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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SobSF3JIwZAAXJZhcEDQGKfjwY/JIZ3+Lp8JgUda58fB/inQ0i3EDOo3Ttp6Mmir RHJO0XXxi0TaZIjAmERIvA== 0000950133-08-000770.txt : 20080225 0000950133-08-000770.hdr.sgml : 20080225 20080225170328 ACCESSION NUMBER: 0000950133-08-000770 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20080219 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080225 DATE AS OF CHANGE: 20080225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOVAVAX INC CENTRAL INDEX KEY: 0001000694 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 222816046 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26770 FILM NUMBER: 08640141 BUSINESS ADDRESS: STREET 1: 9920 BELWARD CAMPUS DRIVE CITY: ROCKVILLE STATE: MD ZIP: 20850 BUSINESS PHONE: 240-268-2000 MAIL ADDRESS: STREET 1: 9920 BELWARD CAMPUS DRIVE CITY: ROCKVILLE STATE: MD ZIP: 20850 8-K 1 w50357e8vk.htm FORM 8-K e8vk

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) February 19, 2008

NOVAVAX, INC.

(Exact name of Registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)	0-26770 (Commission File Number)	22-2816046 (I.R.S. Employer Identification No.)

9920 Belward Campus Drive
Rockville, Maryland		20850
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (240) 268-2000

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 1.01		Entry into a Material Definitive Agreement.

Agreements with Graceway

On February 19, 2008, Novavax, Inc. (“Novavax”) entered into and consummated the closing under an asset purchase agreement (the “Asset Purchase Agreement”) with Graceway Pharmaceuticals, LLC (“Graceway”), pursuant to which Novavax sold to Graceway Novavax’s assets related to Estrasorb® in the United States, Canada and Mexico (the “Territory”). The assets sold include certain patents related to the micellar nanoparticle technology (the “MNP Technology”), trademarks, know-how, manufacturing equipment, customer and supplier relations, goodwill and other assets related to Estrasorb® in the Territory. Novavax retained the rights to commercialize Estrasorb® outside of the Territory.

In a separate but related transaction, Graceway also purchased from Allergan USA, Inc. (“Allergan”), successor-in-interest to Esprit Pharma, Inc., all of Allergan’s tangible and intangible assets related to Estrasorb®. As described under Item 1.02, simultaneously with the closing of the transaction between Novavax and Graceway, Allergan has terminated all of its previously licensed rights to commercialize Estrasorb®.

Novavax agreed with Graceway that, for a certain period commencing on the closing date (the “Noncompetition Period”), Novavax and is affiliates will not develop, manufacture or sell certain competing products in the Territory. In addition, during the Noncompetition Period, if Novavax licenses, sublicenses or otherwise transfers any rights related to the MNP Technology or Estrasorb® to a person outside of the Territory, Novavax must require such person to agree not to sell or distribute certain competing products using the MNP Technology in the Territory or sell, market or distribute such competing products to a person that intends to sell, market or distribute such competing products in the Territory.

On February 19, 2008, Novavax and Graceway also entered into a supply agreement (the “Supply Agreement”), pursuant to which Novavax has agreed to manufacture exclusively for Graceway an agreed upon number of lots of Estrasorb® with final delivery expected by mid 2008. Graceway will pay a preset transfer price per unit of Estrasorb for the supply of this product. Once Novavax has delivered the required quantity of Estrasorb, Novavax must clean the manufacturing equipment and prepare the equipment for transport. Graceway will remove the equipment from the manufacturing facility and Novavax will then exit the facility.

On February 19, 2008, Novavax and Graceway also entered into a license agreement (the “License Agreement”) pursuant to which Graceway granted Novavax an exclusive, non-transferable (except for certain allowed assignments and sublicenses), royalty-free, limited license to the patents and know-how that Novavax sold to Graceway pursuant to the Asset Purchase Agreement. The license granted pursuant to the License Agreement allows Novavax to make, use and sell licensed products and services in certain, limited fields.

The foregoing descriptions of the Asset Purchase Agreement, Supply Agreement and License Agreement are qualified in their entirety by reference to the agreements which are attached to this Current Report on Form 8-K as Exhibits 10.1, 10.2 and 10.3, respectively, and incorporated herein by reference.

Amendment to Agreement with Catalent

Effective February 19, 2008, Novavax and Catalent Pharma Solutions, Inc. (“Catalent”), the successor-in-interest to Packaging Coordinators, Inc., entered into a letter agreement (the “Letter Agreement”). The Letter Agreement amended the Facility Reservation Agreement, dated February 8, 2002, pursuant to

which Novavax leases the Estrasorb manufacturing facility from Catalent. The amendment extends the term of the agreement to mid 2008 and provides for a base monthly fee. The Letter Agreement also provides that Catalent will fill and package Estrasorb bulk in sufficient amounts to allow Novavax meet its requirements under the Supply Agreement.

The foregoing description of the Letter Agreement is qualified in its entirety by reference to the Letter Agreement which is attached to this Current Report on Form 8-K as Exhibit 10.4 and is incorporated herein by reference.


Item 1.02		Termination of a Material Definitive Agreement.

On February 19, 2008, Novavax and Allergan entered into an agreement to terminate the License Agreement dated as of October 18, 2005, pursuant to which Novavax licensed to Allergan certain North American rights with respect to Estrasorb. All rights and obligations of the parties terminated on February 19, 2008, except for obligations related to confidentiality.


Item 9.01.		Financial Statements and Exhibits.

(d)

Exhibits

Exhibits

Confidential treatment has been requested for portions of exhibits marked with a double asterisk (**).

	10.1**		Asset Purchase Agreement by and between Novavax, Inc. and Graceway Pharmaceuticals, LLC, dated February 19, 2008

	10.2**		Supply Agreement by and between Novavax, Inc. and Graceway Pharmaceuticals, LLC, dated February 19, 2008

	10.3**		License Agreement by and between Novavax, Inc. and Graceway Pharmaceuticals, LLC, dated February 19, 2008

	10.4**		Letter Agreement by and between Novavax, Inc. and Catalent Pharma Solutions, Inc., dated February 12, 2008 and effective February 19, 2008

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Novavax, Inc. (Registrant)
February __, 2008	By:	/s/ Len Stigliano
	Name:		Len Stigliano
	Title:		Chief Financial Officer, Vice President and Treasurer

EX-10.1 2 w50357exv10w1.htm EX-10.1 exv10w1

Exhibit 10.1

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of February 19, 2008, by and between NOVAVAX, INC., a Delaware corporation (“Seller”), and GRACEWAY PHARMACEUTICALS, LLC, a Delaware limited liability company (“Buyer”). Seller and Buyer are sometimes referred to herein as the “parties” and individually as a “party”.

WHEREAS, Seller developed a pharmaceutical product known as Estrasorb® (such product, including all dosages and formulations, whether existing on the date hereof or in the past, the “Product”), utilizing certain micellar nanoparticle technology owned by Seller and covered in Patent No. 5,629,021 (the “MNP Technology”);

WHEREAS, Seller granted to Allergan USA, Inc. (formerly known as Esprit Pharma, Inc.), a Delaware corporation (“Esprit”), an exclusive license to certain rights to manufacture, market, promote and sell the Product in the United States, Mexico and Canada, and subsequently thereafter Seller transferred to Esprit all right, title and interest in and to the NDA (as hereinafter defined) for the Product and other regulatory approvals for the Product;

WHEREAS, Allergan, Inc., a Delaware corporation (“Allergan”), owns, directly or indirectly, all of the outstanding capital stock of Esprit;

WHEREAS, Seller, collectively with Esprit and certain of Esprit’s affiliates, own all right, title and interest in, to and under all assets, properties, privileges, claims and rights relating to the Product and the MNP Technology in the Territory (as hereinafter defined);

WHEREAS, concurrently with the execution and delivery of this Agreement, Buyer, Esprit and Allergan have entered into an Asset Purchase Agreement (the “AGN Asset Purchase Agreement”), pursuant to which Esprit has agreed to sell to Buyer, and Buyer has agreed to purchase from Esprit, all right, title and interest of Esprit and certain of Esprit’s affiliates in the Territory in and to the assets and rights associated with the Product identified therein, and Allergan has agreed to guaranty the obligations of Esprit thereunder, all on the terms and subject to the conditions set forth in the AGN Asset Purchase Agreement; and

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, all right, title and interest of Seller in the Territory in and to the Product and the MNP Technology, and all privileges, claims and rights relating to the Product, and the MNP Technology and the other assets and rights identified herein, all on the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and of the representations, warranties, mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE 1.
DEFINITIONS AND INTERPRETATIONS

Capitalized terms used herein without definition shall have the respective meanings assigned thereto in Annex I attached hereto and incorporated herein for all purposes of this Agreement (such definitions to be equally applicable to both the singular and plural forms of the terms defined). Additionally, in this Agreement, unless a clear contrary intention appears: (a) all references herein to “Articles” or “Sections” are to Articles or Sections of this Agreement; (b) the singular number includes the plural number and vice versa; (c) reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof; (d) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; and (e) references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto.

ARTICLE 2.
SALE AND PURCHASE OF ASSETS;
PURCHASE PRICE; EXCLUDED LIABILITIES

2.01 Sale and Purchase of Assets.

Subject to the terms and conditions of this Agreement (including Section 2.02 ), at Closing Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase, acquire, pay for and accept from Seller, all right, title and interest of Seller and its Affiliates in the Territory in, to and under the following assets, properties, privileges, claims and rights (collectively, the “Assets”), free and clear of all Encumbrances:

(a) The Patents, Marks, Trademark Registrations and Copyrights described in Schedule 2.01(a) , and all other Intellectual Property (including Trade Secrets) relating primarily to the Product (all such Assets described in the foregoing clauses, the “Assigned Intellectual Property”);

(b) All Know-How that is (i) primarily related to the Product or the Business, (ii) contained within or comprising the Books and Records or (iii) used, useful or necessary in connection with the manufacture, packaging, labeling or testing of the Product as conducted by Seller or its Affiliates as of the date hereof, or in connection with the use, maintenance or operation of the Manufacturing Equipment by or on behalf of Seller or its Affiliates as of the date hereof, in each case solely for the Territory (except in connection with the exercise of Buyer’s rights in Section 2.01(g) to make or have made the Product outside the Territory) (all such Know-How described in clauses (i), (ii) and (iii), the “ Transferred Know-How ”);

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(c) All registrations, applications, approvals, licenses and permits relating to the Assets (including the Product) from the FDA and any other Governmental Authority in the Territory held in the name of Seller or any of Seller’s Affiliates (collectively, the “Product Registrations”), including those set forth on Schedule 2.01(c) , and all supplements thereto, whether issued, pending, or in draft form, and all records, reports, data and other information primarily related to the Assets (including the Product) required to be kept under applicable Laws in the Territory and all correspondence to or from all Governmental Authorities in the Territory which relates primarily to the Assets (including the Product);

(d) All current and archived books, computer data, records, files, documents, information, correspondence and data (audio, visual or print) in Seller’s possession or control to the extent relating primarily to the Assets (including the Product) for the Territory, including in each case as and to the extent relating primarily to the Assets for the Territory, as applicable: research and development reports, studies, pre-clinical and clinical data, research and development data, lists of customers and suppliers of the Product in the Territory, miscellaneous records with respect to customers and supply sources, credit and collection records, adverse experience reports and files and data related thereto and all periodic adverse experience reports, files and data, and all other files, data and records related to pharmacovigilence matters, business development plans, advertising matter, catalogs, correspondence, mailing lists, photographs, sales and distribution materials and records, purchasing materials and records, manufacturing and quality control records and procedures, market materials, marketing and promotional materials, product literature, training materials, sale aids, research data, copies of all files relating to the filing, prosecution, issuance, maintenance, enforcement and/or defense of any Assigned Intellectual Property, master batch records, including change of control history, executed records for all lots, including those expired, product batch records, analytical methods and validation reports with respect to process, equipment and methods, product complaints, stability data and the history thereof, annual reports, annual product reports, FDA and internal audit reports, whether on paper or in electronic format (the “Books and Records”);

(e) The manufacturing equipment and assets listed on Schedule 2.01(e) (the “Manufacturing Equipment”), and any warranty rights applicable to such Manufacturing Equipment (to the extent the same are transferable);

(f) All customer and supplier relationships and goodwill primarily related to the Product;

(g) All rights to market or have marketed, sell or have sold, promote or have promoted, distribute or have distributed the Product in the Territory, and make or have made the Product in or outside of the Territory, including, to the extent transferable, all rights to reference Drug Master Files and other data for the Product’s active pharmaceutical ingredients;

(h) All claims, counterclaims, credits, causes of action, rights of recovery and rights of setoff and third party warranties, guaranties and similar contractual rights

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as to the third parties held by Seller or any Affiliate of Seller to the extent related primarily to the Assets; and

(i) All other assets, properties, privileges, claims and rights of Seller and its Affiliates relating primarily to the Product or the Business in the Territory (except for Intellectual Property or Know-How, each of which is being sold, assigned, transferred, conveyed and delivered by Seller to Buyer pursuant to the other subparagraphs of this Section 2.01 ).

2.02 Excluded Assets.

(a) Notwithstanding anything to the contrary in this Agreement, there shall be excluded from the Assets, and retained by Seller, the following assets (collectively, the “Excluded Assets”):

(i) all cash and cash equivalents owned by Seller;

(ii) all contracts of insurance and all insurance plans and the assets thereof;

(iii) all accounts receivable or invoices arising out of the sale of the Product on or prior to 11:59 p.m. (EST) on the Closing Date (“Pre-Closing Receivables”);

(iv) any and all claims of Seller with respect to any Tax refunds;

(v) all human resources and any other employee related files and records;

(vi) subject to the license and rights granted to Buyer pursuant to Section 6.04, all right, title and interests of Seller in and to the Names;

(vii) all books and records relating to or used in the business of Seller and not primarily relating to the Assets;

(viii) all assets of the Seller not expressly included within the Assets set forth in Section 2.01 above; and

(ix) all of the rights of Seller under or pursuant to this Agreement or any other rights in favor of Seller pursuant to the Related Documents.

(b) Notwithstanding the foregoing, neither Seller nor any of its Affiliates shall retain any interest, royalty or Intellectual Property rights relating to the Assets in the Territory, other than rights to receive cash or cash equivalents in connection with Pre-Closing Receivables, except as expressly set forth in the Related Agreements.

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(c) For the avoidance of doubt under Section 2.01(b), Buyer acknowledges that Seller retains the ownership rights in the Know-How for use outside the Territory, including the right to develop, make, have made, use, sell, offer for sale, and import products solely outside the Territory, subject to Buyer’s right in accordance with Section 2.01(g) to make or have made the Product outside of the Territory. Buyer hereby agrees not to assert any ownership right, title or interest in or to the Know-How outside the Territory inconsistent with Buyer’s rights under Section 2.01(b) and the foregoing acknowledgement in this Section 2.02(c).

2.03 Excluded Liabilities.

Notwithstanding anything to the contrary in this Agreement, Buyer shall not assume, and Seller and its Affiliates shall retain, pay, perform and discharge when due, all Liabilities of Seller and its Affiliates arising out of or related to the Product and the Business prior to the Closing Date (collectively, the “Excluded Liabilities”), except for any post-Closing Date liabilities expressly agreed to be assumed by Buyer pursuant to this Agreement. The Excluded Liabilities shall include the following:

(a) account payables and Liabilities of Seller or any of its Affiliates for materials and services with respect to the manufacture of the Product or Inventory prior to the Closing Date;

(b) any Tax payable with respect to any business, asset, property or operation of Seller or any member of any affiliated group of which Seller is a member (including any Taxes relating to or arising out of the operation of the Business) arising out of, directly or indirectly, the Assets or the ownership, control, lease, or license of any of the Assets for any pre-Closing Tax period, other than any Tax for which Buyer is responsible pursuant to Section 10.03;

(c) any Liability of Seller or any of its Affiliates arising out of or relating to any Excluded Asset or arising out of the operations or conduct by Seller or its Affiliates of any business other than the Business;

(d) any Liability of Seller or any of its Affiliates arising out of or relating to independent contractors or employees, including any Liability with respect to employment, compensation or benefits (including severance and benefit plans) for the present or future employees of Seller for all employment relating to the Business;

(e) all Liabilities of Seller and any of its Affiliates arising out of any product liability, patent infringement, breach of warranty or claim for injury to person or property whenever asserted which resulted from the use or misuse of Product sold prior to the Closing Date (including all proceedings relating to any such Liabilities);

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(f) all Liabilities of Seller and any of its Affiliates arising out of government seizures, field corrections, withdrawals or recalls of Product sold prior to the Closing Date, whether claimed prior to, on or after the Closing Date;

(g) all Liabilities of Seller and any of its Affiliates with respect to any litigation or other claims to the extent arising from any event, circumstance or condition occurring or alleged to have occurred prior to the Closing Date;

(h) all Liabilities of Seller and any of its Affiliates arising out of user or other similar fees payable to the FDA or other Governmental Authority in the Territory to the extent such fees are payable on account of the operation of the Business prior to the Closing Date;

(i) all Liabilities of Seller and any of its Affiliates arising out of or related to the use, maintenance, occupancy or possession of the Catalent Facility or the Manufacturing Equipment prior to and during the term of the Supply Agreement, and all Liabilities arising out of or related to the cleaning and removal of such Manufacturing Equipment from the Catalent Facility (except for those costs and expenses of Seller to be reimbursed by Buyer pursuant to the Supply Agreement), and the restoration of the Catalent Facility to its prior condition; and

(j) all other Liabilities of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, whether or not accrued, arising out of or relating to, directly or indirectly, the Seller’s operation of the Business prior to the Closing Date or Seller’s ownership of the Assets (including the Product) prior to the Closing Date.

