this Sublease;
(iii) each reference in the Prime Lease to the “Premises” shall be deemed a reference to the
Sublease Premises under this Sublease; (iv) each reference in the Prime Lease to “Landlord” and
“Tenant” shall be deemed a reference to “Sublandlord” and “Subtenant”, respectively; and (v) each
reference to the “date of this lease” or other similar phrase shall be deemed to be a reference to
the date of this Sublease. However, notwithstanding the foregoing, Sublandlord is not assuming,
and shall not be responsible or liable for Prime Landlord’s obligation to perform any agreement or
obligation on the part of the “Landlord” under the Lease to the extent that Prime Landlord
exercises its right to so perform (such as, by way of example and not limitation, restoring the
Sublease Premises following a fire or other casualty or making any of the repairs required by
Section 9 of the Lease). In the event

2

 

Landlord fails to perform any such agreement or obligation, then, promptly following
Subtenant’s request, Sublandlord shall take reasonable, appropriate action against Prime Landlord,
as permitted by law or by the terms of the Prime Lease to enforce such agreements and obligations
of Prime Landlord.

          b. Notwithstanding the foregoing, the following provisions of the Prime Lease are hereby
excluded from this Sublease: Sections 1(c), 1(d), 1(e), 1(f), 1(g), 1(h), 1(j), 1(k), 2, 4, 5, 6,
7, 18, last four sentences of 19(a), 20, 27, 28, 29, 30, 31, 32, 34, 38 and 40.

          c. The rights of Prime Landlord under the Prime Lease may be enforced by, and are for the
benefit of, both Sublandlord and Prime Landlord. Neither Subtenant nor Sublandlord shall permit
anything to be done which would cause the Prime Lease to be terminated or forfeited.

          d. Notwithstanding anything to the contrary in this Sublease, with respect to any approval
required to be obtained from the “Landlord” under the Prime Lease, such consent must be obtained
from both the Prime Landlord and Sublandlord. Sublandlord’s consent, in each instance, shall be
governed by the terms contained in the Prime Lease with respect to the applicable approval.

          e. The time limits set forth in the Prime Lease for the giving of notices, making demands,
performance of any act, condition or covenant, or the exercise of any right, remedy or option, are
changed for the purposes of incorporation into this Sublease, by lengthening or shortening the same
in each instance, as appropriate, so that notices may be given, demands made, or any act, condition
or covenant performed, or any right, remedy or options hereunder exercised, by Sublandlord or
Subtenant, as the case may be (and each party covenants that it will do so), within two (2)
business days prior to the expiration of the time limit, taking into account the maximum grace
period, if any, relating thereto and contained in the Prime Lease.

     4. Subtenant’s Performance. Subtenant shall timely pay and perform all covenants,
agreements and obligations of the “Tenant” under the Prime Lease, except as expressly provided in
Section 3 above. Subtenant’s failure to perform any such covenants, agreements and obligations
shall be a breach of this Sublease.

     5. Sublease Term. The term of this Sublease (“Term”) shall commence on July 1, 2006
(the “Commencement Date”), and, unless sooner terminated as herein provided, the Term shall end on
September 30, 2009. Notwithstanding the foregoing, as soon as Prime Landlord consents to this
Sublease in writing, Subtenant shall be permitted to have access to the Sublease Premises for the
purposes of making the Sublease Premises ready for Subtenant’s use, provided that such preparations
and approvals are governed by the terms of the Prime Lease and do not interfere with Sublandlord’s
normal business operations. All of the terms and conditions of this Sublease shall apply to such
early access, but Subtenant’s shall have no obligation to pay Subrent pursuant to Section 6 hereof.

