Document:

exv4w8

 

Exhibit 4.8

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is dated as of this
19th day of July, 2004, by and between NOVAVAX, INC., a Delaware corporation
(the “Company”), and KING PHARMACEUTICALS, INC., a Tennessee corporation
(“King”).

     WHEREAS, the Company and King entered into an Exchange Agreement dated as
of July 16, 2004 (the “Exchange Agreement”), pursuant to which, among other
things, the Company agreed to issue to King shares of common stock, par value
$0.01 per share, of the Company, in exchange for King’s agreement to terminate
certain agreements between the parties and in consideration for King’s
willingness to permit the Company to make offers of employment to certain
employees of King and its affiliates;

     WHEREAS, the parties have agreed that the Company will grant shelf and
piggyback registration rights with respect to the shares of Common Stock (as
defined hereafter) issued by the Company pursuant to the Exchange Agreement and
with respect to all other shares of Common Stock held by King as of the date
hereof; and

     WHEREAS, the Company and King have agreed to enter into this Agreement as
a condition to the closing of the Exchange Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements of the parties contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

		
	 	1.     Definitions.

     The following terms as used herein shall have the following meanings:

                  
  “Business Day” means a day other than Saturday, Sunday or any day on which
banks located in the State of Maryland or the Commonwealth of Pennsylvania are
authorized or obligated by law to close.

                 
   “Commission” means the Securities and Exchange Commission and any other
similar or successor agency of the federal government then administering the
Securities Act or the Exchange Act.

                
    “Common Stock” means the Common Stock, par value $.01 per share, of the
Company.

 

 

                
    “Exchange Act” means the Securities Exchange Act of 1934, as amended, or
any similar federal statute then in effect, and any reference to a particular
section thereof shall include a reference to the comparable section, if any, of
any such similar federal statute, and the
rules and regulations thereunder.

                
    “Holder” or “Holders” shall mean King and the other beneficial owners (who
are permitted transferees) from time to time of Registrable Securities, but in
each case only so long as each such Person continues to hold any Registrable
Securities.

                 
   “Initiating Holder” has the meaning specified in Section 3.2(a).

                 
   “July 2004 Registration Rights Agreements” shall mean (i) the Registration
Rights Agreement of even date herewith by and among the Company and the
purchasers of the Company’s senior convertible notes being issued on the date
hereof and (ii) the Common Stock Purchase Agreement dated as of July 16, 2004,
between the Company and Joseph R. Gregory; provided, that such agreements shall
not be amended, nor shall any right thereunder be waived, by the Company,
without the prior written consent of King.

                 
   “Person” means any individual, corporation, partnership, limited liability
company or partnership, association, trust or other entity or organization,
including a government or a political subdivision or an agency or
instrumentality thereof.

                 
   “Piggyback Registration Statement” means a registration statement of the
Company filed pursuant to Section 3.2 and all amendments and supplements to
such registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

                 
   “Plan of Distribution” has the meaning specified in Section 3.1(b).

                 
   “Prospectus” means the prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any of the Registrable Securities covered by a Registration
Statement and by all other amendments and supplements to the prospectus,
including pre-effective amendments and post-effective amendments to a
Registration Statement and all material incorporated by reference in such
prospectus.

                 
   “Registered Securities” means the securities covered by a Registration
Statement.

                 
   “Registrable Securities” means (a) the shares of Common Stock issued

2

 

to
King pursuant to the Exchange Agreement (including, for purposes of
clarification, the “Exchange Shares” and the “Sales Force Shares”, each as
defined in the Exchange Agreement) or held as of the date hereof by King and
(b) any additional shares of Common Stock received by the Holders with respect
to the shares referred to in clause (a) pursuant to a subsequent stock split,
stock dividend or other recapitalization of the Company. For purposes of this
Agreement, such shares of Common Stock shall cease to be Registrable Securities
when (i) a registration statement covering such shares of Common Stock has been
declared effective under the Securities Act and such shares of Common Stock
have been sold or disposed of pursuant to such effective registration statement
or (ii) such shares of Common Stock have been distributed to the public
pursuant to Rule 144 under the Securities Act.

                  
  “Registration Statement” means the Shelf Registration Statement or a
Piggyback
Registration Statement, as the case may be.

                  
  “Requesting Holder” has the meaning specified in Section 3.2(a).

                  
  “Securities Act” means the Securities Act of 1933, as amended, or any
similar federal statute then in effect, and any reference to a particular
section thereof shall include a reference to a comparable section, if any, of
any such similar federal statute, and the rules and regulations thereunder.

                  
  “Shelf Registration” means the registration of Registrable Securities
effected pursuant to Section 3.1.

                  
  “Shelf Registration Effective Date” means, with respect to the Shelf
Registration Statement, the date on which the Shelf Registration Statement is
declared effective by the Commission.

                  
  “Shelf Registration Period” means, with respect to the Shelf Registration
Statement, the shorter of (a) the period from and including the Shelf
Registration Effective Date to and including the Shelf Registration Termination
Date or (b) the period from and including the Shelf Registration Effective Date
to and including the date on which all of the Holders of the Registrable
Securities covered by the Shelf Registration Statement shall have disposed of
such Registrable Securities.

                  
  “Shelf Registration Statement” means a shelf registration statement of the
Company filed pursuant to the provisions of Section 3.1 which covers the
Registrable Securities on an appropriate form under Rule 415 of the Securities
Act, or any similar rule that may be adopted by the Commission, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.

3

 

                 
   “Shelf Registration Termination Date” means, with respect to the Shelf
Registration Statement, the date on which all of the Registrable Securities
covered by the Shelf Registration Statement may be sold by the respective
Holders thereof pursuant to Rule 144(k) under the Securities Act.

                 
   “Transfer” means to sell, transfer, assign, distribute or similarly
voluntarily dispose of any Common Stock, or to enter into any agreement,
arrangement or option for the sale, transfer, assignment or similar voluntary
disposition of any Common Stock, or to engage in any direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps
(including on a total return basis), and sales and any other similar
transactions whether or not having the effect of hedging any position in the
Common Stock; provided, that the following shall not be deemed to constitute a
“Transfer”: (a) any sale, transfer, assignment, distribution or similar
voluntary disposition of Common Stock to a wholly-owned direct or indirect
subsidiary of a Holder; (b) any sale, transfer, assignment distribution or
similar voluntary disposition of Common Stock pursuant to a merger or
consolidation in which the Company is a constituent corporation; (c) any sale,
transfer, assignment, distribution or similar voluntary disposition of Common
Stock pursuant to a bona fide tender offer or exchange offer; (d) any sale,
transfer, assignment, distribution or similar voluntary disposition of Common
Stock pursuant to a
business combination or other sale of or involving the Company; (e) any
sale, transfer, assignment, distribution or similar voluntary disposition of
Common Stock in connection with the pledge of any Common Stock under a Holder’s
credit facility, or the enforcement of remedies under a Holder’s credit
facility; or (f) any sale, transfer, assignment, distribution or similar
voluntary disposition of Common Stock pursuant to a merger, consolidation,
business combination or other sale of or involving such Holder.

	
	2.     Effectiveness of Agreement.

     This Agreement shall become effective on the date hereof.

	
	3.     Registration.

     3.1     Shelf Registration Statement.

                 
   (a)     The Company shall file a Shelf Registration Statement with the
Commission not later than thirty (30) days following the date hereof, and shall
use commercially reasonably efforts to cause the Registration Statement to be
declared effective by the Commission as soon as reasonably practicable
thereafter. The Company shall promptly notify the Holders of the date and time
of declaration of effectiveness of the Shelf Registration Statement.

                 
   (b)     The Shelf Registration Statement shall cover the offer and
sale of the
Registrable Securities in accordance with the methods of distribution

4

 

included
in the plan of distribution substantially in the form attached to this
Agreement as Exhibit A (the “Plan of
Distribution”). The Plan of Distribution
shall be included in the Shelf Registration Statement and shall not be modified
without the written consent of the holder of a majority of the Registrable
Securities.