2.04 Purchase Price.

For and in consideration of the conveyances and assignments described herein, Buyer agrees to pay to Seller, and Seller agrees to accept from Buyer, an amount equal to [* * *] (the “Purchase Price”).

2.05 Payment at Closing.

The Purchase Price shall be paid by Buyer to Seller at the Closing by wire transfer of immediately available funds to the account specified by Seller in writing prior to the Closing.

2.06 Additional Assurances.

In addition to and without limitation of the obligations of Seller set forth in Section 10.02, in the event that from and after the Closing Date, Seller or Buyer shall become aware of any Asset that was not transferred to Buyer on the Closing Date, then Seller shall

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promptly assign, transfer and convey such Asset to Buyer, free and clear of all Encumbrances, pursuant to assignment documentation reasonably satisfactory to Buyer; provided, that nothing in this Section 2.06 shall limit Seller’s right to contest whether an item is an Asset that should have been conveyed to Buyer at Closing.

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY SELLER

Seller represents and warrants to Buyer as follows as of the Closing Date:

3.01 Organization and Standing.

Seller is duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business and is in good standing in any jurisdiction where such qualification is necessary. Seller has the corporate power and authority to own, lease and otherwise to hold the Assets, to carry on the Business, and to enter into and perform the terms of this Agreement, the other Related Documents to which it is a party and the transactions contemplated hereby and thereby.

3.02 Authorization.

The execution, delivery and performance of this Agreement and of the other Related Documents to which Seller is a party, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate actions of Seller (none of which actions has been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes, and upon execution and delivery each other Related Document to which Seller is a party will constitute, a valid and binding agreement and obligation of Seller, enforceable against Seller in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights generally and by the application of general principles of equity.

3.03 Consents and Approvals; No Conflicts.

(a) The execution and delivery of this Agreement and each other Related Document to which Seller is a party, and the performance of the transactions contemplated herein and therein by Seller will not require any consent, approval, authorization or other action by, or, except as set forth on Schedule 3.03, filing with or notification to, any Governmental Authority or other Person.

(b) The execution, delivery and performance by Seller of this Agreement and the other Related Documents to which Seller is a party do not and will not (i) conflict with or violate any Law applicable to Seller, the Assets or the Business or by which any

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of the Assets or the Business is subject or affected, (ii) conflict with or result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under any Contract to which Seller is a party or by which Seller is bound or to which any of the Assets or the Business is subject or affected, (iii) result in the creation of any Encumbrance upon the Assets, or (iv) conflict with or violate the organizational documents of Seller; except in the case of clause (i) or (ii) where such conflict, violation or breach would not be reasonably be expected to have a material adverse effect on the Assets or the Business.

3.04 Absence of Certain Changes or Events.

Since September 1, 2007, there has been no Material Adverse Change in the Business or the Assets (including the Product). Except as set forth in Schedule 3.04, since September 1, 2007, Seller has conducted the Business in the ordinary course of business consistent with past practice, and Seller has not (a) incurred, or become subject to, any Liability with respect to the Assets, except current Liabilities incurred in the ordinary course of business consistent with past practice; (b) mortgaged, pledged or subjected to any Encumbrance any of the Assets; (c) transferred to any third party any rights under any licenses, sublicenses or other agreements with respect to any Assigned Intellectual Property; (d) sold, exchanged, transferred or otherwise disposed of, or granted any rights or options in or to, any of the Assets, except for the transfer of inventory in the ordinary course of business; or (e) entered into any transactions with respect to the Business other than in the ordinary course of business consistent with past practice.

3.05 Absence of Litigation.

Except as set forth on Schedule 3.04, there is no action, suit, investigation, proceeding, claim, arbitration or litigation pending against the Seller or its Affiliates or, to the knowledge of Seller, threatened against Seller or its Affiliates with respect to the Product.

3.06 Assets.

Except for the Excluded Assets, (a) the Assets described in subsections (a) through (l) of Section 2.01 constitute all of the assets, rights and properties of Seller that are sufficient for the operation of the Business by Seller, and (b) to the Seller’s knowledge, the Assets, together with the assets and rights previously sold or licensed by Seller to Esprit, constitute all assets, rights, privileges and claims relating to the Product and the MNP Technology in the Territory. The sale, transfer and assignment of the Assets as contemplated by this Agreement will give Buyer possession of all assets, rights and properties of Seller, taken as a whole, required to operate the Business by Seller. Except as set forth on Schedule 3.06, Seller is the sole owner of, and has good and valid title to, the Assets free and clear of any Encumbrances. No Asset is subject to any preemptive right, right of first refusal or other right or restriction arising by or through Seller or any of its Affiliates. At the Closing, Buyer shall acquire good title to, and all right, title and interest in and to the Assets, free and clear of all Encumbrances,

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except for (and specifically excluding) any Encumbrances arising through, at the direction of, or relating to Buyer or its Affiliates.

3.07 Contracts; Product Registrations.

Except as set forth on Schedule 3.07, neither Seller nor any of its Affiliates is a party to or bound by any material Contract primarily relating to the Business or the Assets. Except as set forth on Schedule 2.01(a) or Schedule 2.01(c) , neither Seller nor any of its Affiliates (a) owns or holds any right, title or interest in any registrations, applications, approvals, licenses or permits relating primarily to the Assets (including the Product) from the FDA or any other Governmental Authority in the Territory, or (b) has in the past owned or held any Product Registrations from any Governmental Authority in the Territory, or registered any Intellectual Property with any Governmental Authority in the Territory.

3.08 Intellectual Property.

(a) Schedule 2.01(a) contains a complete and accurate listing of the following, listing the status or renewal dates for each: (i) all registered Assigned Intellectual Property, including the registered Marks, Trademark Registrations, Patents and Copyrights; and (ii) all oral and written material Contracts relating to the Assigned Intellectual Property to which Seller is a party or by which Seller is bound. Except as set forth on Schedule 3.08, Seller has not granted any license of any kind relating to the Assigned Intellectual Property.

(b) Except as set forth in Schedule 3.08, Seller is the sole and exclusive owner of, and has good, valid, and enforceable title to, all rights, title, and interest in and to each item of the Assigned Intellectual Property, free and clear of any Encumbrances. Except as set forth in Schedule 3.08, Seller has the right to make any use desired, without payment to a third party, of all or any part of the Assigned Intellectual Property and the right to convey such Assigned Intellectual Property to Buyer. At the Closing Date, Buyer shall acquire good, valid, and enforceable title to the Assigned Intellectual Property, free and clear of all Encumbrances.

(c) Except as set forth in Schedule 3.08 , to the knowledge of Seller: (i) the use by Seller of the Transferred Know-How in connection with the Business does not infringe, misappropriate, or violate, with any Intellectual Property right or other proprietary right of any other Person or requires a license under the same; (ii) the Assigned Intellectual Property does not infringe, misappropriate, violate, or conflict with any Intellectual Property right or other proprietary right of any other Person or require a license under the same; (iii) Seller has terminated all licenses, sublicenses or other grant of rights granted or provided by Seller with respect to the Product or the Assigned Intellectual Property to any third party (including the Esprit License Agreement), and there exist no further Liabilities under any such license or sublicense; (iv) Seller is not in breach or default of any license or other grant of rights with respect to the Assigned Intellectual Property, nor is any other Person in breach or default of any such license or grant of rights; (v) there have been no claims made against, or notices received

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by Seller or any of its Affiliates alleging or asserting the invalidity, misuse or unenforceability of any Assigned Intellectual Property (including any demand or request that Seller cease using any Assigned Intellectual Property or license any Intellectual Property from any third party); and (vi) neither Seller nor any of its Affiliates have taken any action, or failed to take any action, used or enforced or failed to use or enforce any of the Assigned Intellectual Property in a manner that would result in the abandonment, cancellation, forfeiture, relinquishment, or unenforceability of any of the Assigned Intellectual Property, or any registration therefor, or any of Seller’s rights therein.

(d) Any Assigned Intellectual Property that has been duly registered with or filed in the U.S. Patent and Trademark Office or the U.S. Copyright Office or other applicable Governmental Authority is identified on Schedule 2.01(a), and all such registrations are currently in compliance with all formal legal requirements; provided, however, that Copyrights have not been registered with the U.S. Copyright Office or otherwise been registered with any Governmental Authority. To Seller’s knowledge, Seller has taken all commercially reasonable and desirable actions consistent with its past practice to maintain and protect the Assigned Intellectual Property owned by Seller and no loss or expiration of any such Assigned Intellectual Property is pending or threatened.

3.09 Compliance with Law.

(a) All of Seller’s manufacture, packaging, labeling, testing for release and sale of Product has been in compliance with all applicable requirements under FDCA, PHSA, and similar Laws, rules and regulations relating to investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, record keeping, filing of reports, including adverse event reports as required by 21 C.F.R. Section 314.80.

(b) Seller has obtained all applicable material approvals, clearances, authorizations, licenses and registrations required by the United States, any other Governmental Authority, or foreign governments or government agencies, to permit the operation of the Business, and Seller is in material compliance with all reporting requirements relevant thereto.

(d) With respect to the Product, neither Seller nor any of its Affiliates is in violation of and Seller and its Affiliates are in compliance with, all applicable registration and listing requirements set forth in 21 U.S.C. § 360 and 21 C.F.R. Part 207, in each case as applicable to Seller’s conduct of the Business.

(e) All manufacturing, warehousing, distributing, and testing operations conducted by Seller or any of its Affiliates or, to the Seller’s knowledge, for the benefit of Seller or any of its Affiliates with respect to the Product in the Territory are not in violation of and have

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been and are being conducted in material compliance with, the good manufacturing practice regulations set forth in 21 C.F.R. Parts 210 and 211.

(f) With respect to the Product in the Territory, neither Seller, any of its Affiliates or their respective officers, employees, or agents has made an untrue statement of material fact or fraudulent statement to the FDA or any other Governmental Authority, failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Authority, or committed an act, made a statement, or failed to make a statement that could reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities”, set forth in Compliance Policy Guide sec. 120.100 (7150.09) (issued September 1, 1991) and any amendments thereto.

(g) With respect to the Product in the Territory or to the facilities in which the Product has been developed, manufactured, packaged, collected, handled or stored by or on behalf of Seller, no written reports of inspection observations (FDA Form 483), establishment inspection reports, warning letters or other documents have been received by Seller from by the FDA or other regulating agencies within the last three (3) years that allege lack of compliance with applicable regulatory requirements by Seller, its Affiliates, or, to the knowledge of Seller, Persons covered by product applications or otherwise performing services for the benefit of Seller or its Affiliates.

(h) Seller has made available to Buyer copies of all written communications to the FDA from Seller or received by Seller from the FDA relating specifically to the Product in the Territory, and Seller’s operations or business, including any deficiency letter, warning letter, non-approvable letter/order, withdrawal letter/order and correspondence bearing on the safety and efficacy of the Product.

(i) Neither Seller nor any of its Affiliates have received any written notice and have no knowledge that the FDA, or any other regulating agency, has commenced or threatened to initiate, any action seeking the withdrawal, recall, suspension, or seizure of the Product in the Territory, or commenced or threatened to initiate, any action to enjoin production at any facility where the Product has been manufactured.

(j) As to each article of drug or consumer product manufactured or distributed by Seller or on behalf of Seller or any of its Affiliates with respect to the Product in the Territory, such article is not adulterated or misbranded within the meaning of the FDCA, 21 U.S.C. §§ 351, 352 et. seq., and all Labeling of Seller or its Affiliates with respect to the Product are otherwise in conformance with applicable regulations.

(k) With respect to the Product, Seller, its Affiliates and their respective officers, employees, agents and affiliates have included or caused to be included in the application for any drug, where required, the certification described in 21 U.S.C. §335a(k)(l) and the list described in 21 U.S.C. § 335a(k)(2), and such certification and such list was in each case

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true and accurate, in all material respects, when made and remained true and accurate in all material respects thereafter.

(l) To the knowledge of Seller, with respect to the Product, contractors of Seller and its Affiliates are in compliance with all applicable Laws and, in respect of the FDA, have secured all licenses and renewals necessary to their operation.

(m) As to each commercial or investigational application or abbreviated application submitted by Seller or any of its Affiliates for the Product to, but not authorized or approved by, the FDA, and not withdrawn by Seller or any of its Affiliates, or applicants acting on their behalf as of the date of this Agreement, Seller and its Affiliates have complied and are in compliance with, the requirements of 21 U.S.C. §§ 355 and 21 C.F.R. Parts 312 and 314 and have provided all additional information and taken all additional action reasonably requested by the FDA in connection with the application.

(n) To Seller’s knowledge, there are no lawsuits, actions, arbitrations or legal or administrative or regulatory proceedings, charges, complaints, or investigations by the FDA or any other Governmental Authority pending against Seller or its Affiliates with respect to any approved application, license, or registration for the Product. To the knowledge of Seller, there are no proceedings pending with respect to a violation by Seller or its Affiliates of the FDCA, or PHSA, FDA regulations adopted thereunder, or any other legislation or regulation promulgated by any other Governmental Authority which might result in the revocation, cancellation, suspension, limitation or adverse modification of any approved application, license, or registration with respect to the Product.

(o) Neither Seller nor its Affiliates have been served with any complaint or received any other notices of lawsuits, arbitrations, legal or administrative or regulatory proceedings, charges, complaints or investigations by any federal, state or foreign regulatory agency threatened or pending against or relating to Seller or its Affiliates or any approved application, license, or registration of Seller or its Affiliates with respect to the Product. There have been no product recalls, withdrawals, suspensions, discontinuations, or similar actions by Seller or any of its Affiliates (whether voluntary or otherwise) with respect to the Product.

(p) To the knowledge of Seller, no Person has filed a claim for loss or potential loss under any indemnity covering participants in clinical trials of the Product.

(q) To the knowledge of Seller, all regulatory-related information with respect to the manufacturing of the Product disclosed to Buyer by Seller or any of its Affiliates is true and accurate in all material respects and to the Seller’s knowledge, no information has been omitted from such disclosures to Buyer that is required to make the information actually disclosed to Buyer materially complete or not materially misleading.

(r) [* * *]

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3.10 Condition of Manufacturing Equipment.

The Manufacturing Equipment is free from material defect, in good operating condition and repair (ordinary wear and tear excepted), has been maintained in accordance with normal industry practice, and is suitable and adequate for the uses to which it is being put, and, to the knowledge of Seller, none of the Manufacturing Equipment is in need of maintenance or repairs, except for ordinary, routine maintenance and repairs that are not material in nature or cost. The Manufacturing Equipment is sufficient for the continued conduct of the Business from and after the Closing Date in substantially the same manner as conducted prior to the Closing, subject to replacement for wear and tear obsolescence, provided that Seller makes no representation or warranty with regard to Buyer’s ability to continued manufacture of the Product with sufficient quality or quantities in respect of the operation of the Business by Buyer.

3.11 Inventory.

Seller does not have any right, title or interest in any existing raw materials, inventories of active pharmaceutical ingredients for the Product, components, works-in-process or finished goods inventory of the Product.

3.12 Brokers.

Except as set forth on Schedule 3.12, neither Seller nor any Affiliate of Seller has engaged, or incurred any unpaid liability for any brokerage fees, finders’ fees, commissions or otherwise to any broker, finder or agent in connection with the transactions contemplated by this Agreement.

3.13 Suppliers.

Seller and its Affiliates have used reasonable business efforts to maintain, and currently maintain, good working relationships with all of its suppliers that supply products or services for the Business, including clinical research organizations providing services to Seller. There have been no material adverse changes in the relationships during the past twelve (12) months between Seller and such suppliers, including clinical research organizations providing services to Seller. Schedule 3.13 specifies for the period beginning January 1, 2007 to the date of this Agreement the names of the suppliers of the Product, suppliers of active pharmaceutical ingredients to Seller and any clinical research organization providing services to Seller that are material to the Business. None of the suppliers or clinical research organizations set forth in Schedule 3.13 has given Seller or any of its Affiliates notice terminating, canceling or threatening to terminate or cancel any contract or relationship with Seller or any of its Affiliates relating to the manufacture of the Product by Seller.

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3.14 Solvency.

(a) The Purchase Price represents reasonably equivalent value for the Assets.

(b) Seller is acting in good faith and has no reason to believe that Buyer is purchasing the Assets other than in good faith.

(c) Seller is not entering into the Agreement with the intent to hinder, delay or defraud any Person to which it is or may become indebted.

(d) Seller (i) is not currently debtor or alleged debtor in a case filed under the United States Bankruptcy Code, Title 11 U.S.C., as amended (the “Bankruptcy Code”), (ii) is not the subject of a receivership proceeding under any state law, (iii) is not a party in any case providing for a collective remedy among Seller’s creditors generally, (iv) is not the subject of a present threat by another person or entity to commence any of the foregoing proceedings against Seller, and (v) has no present intention to commence any such proceeding on their own behalf.

(e) As of the date of this Agreement, Seller is, and as of the Closing Date and immediately after the Closing Date, Seller will be, not “insolvent,” as that term is defined in the text and interpretive case law of the Bankruptcy Code.