3

 

     6. Subrent; Security Deposit.

          a. Beginning on the Commencement Date and continuing on the first day of each calendar month
included in the Term, Subtenant shall pay to Sublandlord, in lawful money of the United States of
America, without notice or demand, at the office of Sublandlord at 508 Lapp Road, Malvern,
Pennsylvania 19355, or such other place as Sublandlord may designate in writing to Subtenant from
time to time, subrent (“Subrent”) equal the following schedule:

	 	 	 	 	 
	Months	 	Monthly Subrent
	1-12
	 	$	26,865.56	 
	 
	13-24
	 	$	27,718.44	 
	 
	25-39
	 	$	28,571.31	 

          b. For the avoidance of doubt, Sublandlord acknowledges that such Subrent will be the only
amounts payable by Subtenant hereunder (other than those amounts identified in subsection 6(c)
below) and that Sublandlord shall be solely responsible for Operating Expenses and Utilities under
the Prime Lease, except to the extent any such Operating Expense (or other similar additional rent)
results from an express request by Subtenant to Prime Landlord to provide a service to the Sublease
Premises that was not furnished to the Sublease Premises prior to the Commencement Date. If the
Commencement Date is not the first day of a calendar month, the Subrent for the first month shall
be prorated based upon the number of days in such month.

          c. Notwithstanding the foregoing subsection (b), on the Commencement Date and again on the
first and second anniversary date of the Term, Subtenant shall also pay to Sublandlord, additional
rent (“Additional Rent”) consisting of (i) $2.50 per rentable square foot for electric service in
the Sublease Premises, and (ii) $1.75 per rentable square foot for shared reception services and
shared use of the Common Areas, cafeteria, bathrooms and first floor server room. If Sublandlord
is not able to provide access to the first floor server room, Sublandlord will provide to Subtenant
at Sublandlord’s sole cost and expense comparable services reasonably acceptable to Subtenant that
would have been provided by the first floor server room, including providing a secure location for
Subtenant’s computer hardware, and providing internet capability to Subtenant’s employees.
Subtenant shall, in the alternative, be permitted to pay such Additional Rent in equal monthly
installments throughout the course of the Term. In the event Subtenant’s consumption of electric
in the Sublease Premises exceeds the equivalent of $2.50 per rentable square foot for at least two
consecutive months, Sublandlord may invoice Subtenant separately for, and Subtenant shall pay on
demand, the cost of Subtenant’s excessive consumption.

4

 

          d. In lieu of a security deposit, Subtenant shall deliver to Sublandlord within five (5)
business days following the execution of the Sublease an irrevocable and unconditional letter of
credit (such letter of credit and any replacement thereof, as provided herein, is called a “Letter
of Credit”) issued and drawn upon any commercial bank reasonably approved by Sublandlord which is a
member of the United States Federal Reserve System with offices for banking purposes in
Philadelphia, Pennsylvania or New York, New York (“Issuing Bank”), which Letter of Credit shall be
in a form and content reasonably satisfactory to Sublandlord. The Letter of Credit shall name
Sublandlord as beneficiary and initially be in the amount of $250,000.00 (the “Original Amount”).
If, at any given time during the Sublease, Subtenant has cash and cash equivalents (a) between
$10,000,000.00 and $20,000,000.00, the Letter of Credit may be reduced to $125,000.00 (the “Reduced
Amount”) during such period(s) or (b) in excess of $20,000,000.00, the Letter of Credit shall be
deemed cancelled for such period(s). If at any time during the Term, Subtenant’s cash and cash
equivalents fall below the threshold amount in (a) above, then Subtenant shall be again obligated
to produce a Letter of Credit in the Original Amount. If at any time during the Term, Subtenant’s
cash and cash equivalents fall below the threshold amount in (b) above, Subtenant shall be again
obligated to produce a Letter of Credit in the Reduced Amount. If Subtenant wishes to decrease the
amount of the Letter of Credit to the Reduced Amount or to cancel the Letter of Credit as
summarized above, Subtenant must provided Sublandlord with financial statements certified by
Subtenant’s Chief Financial Officer before changing the Letter of Credit amount. Thereafter,
Subtenant shall provide such financial statements on a quarterly basis demonstrating Subtenant’s
continued compliance with the reduction or cancellation criteria for the Letter of Credit as
summarized above.