     3.2     Piggy-Back
Registration Statements.

                    (a)     Whenever the Company shall propose to file a registration statement
under the Securities Act relating to the public offering of Common Stock for
the Company’s own account (other than pursuant to a registration statement on
Form S-4 or Form S-8 or any successor forms, or filed in connection with an
exchange offer or an offering of securities solely to existing stockholders or
employees of the Company) or for the account of any holder of Common Stock (the
“Initiating Holder”) and on a form and in a manner that would permit
registration of Registrable Securities for sale to the public under the
Securities Act, the Company shall (i) give written notice at least fifteen (15)
Business Days prior to the filing thereof to each Holder of Registrable
Securities then outstanding, specifying the approximate date on which the
Company proposes to file such registration statement and advising such Holder
of its right to have any or all of the Registrable Securities then held by such
Holder included among the securities to be covered thereby and (ii) at the
written request of any such Holder given to the Company within eight (8)
Business Days after such Holder’s receipt of written notice from the Company,
include among the securities covered by such registration statement the number
of Registrable Securities which such Holder (the “Requesting
Holder”) shall
have requested be so included (subject, however, to reduction in accordance
with Section 3.2(b)).

                    (b)     Each Holder of Registrable Securities desiring to participate in an
offering pursuant to Section 3.2(a) may include shares of Common Stock in any
registration statement relating to such offering to the extent that the
inclusion of such shares of Common Stock shall not reduce the number of shares
of Common Stock to be offered and sold by the Company or any Initiating Holder
pursuant thereto. If the lead managing underwriter selected for an
underwritten offering pursuant to Section 3.2(a) determines that marketing
factors require a limitation on the number of shares of Common Stock to be
offered and sold by Requesting Holders in such offering, there shall be
included in the offering only that number of shares of Common Stock, if any,
that such lead managing underwriter reasonably and in good faith believes will
not jeopardize the success of the offering of all the shares of Common Stock
that the Company desires to sell for its own account or that the Initiating
Holder desires to sell for its own account, as the case may be. In such event
and provided the lead managing underwriter has so notified the Company in
writing, the shares of Common Stock, including the Registrable Securities, to
be included in such offering shall be allocated in accordance with the
following priorities: first, among the shares of Common Stock proposed to be

5

 

included for the account of the Company or the Initiating Holder, as the case
may be; second, among the shares of Common Stock requested to be included in
such offering by holders entitled to registration rights pursuant to the July
2004 Registration Rights Agreements; third, among the Registrable Securities
held by all Requesting Holders, such number of Registrable Securities to be
allocated on a pro rata basis based on the aggregate number of Registrable
Securities that each Requesting Holder has requested to be so included in such
offering; and fourth, among the shares of Common Stock held by holders of any
other Common Stock in accordance with the terms of their respective
registration rights, if any.

           
         (c)     Nothing in this
Section 3.2 shall create any liability on the part of
the Company to the Holders of Registrable Securities if the Company for any
reason should decide not to file a registration statement proposed to be filed
under Section 3.2(a) or to withdraw such registration statement subsequent to
its filing, regardless of any action whatsoever that a Holder may have taken,
whether as a result of the issuance by the Company of any notice hereunder or
otherwise.

           
         (d)     No Holder of
Registrable Securities may participate in any
underwritten offering pursuant to this Section 3.2 unless such Holder (i)
agrees to sell such Holder’s securities on the basis provided in any
underwriting arrangements approved by the Company in its reasonable discretion
and (ii) completes and executes all questionnaires, powers of attorney, custody
agreements, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.

     3.3     
Registration Procedures. When the Company causes the registration of
the Registrable Securities pursuant to a Registration Statement, the Company
shall:

                    (a)     prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities on any registration form adopted by the
Commission for which the Company then qualifies or which counsel for the
Company shall deem appropriate, and which form shall be available for the sale
of the Registrable Securities in accordance with the intended methods of
distribution thereof, and use commercially reasonably efforts to cause such
Registration Statement to become and remain effective; provided, that at least
five (5) Business Days prior to filing a Registration Statement or Prospectus
or any amendment or
supplement thereto, the Company shall furnish to a single counsel selected
by the Holders of the Registrable Securities included or to be included in such
Registration Statement copies of such Registration Statement or Prospectus (or
amendment or supplement) as proposed to be filed (including, upon the request
of such counsel, documents to be incorporated by reference therein) which
documents shall be subject to the reasonable review and comments of such
counsel and the Holders of the Registrable Securities included or to be
included in such Registration Statement during such five-Business-Day period,
and the Company shall not file any

6

 

Registration Statement, any Prospectus or
any amendment or supplement thereto (or any such documents incorporated by
reference) containing any statements with respect to any such Holder to which
such Holder shall reasonably object in writing;

           
         (b)     subject to the terms
of Section 4, use its commercially reasonably
efforts to keep the Shelf Registration Statement continuously effective during
the Shelf Registration Period in order to permit the Prospectus forming a part
thereof to be usable and deliverable by the Holders for the Shelf Registration
Period;

           
         (c)     use its commercially
reasonably efforts to cause the Registered
Securities to be registered and qualified under the securities laws of such
jurisdictions as shall reasonably be requested by the Holders to enable them to
consummate the sale or disposition of the Registered Securities;
provided, that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business, to subject itself to taxation or to file a
general consent to service of process in any such jurisdiction in which it is
not otherwise required to do so;

           
         (d)     furnish to each Holder,
as applicable, without charge, such number of
copies of each preliminary prospectus and of the Prospectus as such Holder may
reasonably request in order to facilitate the sale or disposition of the
Registered Securities;

           
         (e)     subject to the
requirements of Section 4(c), if at any time when a
prospectus is required by the Securities Act to be delivered in connection with
the offering or sale of the Registered Securities, an event occurs or a fact
exists as a result of which it is necessary, in the opinion of the Company, to
amend the Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, or if it shall be necessary, in the
opinion of the Company, at any such time to amend the Registration Statement or
amend or supplement the Prospectus to comply with the regulations of the
Commission thereunder, (i) promptly notify each Holder of the occurrence of
such event or existence of such fact or requirements and, consistent with the
terms of Section 4, direct each Holder to cease making offers and sales of the
Registered Securities pursuant to the Registration Statement or deliveries of
the Prospectus contained therein for any purpose and (ii) prepare and file with
the Commission in a timely manner such amendment or supplement as may be
necessary or appropriate to correct such untrue statement or omission or to
make the Registration Statement or the Prospectus comply with such
requirements;

                    (f)     promptly notify each Holder when the Registration Statement or

7

 

any
post-effective amendment to the Registration Statement shall have become
effective, or when any
supplement to the Prospectus or any amended Prospectus shall have been
filed, and furnish to each Holder copies of any amendment of or supplement to
the Prospectus so that, as thereafter delivered to purchasers of the Registered
Securities, the Prospectus shall not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances then existing;

                    (g)     promptly notify the Holders of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any Prospectus, or of the
suspension of the qualification of the Registered Securities for offer or sale
in any jurisdiction, or of the institution or threatening of any proceedings
for any of such purposes, and (ii) the lifting of any such order or suspension
or resolution of any such proceedings that permits the resumption of offers and
sales of the Registered Securities;

                    (h)     in the event of the issuance of any stop order of which the Company is
aware suspending the effectiveness of the Registration Statement, or of any
order suspending or preventing the use of any related Prospectus or suspending
the qualification of any Registrable Securities included in the Registration
Statement for sale in any jurisdiction, use commercially reasonably efforts to
obtain at the earliest practicable time the withdrawal of such stop order or
other order;

                    (i)     provide a transfer agent and registrar for all the Registered
Securities covered by any Registration Statement not later than the effective
date of such Registration Statement;