(f) As of the Closing Date, Seller is, and immediately after the Closing Date Seller will be, able to pay its Liabilities as they mature.

ARTICLE 4.
REPRESENTATIONS AND WARRANTIES BY BUYER

Buyer represents and warrants to Seller as follows as of the Closing Date:

4.01 Organization and Standing.

Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business in each jurisdiction where such qualification is necessary. Buyer has the full power and authority to enter into and perform the terms of this Agreement and the other Related Documents to which it is a party and to carry out the transactions contemplated hereby and thereby.

4.02 Authorization.

The execution, delivery and performance of this Agreement and of the other Related Documents to which Buyer is a party, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary actions

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of Buyer (none of which actions has been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes, and upon execution and delivery each such other Related Document to which Buyer is a party will constitute, a valid and binding agreement and obligation of Buyer, enforceable against Buyer in accordance with its respective terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights generally and by the application of general principles of equity.

4.03 Consents and Approvals; No Conflicts.

(a) The execution and delivery of this Agreement and the other Related Documents to which Buyer is a party, and the performance of the transactions contemplated herein by Buyer, will not require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority or other Person which has not already been obtained.

(b) The execution, delivery and performance by Buyer of this Agreement and the other Related Documents to which Buyer is a party do not and will not (i) conflict with or violate any Law applicable to Buyer, (ii) conflict with or result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) of any Contract to which Buyer is a party or by which Buyer is bound, or (iii) conflict with or violate the organizational documents of Buyer.

4.04 Brokers.

Except for Wachovia Securities, Buyer has not engaged, or incurred any unpaid liability (for any brokerage fees, finders’ fees, commissions or otherwise) to any broker, finder or agent in connection with the transactions contemplated by this Agreement. Buyer agrees to indemnify Seller (without limitation), against any claims asserted against Seller for any such fees or commissions by any Person purporting to act or to have acted for or on behalf of Buyer. Notwithstanding any other provision of this Agreement, this representation and warranty shall survive the Closing Date without limitation.

ARTICLE 5.
REGULATORY MATTERS

5.01 Regulatory Filings.

From and after the Closing Date, to the extent necessary under applicable Law, each of the parties hereto shall continue to use all commercially reasonable efforts to take, or cause to be taken, all appropriate action, and do, or cause to be done, all things necessary, proper or advisable under applicable Laws or otherwise to make effective the transactions contemplated

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by this Agreement as promptly as practicable, including, using all its commercially reasonable efforts to transfer and obtain all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities as are necessary.

5.02 Responsibility for the Product.

(a) Subject to the Supply Agreement, from and after the Closing Date, Buyer shall assume all regulatory responsibilities permitted by applicable Laws to be assumed by Buyer, reporting and otherwise, in connection with the Product, the Product Registrations, to the extent related to the period from and after the Closing Date, including responsibility for reporting any adverse drug experiences in connection with the Product in or with respect to the Territory, and responsibility for compliance with the Prescription Drug Marketing Act of 1987, as the same may be amended from time to time.

(b) Seller and its Affiliates shall promptly submit to Buyer all written medical inquiries, adverse drug experience information or customer complaints received in writing by Seller or its Affiliates in respect of the Product, as well as any material written notifications received by Seller or its Affiliates concerning the safety or efficacy of the Product.

(c) From and after the Closing Date, Seller shall direct all complaints or inquiries concerning the Product in the Territory to Buyer to the attention of l , l , AXA Assistance USA, 122 South Michigan Avenue, Suite 1100, Chicago, Illinois 60603 at the phone number l and facsimile number l .

(d) Seller shall, and shall cause its Affiliates to, submit promptly to Buyer and its Affiliates copies of all correspondence, documents, data, reports, information, files, including third-party consulting reports, and records related thereto in its possession submitted to, reported by, or provided to with respect to such Product complaints, inquiries or reports of adverse drug reactions to any Governmental Authority pursuant to applicable Law.

ARTICLE 6.
ADDITIONAL COVENANTS

6.01 Post-Closing Access and Cooperation.

(a) For a period of five (5) years after the Closing Date, Seller shall, and shall cause its Affiliates to, reasonably cooperate with Buyer and to grant to Buyer and its employees, attorneys, accountants, officers, representatives and agents, during normal business hours and upon reasonable advance written notice, reasonable access to management personnel of Seller and its Affiliates and to the records relating to the Assets and to permit copying at Buyer’s expense of documents relating to the Assets for the purposes of (i) any financial reporting or Tax matters (including any financial and Tax audits, Tax contests, Tax examinations, preparation of any Buyer Tax returns or financial records) relating to the Assets or

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the Product; (ii) any claims or litigation involving Buyer and any of the Assets; or (iii) any investigation of Buyer being conducted by any federal, state, or local Governmental Authority relating to the Assets. Seller shall maintain all such records and documents in the United States and shall not destroy or dispose of any such records and documents without the prior written consent of Buyer. Buyer shall use commercially reasonable efforts to ensure that its access to and requests for records and documents pursuant to this Section 6.01(a) are conducted so as not to interfere with the normal and ordinary operation of Seller’s business. Buyer acknowledges that the records and documents made available to Buyer by Seller shall be governed by the Confidentiality Agreement.

(b) For a period of five (5) years after the Closing Date, Buyer shall, and shall cause its Affiliates to, reasonably cooperate with Seller and to grant to Seller and its employees, attorneys, accountants, officers, representatives and agents, during normal business hours and upon reasonable advance notice, reasonable access to management personnel of Buyer and its Affiliates and to the records relating to the Assets during the period the Assets were owned by Seller and to permit copying at Seller’s expense of documents relating to the Assets during the period the Assets were owned by Seller for the purposes of (i) any financial reporting or Tax matters (including any financial and Tax audits, Tax contests, Tax examinations, preparation of any Seller’s Tax Returns or financial records) relating to the Product; (ii) any claims or litigation involving Seller and the Assets relating to the Product; or (iii) any investigation of Seller’s actions prior to Closing being conducted by any federal, state, or local Governmental Authority relating to the Product. Buyer shall maintain all such records and documents in the United States and shall not destroy or dispose of any such records and documents without the prior written consent of Seller. Seller shall use commercially reasonable efforts to ensure that its access to and requests for records and documents pursuant to this Section 6.01(b) are conducted so as not to interfere with the normal and ordinary operation of Buyer’s business. Seller acknowledges that the records and documents made available to Seller by Buyer shall be governed by Section 6.03(c).

6.02 Noncompetition Agreement.

(a) Except as set forth below, Seller covenants and agrees with Buyer that for a period commencing on the Closing Date and ending upon the date of [* * *] (the “Noncompetition Period”), neither Seller nor any of its Affiliates shall, directly or indirectly, engage in the Business or develop, manufacture, import, distribute, package, test, market or sell, or assist any Person in developing, manufacturing, importing, distributing, packaging, testing, marketing or selling (i) any Competing Product (as defined below) in the Territory or (ii) any line extensions or improvements on or to the Product or any Competing Product in the Territory. For purposes of this Section 6.02(a), a “Competing Product” shall mean [* * *]

(b) In addition, Seller agrees that during the Noncompetition Period, if Seller or any of its Affiliates shall sell, license, sublicense or otherwise transfer to any Person any rights related to the MNP Technology, the Business or the Product outside of the Territory, then Seller shall require that such Person agree in writing (for the benefit of Buyer), not to (i) market,

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sell or distribute a Competing Product using the MNP Technology in the Territory, or (ii) sell or distribute such a Competing Product to another Person that intends to sell, market or distribute such a Competing Product in the Territory.

(c) Seller and Buyer acknowledge and agree that a breach of any of Seller’s covenants set forth in this Section 6.02 could cause irreparable harm to Buyer, that Buyer’s remedies at law in the event of such breach would be inadequate, and that, accordingly, in the event of such breach a restraining order, preliminary injunction or injunction or all of said remedies may be issued against Seller and its Affiliates, in addition to any other rights and remedies that are available to Buyer. If this Section 6.02 is more restrictive than permitted by the laws of any jurisdiction in which a party hereto seeks enforcement hereof, this Section 6.02 shall be limited to the extent required to permit enforcement under such laws. In particular, the parties intend that the covenants contained in this Section 6.02 shall be construed as a series of separate covenants, one for each state within the United States and one for each country outside the United States. Except for geographic coverage, each such separate covenant shall be deemed identical in terms. If, in any judicial proceeding, a court shall refuse to enforce any of the separate covenants deemed included in this Section 6.02, then such unenforceable covenant shall be deemed reduced in scope or duration, or eliminated from these provisions for the purpose of those proceedings, to the extent necessary to permit the remaining separate covenants to be enforced and this Section 6.02 to be given effect to the maximum extent permissible.

(d) If all or part of this Section 6.02 is held invalid, illegal or incapable of being enforced by any governmental, administrative or judicial authority, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect. If any part of this Section 6.02 is held to be excessively broad as to duration, scope, activity or subject, such part will be construed by limiting and reducing it so as to be enforceable to the maximum extent compatible with applicable Law.

(e) Notwithstanding any to the contrary herein, if Seller shall consummate a Change of Control transaction with an unrelated third party, then the provisions of this Section 6.02 shall not apply to in any way limit, prohibit or restrict the development, manufacture or sale of a Competing Product (whether as of or following the Change in Control) by or on behalf of such third party. A “Change in Control” shall be defined as any consolidation or merger of Seller with or into any other Person, or any other corporate reorganization (other than any such transaction following which the stockholders of Seller immediately prior to such consolidation, merger or reorganization, retain, by virtue of their equity interest in Seller at least fifty percent (50%) of the voting power of the surviving corporation immediately after such consolidation, merger or reorganization) or any transaction or series of related transactions to which Seller is a party in which in excess of fifty percent (50%) of Seller’s voting power is transferred; or a sale, lease, exclusive license or other disposition of all or substantially all of the assets of Seller.

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6.03 Confidentiality.

(a) Buyer acknowledges that the information previously provided to it in connection with this Agreement and the consummation of the other transactions contemplated hereby is subject to the terms of the Confidentiality Agreement between Buyer and Seller dated as of November 2, 2007 (the “Confidentiality Agreement”), the terms of which are incorporated herein by reference. Effective upon, and only upon, the Closing, Buyer’s obligations under the Confidentiality Agreement shall terminate with respect to information relating to the Business or otherwise included in the Assets or relating to the Product; provided, that Buyer acknowledges that any and all other information provided to it by Seller or Seller’s representatives concerning Seller and its Affiliates shall remain subject to the terms and conditions of the Confidentiality Agreement from and after the Closing Date. Notwithstanding the foregoing, Seller acknowledges and agrees that Buyer may publicly disclose information subject to the Confidentiality Agreement that relates to the Business (i) if and to the extent required by applicable Law, rule or regulation, (ii) with the consent of Seller (not to be unreasonably withheld) or (iii) as expressly provided in the License Agreement.

(b) Each of Buyer and Seller agrees that the terms of this Agreement and the Related Documents shall not be disclosed or otherwise made available to the public and that copies of this Agreement and the Related Documents shall not be publicly filed or otherwise made available to the public, except where such disclosure, availability or filing is required by applicable Law or the rules of any nationally recognized securities exchange and only to the extent required by such Law or the rules of any nationally recognized securities exchange. In the event that such disclosure, availability or filing is required by applicable Law, each of Buyer and Seller (as applicable) agrees to use commercially reasonable efforts to obtain “confidential treatment” of this Agreement and the Related Documents with the U.S. Securities and Exchange Commission (or the equivalent treatment by any other Governmental Authority) and to use commercially reasonable efforts to redact such terms of this Agreement and the Related Documents as the other party shall request. Notwithstanding the foregoing, the parties have approved and are issuing on the date hereof the press release attached hereto as Exhibit D.

(c) Seller shall keep confidential and shall not use, and shall cause its Affiliates, officers, directors, employees, advisors, successors, assigns, licensees and sublicensees, and the officers, directors, employees, advisors, successors, assigns, licensees and sublicensees of Seller’s Affiliates, to keep confidential, all information relating to the Business, the Product and the Assets, and all other confidential or proprietary information of Buyer and its Affiliates (collectively, “Buyer Confidential Information”). Seller’s obligations under this Section 6.03(c) shall not apply to information that Seller can demonstrably prove (i) is, or later becomes, generally available to the public through no fault of Seller or its Affiliates, (ii) is obtained from a third party not under an obligation of confidentiality, or (iii) is required by Law or administrative process to be disclosed. If required by order of any Government Authority, Seller may disclose to such Government Authority, data, information, or materials pertaining to or involving the Buyer Confidential Information solely to the extent required by such order; provided, that Seller shall first have notified Buyer of the required disclosure and provided

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reasonable cooperation to Buyer in Buyer’s efforts to obtain a protective order to maintain the confidentiality of such data, information or materials. Nothing in this Section 6.03 shall limit or restrict the disclosure or use of Buyer Confidential Information solely to the extent as expressly permitted under the terms of Section 6.05 of this Agreement or the express terms of the License Agreement or the express terms of the Supply Agreement.

(d) Seller and Buyer acknowledge and agree that a breach of any of Seller’s covenants set forth in Section 6.03(c) would cause irreparable harm to Buyer, that Buyer’s remedies at law in the event of such breach would be inadequate, and that, accordingly, in the event of such breach a restraining order, preliminary injunction or injunction or all of said remedies may be issued against Seller and its Affiliates, in addition to any other rights and remedies that are available to Buyer.

6.04 Use of Certain Names.

(a) Except as set forth in this Section 6.04, Buyer shall promptly, and in any event within [* * *] after the Closing Date, complete the revision of advertising and promotional materials and all Product literature relating to the Product (i) to delete all references to the Names and (ii) to delete all references to Seller’s or its Affiliates’ customer service address or phone number; provided, that for a period of [* * *] after the Closing Date, Buyer may continue to distribute such advertising and promotional materials and Product literature that uses any Names, addresses or phone numbers to the extent that such literature exists on the Closing Date, and provided further, that the Names may remain on any promotional materials and literature and advertising materials relating to the Product to the extent required by Law or any Governmental Authority for any reason. Subject to the terms and conditions herein, Seller and its Affiliates hereby grant a non-exclusive, non-transferable, fully-paid, royalty-free right and license to Buyer and its Affiliates to use the Names on the promotional materials and literature and advertising materials relating to the Product, to the limited extent and for not longer than the [* * *] period specified herein. Buyer will destroy their inventory of any remaining promotional materials and literature and advertising materials relating to the Product in their possession bearing the Names, address, or phone number, which Names, address and phone numbers are not deleted pursuant to this Section 6.04(a) within [* * *] after the Closing Date. In no event shall Buyer use any of the Names after the Closing Date in any manner or for any purpose other than as set forth in this Section 6.04(a).

(b) Seller hereby grants a non-exclusive and royalty free right and license to Buyer under the Names to the extent necessary to allow Buyer and its Affiliates and their designees to market, distribute and sell the Product utilizing the Labeling existing on the Closing Date as and to the extent set forth above and for a period not to exceed [* * *].

6.05 Retained Copy of Data.

(a) Buyer agrees that Seller shall be entitled to retain (or to reasonably request that Buyer assist it in obtaining at Seller’s sole cost and expense) a complete copy of the NDA

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and IND for the Product in existence as of the date hereof, together with copies of any clinical data related to the Product in Seller’s possession as of the date hereof that is not included in the NDA or IND (collectively the “Retained Copies”). Seller and its successors, assigns, licensees and sublicensees shall be permitted to use the Retained Copies solely for purposes of seeking, obtaining and maintaining regulatory approvals for the Product outside the Territory. Except for disclosure of information in the Retained Copies to Governmental Authorities for such purposes, Seller shall, and shall cause its successors, assigns, licensees and sublicensees to, keep strictly confidential and not use the information contained in the Retained Copies except as permitted in accordance with Section 6.03 or this Section 6.05. Notwithstanding anything to the contrary in this Section 6.05 or otherwise, Seller acknowledges and agrees that to the extent included in the Assets, (a) the Retained Copies and all information and data contained therein constitute valuable, proprietary trade secrets and confidential information of Buyer, (b) Buyer reserves and retains all right, title and interest in the Retained Copies and all information and data contained therein, subject to Seller’s rights under this Section 6.05 and (c) Seller shall not assert any right, title or interest in or to the Retained Copies or the information or data contained therein, except for Seller’s rights under this Section 6.05.

(b) If Seller or any of its Affiliates shall sell, license, sublicense or otherwise transfer to any Person any rights primarily related to the MNP Technology, the Business or the Product outside of the Territory, then Seller shall require that such Person agree in writing (for the benefit of Buyer), not to (i) market, sell or distribute a product using the Retained Copies or the information and data contained therein in the Territory, or (ii) sell or distribute such a product to another Person that intends to sell, market or distribute such a product in the Territory and shall include in the terms of each such license, sublicense or transfer provisions to the effect that (A) any breach of this limitation shall constitute a material breach subject to injunctive relief and (B) the licensee, sublicense or transferee, as the case may be, shall submit to venue and jurisdiction in New York for enforcement of any breach.

6.06 Drug Master Files.

From and after the Closing Date, Seller and its Affiliates shall cooperate with Buyer in obtaining from the applicable third parties rights to access and reference all Drug Master Files, including all data, information and records contained therein, for the Product’s active pharmaceutical ingredients.