          e. In addition, the Letter of Credit shall (a) have a term of not less than twelve (12)
months, (b) permit multiple drawings, (c) be fully transferable by Sublandlord without the payment
of any fees or charges by Sublandlord, (d) expressly allow Sublandlord to draw upon it: (i) in the
event that the Subtenant is in default under the Sublease after all applicable notice and cure
periods have expired, by delivering to the Issuing Bank written notice that Sublandlord is entitled
to draw thereunder pursuant to the terms of this Sublease, or (ii) if Subtenant, within forty-five
(45) days prior to the expiration of the Letter of Credit then held by Sublandlord, fails to
provide Sublandlord with a replacement Letter of Credit, and (e) expressly state that it will be
honored by the Issuing Bank without inquiry into the accuracy of any such notice or statement made
by Sublandlord. The Letter of Credit shall provide that it shall be deemed automatically renewed,
without amendment, for consecutive periods of twelve (12) months each thereafter during the Term
unless the Issuing Bank sends a notice (the “Non-Renewal Notice”) to Sublandlord by certified mail,
return receipt requested, not less than sixty (60) days preceding the then expiration date of the
Letter of Credit stating that the Issuing Bank has elected not to renew the Letter of Credit. Upon
receipt of the Non-Renewal Notice or upon Subtenant’s failure to deliver a replacement Letter of
Credit not later than forty-five (45) days prior to the expiration of the Letter of Credit then
held by Sublandlord, Sublandlord shall have the right to draw the full amount of the Letter of
Credit then currently in effect, and thereafter hold or apply the cash proceeds of the Letter of
Credit.

5

 

     7. Personal Property; Restoration of Sublease Premises. All furniture being used by
Subtenant shall become the property of Subtenant at the end of the Term to the extent such
furniture was not owned by Subtenant as of the Commencement Date. Subtenant hereby acknowledges
that Subtenant is accepting such furniture, fixtures, equipment and other personal property in
their “as is” condition, without any representations and warranties by Sublandlord.

     8. Permit, Certificate of Occupancy, and Signage. Subtenant shall be responsible for
obtaining any applicable building permit and Certificate of Occupancy regarding Subtenant
modifications to the Premises and its occupation of the Premises. Notwithstanding anything to the
contrary contained within Section 11 of the Prime Lease, provided Prime Landlord consents,
Sublandlord acknowledges that Subtenant shall be permitted to place signage, at Subtenant’s sole
expense, on the exterior entrances to the Sublease Premises and the existing monument road signage
at the Property. Such signage must comply with the terms and conditions of the Lease and continue
to provide Sublandlord with acceptable signage. Sublandlord and Subtenant acknowledge that each
party will have usage of 50% of the area of the existing monument road sign.

     9. Casualty Damage; Partial Taking. Notwithstanding the incorporation herein of
Section 15 of the Prime Lease pertaining to damage to the Sublease Premises by fire or other
casualty or of Section 16 of the Prime Lease pertaining to a taking, Sublandlord shall have no
responsibility for the obligations of Prime Landlord thereunder, and Subtenant shall look solely to
Prime Landlord in connection therewith., To the extent that any portion of rent payable by
“Tenant” under the Prime Lease is abated pursuant to such Sections or otherwise, Subtenant shall be
entitled to a corresponding abatement of Subrent hereunder, calculated as the Subrent otherwise
payable by Subtenant multiplied by a fraction, the numerator of which is the number of rentable
square feet within the Sublease Premises for which the abatement is being given and the denominator
of which is total number of rentable square feet in the Sublease Premises.