                    (j)     upon the request of any Holder, promptly amend the Shelf Registration
Statement or take such other action as may be necessary to de-register, remove
or withdraw all or any portion of the Holder’s Registrable Securities from the
Shelf Registration Statement, as requested by such Holder;

                    (k)     not later than five (5) Business Days after the effective date of the
applicable Registration Statement, provide a CUSIP number for all Registered
Securities covered by such Registration Statement and, unless such Registrable
Securities shall be registered in book-entry form, provide the applicable
transfer agent and registrar for such Registered Securities with printed
certificates for the Registered Securities, which certificates shall be in a
form eligible for deposit with The Depository Trust Company;

                    (l)     if requested in writing by Holders holding a majority of the
Registered Securities included in such Registration Statement, prepare and file
with the Commission amendments and post-effective amendments to such
Registration Statement and amendments and supplements to the Prospectus used

8

 

in
connection with such Registration Statement as shall be necessary to enable any
permitted transferee of Registered Securities included in such Registration
Statement who becomes a Holder under this Agreement to resell such Holder’s
Registered Securities pursuant to such Registration Statement, to the extent
that such amendments, post-effective amendments and supplements shall be
required for such transferee-Holders to be named as selling stockholders in
such Registration Statement and Prospectus;

                    (m)     cause all Registered Securities covered by the Registration Statement
to be listed on any securities exchange or automated quotation system on which
the Common Stock is then listed, if such Registered Securities are not already
so listed and if such listing is then permitted under the rules of such
securities exchange or automated quotation system; and

                    (n)     use commercially reasonably efforts to take all other steps in
accordance with applicable law necessary to effect the registration of the
Registrable Securities contemplated hereby.

	
	4.     Agreements of Holders.

                    (a)     As a condition to the Company’s obligation under this Agreement to
cause the Shelf Registration Statements to be filed and the Registrable
Securities of any Holder to be included in any Registration Statement, such
Holder shall provide to the Company, in writing, with such information,
including, without limitation, the information required by Items 507 and 508 of
Regulation S-K under the Securities Act (or any successor provisions), as may
reasonably be required by the Company in order to comply with applicable
provisions of the Securities Act and the Exchange Act in connection with any
registration of Registrable Securities.

           
         (b)     If at any time when a
Prospectus is required by the Securities Act to
be delivered in connection with the offering or sale of the Registered
Securities of a Holder, an event occurs or a fact exists affecting the Plan of
Distribution as it relates to such Holder or affecting the information provided
by such Holder pursuant to Section 4(a) hereof, such that it is necessary to
amend the Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, then such Holder shall (i) promptly
notify the Company of the occurrence of such event or existence of such fact
and (ii) provide the Company with such information as may be necessary for the
Company to comply with its obligations as set forth in
Section 3.3(e) hereof.

                    (c)     Each Holder agrees that it shall not make offers of or sell the

9

 

Registered Securities pursuant to any Registration Statement or make deliveries
of the Prospectus contained therein for any purpose (i) after receipt by such
Holder of the notice to cease making such offers and sales and such deliveries
which is furnished by the Company pursuant to
Section 3.3(e) until delivery by
the Company to such Holder of copies of any amendment of or supplement to the
Prospectus pursuant to Section 3.3(e) or (ii) after receipt by such Holder of
the notice furnished by the Company pursuant to
Section 3.3(g)(i) until
delivery by the Company to such Holder of the notice referred to in
Section 3.3(g)(ii).

                    (d)     Each Holder agrees that for a period of one (1) year after the date of
the Exchange Agreement, such Holder shall not Transfer any Registrable
Securities.

	
	5.     Registration Expenses.

                    (a)     The Company shall pay and bear all costs and expenses incident to the
performance of its obligations under this Agreement, including the following:

               (i)     expenses related to the preparation and printing of each
Registration Statement (including financial statements and exhibits), any
preliminary prospectuses and the Prospectus, and the cost of furnishing
copies thereof to the Holders, as the case may be;

               (ii)     all Commission, self-regulatory organization, stock exchange
and other registration and filing fees and listing fees;

               (iii)     expenses related to the preparation, printing and distribution
of certificates representing the Registered Securities and other
documents relating to the Company’s performance of and compliance with
the terms of this Agreement;

               (iv)     the fees and disbursements of the Company’s counsel and
independent accountants; and

               (v)     expenses related to the qualification of the Registered
Securities under United States and other applicable securities laws.

                    (b)     Each Holder shall pay and bear all costs and expenses incident to the
delivery of the Registered Securities to be sold by such Holder, including any
stock transfer taxes payable upon the sale of such Registered Securities to the
purchasers thereof, any discounts or commissions payable to brokers, dealers or
agents in connection therewith, and the fees and disbursements of counsel to
such Holder.

10

 

	
	6.     Indemnification;
Contribution.

     6.1     
Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Holder, its officers, directors, agents, partners, trustees
and stockholders and each Person who controls such Holder (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) against
all losses, claims, damages, liabilities and expenses (including reasonable
attorneys’ fees, disbursements and expenses, as incurred) incurred by such
party pursuant to any actual or threatened action, suit, proceeding or
investigation arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus or preliminary Prospectus or any amendment or supplement to any of
the foregoing, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
(in the case of a Prospectus or a preliminary Prospectus, in the light of the
circumstances then existing) not misleading, except in each case insofar as the
same arise out of or are based upon any such untrue statement or omission made
in reliance on and in conformity with information with respect to such Holder
or other indemnified party furnished in writing to the Company by such Holder
or other indemnified party or its counsel expressly for use therein. In
connection with an underwritten offering, the Company shall indemnify the
underwriters thereof, their officers, directors, agents, partners, trustees and
stockholders and each Person who controls such underwriters (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) to the
same extent as provided above with respect to the indemnification of the
Holders. Notwithstanding the foregoing provisions of this
Section 6.1, the
Company shall not be liable to any Person who participates as an underwriter in
the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) under the indemnity agreement in this
Section 6.1 for any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense that arises out of such Person’s failure to send or deliver a copy of
the final Prospectus to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of the Registrable Securities to such Person if such
statement or omission was corrected in such final Prospectus and the Company
has previously furnished copies thereof to such Holder or other Person in
accordance with this Agreement.

     6.2     
Indemnification by the Holders. Each Holder agrees severally and not
jointly to indemnify and hold harmless the Company and any underwriter, as the
case may be, and their respective directors, officers, agents, partners,
trustees, stockholders and controlling Persons (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) against any losses,
claims, damages, liabilities and expenses (including reasonable attorneys’
fees, disbursements and expenses, as incurred), incurred by such party pursuant
to any

11

 

actual or threatened action, suit, proceeding or investigation arising
out of or based upon any untrue or alleged untrue statement of a material fact
contained in, or any omission or alleged omission of a material fact required
to be stated in, any Registration Statement, any Prospectus or preliminary
Prospectus or any amendment or supplement to any of the foregoing or necessary
to make the statements therein (in case of the Prospectus or a preliminary
Prospectus, in the light of the circumstances then existing) not misleading,
but only to the extent that any such untrue statement or omission is made in
reliance on and in conformity with information furnished in writing to the
Company by such Holder or its counsel specifically for inclusion therein;
provided, that the liability of each Holder hereunder shall not in any event
exceed the net proceeds (after deduction of underwriting discounts and
commissions and offering expenses payable by such Holder) received by such
Holder from the sale of Registrable Securities covered by the applicable
Registration Statement.