ARTICLE 7.
CONDITIONS TO CLOSING

7.01 Conditions to Obligations of Buyer.

The obligation of Buyer to effect the transactions contemplated by this Agreement shall be further subject to the satisfaction or waiver by Buyer at or prior to the Closing of each of the following conditions:

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(a) The representations and warranties of Seller made in this Agreement (including the Schedules) and the Related Documents that are qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date).

(b) Seller shall have performed in all material respects all obligations and covenants required to be performed or complied with by Seller under this Agreement by the time of Closing.

(d) All license, sublicense, development and other Contracts purporting to grant any rights in the Product or the Assets to any Person, including the Esprit License Agreement, shall have been terminated on terms and conditions satisfactory to Buyer, and Seller shall have delivered to Buyer written evidence of such terminations.

(e) Buyer shall have entered into the Supply Agreement with Seller for the manufacture and supply of the Product to Buyer on terms and conditions satisfactory to Buyer and Seller.

(f) Buyer shall have consummated the closing under the AGN Asset Purchase Agreement simultaneously with the consummation of the Closing under this Agreement.

7.02 Conditions to Obligations of Seller.

The obligation of Seller to effect the transactions contemplated by this Agreement shall be further subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions:

(a) The representations and warranties of Buyer made in this Agreement and the Related Documents that are qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date).

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(b) Buyer shall have performed in all material respects all obligations and covenants required to be performed or complied with by Buyer under this Agreement by the time of Closing.

(d) Buyer shall have executed and delivered the License Agreement.

(e) Buyer shall have consummated the closing under the AGN Asset Purchase Agreement simultaneously with the consummation of the Closing under this Agreement.

(f) Buyer shall have entered into the Supply Agreement with Seller for the manufacture and supply of the Product to Buyer on terms and conditions satisfactory to Buyer and Seller.

ARTICLE 8.
CLOSING

8.01 Time and Place of Closing.

The closing of the purchase and sale of the Assets pursuant to this Agreement (the “Closing”) shall take place on the date of this Agreement (the “Closing Date”) at the offices of McDermott Will & Emery LLP, 600 13th Street, N.W., Washington, D.C., or at such other time and place as the parties may agree in writing.

8.02 Delivery by Seller.

At the Closing, Seller shall deliver to Buyer the following:

(a) The following instruments of transfer duly executed by Seller (or, if applicable, its Affiliate):

	(i)		the Bill of Sale;

	(ii)		the Assignment of Patents; and

	(iii)		the Assignment of Trademarks.

(b) Copies of documents, materials and files required to be delivered by Seller to Buyer at Closing pursuant to this Agreement, including (i) a complete copy of the Product Registrations and other materials set forth in Section 2.01(c); and (ii) copies of the materials comprising the Books and Records described in Section 2.01(d). If the documents,

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materials and files in items (i) and (ii) are not available to Seller at Closing, Seller may deliver such documents, materials and files to Buyer promptly upon becoming available to Seller and in any case within thirty (30) days following the Closing.

(d) Any other documents or instruments reasonably requested by Buyer.

8.03 Delivery by Buyer.

At the Closing, Buyer shall deliver to Seller the Purchase Price in the amount and manner set forth in Section 2.04 and Section 2.05.

ARTICLE 9.
SURVIVAL; INDEMNIFICATION

9.01 Survival of Representations.

All representations and warranties, covenants and agreements of Seller and Buyer contained in or made pursuant to this Agreement, in any Related Document, or in any certificate furnished pursuant hereto shall survive the Closing Date and shall remain in full force and effect to the following extent: (a) representations and warranties of Seller and Buyer in Articles 3 and 4, respectively, shall remain in full force and effect for a period of [* * *] years from and after the Closing Date (except for the representations and warranties of Seller set forth in Section 3.12); (b) the representation and warranties of Seller set forth in Section 3.12 shall survive in perpetuity; and (c) the covenants and agreements of Buyer and Seller set forth in this Agreement shall remain in full force and effect until fully discharged in accordance with the express terms thereof; provided, however, that, in all cases, any representation, warranty, covenant or agreement that is the subject of a claim which occurred prior to the expiration of the applicable survival period is asserted by the party seeking indemnification hereunder in a reasonably detailed writing delivered to the other party or parties, as the case may be, prior to the expiration of the applicable survival period shall survive with respect to such claim or dispute until the final resolution thereof.

9.02 Indemnification by Seller.

Subject to the conditions and provisions of Section 9.04 and Section 9.05, from and after the Closing Date, Seller shall indemnify, defend and hold harmless Buyer and Buyer’s officers, directors, employees, agents and shareholders (“Buyer Indemnified Parties”) from and against and in any respect of any and all Losses, asserted against, resulting to, imposed upon or incurred by any Buyer Indemnified Parties, directly or indirectly, by reason of or resulting from: (a) any misrepresentation or breach of the representations, warranties and certifications of Seller

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contained in or made pursuant to this Agreement; (b) any breach by Seller of any post-Closing covenants of Seller contained in or made pursuant to this Agreement; or (c) the Excluded Liabilities.

9.03 Indemnification by Buyer.

Subject to the conditions and provisions of Section 9.04 and Section 9.05, from and after the Closing Date, Buyer hereby agrees to indemnify, defend and hold harmless Seller, and officers, directors, employees, agents and partners of Seller (“Seller Indemnified Parties”) from, against and with respect of any and all Losses, asserted against, resulting to, imposed upon or incurred by any Seller Indemnified Parties, directly or indirectly, by reason of or resulting from: (a) any misrepresentation or breach of the representations, warranties and certifications of Buyer (without giving effect to any materiality or material adverse effect qualifiers set forth therein) contained in or made pursuant to this Agreement; or (b) any breach by Buyer of any post-Closing covenants of Buyer contained in or made pursuant to this Agreement.

9.04 Limitations on Indemnification.

(a) Subject to Section 9.04(e), Seller shall not be liable to the Buyer Indemnified Parties in respect of any indemnification for Losses under Section 9.02(a) unless and until the aggregate of such Losses exceeds [* * *] (the “Threshold Amount”), in which event Seller shall be liable for indemnification pursuant to Section 9.02(a) for only the aggregate amount of all such Losses in excess of the Threshold Amount, up to the maximum amount set forth in Section 9.04(b).

(b) Subject to Section 9.04(e), the maximum aggregate liability of Seller to the Buyer Indemnified Parties in respect of any indemnification under Section 9.02(a) shall not exceed [* * *] (the “Indemnity Cap”).

(c) Subject to Section 9.04(f), Buyer shall not be liable to the Seller Indemnified Parties in respect of any indemnification for Losses under Section 9.03(a) unless and until the aggregate of such Losses exceeds the Threshold Amount, in which event Buyer shall be liable for indemnification pursuant to Section 9.03(a) for only the aggregate amount of all such Losses in excess of the Threshold Amount, up to the maximum amount set forth in Section 9.04(d).

(d) Subject to Section 9.04(f), the maximum liability of Buyer to the Seller Indemnified Parties in respect of any indemnification under Section 9.03(a) shall not exceed the Indemnity Cap.

(e) The limitations on liability set forth in Section 9.04(a) and Section 9.04(b) shall not apply with respect to Losses resulting from (i) any breach of any of the representations and warranties of Seller set forth in Section 3.12, (ii) Seller’s fraud in connection with the transactions contemplated hereby; and (iii) any breach by Seller, or any failure of Seller

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to perform, any of the post-Closing covenants, agreements or obligations contained in or made pursuant to this Agreement.

(f) The limitations on liability set forth in Section 9.04(c) and Section 9.04(d) shall not apply with respect to Losses resulting from (i) any breach of any of the representations and warranties of Buyer set forth in Section 4.04, (ii) Buyer’s fraud in connection with the transactions contemplated hereby; and (iii) any breach by Buyer, or any failure of Buyer to perform, any of the post-Closing covenants, agreements or obligations contained in or made pursuant to this Agreement.

9.05 Conditions of Indemnification.

The obligations and liabilities of Seller and of Buyer hereunder with respect to their respective indemnities pursuant to this Article 9, resulting from any Losses, shall be subject to the following terms and conditions:

(a) The party seeking indemnification (the “Indemnified Party”) must give the other party or parties, as the case may be (the “Indemnifying Party”), notice of any such Losses promptly after the Indemnified Party receives notice thereof; provided, that the failure to give such notice shall not affect the rights of the Indemnified Party hereunder except to the extent that the Indemnifying Party shall have suffered actual damage by reason of such failure.

(b) The Indemnifying Party shall have the right to undertake, by counsel or other representatives of its own choosing (reasonably acceptable to the Indemnified Party), the defense of such Losses at the Indemnifying Party’s risk and expense; provided, however, that the Indemnifying Party shall not have the right to defend against such Losses, and the provisions of Section 9.05(c) shall apply with respect to the defense of such Losses, if Buyer reasonably determines (after consultation with Seller) that the amount of such Losses are reasonably expected to exceed the limitations of liability of the Indemnifying Party set forth in Section 9.04.

(c) In the event that the Indemnifying Party shall elect not to undertake such defense, or, within a reasonable time after notice from the Indemnified Party of any such Losses, shall fail to defend, the Indemnified Party (upon further written notice to the Indemnifying Party) shall have the right to undertake the defense, compromise or settlement of such Losses, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the Indemnifying Party (subject to the right of the Indemnifying Party to assume defense of such Losses at any time prior to settlement, compromise or final determination thereof (with counsel reasonably acceptable to the Indemnified Party)).

(d) Anything in this Section 9.05 to the contrary notwithstanding, (i) the Indemnifying Party shall not, without the Indemnified Party’s written consent (which consent shall not be unreasonably withheld, conditioned or delayed), settle or compromise any Losses or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party of a release from all liability in

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respect of such Losses in form and substance reasonably satisfactory to the Indemnified Party, (ii) in the event that the Indemnifying Party undertakes defense of any Losses, the Indemnified Party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the Indemnifying Party and its counsel or other representatives concerning such Losses and the Indemnifying Party and the Indemnified Party and their respective counsel or other representatives shall cooperate with respect to such Losses, (iii) in the event that the Indemnifying Party undertakes defense of any Losses, the Indemnifying Party shall have an obligation to keep the Indemnified Party reasonably informed of the status of the defense of such Losses and furnish the Indemnified Party with all documents, instruments and information that the Indemnified Party shall reasonably request in connection therewith, and (iv) in the event that both the Indemnified Party and the Indemnifying Party are parties (directly or through interpleader) to any Losses giving rise to indemnification hereunder and the Indemnified Party is advised by counsel that there is a conflict of interest in the representation of both the Indemnified Party and the Indemnifying Party by one firm of counsel, the Indemnified Party shall be entitled to assume, at the sole cost and expense of the Indemnifying Party, the defense, compromise and settlement (subject to clause (i) above) of such Loss with one counsel (in addition to local counsel) reasonably satisfactory to the Indemnifying Party.

(e) In the event that an Indemnified Party has a good faith basis for a claim for indemnification which does not involve a claim against it by a third party (a “Direct Claim”), the Indemnified Party shall notify the Indemnifying Party in writing of such Direct Claim with reasonable promptness, specifying, to the extent known, the nature, circumstances and amount of such Direct Claim, including with particularity the specific representation and warranty or covenant and agreement alleged to have been breached; provided, that the failure to give such notice shall not affect the rights of the Indemnified Party hereunder except to the extent that the Indemnifying Party shall have suffered actual damage by reason of such failure. If the Indemnifying Party notifies the Indemnified Party that it disputes an Indemnified Party’s right of indemnification with respect to a particular Direct Claim, the parties shall use their reasonable efforts to negotiate a resolution of such dispute promptly. Except to the extent of the limitations on indemnification set forth in this Article 9, nothing in this Section 9.05(e) shall be deemed to prevent any Indemnified Party from initiating litigation under this Agreement with respect to any Direct Claim disputed by the Indemnifying Party for the purpose of establishing the Indemnified Party’s right to indemnification hereunder.

9.06 Indemnification in the Case of Indemnified Party Negligence.

THE INDEMNIFICATION PROVIDED IN THIS ARTICLE 9 WITH RESPECT TO ANY BREACH OF A REPRESENTATION OR WARRANTY OF A PARTY SHALL BE APPLICABLE WHETHER OR NOT THE SOLE OR CONCURRENT NEGLIGENCE OF THE INDEMNIFIED PARTY, OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED ON THE INDEMNIFIED PARTY, OR THE SOLE OR CONCURRENT LIABILITY IMPOSED VICARIOUSLY ON THE INDEMNIFIED PARTY, IS ALLEGED OR PROVEN.

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9.07 Disclaimer.

IN NO EVENT SHALL THE INDEMNIFICATION OBLIGATIONS UNDER THIS ARTICLE 9 OR OTHERWISE UNDER THIS AGREEMENT OR THE TERM “LOSSES” COVER OR INCLUDE CONSEQUENTIAL, INCIDENTAL, SPECIAL, INDIRECT, OR PUNITIVE DAMAGES OR LOST PROFITS SUFFERED BY AN INDEMNIFIED PARTY, NOR SHALL ANY DAMAGES BE CALCULATED USING A “MULTIPLIER” OR ANY OTHER SIMILAR METHOD HAVING A SIMILAR EFFECT, WHETHER BASED ON STATUTE, CONTRACT, TORT OR OTHERWISE, AND WHETHER OR NOT ARISING FROM THE INDEMNIFYING PARTY’S SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR TORT.

9.08 Sole and Exclusive Remedy.

Except for any equitable relief to which the Buyer Indemnified Parties, on the one hand, and the Seller Indemnified Parties, on the other hand may be entitled (including pursuant to Section 10.01), and for claims based upon fraud, the indemnification provided in this Article 9 shall be the sole and exclusive post-Closing recourse and remedy available to the Buyer Indemnified Parties, on the one hand, and the Seller Indemnified Parties, on the other hand, for any claim under or related to this Agreement or the transactions contemplated hereby, including any breach or non-performance of any representation, warranty, covenant or agreement contained herein. Except for any equitable relief to which Buyer Indemnified Parties, on the one hand, and the Seller Indemnified Parties, on the other hand may be entitled (including pursuant to Section 10.01), and for claims based upon fraud, no party (and no Affiliate of any party) may commence any suit, action or proceeding against any other party hereto or any of their respective Affiliates with respect to the subject matter of this Agreement, whether in contract, tort or otherwise, except to enforce such party’s express rights under this Article 9. The provisions of this Article 9 were specifically bargained for and reflected in the amounts payable to the Seller Indemnified Parties in connection with the consummation of the transactions contemplated by this Agreement.

9.09 Indemnity Payments [* * *].

It is the intention of the parties to treat any indemnity payment made under this Agreement [* * *].

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ARTICLE 10.
GENERAL PROVISIONS

10.01 Specific Performance.

Seller hereby acknowledges that the Assets are unique, and that the harm to Buyer resulting from Seller’s failure to perform their obligations hereunder cannot be adequately compensated by damages. Accordingly, Seller agrees that Buyer shall have the right to have all obligations, undertakings, agreements, covenants and other provisions of this Agreement specifically performed by Seller. In any such specific performance action, Seller agrees to waive the defense that there is an adequate remedy at law for damages and agree that Buyer shall be entitled to obtain specific performance of Seller’s obligations hereunder without having to post any bond or other security in any such proceeding.

10.02 Additional Actions, Documents and Information.

Buyer agrees that it will, at any time, at or after the Closing Date, take or cause to be taken such further actions, and execute, deliver and file or cause to be executed, delivered and filed such further documents and instruments and obtain such consents, as may be reasonably requested by Seller in connection with the consummation of the transactions contemplated by this Agreement. Seller agrees that it will, at any time, at or after the Closing Date, take or cause to be taken such further actions, and execute, deliver and file or cause to be executed, delivered and filed such further documents and instruments and obtain such consents, as may be reasonably requested by Buyer in connection with the consummation of the transactions contemplated by this Agreement, including, in the event that any Assets are owned by any Affiliate of Seller, causing such Affiliate to transfer the Assets to Buyer.

10.03 Expenses and Taxes.

Each party hereto shall pay its own expenses incurred in connection with this Agreement and in the preparation for and consummation of the transactions provided for herein. Notwithstanding the foregoing, Buyer shall pay [* * *] and Seller shall pay [* * *] of all sales, use, documentary, stamp, gross receipts, registration, transfer, conveyance, excise, recording, license and other similar Taxes and fees (“Transfer Taxes”) applicable to, imposed upon or arising out of the transactions contemplated hereby whether now in effect or hereinafter adopted and regardless of which party such Transfer Tax is imposed upon. Each party agrees to cooperate with such other party in the timely completion, execution and filing of any documentation required by any local or state governmental agency in connection with the Transfer Taxes.

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10.04 Notices.

All notices, demands, requests, or other communications which may be or are required to be given or made by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, or transmitted by telegram, telex, or facsimile transmission addressed as follows:

If to Seller:

Novavax, Inc.
9920 Belward Campus Drive
Rockville, Maryland 20850
Telephone: (240) 268-2000
Facsimile: (240) 268-2122
Attention: Ray Hage

with a copy to:

Cooley Godward Kronish LLP
One Freedom Square
Reston Town Center
11951 Freedom Drive
Reston, VA 20190-5656
Telephone: (703) 456-8581
Facsimile: (703) 456-8100
Attention: Kenneth J. Krisko, Esq.

