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EXHIBIT 99.2
TABLE OF CONTENTS
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SECTION 1. PURCHASE AND SALE OF THE NOTES..............................................1
1.1 Sale and Issuance of the First Note...........................................1
1.2 Sale and Issuance of the Second Note..........................................2
1.3 Closings......................................................................2
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................2
2.1 Organization, Good Standing and Qualification.................................3
2.2 Authorization.................................................................3
2.3 Valid Issuance of the Note Shares and Listing.................................3
2.4 Capitalization; Indebtedness..................................................4
2.5 SEC Reports and Certain Changes...............................................5
2.6 Financial Statements and Title to Assets......................................5
2.7 Contracts.....................................................................6
2.8 Compliance and Permits........................................................6
2.9 Compliance with Other Instruments.............................................7
2.10 Governmental Consents.........................................................7
2.11 Litigation....................................................................7
2.12 Taxes.........................................................................8
2.13 Intellectual Property.........................................................8
2.14 Brokerage.....................................................................8
2.15 Fielding Acquisition Agreement................................................8
SECTION 3. REPRESENTATIONS AND WARRANTIES OF KING......................................9
3.1 Organization, Good Standing and Qualification.................................9
3.2 Authorization.................................................................9
3.3 Governmental Consents.........................................................9
3.4 Accredited Investor...........................................................9
SECTION 4. FILINGS AND AUTHORIZATIONS.................................................10
SECTION 5. COMPANY COVENANTS..........................................................10
SECTION 6. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.............................................11
SECTION 7. CONDITIONS OF KING'S OBLIGATIONS AT EACH CLOSING...........................11
SECTION 8. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT EACH CLOSING....................13
SECTION 9. TERMINATION................................................................14
9.1 Termination..................................................................14
9.2 Effect of Termination........................................................14
SECTION 10. MISCELLANEOUS..............................................................15
10.1 Survival.....................................................................15
10.2 Assignment; Successors and Assigns...........................................15
10.3 Governing Law................................................................15
10.4 Counterparts.................................................................15
10.5 Titles and Subtitles.........................................................16
10.6 Notices......................................................................16
10.7 Expenses.....................................................................18
10.8 Publicity....................................................................18
10.9 Amendments and Waivers.......................................................18
10.10 Severability.................................................................18
10.11 Entire Agreement.............................................................18
10.12 Jurisdiction; Venue..........................................................19
10.13 Specific Performance.........................................................20
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Schedules
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Schedule 2.4(c)............................. Registration Rights
Schedule 2.4(d)............................. Preemptive and Antidilution Rights
Schedule 2.14............................... Brokerage Fees
Schedule 5(a)(iii).......................... Efficacy Confirmation
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Exhibits
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Exhibit A................................... Form of Note
Exhibit B................................... Investor Rights Agreement
Exhibit C................................... Registration Rights Agreement
Exhibit D................................... Form of Legal Opinion
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Index of Defined Terms
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Section
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1995 Plan................................................................... 2.4(a)
1999 10-K................................................................... 2.5(a)
Accredited Investor......................................................... 3.4
Agreement................................................................... PREAMBLE
Closing..................................................................... 1.3(b)
Closing Location............................................................ 1.3(a)
Common Stock................................................................ RECITALS
Company..................................................................... PREAMBLE
Company Stock Option Plans.................................................. 2.4(a)
Convertible Note............................................................ RECITALS
Consultant Opinion Letters.................................................. 5(a)(ii)
Director Plan............................................................... 2.4(a)
Exchange.................................................................... 2.3
Exchange Act................................................................ 2.4(c)
Existing Warrants........................................................... 2.4(a)
FDA......................................................................... 5(a)(i)
FDA Written Notice.......................................................... 5(a)(i)
Fielding.................................................................... 1.3(a)
Fielding Acquisition Agreement.............................................. 1.3(a)
First Closing............................................................... 1.3(a)
First Note.................................................................. 1.1
HPV License Agreement....................................................... RECITALS
HSR Act..................................................................... 2.10
Investor Rights Agreement................................................... RECITALS
King........................................................................ PREAMBLE
Maryland Process Agent...................................................... 10.12(c)
Material Adverse Effect..................................................... 2.1
Material Contracts.......................................................... 2.7
Nasdaq...................................................................... 2.3
Note Shares................................................................. 2.2
Notes....................................................................... 1.2
Parkedale................................................................... RECITALS
Preferred Stock............................................................. 2.4(a)
Quintiles................................................................... 5(a)(ii)
Quintiles Efficacy Confirmation............................................. 5(a)(iii)
Registration Rights Agreement............................................... RECITALS
Related Agreements.......................................................... RECITALS
SEC......................................................................... 2.5(a)
SEC Filings................................................................. 2.5(a)
Second Closing.............................................................. 1.3(b)
Second Note................................................................. 1.2
Securities Act.............................................................. 2.4(c)
Tennessee Process Agent..................................................... 10.12(b)
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NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (this "Agreement") is made as of
the 19th day of December, 2000 by and between NOVAVAX, INC., a Delaware
corporation (the "Company"), and KING PHARMACEUTICALS, INC., a Tennessee
corporation ("King").