     6.3     
Indemnification Proceedings. Any Person entitled to indemnification
under Section 6.1 or Section 6.2 agrees to give prompt written notification to
the indemnifying party after the receipt by such indemnified party of any
written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such indemnified
party may claim indemnification or contribution pursuant to this Agreement;
provided, that failure to give such notification shall not affect the
obligations of the indemnifying party pursuant to
Section 6.1, Section 6.2 or
Section 6.4 except to the extent the indemnifying party shall have been
actually prejudiced as a result of such failure; provided,
further, that if the
indemnified party shall fail to provide such notice to the indemnifying party,
then the indemnifying party shall not be required to pay the costs and expenses
of such indemnified party incurred by such indemnified party during the period
commencing on the date such indemnified party was required to provide such
notice to the indemnifying party and ending on the date that the indemnifying
party has knowledge of such action, suit, proceeding or investigation. In case
any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of its
election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under these indemnification provisions
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless in the reasonable
judgment of any indemnified party a conflict of interest is likely to exist,
based on the written opinion of counsel, between such indemnified party and any
other of such indemnified parties with respect to such claim. In the event of
such a conflict of

12

 

interest, the indemnifying party shall not be liable for the
fees and expenses of (a) more than one counsel for all Holders of Registrable
Securities who are indemnified parties, which counsel shall be selected by the
Holders of a majority of the Registrable Securities covered by the applicable
Registration Statement who are indemnified parties (and which selection shall
be reasonably satisfactory to the Company), (b) more than one counsel for any
underwriters or (c) more than one counsel for the Company in connection with
any one action or separate but similar or related actions. An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
shall not be obligated to pay the fees and expenses of more than one counsel
for all parties indemnified by such indemnifying party with respect to such
claims, unless in the reasonable judgment of any indemnified party, based on
the written opinion of counsel, a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such claim. In the event of such a conflict of interest, the indemnifying
party shall be obligated to pay the fees and expenses of such additional
counsel or counsels; provided, that the indemnifying party shall not be liable
for the fees and expenses of (x) more than one counsel for all Holders of
Registrable Securities who are indemnified parties, which counsel shall be
selected by the Holders of a majority of the Registrable Securities covered by
the applicable Registration Statement who are indemnified parties (and which
selection shall be reasonably satisfactory to the Company), (y) more than one
counsel for any underwriters or (z) more than one counsel for the Company in
connection with any one action or separate but similar or related actions. No
indemnifying party, in defense of any such action, suit, proceeding or
investigation, shall, except with the consent of each indemnified party,
consent to the entry of any judgment or entry into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such action, suit, proceeding or investigation to the extent the same is
covered by the indemnity obligations set forth in
Section 6.1 or Section 6.2.
No indemnified party shall consent to entry of any judgment or enter into any
settlement without the consent of each indemnifying party, which consent shall
not be unreasonably withheld or delayed.

     6.4     
Contribution. If the indemnification from the indemnifying party
provided for in Section 6.1 or Section 6.2 is unavailable to an indemnified
party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified party in connection
with the actions which resulted in such losses, claims, damages, liabilities
and expenses, as well as any other relevant equitable considerations;
provided,
that the liability of each Holder hereunder shall not in any event exceed the
net proceeds (after deduction of underwriting discounts and

13

 

commissions and
offering expenses payable by such Holder) received by such Holder from the sale
of Registrable Securities covered by the applicable Registration Statement.
The relative fault of such indemnifying party and indemnified party
shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 6.3, any legal or other fees and expenses
reasonably incurred by such indemnified party in connection with any
investigation or proceeding. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation.

     6.5     
Other Liability. The provisions of Sections 6.1,
6.2, 6.3 and 6.4
shall be in addition to any liability which any indemnifying party may have to
any indemnified party and shall survive the termination of this Agreement.

	
	7.     Miscellaneous.

     7.1     
Assignment. Subject to the restrictions on transfer set forth in
Section 4(d), the registration rights contained in
Section 3 may be transferred
by a Holder in connection with the transfer by such Holder of the Registrable
Securities to which such registration rights relate to any transferee who,
immediately following such transfer, holds at least twenty-five percent (25%)
of the outstanding Registrable Securities originally issued to King. As a
condition to the effectiveness of any such transfer of registration rights
hereunder, the transferee shall execute a counterpart of, and shall become a
party to, this Agreement.

     7.2     
Reports Under the Exchange Act. The Company agrees to:

                    (a)     file with the Commission in a timely manner all reports and other
documents required to be filed by the Company under the Exchange Act; and

                    (b)     furnish to any Holder promptly upon request a written statement by the
Company that it has complied with the current public information and reporting
requirements of Rule 144 under the Securities Act.

14

 

     7.3     
Mergers, etc.
The Company agrees that, as a condition to any merger,
consolidation or the sale of all or substantially all of its assets in exchange
for securities of another company, it shall use its commercially reasonable
efforts in light of the circumstances then existing to require the surviving,
consolidated or purchasing corporation to enter into an agreement to register
the securities of such surviving, consolidated or purchasing corporation, to be
received by the Holders, on substantially the same terms and provisions as are
provided in this Agreement.

     7.4     
No Inconsistent Agreements. The Company
shall not hereafter enter into any agreement with respect to its securities
which is inconsistent with or, except for the July 2004 Registration Rights
Agreements, which in any way shall limit the registration rights granted to the
Holders in this Agreement without the consent of the Holders of a majority of
the Registrable Securities.

     7.5     
Notices. All notices, demands or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given when
(a) delivered personally to the recipient, (b) telecopied to the recipient
(with hard copy sent to the recipient by reputable overnight courier service
(charges prepaid) that same day) if telecopied before 5:00 p.m. Eastern time on
a Business Day, and otherwise on the next Business Day, or (c) one Business Day
after being sent to the recipient by reputable overnight courier service
(charges prepaid). Such notices, demands and other communications shall be
sent to the following Persons at the following addresses:

To the
Company:

8320 Guilford Road

Columbia, Maryland 21046

Attn: Chief Executive Officer

Telecopy: (301) 854-3902

with a copy to:

Ropes & Gray LLP

45 Rockefeller Plaza

New York, New York 10111

Attn: Sanford B. Kaynor, Jr., Esq.

Telecopy: (212) 841-5725

15

 

To
King:

501 Fifth Street

Bristol, Tennessee 37620

Attn: Executive Vice President of Legal Affairs

and General Counsel

Telecopy: (423) 989-6282

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
Notice to any other Holder shall be addressed to such Holder at the address set
forth for such Holder in the Company’s records or at such other address and to
the attention of such other Person as such Holder may designate by written
notice to the Company.

     7.6     
Counterparts. This Agreement may be executed in one or more
counterparts (including by facsimile transmission), each of which shall be
deemed an original and all of which taken together shall constitute one and the
same agreement.

     7.7     
Headings. Section headings are inserted
herein for convenience only and do not form a part of this Agreement.

     7.8     
Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware. The parties
irrevocably submit to the exclusive jurisdiction of any court located in the
City of Wilmington, Delaware or the United States Federal Court sitting in the
District of Delaware over any suit, action or proceeding arising out of or
relating to this Agreement. Each of the parties consents to process being
served in any such suit, action or proceeding by serving a copy thereof upon
the agent for service of process, provided that to the extent lawful and
possible, written notice of such service will also be mailed to such party, as
the case may be. Each of the parties agrees that such service will be deemed
in every respect effective service of process upon such party in any such suit,
action or proceeding and will be taken and held to be valid personal service
upon such party. Nothing in this subsection will affect or limit any right to
serve process in any manner permitted by law, or to enforce in any lawful
manner a judgment obtained in a court described in this
Section 7.8 in any
other jurisdiction. Each of the parties waives any right it may have to assert
the doctrine of forum non conveniens or to object to venue to the extent any
proceeding is brought in accordance with this Section 7.8.

     7.9     
Severability. In the event that any one or more of the
provisions
contained herein, or the application thereof in any circumstances, is held
invalid,

16

 

illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereunder shall be enforceable to the fullest extent permitted by law.