If to Buyer, to:

Graceway Pharmaceuticals, LLC
340 Martin Luther King Jr. Blvd.
Suite 500
Bristol, Tennessee 37620
Telephone: (423) 274-2100
Facsimile: (423) 274-2199
Attention: General Counsel

with a copy to:

McDermott Will & Emery LLP
600 13th Street, N.W.
Washington, D.C. 20005-3096

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Telephone: (202) 756-8035
Facsimile: (202) 756-8087
Attention: Thomas E. Repke, Esq.

or such other address as the addressee may indicate by written notice to the other parties.

Each notice, demand, request, or communication which shall be given or made in the manner described above shall be deemed sufficiently given or made for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, the affidavit of messenger or (with respect to a telex) the answerback being deemed conclusive but not exclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

10.05 Waiver.

No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement or under any other instrument or document given in connection with or pursuant to this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein.

10.06 Assignment.

Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party; provided, that Buyer may assign this Agreement to an Affiliate of Buyer, but any such assignment shall not relieve Buyer of Buyer’s obligations hereunder and provided, that Seller shall be permitted, to the extent necessary, to assign all, but not less than all, of Seller’s rights under this Agreement to a buyer in a Change of Control transaction if such buyer shall agree in writing to be bound by the terms and conditions of this Agreement. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.

10.07 Entire Agreement; Amendment.

This Agreement, including the Schedules, Exhibits and Annexes hereto, the Confidentiality Agreement, the Supply Agreement, the License Agreement and the other instruments and documents referred to herein or delivered pursuant hereto contains the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, commitments or understandings with respect to such matters. No

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amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by the party or parties against whom enforcement of the amendment, modification or discharge is sought.

10.08 Severability.

If any part of any provision of this Agreement or any other Contract, document or writing given pursuant to or in connection with this Agreement shall be invalid or unenforceable under applicable Law, such part shall be ineffective to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of such provisions or the remaining provisions of said contract, document or writing.

10.09 Table of Contents; Headings.

The Table of Contents and headings of the sections and subsections contained in this Agreement are inserted for convenience only and do not form a part or affect the meaning, construction, interpretation or scope thereof.

10.10 Construction.

The construction of this Agreement shall not take into consideration the party who drafted or whose representative drafted any portion of this Agreement, and no canon of construction shall be applied that resolves ambiguities against the drafter of a document. Each party acknowledges that: (a) it has read this Agreement; (b) it has been represented in the preparation, negotiation and execution of this Agreement by legal counsel of its own choice or has voluntarily declined to seek such counsel; and (c) it understands the terms and consequences of this Agreement and is fully aware of the legal and binding effect of this Agreement.

10.11 Waiver of Bulk Sales.

Seller and Buyer waive compliance with any bulk sales law or similar law in connection with the consummation of the transactions contemplated herein.

10.12 Governing Law; Jurisdiction.

This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed under and in accordance with the laws of the State of New York, without giving effect to the conflicts of law principles thereof (other than Section 5-1401 of the New York General Obligations Law). The parties hereto hereby waive personal service of any process in connection with any such action, suit or proceeding and agree that the service thereof may be made by certified or registered mail addressed to or by personal delivery to the other party, at such other party’s address set forth

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pursuant to Section 10.04 hereof. In the alternative, in its discretion, any of the parties hereto may effect service upon any other party in any other form or manner permitted by Law.

10.13 Signature in Counterparts.

This Agreement may be executed in separate counterparts, none of which need contain the signatures of all parties, each of which shall be deemed to be an original, and all of which taken together constitute one and the same instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than the number of counterparts containing the respective signatures of, or on behalf of, all of the parties hereto.

[The remainder of this page intentionally left blank.]

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IN WITNESS WHEREOF, each of the parties hereto has executed this Asset Purchase Agreement, or has caused this Asset Purchase Agreement to be duly executed and delivered in its name on its behalf, all as of the day and year first above written.


SELLER NOVAVAX, INC.
By:	/s/ Raymond J. Hage, Jr.
Name:		Raymond J. Hage, Jr.
Title:		SVP Commercial Operations


BUYER GRACEWAY PHARMACEUTICALS, LLC
By:	/s/ Jefferson J. Gregory
Name:		Jefferson J. Gregory
Title:		Chairman and CEO

ANNEX I
DEFINITIONS

“Affiliate” shall mean, with respect to any Person, any other Person that, (a) directly or indirectly is in control of, is controlled by, or is under common control with, the first Person, (b) is an officer, director, trustee, partner (general or limited), employee or holder of ten percent (10%) or more of any class of any voting or non-voting securities or other equity in the first Person, and (c) is an officer, director, trustee, partner (general or limited), employee or holder of ten percent (10%) or more of any class of the voting or non-voting securities or other equity in any Person which directly or indirectly is in control of, is controlled by, or is under common control with, the first Person. For purposes of this definition, “control” (including with correlative meanings “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of either (i) ten percent (10%) or more of the voting power of the securities having ordinary voting power for the election of directors of the first Person, or (ii) the power to direct or cause the direction of the management or policies of the first Person (whether through ownership of securities, partnership interests or any other ownership or debt interests, by contract or otherwise).

“AGN Asset Purchase Agreement” shall have the meaning set forth in the Recitals.

“Agreement” shall have the meaning set forth in the Preamble.

“Allergan” shall have the meaning set forth in the Recitals.

“Assets” shall have the meaning set forth in Section 2.01.

“Assigned Intellectual Property” shall have the meaning set forth in Section 2.01(a).

“Assignment of Patents” means that certain Assignment of Patents executed by Seller in the form attached hereto as Exhibit A.

“Assignment of Trademarks” means that certain Assignment of Trademarks executed by Seller in the form attached hereto as Exhibit B.

“Bankruptcy Code” shall have the meaning set forth in Section 3.14(d).

“Bill of Sale” means that certain Bill of Sale and Assignment of Assets, dated as of the Closing Date and executed by Seller, in the form attached hereto as Exhibit C.

“Books and Records” shall have the meaning set forth in Section 2.01(d).

“Business” means the manufacturing, warehousing, testing and other operations conducted as of the date hereof by or on behalf of Seller or any of its Affiliates, in each case with respect to the Product in the Territory.

“Buyer” shall have the meaning set forth in the Preamble.

“Buyer Confidential Information” shall have the meaning set forth in Section 6.03(c)

“Buyer Indemnified Parties” shall have the meaning set forth in Section 9.02.

“Catalent Facility” shall mean the manufacturing facility of Catalent Pharma Solutions, Inc. located at 3002 Red Lion Road, Philadelphia, Pennsylvania 10014.

“Change of Control” shall have the meaning set forth in Section 6.02(e)

“Closing” shall have the meaning set forth in Section 8.01.

“Closing Date” shall have the meaning set forth in Section 8.01.

“Competing Product” shall have the meaning set forth in Section 6.02(a).

“Confidentiality Agreement” shall have the meaning set forth in Section 6.03(a).

“Contract” shall mean any agreement, contract, lease, consensual obligation, promise, or undertaking (whether written or oral and whether express or implied), whether or not legally binding.

“Copyrights” shall mean all registered and unregistered copyrights in both published works and unpublished works that relate primarily to the Product or that are used in connection with the operation of the Business.

“Direct Claim” shall have the meaning set forth in Section 9.05(e).

“Encumbrances” means any charge, claim, community property interest, condition, equitable interest, lien (statutory or otherwise), option, pledge, security interest, mortgage, right of way, easement, encroachment, servitude, right of first option, right of first refusal or similar restriction, including any restriction on use, voting (in the case of any security or equity interest), transfer, exercise of any other attribute of ownership, financing statement or similar encumbrance of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any lease having substantially the same effect as any of the foregoing and any assignment or deposit arrangement in the nature of a security device); provided, however, that Encumbrance(s) shall not include any restrictions on the Assets arising

pursuant to and in accordance with the following: (i) the License Agreement; (ii) Seller’s right to use the Assets under the terms of the Supply Agreement; or (iii) that certain [* * *]

“Esprit” shall have the meaning set forth in the Recitals.

“Esprit License Agreement” mean the License Agreement dated October 18, 2005, between Novavax and Esprit, and all amendments thereto.

“Excluded Assets” shall have the meaning set forth in Section 2.02(a).

“Excluded Liabilities” shall have the meaning set forth in Section 2.03.

“FDA” shall mean the Food and Drug Administration.

“FDCA” means the United States Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder.

“Formulae” shall mean the percentages and specifications of ingredients used to manufacture a pharmaceutical product.

“GAAP” means generally accepted accounting principles consistently applied for the periods involved.

“Governmental Authority” means any agency, board, bureau, court, commission, department, instrumentality or administration of the United States government, any state government, any local government, any provincial government or other governmental body or instrumentality having jurisdiction in the Territory.

“Indemnified Party” and “Indemnifying Party” shall have the respective meanings set forth in Section 9.05(a).

“Indemnity Cap” shall have the meaning set forth in Section 9.04(b).

“Intellectual Property” shall mean any or all of the following and all rights in, arising out of, or associated therewith: (i) all United States and foreign patents and utility models and applications therefor and all reissues, divisions, re-examinations, renewals, extensions, provisionals, continuations and continuations-in-part thereof, and equivalent or similar rights anywhere in the world in inventions and discoveries including invention disclosures; (ii) all trade secrets and other rights in know-how and confidential or proprietary information; (iii) all copyrights, copyrights registrations and applications therefor and all other rights corresponding thereto throughout the world; (iv) all industrial designs and any registrations and applications therefor throughout the world; (v) all rights in world wide web addresses and domain names and applications and registrations therefor; (vi) all trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor and all goodwill associated therewith throughout the world; (vii) any

similar, corresponding or equivalent rights to any of the foregoing anywhere; and (viii) all rights to sue or recover and retain damages and costs and attorneys’ fees for past, present and future infringement or breach of any of the foregoing.

“Know-How” means any proprietary or nonproprietary information related to the manufacture, preparation, development (both research and clinical), or commercialization of a product, including product specifications, processes, product designs, plans, trade secrets, ideas, concepts, inventions, formulae, chemical, pharmacological, toxicological, pharmaceutical, physical, analytical, stability, safety, quality assurance, quality control and clinical data or information, technical information, research records or information, and all other confidential or proprietary technical and business information, whether or not embodied in any documentation or other tangible materials.

“Labeling” shall be as defined in Section 201(m) of the FDCA, 21 U.S.C. § 321(m), including the applicable Product’s label, packaging and package inserts accompanying such Product, and any other written, printed, or graphic materials accompanying such Product, including patient instructions or patient indication guides.

“Law(s)” means any federal, state or local law, statute, code, ordinance, regulation, order, writ, injunction, judgment or decree applicable to the specified Person and to the businesses and assets thereof.

“License Agreement” means the License Agreement dated as of the date hereof between Buyer and Seller.

“Liabilities” means, as to any Person, all debts, adverse claims, commitments, liabilities and obligations, direct, indirect, absolute or contingent of such Person, whether accrued, vested or otherwise, whether in contract, tort, strict liability or otherwise and whether or not actually reflected, or required by GAAP to be reflected, in such Person’s balance sheets or other books and records.

“Losses” means any liabilities, demands, claims, actions, causes of action, third party out of pocket costs and other reasonable costs, damages, deficiencies, Taxes, penalties, fines, judgments, settlements, arbitrations, assessments, obligations (including those arising out of any action, such as any settlement or compromise thereof of judgment or award therein or other loss or expense, whether or not arising out of a third party claim, including all interest, penalties, reasonably attorneys’ fees and expenses, reasonable accountants’ fees and expenses and all amounts paid or incurred in connection with any such action, demand, proceeding, investigation, preservation or enforcement of rights to indemnification), or claim (including any Governmental Authority or any department, agency or political subdivision thereof) and the investigation, defense or settlement of any of the foregoing.

“Manufacturing Equipment” shall have the meaning set forth in Section 2.01(e).

“Material Adverse Change” means any effect that is, or is likely to be, materially adverse to the Business taken as a whole; provided, however, that none of the following shall be deemed, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been, a Material Adverse Change: any failure to meet internal or other estimates, predictions, projections or forecasts of financial performance, or to achieve any forecasted, projected or planned milestones; any adverse effect (including any claim, litigation, cancellation of or delay in customer orders, reduction in revenues or income, disruption of business relationships or loss of employees) arising from or attributable or relating to the announcement of the transactions contemplated by this Agreement; conditions affecting any of the industries in which Buyer operates or participates, or the U.S. economy or financial markets; the taking of any action reasonably required to cause compliance with the terms of, or the taking of any action required by, this Agreement; or the success of any product that competes with the Business.

“Marks” shall mean the mark Estrasorb® and any other marks relating primarily to the Product or that are used in connection with the operation of the Business, together with the goodwill symbolized by such Marks.

“MNP Technology” shall have the meaning set forth in the Recitals.

“Names” means “Novavax, Inc.”, “Novavax”, variations and derivatives thereof and any other logos or trademarks, trade names or service marks of Seller or its Affiliates not included on Schedule 2.01(a).

“NDA” means a New Drug Application for any product, as appropriate, requesting permission to place a drug on the market in accordance with the FDCA, and all supplements or amendments filed pursuant to the requirements of the FDA, including all documents, data and other information concerning a product which are reasonably necessary for FDA approval to market a product in the United States.

“Patents” shall mean the patent described in Schedule 2.01(a), and all other issued patents (including all reissues, divisions, re-examinations, renewals, extensions, provisionals, continuations and continuations-in-part thereof, and equivalent or similar rights anywhere in the world thereof), pending or unfiled patent applications and inventions and discoveries that may be patentable that relate primarily to the Product or that are used in connection with the operation of the Business.

“Person” or “person” means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization, other form of business or legal entity or Governmental Authority.

“PHSA” shall mean the Public Health Services Act, as amended, and the regulations thereunder.

“Pre-Closing Receivables” shall have the meaning set forth in Section 2.02(a)(iii).

“proceeding” shall mean any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, whether public or private) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Authority or arbitrator.

“Product” shall have the meaning set forth in the Recitals.

“Product Registrations” shall have the meaning set forth in Section 2.01(c).

“Purchase Price” shall have the meaning set forth in Section 2.04.

“Related Documents” means, collectively, this Agreement, the Supply Agreement, the License Agreement and the other agreements, documents, instruments and certificates executed and delivered in connection with the transactions contemplated by this Agreement.

“Schedules” means the disclosure schedules delivered by Seller to Buyer in connection herewith.

“Seller” shall have the meaning set forth in the Preamble.

“Seller Indemnified Parties” shall have the meaning set forth in Section 9.03.

“Seller’s Tax Returns” means all federal, state, local, foreign and other applicable Tax returns, declarations of estimated Tax reports required to be filed by Seller (without regard to extensions of time permitted by law or otherwise).

“Supply Agreement” means the Supply Agreement between Seller and Buyer dated as of the date hereof.

“Taxes” means all federal, state and local taxes (including income, profit, franchise, sales, use, real property, personal property, ad valorem, excise, employment, social security and wage withholding taxes) and installments of estimated taxes, assessments, deficiencies, levies, imports, duties, license fees, registration fees, withholdings, or other similar charges of every kind, character or description imposed by any Governmental Authorities.

“Territory” shall mean the United States, Canada and Mexico.

“Threshold Amount” shall have the meaning set forth in Section 9.04(a).

“Trade Secrets” shall mean all Know-How, Formulae, trade secrets, inventions and discoveries, confidential information, research records, test information, customer lists,

software, manufacturing and technical information, data, process technology, plans, drawings and blue prints owned, used or licensed by Seller or its Affiliates as licensee or licensor that relate primarily to the Product or that are used in connection with the operation of the Business.

“Trademark Registrations” shall mean all pending trademark and service mark applications and registrations for the Marks in the Territory.

“Transferred Know How” shall have the meaning set forth in Section 2.01(b).

“Transfer Taxes” shall have the meaning set forth in Section 10.03.

“United States” shall mean the fifty states of the United States of America and its territories and possessions including Puerto Rico, irrespective of its political structure, and the District of Columbia.

EX-10.2 3 w50357exv10w2.htm EX-10.2 exv10w2

Exhibit 10.2

SUPPLY AGREEMENT

THIS SUPPLY AGREEMENT (this “Agreement”) dated as of February 19, 2008, by and between NOVAVAX, INC., a Delaware corporation (“Novavax”), and GRACEWAY PHARMACEUTICALS, LLC, a Delaware limited liability company (“Graceway”). Novavax and Graceway may be referred to individually as a “Party” or collectively as the “Parties”.

WHEREAS, Novavax has been engaged in the development, manufacture, and supply of the Product (as hereinafter defined);

WHEREAS, on the date hereof, Graceway and Novavax have entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) for the acquisition by Graceway from Novavax of all rights of Novavax associated with the Product in the Territory; and

WHEREAS, Graceway desires to have Novavax manufacture and supply, and Novavax desires to manufacture and supply to Graceway, the Product for sale by Graceway or its designees, subject to the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and of the representations, warranties, mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the Parties hereto agree as follows:

ARTICLE 1
DEFINITIONS AND INTERPRETATIONS

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

“Affiliate” shall mean, with respect to any Person, any other Person that, (a) directly or indirectly is in control of, is controlled by, or is under common control with, the first Person, (b) is an officer, director, trustee, partner (general or limited), employee or holder of ten percent (10%) or more of any class of any voting or non-voting securities or other equity in the first Person, or (c) is an officer, director, trustee, partner (general or limited), employee or holder of ten percent (10%) or more of any class of the voting or non-voting securities or other equity in any Person which directly or indirectly is in control of, is controlled by, or is under common control with, the first Person. For purposes of this definition, “control” (including with correlative meanings “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of either (i) ten percent (10%) or more of the voting power of the securities having ordinary voting power for the election of directors of the first Person, or (ii) the power to direct or cause the direction of the management or policies of the first Person (whether through ownership of securities, partnership interests or any other ownership or debt interests, by contract or otherwise).