     10. Surrender. Sublandlord acknowledges, however, that notwithstanding the
incorporation of the surrender obligations contained in the Prime Lease (which apply due to the
incorporation herein of Section 21 of the Prime Lease), Subtenant shall have no obligation to
remove any alterations made to the Sublease Premises by Sublandlord prior to the Commencement Date.
Moreover, Sublandlord hereby ratifies any surrender obligations contained in the Prime Lease and
confirms that Sublandlord will timely perform all such obligations. Subtenant acknowledges that it
may be obligated to remove alterations made by Subtenant after the Commencement Date in accordance
with Section 12 of the Prime Lease.

     11. Hold Harmless. Except to the extent caused by the negligence or willful
misconduct of Sublandlord or its agents, Subtenant shall indemnify, protect, defend with counsel
reasonably acceptable to Sublandlord and hold harmless Sublandlord from and against any and all
claims, liabilities, judgments, causes of action, damages, costs and expenses (including, without
being limited to, reasonable attorneys’ and experts’ fees and expenses), caused by or arising in
connection with (a) a breach of Subtenant’s covenants,

6

 

representations and warranties under this Sublease, and (b) the negligence or willful
misconduct of Subtenant. Except to the extent caused by the negligence or willful misconduct of
Subtenant or its agents, Sublandlord shall indemnify, protect, defend with counsel reasonably
acceptable to Subtenant and hold harmless Subtenant from and against any and all claims,
liabilities, judgments, causes of action, damages, costs and expenses (including, without being
limited to, reasonable attorneys’ and experts’ fees and expenses), caused by or arising in
connection with (a) a breach of Sublandlord’s covenants, representations and warranties under this
Sublease, and (b) the negligence or willful misconduct of Sublandlord.

     12. Remedies; Self-Help. In the event of any material default by either party under
this Sublease, the non-defaulting party shall have all remedies provided at law or in equity,
including without limitation in the case of Sublandlord all remedies provided in Section 22 of the
Prime Lease. Either party may resort to its remedies cumulatively or in the alternative.
Subtenant and Sublandlord agree to copy Prime Landlord on all notices given in connection with this
Section 13. In addition, if Sublandlord is the defaulting party and if such default materially,
adversely affects Subtenant’s ability to conduct its business in the Sublease Premises, then
Subtenant shall have the right to cure such default on behalf of Sublandlord after written notice
(except in the case of an emergency) to Prime Landlord and Sublandlord. In such event, Sublandlord
shall reimburse Subtenant upon demand for any sums paid or costs incurred by Subtenant in curing
such default, which are based on reasonable commercial terms, including without limitation interest
thereon from the respective dates of Subtenant’s paying such sums or incurring such costs, and if
Sublandlord fails to pay such amounts within 15 days following Subtenant’s demand therefor,
Subtenant shall have the right to deduct from the next monthly payments of Subrent coming due
hereunder until Subtenant is fully reimbursed.

     13. Notices. Whenever it shall be necessary or desirable for either party to this
Sublease to serve any notice or demand on the other party, such notice or demand shall be served by
certified mail, return receipt requested, by overnight courier (such as Federal Express), next day
delivery, or telecopy, at the addresses set forth below or at such other address as shall be
designated by the parties in writing in accordance with this Section. Each party shall provide to
the other copies of all notices received by each from Prime Landlord.

	 	 	 
	To:
	 	 
	Prime Landlord:

	 	Liberty Property Limited Partnership
	 

	 	500 Chesterfield Parkway
	 

	 	Malvern, PA 19355
	 
	 	 
	Sublandlord:

	 	Novavax, Inc.
	 

	 	508 Lapp Road
	 

	 	Malvern, PA 19355
	 

	 	Attn: CFO
	 
	 	 
	To Subtenant, prior to the
	 	 
	Commencement Date:

	 	Sterilox Technologies, Inc.

7

 

	 	 	 
	 

	 	320 King of Prussia Road
	 

	 	Suite 200
	 

	 	Radnor, PA 19087
	 

	 	Attn: Keith A. Goldan, CFO
	 
	 	 
	To Subtenant, from and after
	 	 
	Commencement Date:

	 	Sterilox Technologies, Inc.
	 