     7.10     
Entire Agreement; Amendment. This Agreement and the Exchange
Agreement contain the entire agreement among the parties with respect to the
transactions contemplated herein, and supersede all prior written agreements
and negotiations and oral understandings, if any, with respect to their subject
matter. Except as otherwise expressly provided herein, the provisions of this
Agreement may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if the
Company has obtained the written consent of the Holders of a majority of the
Registrable Securities; provided, that if any such amendment, modification or
waiver would adversely affect any Holder of Registrable Securities relative to
the Holders of Registrable Securities voting in favor of such amendment,
modification, or waiver, such amendment, modification or waiver shall also
require the written consent of the holders of a majority of the Registrable
Securities held by all Holders so adversely affected; and
provided, further,
that if such amendment, modification or waiver is to a provision in this
Agreement that requires a specific vote to take an action thereunder or to take
an action with respect to the matters described therein, such amendment,
modification or waiver shall not be effective unless such vote is obtained with
respect to such amendment, modification or waiver. No other course of dealing
between the Company and any Holder or any delay in exercising any rights
hereunder or the Company’s certificate of incorporation shall operate as a
waiver of any rights of any such Holder.

     7.11     
Specific Performance. Without limiting the rights of each party
hereto to pursue all other legal and equitable rights available to such party
for any other parties’ failure to perform their obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and that
each
of them, respectively, to the extent permitted by applicable law, shall be
entitled to specific performance, injunctive relief or other equitable remedies
in the event of any such failure, without bond or other security being
required.

[The remainder of this page intentionally left blank.]

17

 

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

	 	 	 	 	 
	 	COMPANY:

NOVAVAX, INC.

 	 
	 	By:  	/s/ Nelson Sims
 	 
	 	Name:  	Nelson Sims	 
	 	Title:  	President and Chief Executive Officer
	 
	 	KING:
	 
	 	KING PHARMACEUTICALS, INC.
	 
	 	By:  	/s/ Brian A. Markison
 	 
	 	Name:  	Brian A. Markison	 
	 	Title:  	President and Chief Executive Officer<PAGE>

                                                                    EXHIBIT 10.1

                    EMPLOYMENT AND NON-COMPETITION AGREEMENT

      THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "Agreement") is made
effective as of January 1, 2004, between HOME INTERIORS & GIFTS, INC., a Texas
corporation (together with its successors and assigns, the "Company"), and
MARY-KNIGHT TYLER (the "Executive").

      WHEREAS, the Company desires to employ the Executive, and the Executive
desires to be employed by the Company on the terms and conditions set forth
herein;

      NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

      1.    EMPLOYMENT PERIOD. The Company agrees to employ the Executive, and
the Executive agrees to be employed by the Company, in accordance with the terms
and conditions of this Agreement, for the period commencing as of the date of
this Agreement and continuing until December 31, 2004 (the "Employment Period");
provided, however, that such Employment Period (i) shall be extended for
successive terms of one (1) year unless either party advises the other in
writing, at least one hundred twenty (120) days prior to the end of the initial
term, or any annual extension thereof, that it will not agree to extend this
Agreement, and (ii) may be terminated in accordance with Section 3 and Section
4, below.

      2.    TERMS OF EMPLOYMENT.

            (a)   Position and Duties.

                  (i)   During the Employment Period, the Executive shall have
            the title of Senior Vice President of Operations of the Company and
            shall report to the President of the Company or such other member of
            executive management as shall be designated by the President. The
            Executive shall have such powers and duties as may from time to time
            be assigned or delegated to her by appropriate officers of the
            Company, or, in the absence of such assignment or delegation, shall
            have such powers and duties as are normally associated with and
            inherent in such position.

                  (ii)  During the Employment Period, excluding any periods of
            vacation and sick leave to which the Executive is entitled, the
            Executive agrees to devote such time as shall be necessary (which
            shall not be less than forty (40) hours during a regular work week),
            up to and including substantially all of her business time, to the
            business and affairs of the Company and, to the extent necessary to
            discharge the responsibilities assigned to the Executive hereunder,
            to use the Executive's reasonable best efforts to perform
            faithfully, effectively and efficiently such responsibilities. The
            Executive will use her reasonable best efforts to promote the
            success of the Company's business, and will cooperate fully with the
            Board of Directors and executive management of the Company.
            Notwithstanding the foregoing, nothing herein prohibits Executive
            from serving on corporate, civic or charitable board or committee,
            or from delivering lectures and fulfilling speaking engagements, or
            managing personal investments; provided

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 1

<PAGE>

            that such activities do not significantly interfere with Executive's
            obligations hereunder.

            (b)   Compensation.

                  (i)   Base Salary. During the Employment Period, the Executive
            shall receive, at such intervals and in accordance with such Company
            policies as may be in effect from time to time, an annual salary
            (pro rata for any partial year) equal to One Hundred Ninety Thousand
            and No/100 Dollars ($190,000.00), payable in equal installments in
            accordance with the Company's normal practices, but no less often
            than monthly (the "Annual Base Salary"), which Annual Base Salary
            shall be subject to increase, as determined in the sole discretion
            of the Board of Directors of the Company.

                  (ii)  Annual Bonus. The Executive shall be eligible to
            participate in the Company's Key Employee Bonus Plan applicable to
            senior executives of the Company (the "Annual Bonus") for the fiscal
            year of the Company ending December 31, 2004 and thereafter during
            the term of this Agreement, as may be extended from year to year, as
            approved by the Board of Directors of the Company in good faith, and
            subject to such other criteria as may be recommended by management
            and established by the Board of Directors of the Company from time
            to time. The Annual Bonus (or portion thereof) shall be in an amount
            up to forty percent (40%) of Executive's Annual Base Salary, paid in
            cash promptly following delivery to the Board of Directors of the
            Company of audited financial statements of the Company for the
            fiscal year for which the Annual Bonus (or pro rated portion) is
            earned or awarded, unless electively deferred by the Executive
            pursuant to any deferral programs or arrangements that the Company
            may make available to the Executive.

            (c)   Incentive, Savings and Retirement Plans. During the term of
      the Executive's employment, the Executive shall be entitled to participate
      in all incentive, savings, and retirement plans, practices, policies and
      programs applicable generally to management-level employees of the Company
      ("Investment Plans") as determined by and at the discretion of the Board
      of Directors of the Company.

            (d)   Welfare Benefit Plans. During the term of the Executive's
      employment, the Executive and/or the Executive's family, as the case may
      be, shall be eligible for participation in and shall receive all benefits
      under welfare benefit plans, practices, policies and programs ("Welfare
      Plans") provided by the Company (including, without limitation, medical,
      prescription, dental, disability, employee life, group life, accidental
      death and travel accident insurance plans and programs) to the extent
      offered and applicable generally to other management-level employees of
      the Company and to the extent the Executive is eligible under the terms of
      the Welfare Plans. In addition, during the term of Executive's employment,
      the Company shall (A) pay all medical, dental and vision insurance costs
      for the Executive and the Executive's family, including all premiums and
      co-payments, and (B) increase the Executive's and family members' annual
      maximum dental covered expenses from $1,000 to $5,000.

            (e)   Expenses. During the term of the Executive's employment, the
      Executive shall be entitled to receive prompt reimbursement for all
      reasonable employment expenses incurred by the Executive at the request
      of, or on behalf of, the Company and in

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 2

<PAGE>

      performance of the Executive's duties under this Agreement, and in
      accordance with the policies, practices and procedures of the Company. The
      Executive must file expense reports with respect to such expenses in
      accordance with the Company's normal policies.

            (f)   Vacation and Holidays. During the term of the Executive's
      employment, the Executive shall be entitled to paid vacation of three (3)
      weeks per year and paid holidays in accordance with the plans, policies,
      programs and practices of the Company for its employees. Such vacation
      shall be taken at such time or times reasonably acceptable to the Company.

            (g)   Automobile. In addition to the other compensation to be
      provided to the Executive under this Agreement, the Company shall provide
      to the Executive reimbursement for the use of a vehicle. In satisfaction
      of this Section 2(g), the Company will pay to the Executive, in accordance
      with the Company's normal policies, during the Employment Period, the
      monthly payment of $800.00 for the Executive's use of her current vehicle.