WHEREAS, King wishes to purchase from the Company, and the
Company wishes to sell to King, 4% Convertible Senior Notes in the form of
Exhibit A attached hereto (each a "Convertible Note") in the aggregate principal
amount of Twenty-Five Million Dollars ($25,000,000), all subject to and in
accordance with the terms and conditions of this Agreement;
WHEREAS, shares of common stock, par value $0.01 per share, of
the Company (the "Common Stock") shall be issuable upon the conversion of, and
as interest payments on, the Convertible Notes;
WHEREAS, as a condition to the consummation of the First Closing
of this Agreement, King and the Company have agreed to enter into an Investor
Rights Agreement in the form of Exhibit B attached hereto (the "Investor Rights
Agreement");
WHEREAS, as a condition to the consummation of the First Closing
of this Agreement, King and the Company have agreed to enter into a Registration
Rights Agreement in the form of Exhibit C attached hereto (the "Registration
Rights Agreement"); and
WHEREAS, as a condition to King entering into this Agreement, the
Company and Parkedale Pharmaceuticals, Inc., a subsidiary of King ("Parkedale")
have entered into a License Agreement dated as of the date hereof (the "HPV
License Agreement" and together with the Registration Rights Agreement and the
Investor Rights Agreement, collectively, the "Related Agreements") pursuant to
which the Company will supply certain proprietary manufacturing cell banks to
Parkedale so that Parkedale can develop products to treat or prevent human
papillomavirus and/or cervical cancer.
NOW THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
SECTION 1. PURCHASE AND SALE OF THE NOTES.
1.1 SALE AND ISSUANCE OF THE FIRST NOTE.
Subject to the terms and conditions of this Agreement,
the Company agrees to sell and issue to King, and King agrees to purchase from
the Company, at the First Closing (as defined below) a Convertible Note in the
principal amount of Twenty Million Dollars ($20,000,000) (the "First Note").
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1.2 SALE AND ISSUANCE OF THE SECOND NOTE.
Subject to the terms and conditions of this Agreement, the
Company agrees to sell and issue to King, and King agrees to purchase from the
Company, at the Second Closing (as defined below) a Convertible Note in the
principal amount of Five Million Dollars ($5,000,000) (the "Second Note" and
together with the First Note, the "Notes").
1.3 CLOSINGS.
(a) The closing for the purchase and sale of the First
Note (the "First Closing"), shall take place at the offices of Hogan & Hartson
L.L.P., 8300 Greensboro Drive, McLean, Virginia 22102 (the "Closing Location"),
subject to the satisfaction or waiver of the applicable conditions set forth in
Sections 6, 7 and 8 hereof, simultaneously with the closing of the Company's
acquisition of The Fielding Pharmaceutical Company ("Fielding") pursuant to the
terms and conditions of that certain Agreement and Plan of Merger dated as of
October 4, 2000, by and among the Company, Fielding and the other parties
thereto (the "Fielding Acquisition Agreement"), or at such other time and place
as the Company and King mutually agree upon in writing.