	 	508 Lapp Road
	 

	 	Malvern, PA 19355
	 

	 	Attn: Keith A. Goldan, CFO

     14. Option to Extend Term.

          a. Provided (i) there is no existing Event of Default by Subtenant under this Sublease, and
(ii) subject to Sublandlord’s interest, solely in Sublandlord’s discretion, to exercise its Early
Termination Option under the Prime Lease, Subtenant shall have the right and option (“Extension
Option”), to extend the Term for one additional period of two (2) years (“Extension Term”).
Subtenant shall give Sublandlord prior written notice of Subtenant’s intention to exercise the
Extension Option at any time prior to August 1, 2008. If Sublandlord does not exercise its Early
Termination Option under the Prime Lease, and if Subtenant has provided Sublandlord notice of
Subtenant’s election to exercise the Extension Option, Subtenant and Sublandlord shall then
mutually agree on the Subrent to be charged to Subtenant during the Extension Term in question
within the next 60 days. Sublandlord will not raise the applicable rent by more than $0.50/sf
between the first and second years of the Extension Term. Subtenant’s Extension Option is subject
to Prime Landlord’s consent.

     15. Brokers. Sublandlord and Subtenant represent to each other that neither party has
dealt with any broker or other person who may be owed a commission in connection with the
transactions contemplated by this Sublease other than TCA Brokerage Services (“Subtenant’s Broker”)
whose commission shall be paid by Subtenant pursuant to a separate agreement. Except as provided
in this Section, each party agrees to hold the other party harmless from and against all claims for
brokerage commissions, finder’s fees, or other compensation made by any other agent, broker,
salesman or finder as a consequence of said party’s actions or dealings with such agent, broker,
salesman, or finder.

     16. Binding Effect; Amendments. The provisions of this Sublease shall be binding upon
and inure to the benefit of the parties hereto and their respective legal representatives,
successors and assigns. This Sublease constitutes the entire agreement between the parties hereto
and may not be modified except by an instrument in writing signed by the parties hereto. No
amendments shall be made to this Sublease without the prior written approval of Prime Landlord in
accordance with the terms of the Prime Lease.

     17. Severability. Each covenant and agreement contained in this Sublease is a
separate and independent covenant and agreement. If any covenant or agreement or the

8

 

application thereof to any person or circumstance shall to any extent be invalid and
unenforceable, the remainder of this Sublease, or the application of such covenant or agreement to
persons or circumstances, other than those as to which it is invalid or unenforceable, shall not be
affected thereby, and all other covenants and agreements of this Sublease shall be valid and
enforceable to the fullest extent permitted by law.

     18. Counterparts. This Sublease may be executed in counterparts, each of which, when
taken together as a whole, shall constitute one and the same instrument.

     19. Condition Precedent. This Sublease and Sublandlord’s and Subtenant’s obligations
hereunder are conditioned upon obtaining the written consent of the Prime Landlord in a form
mutually acceptable to Sublandlord and Subtenant. If such consent has not been obtained within 30
days after the date first set forth above, either party may terminate this Sublease by written
notice to the other, whereupon the parties shall have no further obligation thereafter arising
under this Sublease.

     20. Capitalized Terms. Each capitalized term used herein but not defined shall have
the meaning ascribed to such term in the Prime Lease.

     21. Governing Law. This Sublease shall be construed and governed by the laws of the
Commonwealth of Pennsylvania.

[SIGNATURES CONTINUE ON NEXT PAGE]

9

 

     IN WITNESS WHEREOF, the parties have caused this Sublease to be duly executed as of the date
first above written.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	SUBLANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS:	 	 	 	Novavax, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Dennis W. Genge	 	 
	 

	 	 	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	SUBTENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS:	 	 	 	Sterilox Technologies, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Keith A. Goldan	 	 
	 

	 	 	 	 	 	Chief Financial Officer	 	 

10

 

EXHIBIT A

Sublease Premises

A-1

 

EXHIBIT B

Prime Lease

B-1

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