            (h)   Physical Exam. During the term of the Executive's employment,
      the Company shall reimburse the Executive for all costs associated with
      Executive's physical exam at the Cooper Clinic or a similar facility;
      provided, that the Executive shall only be reimbursed for the costs of one
      such exam during each calendar year.

      3.    TERMINATION OF EMPLOYMENT.

            (a)   Death or Disability. The Executive's employment shall
      terminate automatically upon the Executive's death during the Employment
      Period. If the Disability of the Executive has occurred during the
      Employment Period (pursuant to the definition of Disability set forth
      below), the Company shall give to the Executive no less than thirty (30)
      days written notice in accordance with Section 11(b) hereof of its
      intention to terminate the Executive's employment based upon Disability.
      In such event, the Executive's employment with the Company shall terminate
      effective on the later of 30 days from the date specified in such notice
      or the date that Executive's disability benefits begin (the "Disability
      Effective Date"). For purposes of this Agreement, "Disability" shall mean
      the Executive's inability to perform her duties and obligations hereunder
      for a period of one hundred twenty (120) consecutive days or any one
      hundred twenty (120) days in any twelve (12) month period due to mental or
      physical incapacity as determined by a physician selected by the Company
      or its insurers and acceptable to the Executive or the Executive's legal
      representative (such agreement as to acceptability not to be withheld
      unreasonably).

            (b)   Termination by the Company. The Company may terminate the
      Executive's employment during the Employment Period with or without Cause.
      If termination by the Company is without Cause, the Company shall give
      Executive ten (10) days prior written notice of the Company's intent to do
      so. For purposes of this Agreement, "Cause" means: (i) the Executive's
      material breach of this Agreement or any other document, agreement or
      contract to which the Executive and the Company are a party, which
      constitutes a material nonperformance by the Executive of her obligations
      and duties hereunder or thereunder, as reasonably determined by the Board
      of Directors of the Company, which is not remedied within ten (10)
      business days after receipt of

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 3

<PAGE>

      written notice from the Company in accordance with Section 11(b),
      specifying such breach; (ii) the Executive's failure to adhere to any
      material written policy of the Company, which is not remedied within
      thirty (30) days after receipt of written notice from the Company
      specifying such failure; (iii) the Executive's appropriation (or attempted
      appropriation) of a material business opportunity of the Company,
      including, without limitation, attempting to secure or securing, any
      personal profit in connection with any transaction entered into on behalf
      of the Company; (iv) the Executive's commission of (or attempt to commit)
      an act of fraud, illegality, theft or dishonesty toward the Company in the
      course of employment with the Company that relates to the Company's
      assets, activities, operations or other employees; (v) the Executive's
      conviction of, the indictment for (or its procedural equivalent), or the
      entering of a guilty plea or plea of no contest or deferred adjudication
      with respect to, a felony, the equivalent thereof, or any other crime with
      respect to which imprisonment is a possible punishment; (vi) the
      Executive's absence from her duties without the consent of the Company's
      Board of Directors for more than ten (10) consecutive business days for
      reasons other than vacation authorized under this Agreement, illness or
      injury; (vii) a material breach by the Executive of Section 6 or Section 9
      hereof; or (viii) the failure of the Executive to carry out, or comply
      with, in any material respect any directive of the Board of Directors
      consistent with the terms of this Agreement, which is not remedied within
      thirty (30) days after receipt of written notice from the Company
      specifying such failure.

            (c)   Voluntary Termination by Executive. Notwithstanding anything
      in this Agreement to the contrary, the Executive's employment may be
      terminated during the Employment Period by the Executive for good reason
      or no reason, provided the Executive gives three (3) months prior written
      notice to the Company of the Executive's intention to do so.

            (d)   Termination for Good Reason. The Executive may terminate her
      employment at any time for Good Reason. For purposes of this Agreement,
      "Good Reason" shall mean (i) any reduction, approved by the Board of
      Directors without the Executive's written consent, in the Executive's
      title or the Executives' Base Salary other than under a circumstance that
      constitutes Cause; provided, that any such reduction or alteration in the
      Executive's title without the Executive's consent during the thirty-day
      cure period applicable to subparagraph (viii) of Section 3(b) shall not
      constitute Good Reason; (ii) any alteration, approved by the Board of
      Directors without the Executive's written consent, in the Executive's
      duties, which alteration results in duties that are not commensurate with
      Executive's title in businesses of similar size and complexity (it being
      understood that alterations in Executive's duties are contemplated during
      the term of this Agreement), other than under a circumstance that
      constitutes Cause; provided, that any such alteration in the Executive's
      duties without the Executive's consent during the thirty-day cure period
      applicable to subparagraph (viii) of Section 3(b) shall not constitute
      Good Reason; and (iii) a change, without the Executive's written consent,
      of more than fifty (50) miles in the office or location where the
      Executive is based. Notwithstanding the above, the occurrence of any of
      the events described above will not constitute Good Reason unless the
      Company fails to cure any such event within thirty (30) days after receipt
      from the Executive of the Notice of Termination (as defined in Section
      3(e)).

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 4

<PAGE>

            (e)   Notice of Termination. Any termination by the Company (for
      Cause or otherwise), or by the Executive, shall be communicated by Notice
      of Termination to the other party hereto given in accordance with Section
      1l(b).

            (f)   Date of Termination. "Date of Termination" means: (i) the date
      of receipt of a Notice of Termination, or any later date specified
      therein, and (ii) if the Executive's employment is terminated by reason of
      death or Disability, the date of death of the Executive or the Disability
      Effective Date, as the case may be.

      4.    OBLIGATIONS OF THE COMPANY UPON TERMINATION.

            (a)   Termination by the Company Other Than For Cause. If the
      Company terminates the Executive without Cause or in connection with death
      or Disability or fails to renew this Agreement beyond the initial term
      ending December 31, 2004, or any extension term, or if the Executive
      terminates this Agreement for Good Reason, the Company shall pay to the
      Executive: (i) in a lump sum in cash within thirty (30) days after the
      Date of Termination (1) the sum of the Executive's applicable Annual Base
      Salary through the Date of Termination to the extent not theretofore paid
      ("Accrued Obligations"), (2) any amount arising from the Executive's
      participation in, or benefits under, any Investment Plans ("Accrued
      Investments"), which amounts shall be payable in accordance with the terms
      and conditions of such Investment Plans, and (3) severance pay in an
      amount equal to twelve (12) months of the Executive's Annual Base Salary
      ("Severance Pay"); and (ii) any earned but unpaid Annual Bonus in respect
      of any full fiscal year ended prior to the date the Executive's employment
      is terminated, payable in a lump sum in cash at such time as such Annual
      Bonus otherwise would be payable ("Accrued Bonus"), but not a prorated or
      partial bonus with respect to the time period between the end of the
      previous full fiscal year and the date the Executive's employment is
      terminated.

            (b)   Termination by the Company for Death or Disability. If the
      Executive's employment is terminated by reason of the Executive's death or
      Disability during the Employment Period, the Company shall pay to her
      legal representatives: (i) in a lump sum in cash within thirty (30) days
      after the Date of Termination the aggregate Accrued Obligations; (ii) the
      Accrued Investments, which shall be payable in accordance with the terms
      and conditions of the Investment Plans; and (iii) any Accrued Bonus, which
      shall be payable at such time as such Annual Bonus otherwise would be
      payable. The Company shall have no further payment obligations to the
      Executive or her legal representatives under this Agreement.

            (c)   Termination by the Company for Cause or by Executive. If the
      Executive's employment shall be terminated by the Company for Cause or
      terminated by the Executive, during the Employment Period, the Company
      shall have no further payment obligations to the Executive other than for
      payment of Accrued Obligations (which shall be paid within thirty (30)
      days after the Date of Termination), Accrued Investments (which shall be
      payable in accordance with the terms and conditions of the Investment
      Plans) and Accrued Bonus (which shall be payable at such time as such
      Annual Bonus otherwise would be payable).