(b) The closing for the purchase and sale of the
Second Note (the "Second Closing", with each of the First Closing and Second
Closing being referred to herein individually as a "Closing") shall take place
at the Closing Location as promptly as practicable after the satisfaction or
waiver of the applicable conditions set forth in Sections 6, 7 and 8 hereof, or
at such other time and place as the Company and King mutually agree upon in
writing. Assuming satisfaction of all the conditions precedent to the Company's
obligation to consummate the Second Closing set forth in Sections 6 and 8, the
parties acknowledge and agree that notwithstanding any provision to the contrary
contained in this Agreement or any Related Agreement, the Second Closing shall
take place on a date specified by King in a written notice to the Company;
provided that such date shall not be earlier than the twentieth (20th) day
following the date of the Company's receipt of such written notice from King.
(c) At the First Closing, among other things, the
Company shall deliver to King the fully executed First Note. In consideration of
such delivery, King shall deliver to the Company the amount of the principal of
the First Note in immediately available funds by wire transfer of funds to the
Company's designated bank account.
(d) At the Second Closing, among other things, the
Company shall deliver to King the fully executed Second Note. In consideration
of such delivery, King shall deliver to the Company the amount of the principal
of the Second Note in immediately available funds by wire transfer of funds to
the Company's designated bank account.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to King that:
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2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION.
The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to carry on its business as now
conducted and as proposed to be conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse effect on the business,
operations, properties, assets, prospects or condition (financial or otherwise)
of the Company and its subsidiaries taken as a whole (a "Material Adverse
Effect"). Except as disclosed in the 1999 10-K (as defined below) and except for
Fielding Acquisition Corp., the Company has no subsidiaries.
2.2 AUTHORIZATION.
The Company has all requisite corporate power and
authority (a) to execute, deliver and perform its obligations under this
Agreement, the Notes and the Related Agreements, (b) to issue the Notes and the
shares of Common Stock issuable upon the conversion of, and as interest payments
on, the Notes (the "Note Shares"), in the manner and for the purpose
contemplated by this Agreement, the Notes and the Related Agreements, and (c) to
execute, deliver and perform its obligations under all other agreements and
instruments executed and delivered by it pursuant to or in connection with this
Agreement and the Related Agreements. All corporate action on the part of the
Company, its officers, directors and stockholders for the authorization,
execution and delivery of this Agreement, and the Related Agreements and the
performance of all obligations of the Company hereunder and thereunder and the
authorization, issuance (or reservation for issuance) and delivery of the Notes
and the Note Shares (when issued) has been taken or will be taken prior to the
First Closing or the Second Closing, as the case may be. This Agreement and the
HPV License Agreement constitute, and each Note and other Related Agreement when
executed by the Company will constitute, valid and legally binding obligations
of the Company, enforceable in accordance with their respective terms, except
(x) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
and other laws of general application affecting enforcement of creditors' rights
generally and (y) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
2.3 VALID ISSUANCE OF THE NOTE SHARES AND LISTING.
The Note Shares will be duly and validly issued, fully
paid and nonassessable and not subject to preemptive or similar rights, and such
Note Shares will be issued in compliance with all applicable federal and state
securities laws, when issued, sold and delivered in accordance with the terms of
the Notes and the Investor Rights Agreement for the consideration expressed
therein. The Note Shares will be listed on the principal U.S. national
securities exchange on which the Common Stock is listed or, if the Common Stock
is listed on the Nasdaq National Market ("Nasdaq"), then the Note Shares will be
listed on Nasdaq (such place of listing of the Note Shares, the "Exchange"),
subject only to official notice of issuance. No approval of the stockholders of
the Company is required to issue the Notes or the Note Shares under the rules
and regulations of the Exchange, including, without limitation, Sections 712 and
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713 of the Listing Standards, Policies and Requirements of the American Stock
Exchange.