“Agreement” shall have the meaning set forth in the Preamble.

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“Allergan Agreement” shall mean the Asset Purchase Agreement dated as of the date hereof among Graceway, Allergan USA, Inc. and Allergan, Inc.

“Asset Purchase Agreement” shall have the meaning set forth in the Preamble.

“Bankruptcy Code” shall have the meaning set forth in Section 7.02.

“Bankruptcy Laws” shall have the meaning set forth in Section 7.02.

“cGMP” shall mean good manufacturing practices according to 21 C.F.R. Parts 210 and 211.

“Catalent” shall mean Catalent Pharma Solutions, Inc. as the contract manufacturer of the Product pursuant to the Catalent Agreement.

“Catalent Agreement” shall mean the Facility Reservation Agreement dated February 8, 2002, between Novavax and Catalent, as renewed and amended by that certain letter agreement dated February 12, 2008 between Catalent and Novavax.

“Catalent Facility” shall mean Catalent’s manufacturing facility for the Product located at 3001 Red Lion Road, Philadelphia, Pennsylvania 10014.

“Confidential Information” shall have the meaning set forth in Section 13.01.

“Damages” shall have the meaning ascribed to such term in Section 16.01.

“Delivery Schedule” shall have the meaning set forth in Section 4.01(a).

“Expiration Date” shall have the meaning set forth in Article 6.

“FDA” means the United States Food and Drug Administration and successor bodies.

“Force Majeure Event” shall have the meaning set forth in Article 11.

“Indemnified Party” shall have the meaning set forth in Section 16.03.

“Indemnifying Party” shall have the meaning set forth in Section 16.03.

“Lot” means approximately [* * *] Units of the Product.

“Manufacturing Equipment” shall mean the Manufacturing Equipment transferred and assigned by Novavax to Graceway pursuant to the Asset Purchase Agreement.

“Packaging and Promotional Material” shall have the meaning set forth in Article 12.

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“Product” shall mean Estrasorb, as more fully described on Schedule A to this Agreement, manufactured and packaged in accordance with the Specifications.

“Raw Materials” shall mean the materials, components and packaging required to manufacture and package the Product in accordance with the Specifications.

“Raw Materials Inventory” shall mean the Raw Materials acquired by Graceway pursuant to the Allergan Agreement.

“Raw Materials Specifications” shall mean the specifications for the composition, product safety assurance, manufacture, packaging, and/or quality control of the Raw Materials, as set forth on Schedule B-1 attached hereto and made a part hereof, as the same may hereafter be modified by mutual agreement of the Parties in writing.

“Specifications” shall mean the specifications for the design, composition, product safety assurance, manufacture, packaging, and/or quality control of the Product, as set forth on Schedule B-2 attached hereto and made a part hereof, as the same may hereafter be modified by mutual agreement of the Parties in writing.

“Stability Date” shall have the meaning set forth in Section 10.06.

“Territory” shall mean the United States, Mexico and Canada.

“Third Party Claim” shall have the meaning set forth in Section 16.03.

“Unit” means a packaged month of therapy of the Product for an individual end user, consisting of 56 pouches each containing 1.74 grams of the Product.

ARTICLE 2
SUPPLY OF THE PRODUCT

During the term of this Agreement, Novavax shall manufacture and supply exclusively to Graceway those quantities of the Product as set forth in this Agreement. Each Lot manufactured and sold to Graceway hereunder will conform to all Specifications for the Product, and shall be manufactured, tested, released and stored in accordance with cGMPs, applicable FDA and other rules and regulations, and the terms and conditions of this Agreement. Subject to the terms and conditions herein, Novavax will provide, at its sole cost and expense, the facilities, equipment, labor (and supervision thereof) and know-how necessary for the manufacture, testing

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(including stability), packaging and supply of the Product to Graceway in accordance with the terms and conditions of this Agreement.

ARTICLE 3
TRANSFER PRICE; PAYMENT TERMS

3.01 Transfer Price.

The transfer price of the Product from Novavax to Graceway pursuant to this Agreement will be $ [* * *] per Unit. Such transfer price shall be all inclusive and Graceway shall have no obligation to pay any other amounts to Novavax related to the manufacture and supply of the Product to Graceway pursuant to this Agreement, except as otherwise specifically set forth in this Agreement.

3.02 Payment Terms.

Payment terms on all deliveries of the Product to Graceway under this Agreement shall be thirty (30) days from the delivery of an invoice by Novavax for such Product delivery, which invoice shall be provided by Novavax to Graceway on or after the delivery of such Product to Graceway.

ARTICLE 4
LOTS PURCHASED

4.01 Quantity; Schedule of Delivery.

(a) Graceway agrees to purchase, and Novavax agrees to manufacture and supply to Graceway, an aggregate amount of [* * *] Lots in accordance with the delivery schedule attached hereto at Schedule 4.01 (the “Delivery Schedule”).

(b) Novavax acknowledges and agrees that all of the Raw Materials Inventory is being held by Novavax at the Catalent Facility. Novavax is permitted to use such Raw Materials Inventory solely in connection with the manufacture of the Product for Graceway pursuant to this Agreement. In the event that the Raw Materials Inventory has expired or lacks sufficient expiration dating (two (2) years), or additional Raw Materials are required for Novavax to manufacture the required Lots for Graceway pursuant to this Agreement, then Novavax will acquire sufficient additional Raw Materials to produce the required Lots without additional expense to Graceway.

4.02 Conflicts.

To the extent of any conflict or inconsistency between this Agreement and any order, acknowledgement, confirmation, acceptance or any similar document, the terms of this Agreement shall govern.

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ARTICLE 5
ADDITIONAL AGREEMENTS

5.01 Other Affiliates.

If any other Affiliate of Graceway desires to purchase the Product from Novavax pursuant to the terms of this Agreement, then, upon the execution of a copy of this Agreement by such Affiliate, Novavax shall accord such Affiliate all of the benefits hereof and treat such Affiliate the same as Graceway for the purposes of this Agreement; provided, that this Section 5.01 will not be construed to relieve Graceway of any of its obligations hereunder.

5.02 Exclusive Rights.

During the term of this Agreement, Novavax shall supply Graceway, on an exclusive basis, with the Product for sale in the Territory and neither Novavax nor any of its Affiliates shall sell or distribute the Product within the Territory.

5.03 Insurance.

Each of Novavax and Graceway agrees to procure and maintain in full force and effect during the term of this Agreement valid and collectible insurance policies of a type and coverage amount consistent with Novavax’s and Graceway’s past practices. Upon Graceway’s request, Novavax shall provide to Graceway a certificate of coverage or other written evidence reasonably satisfactory to Graceway of such insurance coverage. Upon Novavax’s request, Graceway shall provide to Novavax a certificate of coverage or other written evidence reasonably satisfactory to Novavax of such insurance coverage.

5.04 Personnel.

During the term of this Agreement, Novavax (itself or through one or more third party contract manufacturers) shall maintain a workforce of appropriate size, training and experience sufficient for the manufacturing, packaging, testing (including stability) and supply of the Product to Graceway pursuant to the terms and conditions of this Agreement, and for the satisfaction of Novavax’s obligations under this Agreement.

5.05 Manufacturing Equipment.

Novavax shall use the Manufacturing Equipment solely for purposes of manufacturing and supplying the Product to Graceway pursuant to the terms and conditions of this Agreement. Novavax shall, during the term of this Agreement, clean and maintain the Manufacturing Equipment in good operating condition and repair (ordinary wear and tear excepted) and in accordance with good industry and manufacturing practices and applicable laws, rules and regulations. Novavax shall, at its sole cost and expense, be responsible for maintaining all warranty, service and maintenance agreements related to the Manufacturing Equipment in full force and effect, including all preventative maintenance and calibration

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programs and agreements during the term of this Agreement. Graceway, as the owner of the Manufacturing Equipment, shall bear the risk of loss of the Manufacturing Equipment, but subject to Novavax’s compliance with its obligations under this Agreement.

ARTICLE 6
TERM

Subject to the survival provisions of Section 17.12, the term of this Agreement shall commence on the date hereof and, unless terminated earlier pursuant to Article 7, shall remain in effect until the later of the following dates (the “Expiration Date”): (a) July 31, 2008, or (b) such time that Novavax has delivered, and Graceway has accepted in accordance with the terms of this Agreement, the aggregate number of Lots set forth in Section 4.01.

ARTICLE 7
TERMINATION

7.01 Breach.

This Agreement may be terminated, prior to the Expiration Date, by either Party by giving 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 such notice shall have sixty (60) days from the date of receipt thereof to cure the breach or failure; provided, that the cure period for a failure to make timely payment hereunder shall be only thirty (30) days. If the Party receiving such notice does not cure such breach or failure within such cure period, then this Agreement shall automatically terminate effective as of the end of such period.

7.02 Insolvency, Etc.

This Agreement may be terminated, prior to the Expiration Date, upon thirty (30) days advance written notice by either Party: (a) in the event that the other Party hereto shall (i) 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, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the United States Bankruptcy Code, as now or hereafter in effect (the “Bankruptcy Code”), (iv) 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 (v) take any corporate action for the purpose of effecting any of the foregoing; or (b) if a proceeding or case shall be commenced against the other Party hereto in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) 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 (iii) similar relief under any Bankruptcy Laws, or an order, judgment or decree approving any of the foregoing shall be

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entered and continue unstayed for a period of sixty (60) days; or (c) an order for relief against the other Party hereto shall be entered in an involuntary case under the Bankruptcy Code.

7.03 Effect of Termination.

(a) 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 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 7.01 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 17.01.

(b) In the event that this Agreement expires or is terminated for any reason, Novavax shall return to Graceway (at no cost to Graceway) any Raw Materials Inventory that has not been utilized prior to the expiration or earlier termination of this Agreement. Novavax shall deliver, and Graceway shall accept delivery of, any such Raw Materials Inventory within five (5) days after such expiration or termination of this Agreement to a location designated by Graceway. Such delivery shall be F.O.B. Catalent Facility.

7.04 Cleaning and Restoration of Manufacturing Equipment.

(a) Prior to or promptly after the expiration or termination of this Agreement, Novavax shall (i) clean the Manufacturing Equipment in accordance with good industry and manufacturing practices and applicable laws, rules and regulations; (ii) restore the Manufacturing Equipment to the condition that existed as of the date of this Agreement (ordinary wear and tear excepted); (iii) disconnect, disassemble and make the Manufacturing Equipment available for removal from the Catalent Facility; and (iv) make its personnel reasonably available to assist Graceway in said removal. Graceway shall remove the Manufacturing Equipment from the Catalent Facility within forty-five (45) days after receiving written notice from Novavax that the Manufacturing Equipment is ready for transport. Novavax shall be solely responsible for all costs and expenses incurred by it (including, without limitation, rent and other non-routine costs incurred to clean, handle or decommission the Manufacturing Equipment irrespective of when incurred) in complying with its obligations under this Section 7.04(a); provided, that Graceway agrees to reimburse Novavax for up to Two Hundred Fifty Thousand Dollars ($250,000) of such costs and expenses to the extent supported by reasonably detailed documentation (excluding any rent expenses with respect to the period prior to June 30, 2008).

(b) Novavax shall be responsible for complying with the terms of the Catalent Agreement that are applicable to Novavax’s obligations hereunder, including terms related to (i) the use, maintenance, occupancy or possession of the Catalent Facility, (ii) the cleaning and removal of the Manufacturing Equipment from the Catalent Facility, and (iii) the restoration of

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the Catalent Facility as required by Catalent, whether under the Catalent Agreement or otherwise.

7.05 Transfer Assistance.

(a) During the term of this Agreement and for ninety (90) days after the acceptance by Graceway of the last Lot (per the Delivery Schedule), Novavax shall, at Graceway’s request, assist Graceway with (i) the relocation of the Manufacturing Equipment to a new location and the installation of the Manufacturing Equipment at such new location such that the Manufacturing Equipment is fully operational at such new location for the manufacturing of the Product in accordance with the Specifications and (ii) designating alternative supplier(s) of the Product and qualifying and enabling Graceway, any alternative supplier(s) and supplier’s manufacturing sites to manufacture and supply the Product in accordance with all applicable laws, Product approvals and Specifications, including (A) the transfer and disclosure of, and enablement of such parties and sites with respect to technology and (B) the provision of relevant technical documentation, technical expertise, and development reports and/or historical documentation reasonably necessary for the transfer and qualification of both analytical methodologies and manufacturing processes with respect to such parties and sites. All such assistance shall be provided during Novavax’s normal business hours at times and locations to be mutually agreed upon by the Parties.

(b) Novavax shall make any technically qualified individuals with knowledge of the manufacture of the Product available, at a rate of [* * *] per hour, to provide the assistance described in Section 7.05(a) above. Such individuals shall remain as employees of Novavax, and nothing herein shall be construed to impose upon Graceway any obligations as an employer of any such individual.

7.06 Transfer of Records.

Upon the expiration or termination of this Agreement, Novavax shall promptly deliver to Graceway all documentation, records and files in Novavax’s possession related to the manufacturing, testing and/or release of the Product, whether generated before or during the term of this Agreement, including all regulatory reports, validation documents, batch record history and stability and Product complaint databases.

ARTICLE 8
SHIPMENT AND DELIVERY; INVENTORY AND RAW MATERIALS

8.01 Shipment and Delivery.

(a) All shipments of the Product pursuant to this Agreement shall be F.O.B. Catalent Facility (i.e., Graceway will pay for shipment). All shipments must be accompanied by a packing slip which describes the articles and shows the shipment’s destination. Novavax agrees to promptly forward the original bill of lading or other shipping receipt for each shipment in accordance with Graceway’s instructions. Novavax further agrees to promptly render, after

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delivery of goods or performance of services, correct and complete invoices to Graceway, and to accept payment by check or, at Graceway’s discretion, other cash equivalent (including electronic transfer of funds).

(b) The risk of loss with respect to the Product shall remain with Novavax until the point at which such Product is delivered to the loading dock at the Catalent Facility. Novavax will pack all the 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.

(c) Novavax shall provide to Graceway upon each shipment of each Lot the following: (i) Novavax’s standard certificate of analysis for each Lot certifying that the delivered batch contained in the Lot is in conformance with all the Specifications, (ii) test results with respect to each batch, (iii) deviation reports related to manufacturing, testing and/or packaging, for each batch and (iv) an executed batch record.

8.03 Inventory; Raw Materials.

(a) Novavax will maintain inventory of the Product on a first-in, first-out basis. Novavax will use commercially reasonable efforts to manage such inventory as efficiently as possible.

(b) Novavax shall, during the term of this Agreement, maintain such inventory of Raw Materials as are reasonably required to manufacture and package the Product in the quantities set forth in the Delivery Schedule; provided, that Graceway has agreed to permit Novavax to use the Raw Materials Inventory at no cost to Novavax in connection with the manufacture of the Product for Graceway.

ARTICLE 9
MONITORING; INSPECTION

9.01 Monitoring.

At all times during the term of this Agreement, Graceway shall have the right to have an employee or other representative of Graceway present on site at the Catalent Facility while any of the Product is being manufactured pursuant to this Agreement. Novavax shall provide Graceway with at least ten (10) days advance notice of the commencement of manufacturing of any Lot hereunder so that Graceway has sufficient time to have its employee or representative present for the manufacturing of such Lot. Graceway agrees to cause its employees and representatives to follow Novavax’s operating and security procedures in connection with the manufacturing process for the Product.

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9.02 Inspection.

In addition and to and without limiting Graceway’s rights under Section 9.01, Graceway shall have the right, upon reasonable notice to Novavax and during regular business hours, to inspect and audit, not more than once during the term of this Agreement (except that Graceway shall have an immediate right of inspection for good cause), the facilities being used by Novavax for production and storage of the Product to assure compliance by Novavax with cGMP and applicable FDA and other rules and regulations and with other provisions of this Agreement. Novavax will provide a written response to any cGMP or other issues noted by Graceway within ten (10) days of receipt of Graceway correspondence. Novavax shall notify Graceway 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 Graceway of any such audit, review or inspection within twenty four (24) hours of Novavax’s first being informed of any such event. Novavax and Graceway 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 cannot reasonably be remedied within a seven (7) day period, develop a written plan to remedy such deficiencies as soon as possible. The costs of such remedy shall be borne by Novavax.

ARTICLE 10
DEFECTIVE PRODUCT; TESTING; QUALITY CONTROL; STABILITY TESTING

10.01 Acceptance; Disposition of Defective Product.

Graceway may reject any amount of the Product delivered under this Agreement that does not comply with the Specifications by giving written notice of such non-conforming Product to Novavax within thirty (30) days after delivery to Graceway. If, as to a particular Lot, Graceway does not so notify Novavax that such delivery is non-conforming within such period, Graceway will be deemed to have accepted such quantities of the Product. Graceway shall notify Novavax of the existence and nature of any non-compliance or defect of which Graceway becomes aware, and Novavax shall have a reasonable opportunity, not to exceed ten (10) days from receipt of notification, to inspect such defective Product and provide Graceway with detailed written instructions to return or dispose of such defective Product. If Novavax fails to so inspect and instruct Graceway as to the disposition of such defective Product, Graceway may dispose of such defective Product as it sees fit and Novavax shall promptly reimburse Graceway for all direct, out-of-pocket costs incurred by Graceway in such disposition. Graceway shall have no obligation to pay for any Product that is subject to such a claim of non-compliance or defect, and Novavax shall, within thirty (30) days after receiving notice of such noncompliance or defect, replace such defective Product at Novavax’s sole cost and expense, provided that Graceway’s sole and exclusive remedy for any rejected Product shall be a refund for the price paid for such rejected Product in the event Novavax cannot replace such Product by July 31, 2008.