            (d)   Full Settlement; Mitigation. In no event shall the Executive
      be obligated to seek other employment or take any other action by way of
      mitigation of the amounts

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 5

<PAGE>

      payable to the Executive under any of the provisions of this Agreement,
      and such amounts shall not be reduced whether or not the Executive obtains
      other employment. The Company shall not be liable to the Executive for any
      damages in addition to the amounts payable under Section 4 arising out of
      the termination of the Executive's employment, for any reason, prior to
      the end of the Employment Period; provided, however, that the Company
      shall be entitled to seek damages from the Executive for any breach of
      Sections 6, 7, or 9 hereof or criminal misconduct.

      5.    OWNERSHIP OF INTELLECTUAL PROPERTY. Any and all inventions, trade
secrets, copyrights, patents or other intellectual property rights relating to
the Business (as defined below) prepared or created by the Executive during the
Employment Period (together with all extension and renewal rights), shall be
owned exclusively by the Company, its successors and assigns, absolutely and
forever, and for all uses and purposes whatsoever and free from the payment of
any royalty or compensation whatsoever to Executive. In the event any such items
may not, by operation of law, be deemed the property of the Company, the
Executive hereby assigns to the Company, for no additional consideration, all
rights, including intellectual property rights, in such items. The Executive
shall execute such documents, and provide such assistance as the Company may
reasonably request to give full effect to the provisions of this Section 5. This
provision shall survive the termination of this Agreement.

      6.    CONFIDENTIAL INFORMATION.

            (a)   The Executive acknowledges that during the Employment Period
      and as part of her employment, the Executive will be and has been afforded
      access to confidential information of the Company and its Affiliates, as
      defined herein. The Executive further acknowledges that for purposes of
      this Agreement, "Affiliates" shall be defined as any corporation,
      partnership, limited liability company or other entity controlling,
      controlled by or under common control with the Company, all of which have
      trade, business, and financial secrets and other confidential and
      proprietary information, including, but not limited to, product
      information, designs and formulas, processes, pricing and cost
      information, sales and marketing strategies, and identities of suppliers
      and displayers, and that such confidential information constitutes
      valuable, special and unique property of the Company and its Affiliates
      (collectively, the "Confidential Information"). As defined herein,
      Confidential Information shall not include (i) public information or
      information that is generally known to other persons or entities; (ii)
      information that is or becomes available to the Executive on a
      non-confidential basis from a source other than the Company and its
      Affiliates, provided that such source was not known by Executive to be
      bound by a confidentiality agreement with the Company and its Affiliates
      or to be otherwise prohibited from transmitting the information to
      Executive by a contractual, legal or fiduciary obligation; (iii)
      information that was within the Executive's possession prior to its being
      furnished to the Executive by or on behalf of the Company and its
      Affiliates, including, without limitation, product and marketing
      information possessed by Executive prior to employment by the Company,
      provided that the source of such information was not known by the
      Executive to be bound by a confidentiality agreement with the Company and
      its Affiliates or to be otherwise prohibited from transmitting the
      information to Executive by a contractual, legal or fiduciary obligation;
      or (iv) information required to be disclosed by the Executive pursuant to
      a subpoena or court order, or pursuant to a requirement of a governmental
      agency or law of the United States of America or a state thereof or any
      governmental or political subdivision thereof; provided, however, that the
      Executive shall take all

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 6

<PAGE>

      reasonable steps, at the cost of the Company, to prohibit disclosure of
      such Confidential Information pursuant to subsection (iv) herein.

            (b)   The Executive also acknowledges that public disclosure of such
      Confidential Information could have an adverse effect on the Company and
      its business and that the provisions of this Section 6 are reasonable and
      necessary to prevent the improper use or disclosure of Confidential
      Information.

            (c)   In consideration of the compensation and benefits to be paid
      or provided to the Executive by the Company under this Agreement, the
      Executive covenants that both during and after the Employment Period, the
      Executive shall (i) hold Confidential Information in confidence; (ii) not
      disclose, disseminate, publish or release (either directly or indirectly)
      Confidential Information to any person (other than Company employees and
      other persons to whom it is appropriate to disclose such Confidential
      Information in order to carry out the Executive's duties or to pursue the
      best interests of the Company or to whom the Company has authorized the
      Executive to disclose such information and then only to the extent that
      such Company employees and other persons authorized by the Company have a
      need for such knowledge); and (iii) not use any Confidential Information
      for the benefit of any person or entity other than the Company.

            (d)   If the Executive becomes legally compelled to disclose any
      Confidential Information, she will provide the Company with prompt written
      notice of such requirement prior to disclosure so that the Company may
      seek appropriate relief. If such relief is not obtained, then the
      Executive will furnish only that portion of the Confidential Information
      that the Executive is legally required to furnish and will use
      commercially reasonable efforts to assist the Company in obtaining
      assurances that such Confidential Information will be accorded
      confidential treatment.

      7.    SURRENDER OF MATERIALS UPON TERMINATION. Upon termination of the
Executive's employment for any reason, the Executive shall immediately return to
the Company all originals and/or copies, in whatever form, of any and all
Confidential Information and any other property of the Company and its
Affiliates, which are in the Executive's possession, custody or control, whether
or not provided by the Company.

      8.    SUCCESSORS.

            (a)   This Agreement is personal to the Executive and shall not be
      assignable by the Executive otherwise than by will or the laws of descent
      and distribution. This Agreement shall inure to the benefit of and be
      enforceable by the Executive's legal representatives.

            (b)   This Agreement shall inure to the benefit of and be binding
      upon the Company and its successors and assigns.

            (c)   The Company may assign this Agreement only to an assignee that
      agrees to perform this Agreement in the same manner and to the same extent
      that the Company would be required to perform if no such succession had
      taken place. The failure of any assignee of the Company to expressly
      assume to perform this Agreement in writing, which is not remedied within
      ten (10) business days after receipt of written notice from the Executive
      in accordance with Section 11(b), notifying Company or Company's

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 7

<PAGE>

      assignee of such failure, shall, at the election of Executive, be deemed
      to be a termination of this Agreement without cause.

      9.    NON-COMPETITION AND NON-SOLICITATION.

            (a)   The Executive acknowledges that: (i) the services to be
      performed by her under this Agreement are of a special, unique, unusual,
      extraordinary, and intellectual character; (ii) the Business is
      international in scope and the Company's and its Affiliates' products are
      marketed throughout the United States and the world; (iii) the Company
      compete with other businesses both nationally within the United States and
      internationally; and (iv) the provisions of this Section 9 are reasonable
      and necessary to protect the Business. For purposes of this Agreement, the
      term "Business" shall mean the Company's and its Affiliates' production
      and sale of home decorative and garden decorative products of the types
      offered for sale by the Company and its Affiliates as of the date of this
      Agreement and during the Employment Period.

            (b)   In consideration of the acknowledgments by the Executive, and
      in consideration of the compensation and benefits to be paid or provided
      to the Executive by the Company, the Executive agrees that she will not,
      directly or indirectly:

                  (i)   during the Employment Period, except in the course of
            her employment hereunder, and during the Post-Employment Period,
            engage in, invest in, own, manage, operate, finance, control, or
            participate in the ownership, management, operation, financing or
            control of, be employed by, or render services to, any business
            whose products or services compete with the Business, anywhere
            within the United States or within foreign countries in which the
            Company or its Affiliates conduct the Business;

                  (ii)  whether for the Executive's own account or for the
            account of any other person, at any time during the Employment
            Period and the Post-Employment Period, solicit business from (either
            directly or indirectly) or sell products to any customer of the
            Company or its Affiliates, including without limitation, customers
            with whom the Executive had personal contact prior to Executive's
            employment with the Company;

                  (iii) whether for the Executive's own account or the account
            of any other person, at any time during the Employment Period and
            the Post-Employment Period, solicit, employ, or otherwise engage as
            an employee, independent contractor, or otherwise, any person who is
            or was at the time of such solicitation, employment or engagement an
            employee, consultant or independent contractor of the Company or its
            Affiliates or in any manner induce or attempt to induce any employee
            of the Company or its Affiliates to terminate her employment with
            the Company or its Affiliates; or

                  (iv)  at any time during or after the Employment Period, and
            during the Post-Employment Period, disparage the Company or its
            Affiliates or any of their shareholders, partners, members, other
            holders of equity in the Company, directors, officers, employees, or
            agents or any Affiliate of the foregoing.