2.4 CAPITALIZATION; INDEBTEDNESS.
(a) The authorized capital stock of the Company
consists of fifty million (50,000,000) shares of Common Stock and two million
(2,000,000) shares of preferred stock, $.01 par value per share (the "Preferred
Stock"). As of December 12, 2000: (i) nineteen million five hundred ninety
thousand seven hundred ninety-three (19,590,793) shares of Common Stock were
issued and outstanding; (ii) three million five hundred fifty-five thousand one
hundred eighty-five (3,555,185) shares of Common Stock were reserved for
issuance upon the exercise of outstanding stock options or other rights to
purchase or receive the Common Stock granted under the Company's 1995 Stock
Option Plan (the "1995 Plan"); (iii) four hundred twenty thousand (420,000)
shares of Common Stock were reserved for issuance upon the exercise of
outstanding stock options or other rights to receive the Common Stock granted
under the Company's Director Stock Option Plan (the "Director Plan" and together
with the 1995 Plan, the "Company Stock Option Plans"); (iv) four hundred
seventy-nine thousand four hundred eighty-three (479,483) shares of Common Stock
were held by the Company in the Company's treasury; (v) no shares of Preferred
Stock were issued or outstanding; and (vi) warrants to purchase one million four
hundred seventy-eight thousand eight hundred twenty-six (1,478,826) shares of
Common Stock were issued and outstanding (the "Existing Warrants").
(b) The maximum number of shares of Common Stock
issuable at the Closing of the Fielding Acquisition Agreement is Three Million
Three Hundred Sixty Three Thousand Six Hundred Thirty Six (3,363,636) shares of
Common Stock.
(c) All outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive or similar rights. Except as set forth in this Section
2.4 and except for changes resulting from the issuance of shares of Common Stock
pursuant to the Company Stock Option Plans, the Existing Warrants and the
Fielding Acquisition Agreement, or as expressly permitted by this Agreement, (i)
there are not issued, reserved for issuance or outstanding (A) any shares of
capital stock or other voting securities of the Company, (B) any securities of
the Company or any Company subsidiary convertible into or exchangeable or
exercisable for shares of capital stock or voting securities of or ownership
interests in the Company or any Company subsidiary, (C) any warrants, calls,
options or other rights to acquire from the Company or any Company subsidiary,
or any obligation of the Company or any Company subsidiary to issue, any capital
stock, voting securities or other ownership interests in, or securities
convertible into or exchangeable or exercisable for capital stock or voting
securities of or other ownership interests in, the Company or any Company
subsidiary, (ii) there are no outstanding obligations of the Company or any
Company subsidiary to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities, and (iii) except as contemplated in this Agreement or
as set forth on Schedule 2.4(c), the Company is not presently under any
obligation, has not agreed or committed, and has not granted rights, to register
under the Securities Act of 1933, as amended (the "Securities Act"), or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
file any registration statement under the Securities Act or the Exchange Act
covering, any of its currently outstanding capital stock or
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other securities or any of its capital stock or other securities that may be
subsequently issued.
(d) Except as provided for in this Agreement and the
Related Agreements, and except as set forth on Schedule 2.4(d), neither the
Company nor any Company subsidiary is a party to any agreement granting any
preemptive or antidilutive rights with respect to any securities of the Company
or any Company subsidiary that are outstanding as of the date hereof, or with
respect to any securities of the Company or any Company subsidiary that may be
subsequently issued upon the conversion or exercise of any instrument
outstanding as of the date hereof. The execution, delivery and performance of
this Agreement and the Related Agreements and the issuance of the Notes and the
Note Shares will not trigger any of the preemptive or antidilutive rights under
any of the agreements set forth on Schedule 2.4(d) hereto. Other than the
Company subsidiaries, the Company does not directly or indirectly beneficially
own any securities or other beneficial ownership interests in any other person.
A list of all of the Company subsidiaries, other than Fielding Acquisition
Corp., is set forth in an exhibit to the 1999 10-K.
(e) Except for the Notes to be issued hereunder, the
Company has no Indebtedness (as defined in the Investor Rights Agreement).
2.5 SEC REPORTS AND CERTAIN CHANGES.
(a) The Company has heretofore filed with the United
States Securities and Exchange Commission (the "SEC") all forms, statements,
reports and documents (together with all exhibits, amendments and supplements
thereto, the "SEC Filings") required to be filed by the Company under each of
the Securities Act and the Exchange Act and the SEC rules and regulations
thereunder, including an Annual Report on Form 10-K for the year ended December
31, 1999 (the "1999 10-K"). As of their respective filing dates, none of the SEC
Filings, at the time they were filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading. Since December 31,
1999, the Company has timely filed with the SEC all SEC Filings required to be
filed since such date, and all such SEC Filings complied with all applicable
requirements of the Securities Act and the Exchange Act, as applicable, and the
rules and regulations thereunder. The Company has previously made available or
delivered to King copies of the SEC Filings.