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10.02 Independent Testing.

If, after Novavax’s inspections of the Product, the Parties disagree as to the Product’s conformance to the Specifications or 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. The results of the third party laboratory shall be binding on both Parties. All costs associated with such third party testing shall be borne by the non-prevailing Party. No inspection or testing of or payment for the Product by Graceway or any third party agent of Graceway shall constitute acceptance by Graceway thereof (except as described in this Article 10), nor shall any such inspection or testing be in lieu or substitution of any obligation of Novavax 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.

10.03 Reports.

Promptly after Graceway’s reasonable written request, Novavax shall provide Graceway written reports that are routinely generated by or on behalf of Novavax in the course of manufacturing the Product.

10.04 Complaint Handling.

During and after the term of this Agreement, Novavax shall promptly convey to and inform Graceway of any customer or user complaints received by Novavax in connection with the Product. Novavax shall provide to Graceway the results of a complaint investigation no later than thirty (30) days from date of receipt of the complaint.

10.05 Quality Control.

(a) Prior to each shipment of the Product to Graceway, Novavax shall conduct or have conducted quality control testing of the API, excipients and finished Product in accordance with the Specifications and such other Novavax approved quality control testing procedures that are consistent with cGMPs. Novavax shall retain accurate and complete records pertaining to such testing.

(b) Novavax shall not implement any change in the Specifications, testing methods or other procedures in connection with the manufacturing, testing and release of the Product without Graceway’s prior written consent.

(c) Novavax shall notify Graceway of any deviation that may occur during the manufacturing, packaging and testing of the Product within twenty four (24) hours of discovery of such deviation. Novavax shall conclude its investigation of such deviation prior to shipment of the Product to Graceway.

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10.06 Stability Testing.

Effective upon such date as Graceway has identified, qualified and engaged an alternative laboratory for the conduct of quality control and stability testing (the “Stability Date”), Graceway shall be responsible for (a) taking and maintaining quality control and stability samples of all the Product delivered to Graceway and (b) testing stability samples of all the Product purchased hereunder. Graceway shall use reasonable efforts to engage and qualify such an alternative laboratory as soon as reasonably practicable. Novavax and Graceway shall cooperate in the qualification of such alternative laboratory. In the event such alternative laboratory is not qualified by [* * *], 2008, Novavax agrees to continue performing stability protocols, both for existing stability retains as well as the retains contemplated to be taken hereunder, until such alternative laboratory is qualified or until [* * *], 2008, whichever is earlier. As of the Stability Date, Novavax shall transfer to Graceway or Graceway’s designee Novavax’s existing stability samples for the Product as well as all validation reports and stability data pertaining to the existing stability samples. Notwithstanding the foregoing, if the Stability Date shall be after [* * *], 2008, then Graceway shall reimburse Novavax at cost (up to [* * *] per test point) for all reasonable internal or external costs and expenses incurred by Novavax to continue stability testing for the Product during the period from the expiration or termination of this Agreement until the Stability Date.

ARTICLE 11
FORCE MAJEURE

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 so long as such event shall be continuing; 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.

ARTICLE 12
LABELING; ART WORK; PROPRIETARY RIGHTS

Graceway acknowledges that 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”) shall be identical to the materials as manufactured by Novavax prior to the date of this Agreement. No artwork or other Packaging and Promotional Material component changes are permitted during the term of this Agreement.

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ARTICLE 13
CONFIDENTIALITY

13.01 Confidential Information.

All confidential information of one Party disclosed to the other Party under 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. Each Party may also disclose the other’s information to an Affiliate, agent or consultant (and, in the case of Novavax, to Catalent), solely for purposes of complying with the terms of this Agreement and provided that such Person is under a written obligation of confidentiality and non-use at least substantially equivalent to the obligations of this Article 13. 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 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 with respect to any information that:

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

(b) 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.

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) or (b) above.

13.02 Permitted Disclosure.

Notwithstanding the above obligations of confidentiality and non-use, a Party may 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 permitted disclosures as set forth in this Section 13.02, 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 only disclose such information as is required to be disclosed pursuant to the law, regulation, rule or order, and shall 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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13.03 Publication and Promotional Materials.

Neither Party shall state or imply, in any advertisement or sales promotional material (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.

13.04 Consent.

(a) Except for the filing of a copy of this Agreement with the U.S. 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 U.S. 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 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.

(b) 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.

13.05 Conflict.

With respect to information disclosed on or after the date hereof between Graceway and Novavax 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 the confidentiality provisions set forth in the Asset Purchase Agreement, the terms of the Asset Purchase Agreement shall govern and prevail.

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ARTICLE 14
CERTAIN REPRESENTATIONS; WARRANTIES AND COVENANTS

14.01 Product Warranties.

Novavax warrants to Graceway that all of the Product supplied in connection with this Agreement shall, at the time of delivery, have been manufactured in accordance and conformity with all the Specifications.

14.02 Execution and Performance of Agreement.

Each of Novavax and Graceway represents to the other that (a) it has full right, power and authority to enter into and perform its obligations under this Agreement; (b) the entry into and performance of this Agreement has been duly authorized, executed and delivered by it; and (c) 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. Each of Novavax and Graceway further represents 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.

14.03 Catalent.

Novavax represents and warrants that (a) Novavax has entered into an agreement or agreements with Catalent, including the Catalent Agreement, granting to Novavax rights sufficient for Novavax to perform its obligations under this Agreement, and (b) pursuant to such agreements, Graceway will have access to the Catalent Facility and the Manufacturing Equipment as provided for in this Agreement, including Section 9.01 and Section 9.02 hereof.

14.04 Excluded Warranties.

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 OF WHICH ARE HEREBY SPECIFICALLY EXCLUDED AND DISCLAIMED.

14.05 Third Party Claims.

EXCEPT FOR THEIR RESPECTIVE OBLIGATIONS UNDER ARTICLE 16 ARISING OUT OF THIRD PARTY CLAIMS, SUITS OR DEMANDS, OR THEIR OBLIGATIONS UNDER ARTICLE 13, 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

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EQUITABLE THEORY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER AND IN NO EVENT SHALL THE AGGREGATE DAMAGES PAYABLE BY A PARTY HEREUNDER EXCEED [* * *].

ARTICLE 15
COMPLIANCE

Novavax agrees to comply with the applicable provisions of any federal, state or local 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 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. Novavax 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 cGMPs) and International Standards Organization Rules 9,000 et seq.

ARTICLE 16
INDEMNIFICATION

16.01 Indemnification by Novavax.

Novavax shall indemnify and hold harmless Graceway and its directors, officers and employees from and against any and all damages, liabilities, claims, costs, charges, judgments and expenses (including reasonable attorneys’ fees) claimed by third parties (collectively “Damages”) that may be sustained, suffered or incurred by Graceway or its directors, officers and employees, to the extent arising directly from or by reason of (a) the breach by Novavax of any warranty, representation, covenant or agreement made by Novavax in this Agreement; or (b) the negligence or willful misconduct of Novavax, except in each case to the extent Graceway is obligated to indemnify Novavax under Section 16.02.

16.02 Indemnification by Graceway.

Graceway shall indemnify and hold harmless Novavax and its directors, officers and employees from and against any and all Damages, that may be sustained, suffered or incurred by Novavax and its directors, officers and employees to the extent arising directly from or by reason of (a) the breach by Graceway of any warranty, representation, covenant or agreement made by Graceway in this Agreement; (b) the negligence or willful misconduct of

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Graceway, or (c) any claim, suit, or proceeding brought by a third party arising out of or related to the use or commercialization of the Product by or on behalf of Graceway or any of its Affiliates, except in each case to the extent Novavax is obligated to indemnify Graceway under Section 16.01.

16.03 Claims.

If any claim (a “Third Party Claim”) is made against a Party entitled to indemnification hereunder (an “Indemnified Party”) that, if sustained, would give rise to Damages 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, 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 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 (a) with the written consent of the Indemnified Party, not to be unreasonably withheld or delayed or (b) without the written consent of the Indemnified Party, so long as such settlement (i) includes an unconditional release of the Indemnified Party

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from all liability in respect of such Third Party Claim and (ii) does not subject the Indemnified Party to any injunctive relief or other equitable remedy.

ARTICLE 17
MISCELLANEOUS

17.01 Dispute Resolution.

This Agreement, the rights and obligations of the Parties hereto, and any claims or disputes relating thereto, shall be governed by and construed under and in accordance with the laws of the State of New York, without giving effect to the conflicts of law principles thereof (other than Section 5-1401 of the New York General Obligations Law). The Parties hereto hereby waive personal service of any process in connection with any such action, suit or proceeding and agree that the service thereof may be made by certified or registered mail addressed to or by personal delivery to the other Party, at such other Party’s address set forth pursuant to Section 17.05 hereof. In the alternative, in its discretion, any of the Parties hereto may effect service upon any other Party in any other form or manner permitted by applicable law.

17.02 Relationship of the Parties.

The relationship of Graceway and Novavax established by this Agreement is that of independent contractors, and nothing contained herein shall be construed to (a) give either Party any right or authority to create or assume any obligation of any kind on behalf of the other or (b) constitute the Parties as partners, joint venturers, co-owners or otherwise as participants in a joint or common undertaking.

17.03 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 (a) constitutes 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 (b) supersedes 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.

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17.04 Construction.

Unless otherwise expressly provided for herein (a) financial and accounting terms will have the meaning ascribed to such terms in accordance with U.S. generally accepted accounting principles, consistently applied, (b) the word, “including”, will mean “including but not limited to” and the word “day” will mean “calendar day”, (c) references to the singular will include the plural and vice versa, (d) the use of any pronoun will include the neuter and both genders, and (e) 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, and (f) headings and titles of Sections and Articles herein will be construed to be descriptive only and without any substantive or interpretive effect.

17.05 Notice.

All notices and other communications hereunder shall be in writing and 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 (3) business days after deposit in the mail, and shall be addressed:

If to Novavax:

Novavax, Inc.
9920 Belward Campus Drive
Rockville, Maryland 20850
Telephone: (240) 268-2000
Facsimile: (240) 268-2122
Attention: Ray Hage

with a copy to:

Cooley Godward Kronish LLP
One Freedom Square
Reston Town Center
11951 Freedom Drive
Reston, VA 20190-5656
Attention: Kenneth J. Krisko, Esq.
Telephone: (703) 456-8581
Facsimile: (703) 456-8100

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If to Graceway, to:

Graceway Pharmaceuticals, LLC
340 Martin Luther King Jr. Blvd.
Suite 500
Bristol, Tennessee 37620
Telephone: (423) 274-2100
Facsimile: (423) 274-2199
Attention: General Counsel

with a copy to:

McDermott Will & Emery LLP
600 13th Street, N.W.
Washington, D.C. 20005-3096
Telephone: (202) 756-8035
Facsimile: (202) 756-8087
Attention: Thomas E. Repke, Esq.

or such other address as the addressee may indicate by written notice to the other Parties.

17.06 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.

17.07 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 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 Novavax (whether by merger or sale of capital stock or otherwise) at the shareholder or Board of Director levels or otherwise.

17.08 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

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Agreement or any other such instrument. Any term or provision of this Agreement which is invalid, illegal or unenforceable in any jurisdiction shall not affect the validity, legality or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.

17.09 Further Assurances.

Upon reasonable request from Graceway therefor, Novavax shall provide to Graceway, promptly, any samples of the Product, manufacturing information and other information as is necessary for Graceway to complete or obtain U.S. or foreign registration (including reimbursement arrangements) or approval in the Territory.

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 7.03, 7.05, 7.06, 10.04, 10.06, and Articles 12, 13, 14, 16, and 17 shall survive the termination of this Agreement in accordance with the respective terms thereof.

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IN WITNESS WHEREOF, each of the parties hereto has executed this Supply Agreement, or has caused this Supply Agreement to be duly executed and delivered in its name on its behalf, all as of the day and year first above written.


NOVAVAX, INC.
By:	/s/ Raymond J. Hage, Jr.
	Name:	Raymond J. Hage, Jr.
	Title:	SVP Commercial Operations


GRACEWAY PHARMACEUTICALS, LLC
By:	/s/ Jefferson J. Gregory
	Name:	Jefferson J. Gregory
	Title:	Chairman and CEO

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EX-10.3 4 w50357exv10w3.htm EX-10.3 exv10w3

Exhibit 10.3

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (this “Agreement”) is entered into as of February 19, 2008 (“Effective Date”), by and among NOVAVAX, INC., a Delaware corporation (“Novavax”), and GRACEWAY PHARMACEUTICALS, LLC, a Delaware limited liability company (“Graceway”).

WHEREAS, Graceway and Novavax are parties to that certain Asset Purchase Agreement dated as of the date hereof (the “Asset Purchase Agreement”), pursuant to which, Novavax agreed to sell to Graceway, and Graceway agreed to acquire from Novavax, certain assets used by Novavax in connection with the research, development, manufacture, distribution, marketing, sale, promotion, importation and use of the Product (as defined in the Asset Purchase Agreement);

WHEREAS, pursuant to Section 7.02(d) of the Asset Purchase Agreement, Graceway has agreed to license to Novavax certain rights in the Licensed Technology (as defined herein); and

WHEREAS, it is a condition precedent to Novavax’s obligation to consummate the Closing under the Asset Purchase Agreement that the parties enter into this Agreement, and the parties are entering into this Agreement on and as of the Closing Date under the Asset Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing, the covenants and agreements contained in this Agreement and the Asset Purchase Agreement, and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1
DEFINITIONS AND REFERENCES

1.1. Defined Terms.

Capitalized terms used in this Agreement and not otherwise defined in this Agreement shall have the meanings given to such terms in the Asset Purchase Agreement.

“Agreement” has the meaning set forth in the Preamble.

“Asset Purchase Agreement” has the meaning set forth in the Recitals.

“Effective Date” has the meaning set forth in the Preamble.

“Field” means [* * *]

“Graceway Confidential Information” has the meaning set forth in Section 4.2(a).

“Licensed IP” means the Patents listed in Schedule 2.01(a) of the Asset Purchase Agreement.

“Licensed Technology” means the Transferred Know-How as defined in the Asset Purchase Agreement.

1.2. Construction of Certain Terms and Phrases.

Unless the context of this Agreement otherwise requires: (a) words of any gender include each other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof”, “herein”, “hereby” and derivative or similar words refer to this entire Agreement; (d) all references herein to “Articles” or “Sections” are to Articles or Sections of this Agreement; (e) the term “or” has, except as otherwise indicated, the inclusive meaning represented by the phrase “and/or”; and (f) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.

ARTICLE 2
LICENSE GRANT

2.1. License Grant.

(a) Subject to the terms and conditions of this Agreement, Graceway hereby grants to Novavax an exclusive, non-transferable (except as permitted under Section 8.6), royalty-free, limited license, with the right to grant sublicenses through multiple tiers, to develop, make, have made, use, sell, offer for sale, and import products and services claimed or covered by the Licensed IP solely in the Field. Novavax acknowledges and agrees that the license granted in this Section 2.1(a) is for the sole purpose of enabling Novavax to practice and/or sublicense to third parties the Licensed IP for the research, development and sale of products and services by such third parties in the Field in accordance with the terms of the foregoing license, and Novavax is expressly excluded from using the Licensed IP for any other purpose.

(b) Subject to this Section 2.1(b), Novavax may sublicense the rights granted under this Section 2.1 to a third party without the consent of Graceway. Novavax acknowledges and agrees that any sublicense granted shall be made subject to the terms of this Agreement and shall not relieve Novavax of its obligations under this Agreement. Promptly after the execution of any sublicense agreement, Novavax shall provide Graceway with a complete copy of such agreement; provided, that financial and other business terms that are unrelated to Novavax’s obligations under this Agreement may be redacted.

(c) Subject to the terms and conditions of this Agreement, Graceway hereby grants to Novavax an exclusive, non-transferable (except as permitted under Section 8.6),

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royalty-free, limited license, with the right to grant sublicenses through multiple tiers, to make, have made, use, sell, offer for sale, and import products and services developed using or incorporating the Licensed Technology solely in the Field and in the Territory.

2.2. Reservation of Rights.

Novavax acknowledges and agrees that Graceway owns, reserves and retains all right, title and interest in and to the Licensed IP and the Licensed Technology, except for the limited, express license grant set forth herein.

2.3. No Access to Information.

Novavax acknowledges and agrees that Graceway has no obligation to provide Novavax with any information, data, materials or documentation regarding the Licensed Technology or any other assets of Graceway (including the NDA for the Product), nor to provide any other technical assistance. For the avoidance of doubt, Novavax acknowledges and agrees that neither Novavax nor any of its licensees or sublicensees shall have any right of reference to any information, data, materials or documentation regarding the Licensed Technology or any other assets of Graceway (including the NDA for the Product).