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 8

<PAGE>

            (c)   If any covenant in this Section 9 is held to be unreasonable,
      arbitrary, or against public policy, such covenant will be considered to
      be divisible with respect to scope, time, and geographic area, and such
      lesser scope, time, or geographic area, or all of them, as a court of
      competent jurisdiction may determine to be reasonable, not arbitrary, and
      not against public policy, will be effective, binding, and enforceable
      against the Executive.

            (d)   The period of time applicable to any covenant in this Section
      9 will be extended by the duration of any conduct which the Executive knew
      or should reasonably have known violated such covenant.

            (e)   The Executive will, while the covenant under this Section 9 is
      in effect, give written notice to the Company, within ten (10) days after
      accepting any other employment or consulting arrangement, of the identity
      of the Executive's new employer or contractor and all of the material
      duties and services to be provided by the Executive in such employment or
      retention, which shall not require disclosure by the Executive of any
      terms of compensation. The Company may notify such new employer that the
      Executive is bound by this Agreement and, at the Company's election,
      furnish such new employer with a copy of this Agreement or relevant
      portion thereof.

            (f)   The term "Post-Employment Period" means the one (1) year
      period beginning on the date of termination of the Executive's employment
      with the Company.

            (g)   The Executive acknowledges that the geographic boundaries,
      scope of prohibited activities, and time duration of the preceding
      paragraphs are reasonable in nature and are no broader than are necessary
      to maintain the confidentiality and the goodwill of the Company's and the
      Affiliates' proprietary information, plans and services and to protect the
      other legitimate business interests of the Company and the Affiliates.

      10.   EFFECT OF AGREEMENT ON OTHER BENEFITS. The existence of this
Agreement shall not prohibit or restrict the Executive's entitlement to full
participation in the employee benefit and other plans or programs in which
management-level employees of the Company are eligible to participate.

      11.   MISCELLANEOUS.

            (a)   Jurisdiction and Venue. This Agreement shall be governed by
      and construed in accordance with the laws of the State of Texas without
      reference to principles of conflict of laws. Any legal action to enforce
      or interpret any provision of this Agreement shall be brought exclusively
      in Dallas County, Texas. By execution and delivery of this Agreement, the
      Executive accepts and consents to for himself, the jurisdiction of the
      Courts of the State of Texas, County of Dallas.

            (b)   Notice. All notices and other communications hereunder shall
      be in writing and shall be given by hand delivery, by overnight courier
      (providing proof of delivery) or by registered or certified mail, return
      receipt requested, postage prepaid, addressed as follows:

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 9

<PAGE>

            If to the Executive:  Mary-Knight Tyler
                                  619 Stratford Lane
                                  Coppell, Texas 75019

            If to the Company:    Home Interiors & Gifts, Inc.
                                  1649 Frankford Road West
                                  Carrollton, Texas 75007
                                  Attn: President

      or to such other address as either party shall have furnished to the other
      in writing in accordance herewith. Notice and communications shall be
      effective when actually received by the addressee.

            (c)   Severability. If any provision of this Agreement is held to be
      illegal, invalid or unenforceable under present or future laws effective
      during the term of this Agreement, such provision shall be fully
      severable; this Agreement shall be construed and enforced as if such
      illegal, invalid or unenforceable provision had never comprised a portion
      of this Agreement; and the remaining provisions of this Agreement shall
      remain in full force and effect and shall not be affected by the illegal,
      invalid or unenforceable provision or by its severance from this
      Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
      provision there shall be added automatically as part of this Agreement a
      provision as similar-in terms to such illegal, invalid or unenforceable
      provision as may be possible and be legal, valid and enforceable.

            (d)   Withholding. The Company may withhold from any amounts payable
      under this Agreement such Federal, state or local taxes as shall be
      required to be withheld pursuant to any applicable law or regulation.

            (e)   Obligations Contingent on Performance. The obligations of the
      Company hereunder, including its obligation to pay the compensation
      provided for herein, are contingent upon the Executive's performance of
      the Executive's obligations hereunder.

            (f)   Waiver. The Executive's or the Company's failure to insist
      upon strict compliance with any provision of this Agreement or the failure
      to assert any right the Executive or the Company may have hereunder shall
      not be deemed to be a waiver of such provision or right or any other
      provision or right of this Agreement.

            (g)   Injunctive Relief and Additional Remedy. The Executive
      acknowledges that money damages would be both incalculable and an
      insufficient remedy for a breach of Section 6 or 9 by the Executive and
      that any such breach would cause the Company irreparable harm.
      Accordingly, the Company, in addition to any other remedies at law or in
      equity it may have, shall be entitled, without the requirement of posting
      of bond or other security, to equitable relief, including injunctive
      relief and specific performance, in connection with a breach of Section 6
      or 9 by the Executive. If the Executive breaches in any material respect
      any of the material provisions of Section 6 or 9, following termination of
      Executive's employment, the Company will have the right to cease making
      any payments otherwise due to the Executive under this Agreement.

            (h)   Entire Agreement; Amendments. The provisions of this Agreement
      constitute the complete understanding and agreement between the parties
      with respect to

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 10

<PAGE>

      the subject matter hereof and supersede all prior agreements and
      understandings, oral or written, between or among the parties hereto. This
      Agreement may not be amended orally, but only by an agreement in writing
      signed by the parties hereto or their respective successors and legal
      representatives.

            (i)   Counterparts. This Agreement may be executed in one or more
      counterparts, each of which will be deemed to be an original copy of this
      Agreement and all of which, when taken together, will be deemed to
      constitute one and the same Agreement.

            (j)   Covenants of Sections 6 and 9 are Essential and Independent
      Covenants. The covenants by the Executive in Sections 6 and 9 are
      essential elements of this Agreement, and without the Executive's
      agreement to comply with such covenants, the Company would not have
      entered into this Agreement or employed or continued the employment of the
      Executive. The Company and the Executive have independently consulted
      their respective counsel and have been advised in all respects concerning
      the reasonableness and propriety of such covenants, with specific regard
      to the nature of the business conducted by the Company.

            (k)   Section Headings; Construction. The captions or headings of
      Sections in this Agreement are provided for convenience only and are not
      part of the provisions hereof and shall have no force or effect. Whenever
      the terms "hereof", "hereby", "herein", or words of similar import are
      used in this Agreement they shall be construed as referring to this
      Agreement in its entirety rather than to a particular section or
      provision, unless the context specifically indicates to the contrary. Any
      reference to a particular "Section" or "paragraph" shall be construed as
      referring to the indicated section or paragraph of this Agreement unless
      the context indicates to the contrary. The use of the term "including"
      herein shall be construed as meaning "including, without limitation."

                            (SIGNATURE PAGE FOLLOWS)

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 11

<PAGE>

      EXECUTED to be effective as of January 1, 2004.

                                          EXECUTIVE:

                                          /s/ Mary-Knight Tyler
                                          --------------------------------------
                                          Mary-Knight Tyler, Individually

                                          COMPANY:

                                          HOME INTERIORS & GIFTS, INC.,
                                          a Texas corporation

                                          By: /s/ Michael D. Lohner
                                              ----------------------------------
                                                 Michael D. Lohner
                                                 President

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]