(b) Since December 31, 1999, and except as set forth in
SEC Filings or otherwise previously disclosed to King in writing, there has been
no change in the business, assets, liabilities, financial condition or operating
results of the Company from that reflected in the 1999 10-K, except changes in
the ordinary course of business that have not, individually or in the aggregate,
resulted in and are not reasonably expected to result in a Material Adverse
Effect.
2.6 FINANCIAL STATEMENTS AND TITLE TO ASSETS.
The audited consolidated financial statements of the
Company included or incorporated by reference in the 1999 10-K and the unaudited
interim financial statements contained in the quarterly reports on Form 10-Q for
the first three quarters in the year ending
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December 31, 2000 have been prepared in accordance with the published rules and
regulations of the SEC and with U.S. generally accepted accounting principles
applied on a consistent basis throughout the periods indicated therein and with
each other, except as may be indicated therein or in the notes thereto, and
fairly present in all material respects the financial condition of the Company
and its subsidiaries as of the respective dates thereof and the results of their
operations and statements of cash flows for the respective periods then ended,
subject, in the case of unaudited interim financial statements, to usual
year-end adjustments. Except as reflected in such financial statements, the
Company and its subsidiaries have no material liabilities, absolute or
contingent, other than ordinary course liabilities incurred since the date of
the last such financial statements in connection with the conduct of the
business of the Company and its subsidiaries. Except as otherwise set forth in
the SEC Filings, the Company and its subsidiaries have (a) good and marketable
title to all material property and assets reflected as owned by the Company or
its subsidiaries in the financial statements to the 1999 10-K (or as disclosed
in the SEC Filings), and (b) valid and enforceable leasehold interests in all
material property and assets reflected as leased by the Company or its
subsidiaries in the financial statements to the 1999 10-K (or as disclosed in
the SEC Filings).
2.7 CONTRACTS.
With respect to each of the material contracts,
commitments and agreements of the Company and its subsidiaries ("Material
Contracts"), neither the Company nor any of its subsidiaries is, or has actual
knowledge that any other party is, in default under or in respect of any
Material Contract, the result of which default would have a Material Adverse
Effect.
2.8 COMPLIANCE AND PERMITS.
(a) Except as disclosed in the SEC Filings, each of the
Company and its subsidiaries has complied with, and is not in default under or
in violation of, (i) its Certificate of Incorporation, By-laws or other
organizational document or (ii) any laws, ordinances and regulations or other
governmental restrictions, orders, judgments or decrees applicable to each of
the Company and its subsidiaries, except, in the case of clause (ii), for any
such default or violation which would not have a Material Adverse Effect. Except
as disclosed in the SEC Filings, neither the Company nor any of its subsidiaries
has received notice of any possible or actual violation of any applicable law,
ordinance, regulation, or order, the result of which violation would be
reasonably expected to have a Material Adverse Effect. Neither the execution and
delivery of this Agreement, the Notes or any of the Related Agreements, nor the
consummation of the transactions contemplated hereby or thereby will violate,
conflict with or result in a breach or result in the acceleration or termination
of, or the creation in any third party of the right to accelerate, terminate,
modify or cancel, any material indenture, contract, lease, sublease, loan
agreement, note or other material obligation or liability to which the Company
or any of its subsidiaries is a party or is bound or to which any of its assets
are subject.
(b) Except as disclosed in SEC Filings, each of the
Company and its subsidiaries has, and is not in default in any material respect
under, all governmental franchises, permits, licenses, and any similar authority
necessary for the conduct of its business as now being
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conducted by it, the lack of which would be reasonably expected to have a
Material Adverse Effect.
2.9 COMPLIANCE WITH OTHER INSTRUMENTS.
The execution, delivery and performance of this Agreement
or any of the Related Agreements and the transactions contemplated hereby and
thereby will not result in any violation of or constitute, with or without the
passage of time and the giving of notice, a default under any provision of (a)
the Certificate of Incorporation, By-laws or other organizational document of
the Company or any of its subsidiaries or (b) any material provision of any
material indenture, agreement or other instrument by which the Company or any of
its subsidiaries or any of their properties or assets are bound, or result in
the creation or imposition of any lien, or encumbrance upon any of the material
properties or assets of the Company or any of its subsidiaries, except, in the
case of clause (b), for any such default or violation which would not have in
any such event a Material Adverse Effect.