2.4. Disclaimers.

Graceway makes no representation as to, and does not warrant, the accuracy or completeness of the Licensed IP or the Licensed Technology, nor does Graceway warrant that the use of the Licensed IP or the Licensed Technology, or any products developed, manufactured or packaged in accordance with or utilizing such technology or the intellectual property rights therein, will be free from claims of infringement of the patents, copyrights or other intellectual property rights of any third party. Except for Graceway’s express obligations under this Agreement, Graceway shall not be under any liability arising out of granting the license set forth in Section 2.1 under, in connection with or as a result of this Agreement, whether on warranty, contract, negligence or otherwise.

ARTICLE 3
COVENANTS

Novavax covenants and agrees that Novavax shall not use, nor permit any permitted assignee or sublicensee to use, all or any part of the Licensed IP or the Licensed Technology for any purpose except as set forth in Section 2.1 and Novavax agrees that any use of the Licensed IP or the Licensed Technology outside of the scope of the license grant set forth in Section 2.1 shall be a breach of this Agreement.

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ARTICLE 4
PROPRIETARY RIGHTS AND CONFIDENTIAL INFORMATION

4.1. Ownership.

Novavax hereby agrees that the Licensed Technology constitutes commercially valuable, proprietary trade secrets and confidential information of Graceway. Novavax further agrees that except for the limited license grant set forth in Section 2.1 and its rights to the Licensed Technology outside the Territory, Novavax shall not assert any right, title or interest in or to the Licensed IP or the Licensed Technology. Novavax acknowledges that the Licensed Technology (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from the disclosure or use and (ii) is the subject of efforts of Graceway that are reasonable under the circumstances to maintain its secrecy.

4.2. Confidential Information.

(a) In addition to Novavax’s other confidentiality obligations set forth in the Asset Purchase Agreement, Novavax agrees, during the term of this Agreement and thereafter, to (i) maintain the Licensed Technology whether disclosed by Graceway to Novavax in any manner and in any form or format or otherwise retained by Novavax (the “Graceway Confidential Information”), in the strictest confidence, (ii) not disclose the Graceway Confidential Information to any third parties, and (iii) only use such Graceway Confidential Information to practice the license and other rights granted hereunder in accordance with this Agreement. Notwithstanding the foregoing, Novavax may disclose Graceway Confidential Information, and authorize the use of such Graceway Confidential Information on the same terms applicable to Novavax under this Agreement, to the following persons and entities: (A) employees or contractors of Novavax who have a need to know such information and (B) sublicensees in connection with the grant of any sublicense of the rights granted hereunder, in each case where such persons or entities have a legal obligation to maintain the confidentiality of such information on the same terms applicable to Novavax in this Agreement. In addition, Novavax may disclose Graceway Confidential Information to Governmental Authorities solely for the purposes of, and solely to the extent necessary for, submitting and maintaining applications for the authorization or use of pharmaceutical products in the Field; provided, that Novavax shall request confidential treatment for any submission of such information to any Governmental Authority and, if such information will not receive confidential treatment by such Governmental Authority, then Novavax shall not disclose such information to such Governmental Authority without Graceway’s prior written consent, which consent will not be unreasonably withheld. Without limiting the foregoing, Novavax shall, consistent with the practices and procedures under which Novavax protects its own most valuable proprietary information and materials, protect the Graceway Confidential Information against any unauthorized or unlawful use, disclosure, dissemination or copying.

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(b) Novavax’s obligations under this Section 4.2 shall not apply to information that Novavax can demonstrably prove (i) is, or later becomes, generally available to the public through no fault of Novavax or its Affiliates, or (ii) is obtained from a third party not under an obligation of confidentiality. If required by order of any Government Authority, Novavax may disclose to such authority, data, information, or materials pertaining to or involving the Graceway Confidential Information to the extent required by such order, provided that Novavax shall first have notified Graceway of the required disclosure and provided reasonable cooperation to Graceway’s efforts to obtain a protective order to maintain the confidentiality of such data, information or materials.

(c) Novavax’s obligations of confidentiality shall remain in full force and effect until the Graceway Confidential Information falls into one of the categories set forth in (b) above.

(d) Novavax acknowledges that in the event of a breach by Novavax of any provisions of this Article 4, Graceway will not have an adequate remedy in money or damages. Graceway shall therefore be entitled to seek injunctive relief against any such breach by Novavax in any court of competent jurisdiction without the necessity of posting bond. Graceway’s rights hereunder shall not in any way be construed to limit or restrict its right to seek or obtain other damages or relief under this Agreement or under applicable law.

4.3. Maintenance and Enforcement of Licensed IP.

(a) Graceway agrees to use commercially reasonable efforts to prosecute and maintain patents and patent applications within the Licensed IP in the Territory. However, Graceway may, in its discretion, elect to abandon any patent applications or issued patent in the Licensed IP in all or any jurisdictions in the Territory. Following any such abandonment in any such jurisdiction, Novavax shall have the right, but not the obligation, to commence or continue such prosecution solely in such jurisdiction and to maintain any such patent or patent application solely in such jurisdiction under its own control and at its own expense (and, as between the parties hereto, such abandoned patent applications or issued patent in the Licensed IP solely in such jurisdiction shall, at the election of Novavax, become the sole and exclusive property of Novavax). Prior to any such abandonment, Graceway shall give Novavax at least ninety (90) days notice and a reasonable opportunity to take over prosecution of such patent or patent application.

(b) Novavax shall, and shall cause its licensees and sublicensees to, use commercially reasonable efforts to notify Graceway of any infringement or potential infringement by any Person of the Licensed IP. Upon the reasonable request of Graceway, Novavax will use commercially reasonable efforts to cooperate with Graceway in the prosecution and enforcement of Graceway’s rights in the Licensed IP. Notwithstanding anything herein to the contrary, nothing in this Agreement shall be construed to obligate Graceway to enforce or prosecute any of the Licensed IP.

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(c) In the event Novavax notifies Graceway of an infringement in the Field with sufficient supporting documentation or facts to support the good faith filing of an enforcement action, Graceway has the right to determine within forty-five (45) days of receipt of such notification, or twenty (20) days in the event a sufficient presentation is made by Novavax as to the need for preliminary injunctive relief, to elect to bring such action against the potential infringers in the Field. If Graceway determines to bring an action within such applicable time period with respect to any infringement, Novavax agrees to fully cooperate with Graceway, at its cost and expense, in prosecuting any such action. Graceway will promptly provide Novavax with copies of all pleadings and documents filed by any third party or served on it. Graceway will also promptly provide Novavax with copies of all pleadings and documents to be filed by it and will reasonably implement any comments received from Novavax with respect to any such pleadings and documents. In the event Graceway declines to bring an action, if Novavax nevertheless desires to enforce the Licensed IP against potential infringers in the Field, then Novavax shall inform Graceway. Upon the reasonable request of Novavax, Graceway will then use commercially reasonable efforts to cooperate with Novavax in such enforcement, including, if required to bring such action, by either, at Graceway’s option, furnishing a Power of Attorney or joining such action as a necessary party. Novavax will promptly provide Graceway with copies of all pleadings and documents filed by any third party or served on it. Novavax also will promptly provide Graceway with copies of all pleadings and documents to be filed by it and will reasonably implement any comments received from Graceway with respect to any such pleadings and documents. Graceway will have the right to be represented by separate counsel in any such action. Except as otherwise agreed by the parties as a cost sharing arrangement, any recovery realized as a result of any litigation described in this Section 4.3(c) (whether by way of settlement or otherwise) will be first allocated to reimbursement of Graceway’s legal fees and expenses, then toward reimbursement of Novavax’s legal fees and expenses, and then the remainder will be divided [* * *] to Novavax and [* * *] to Graceway.

(d) Neither party shall have the right to settle any patent infringement litigation under this Section 4.3 in a manner that diminishes the rights or interest of the other party without the express written consent of such other party, such written consent to not be unreasonably withheld.

ARTICLE 5
TERMINATION

5.1. Termination.

Novavax may terminate this Agreement for its convenience upon thirty (30) days prior written notice to Graceway. Graceway may terminate this Agreement for any material breach by Novavax in the event that Novavax fails to cure such breach within sixty (60) days after receipt of written notice of such breach.

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5.2. Effect of Termination.

Upon termination of this Agreement, all license rights granted herein shall automatically terminate and Novavax and any permitted assignee or sublicensee shall immediately cease all use of the Licensed IP and the Licensed Technology, unless Graceway otherwise agrees in writing

5.3. Survival.

The following articles and sections of this Agreement shall survive termination for any reason: Sections 2.2, 2.4, 4.1 and 4.2, and Articles 5, 6, 7 and 8.

ARTICLE 6
WARRANTY DISCLAIMER

GRACEWAY MAKES NO WARRANTIES REGARDING THE LICENSED TECHNOLOGY OF ANY KIND, EXPRESS OR IMPLIED, WHETHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND GRACEWAY EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR OTHERWISE. GRACEWAY MAKES NO WARRANTY AS TO THE SUITABILITY OF THE LICENSED TECHNOLOGY.

ARTICLE 7
INDEMNIFICATION

In addition to Novavax’s indemnification obligations under the Asset Purchase Agreement, Novavax shall indemnify, defend, and hold Graceway and the Buyer Indemnified Parties harmless from and against any claims and all Losses incurred or suffered by Graceway and the Buyer Indemnified Parties from any claim brought by a third party to the extent caused by any breach by Novavax of any term of this Agreement.

ARTICLE 8
MISCELLANEOUS

8.1. Notices.

All notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand, prepaid telex, cable, courier, telegram or facsimile and confirmed in writing, or mailed first class, postage prepaid, by registered or certified mail, return receipt requested (mailed notices and notices sent by telex, cable or telegram shall be deemed to have been given on the date received) in accordance with the notice information set forth in Section 10.04 of the Asset Purchase Agreement.

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8.2. Entire Agreement.

This Agreement, the Asset Purchase Agreement, and its Appendices, Exhibits and Schedules constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements or understandings of the parties relating thereto.

8.3. Waiver; Remedies.

No delay on the part of either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of either party of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

8.4. Amendment.

This Agreement may be modified or amended only by written agreement of the parties hereto.

8.5. No Third Party Rights.

No provision of this Agreement shall be deemed or construed in any way to result in the creation of any rights in or obligations of any Person not a party to this Agreement.

8.6. Successors and Assigns.

Novavax may not sublicense or otherwise transfer, convey or assign any of its rights, duties or obligations hereunder without the prior written consent of Graceway; provided, that Novavax shall be permitted to (i) grant sublicenses in accordance with the terms of Section 2.1; (ii) to the extent necessary, assign all, but not less than all, of Novavax’s rights under this Agreement to a buyer in a Change of Control transaction if such buyer shall agree in writing to be bound by the terms and conditions of this Agreement; and (iii) assign this Agreement, in whole or in part, to a third party in connection with the sale of all or substantially all of the assets or rights to which this Agreement relates if such buyer shall agree in writing to be bound by the terms and conditions of this Agreement. Any purported assignment or sublicense in violation of this Agreement shall be void. Any permitted assignee or sublicensee shall assume all obligations of its assignor or sublicensor under this Agreement. No sublicense of this Agreement or of any rights hereunder shall relieve the sublicensing party of any of its obligations or liability hereunder. Graceway shall be free to assign or sublicense all or any part of this Agreement without the prior written consent of Novavax. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

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8.7. Governing Law; Jurisdiction.

8.8. Fees and Expenses.

Except as may be otherwise specified in the Asset Purchase Agreement, each party shall bear its own fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby.

8.9. Further Assurances.

Each party shall execute and deliver such additional instruments and other documents and use all commercially reasonable efforts to take or cause to be taken, all actions and to do, or cause to be done, all things necessary under applicable law to consummate the transactions contemplated hereby.

8.10. Interpretation.

The parties hereto acknowledge and agree that: (a) each party and its representatives have reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (b) the terms and provisions of this Agreement shall be construed fairly as to each party hereto and not in favor of or against either party regardless of which party was generally responsible for the preparation or drafting of this Agreement; (c) all section titles or captions contained in this Agreement and in any appendix referred to herein or annexed to this Agreement are for convenience only, shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this Agreement; and (d) each Appendix, Exhibit and Schedule hereto is incorporated by reference and made a part of this Agreement.

8.11. No Joint Venture.

Nothing contained herein shall be deemed to create any joint venture or partnership between the parties hereto, and, except as is expressly set forth herein, neither party shall have any right by virtue of this Agreement to bind the other party in any manner whatsoever.

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8.12. Severability.

If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective while this Agreement remains in effect, the legality, validity and enforceability of the remaining provisions shall not be affected thereby.

8.13. Counterparts.

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute a single instrument.

[The remainder of this page intentionally left blank.]

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


LICENSEE: NOVAVAX, INC.
By:	/s/ Raymond J. Hage, Jr.
Name:		Raymond J. Hage, Jr.
Title:		SVP Commercial Operations


LICENSOR: GRACEWAY PHARMACEUTICALS, LLC
By:	/s/ Jefferson J. Gregory
Name:		Jefferson J. Gregory
Title:		Chairman and CEO

EX-10.4 5 w50357exv10w4.htm EX-10.4 exv10w4

Exhibit 10.4

February 12, 2008

VP Global Packaging Solutions
3001 Red Lion Road
Philadelphia, PA 19114

Re: Supply and Lease Terms and Conditions

Dear Renard:

This letter confirms the agreement between Novavax, Inc. (“Novavax”) and Catalent Pharma Solutions, Inc. (“Catalent”) with respect to certain supply and leasing arrangements between the parties. As we have discussed, Novavax is negotiating a potential sale of the Estrasorb™ product (the “Product”) with Graceway Pharmaceuticals, LLC (“Graceway”) and this letter agreement will be effective upon consummation of that transaction and written notice to Catalent.

1. Changes to Facility Reservation Agreement. Pursuant to that certain Facility Reservation Agreement, dated February 8, 2002, by and between Novavax and Packaging Coordinators, Inc., Catalent’s predecessor-in-interest, Catalent has leased certain real property to Novavax. As of the date hereof, the formal Term of such agreement has expired and Novavax is holding over on a month-to-month basis. Notwithstanding anything to the contrary set forth in such Facility Reservation Agreement, Novavax and Catalent agree that (i) for the period beginning effective January 1, 2008 and ending not later than July 31, 2008 (the “Interim Term”), the Base Monthly Fee (as defined in such agreement) will be [* * *], and (ii) unless Catalent has entered into an arrangement with Graceway (or its designee) for the continued manufacture of Product in the Area (as defined in the Facility Reservation Agreement) prior to May 2008, Novavax, or Graceway, as its designee, will decommission and remove all of its equipment from the Area and will vacate the Area on or before July 31, 2008, when the lease will expire. All other terms and conditions set forth in the Facility Reservation Agreement not expressly modified herein will continue in full force and effect.

2. Interim Supply. The Term (as defined therein) of the Supply Agreement dated March 22, 2001 between Novavax, Inc. and Packaging Coordinators, Inc., Catalent’s predecessor-in-interest, was for two years and it has been extended month-to-month by agreement of the Parties. During the Interim Term (January 1, 2008 to July 31, 2008), Catalent will supply Novavax with [* * *] lots of (each of approximately [* * *] months of therapy – 56 pouches of 1.74 grams of Estrasorb) finished Product pursuant to the terms of this letter agreement, the Supply Agreement and other terms and conditions to be agreed upon by the parties in individual purchase orders,

which shall be consistent with the terms and conditions applicable to Novavax’s current purchase of Product. Such purchase orders will provide for a flat packaging price of [* * *] per pouch of Product. During the Interim Term, Novavax may submit purchase orders for [* * *] packaged manufacturing lots of Product (see Exhibit A, Supply Schedule). In addition, the terms set forth in the Quality Agreement between Novavax and Cardinal Health PTS, LLC, dated May 28, 2007 (a copy of which is attached hereto as Exhibit B), will govern such supply and any related testing, release, and communication procedures for the Product. Due to the terminal nature of this project, any components or raw materials purchased by Catalent consistent with requirements but not utilized in the [* * *] lots, will be for Novavax’ account. If formal agreement is not reached between the Parties regarding an extension of the Supply Agreement beyond the Interim Term, the Supply Agreement shall expire on July 31, 2008. All other terms and conditions set forth in the Supply Reservation Agreement not expressly modified herein will continue in full force and effect.

3. Other Terms. This letter agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This letter agreement and all information disclosed under this agreement will be deemed to be “Confidential Information.” Novavax and Catalent agree to exclude applicability of the United Nations Convention on Contracts for the International Sale of Goods. This Agreement shall be governed by, and construed in accordance with, the laws of the state of Delaware in the United States of America, without respect to the laws that might otherwise govern under applicable principles of conflicts of laws. This letter agreement may not be modified except in a writing signed by each party. No failure or delay by any party in enforcing this letter agreement shall be construed as a waiver, nor shall any waiver be effective, unless expressly set forth in a writing executed by the parties.

If the foregoing is acceptable to you, please countersign this letter agreement to indicate your agreement.


		Very truly yours,

		NOVAVAX, INC.

		By:		/s/ Raymond J. Hage, Jr.

				Raymond J. Hage, Jr.
				SVP Commercial Operations

Agreed and accepted:

[_Catalent Pharma Solutions, Inc.__]


By:		/s/ Tracy Tsuetaki

Name:		Tracy Tsuetaki
Title:		Group President — Packaging Services

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