2.10 GOVERNMENTAL CONSENTS.
Except for (a) any notification required to be filed or
supplied pursuant to the Hart-Scott Rodino Antitrust Improvements Act of 1976,
as amended, and the rules promulgated thereunder (the "HSR Act") in connection
with the conversion of the Notes, (b) registration of the Note Shares under the
Securities Act pursuant to the Registration Rights Agreement, (c) listing of the
Note Shares on the Exchange, (d) any filings required under federal and state
securities laws in connection with the issuance of the Notes or the Note Shares,
and (e) any consents, approvals, orders or authorizations of, or registrations,
qualifications, designations, declarations or filings with, any federal, state
or local governmental authority as provided for in the HPV License Agreement, no
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority is required on the part of the Company in connection with
the Company's valid execution, delivery and performance of this Agreement, the
Notes or any of the Related Agreements. The filings under federal and state
securities laws, if any, will be effected by the Company at its cost within the
applicable stipulated statutory period.
2.11 LITIGATION.
There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Company, currently threatened against the
Company or any of its subsidiaries which questions the validity of this
Agreement, the Notes or any of the Related Agreements, or the right of the
Company to enter into such agreements and instruments or to consummate the
transactions contemplated hereby or thereby. Except as disclosed in SEC Filings,
there is no action, suit, proceeding or investigation pending or, to the
knowledge of the Company, currently threatened against the Company, which singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have or would reasonably be expected to have a Material Adverse
Effect.
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2.12 TAXES.
Each of the Company and its subsidiaries has filed all
federal, state, foreign and other tax returns which are required to be filed and
has heretofore paid all taxes which have become due and payable, except where
the failure to file or pay would not be reasonably expected to have a Material
Adverse Effect.
2.13 INTELLECTUAL PROPERTY.
Except as disclosed in the SEC Filings, to the knowledge
of the Company, each of the Company and its subsidiaries owns, or possesses
adequate rights to use, all of the patents, patent rights, trade secrets,
know-how, proprietary techniques, including processes and substances,
trademarks, service marks, trade names and copyrights described or referred to
in the SEC Filings or owned or used by it or which is necessary for the conduct
of its business as presently conducted, except where the failure to own or
possess such patents, patent rights, trade secrets, know-how, proprietary
techniques, including processes and substances, trademarks, service marks, trade
names and copyrights would not have a Material Adverse Effect. Except as
disclosed in the SEC Filings, neither the Company nor any of its subsidiaries
has received any notice of infringement of or conflict with asserted rights of
others with respect to any patents, patent rights, trade secrets, know-how,
proprietary techniques, including processes and substances, trademarks, service
marks, trade names and copyrights which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would be reasonably
expected to have a Material Adverse Effect.
2.14 BROKERAGE.
Except as set forth on Schedule 2.14, there are no claims,
agreements, or commitments for brokerage commissions or finder's fees or similar
compensation in connection with the transactions contemplated by this Agreement,
the Related Agreements, the acquisition of Fielding or otherwise, based on any
arrangement made by or on behalf of the Company or any of its subsidiaries, and
the Company agrees to indemnify and hold King harmless against any damages
incurred as a result of any such claim, agreement, or commitment.
2.15 FIELDING ACQUISITION AGREEMENT.
The Company and its subsidiaries have not waived any of
their rights under, or any of the conditions to the obligation of the Company to
consummate any transaction contemplated by, the Fielding Acquisition Agreement.
Neither the Company nor any other party to the Fielding Acquisition Agreement is
in material breach of, or has defaulted under, any of the terms of the Fielding
Acquisition Agreement. The Fielding Acquisition Agreement constitutes a legal,
valid and binding obligation of the Company, Fielding and the other parties
thereto enforceable in accordance with its terms, except (x) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally and (y)
as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies. The Company is not and, to
Company's knowledge, no other party to the Fielding Acquisition Agreement is,
subject to any
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judgment, award, order, writ, injunction, arbitration decision or decree which
prohibits the performance of the Fielding Acquisition Agreement or the
consummation of any transaction contemplated under the Fielding Acquisition
Agreement. There is no action (a) pending or, to the Company's knowledge,
threatened against or affecting the Company or (b) to the Company's knowledge,
pending or threatened against or affecting any other party to the Fielding
Acquisition Agreement in any federal, state or local court, or before any
governmental authority or arbitrator that would adversely affect the ability of
the Company or any other party to the Fielding Acquisition Agreement to
consummate, or that would prohibit, the transactions contemplated under the
Fielding Acquisition Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF KING.
King hereby represents and warrants that:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION.
King is a corporation duly organized, validly existing and
in good standing under the laws of the State of Tennessee and has all requisite
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted.
3.2 AUTHORIZATION.
All corporate action on the part of King, its officers and
directors necessary for the authorization, execution and delivery of this
Agreement and each of the Related Agreements and the performance of all
obligations of King hereunder and thereunder has been taken or will be taken
prior to each Closing, and this Agreement and the Related Agreements constitute
valid and legally binding obligations of King enforceable in accordance with
their respective terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting the enforcement of creditors' rights generally, or (b) as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies.
3.3 GOVERNMENTAL CONSENTS.
Other than matters contemplated by this Agreement and the
Related Agreements, and any filings required to be made or supplied pursuant to
Section 13 or 16 of the Exchange Act or the HSR Act, in connection with the
issuance or conversion of the Notes, or the issuance of Note Shares in payment
of interest on the Notes, no consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority is required on the part of King
in connection with King's valid execution, delivery and performance of this
Agreement and the Related Agreements.
3.4 ACCREDITED INVESTOR.
King is an "accredited investor" as such term is defined
in Rule 501(a) of the Securities Act and is purchasing the Notes and the
underlying Note Shares for its own
9
<PAGE> 14
account for investment purpose. King has sufficient knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of its investment in the Notes (and the underlying Note
Shares) and is capable of bearing the economic risks of such investment.
SECTION 4. FILINGS AND AUTHORIZATIONS.
The Company and King, as promptly as practicable, (a) will make,
or cause to be made, all such other filings and submissions under laws, rules
and regulations applicable to them as may be required for them to consummate the
transactions contemplated hereby in accordance with the terms of this Agreement
and the Related Agreements, and (b) will use reasonable efforts to obtain, or
cause to be obtained, all authorizations, approvals, consents and waivers from
all governmental authorities necessary to be obtained by them in order for them
to consummate such transactions.
SECTION 5. COMPANY COVENANTS.
The Company hereby covenants and agrees as follows:
(a) The Company shall use its best efforts to obtain and deliver
to King as promptly as practicable each of the following, each in a form
reasonably acceptable to King:
(i) written notice from the U.S. Food and Drug
Administration (the "FDA") stating that the FDA has accepted the Company's New
Drug Application for Estrasorb(TM) (the "FDA Written Notice");
(ii) an opinion letter from Quintiles Transnational
Corp. ("Quintiles") stating that the Company's New Drug Application for
Estrasorb(TM) exceeds the minimum filing standards required by the FDA, and, if
not covered by such opinion letter from Quintiles, an additional opinion letter
from a nationally recognized consulting firm reasonably acceptable to King
stating that the CMC section of the Company's New Drug Application for
Estrasorb(TM) exceeds the minimum filing standards required by the FDA (opinion
letters described in this clause (ii), the "Consultant Opinion Letters"); and
(iii) written confirmation from Quintiles regarding the
efficacy results for the E98-2 study, all as is more fully described in Schedule
5(a)(iii) attached hereto (the "Quintiles Efficacy Confirmation").
(b) Fielding Acquisition Agreement. The Company shall not
terminate, amend, modify or change the Fielding Acquisition Agreement or take
any action, or refrain from taking any action, that would constitute a material
breach of, constitute a default (or event which with the giving of notice, or
lapse of time or both, would become a default) under, or give to others any
rights of termination, amendment, acceleration, suspension, revocation or
cancellation of the Fielding Acquisition Agreement. Within two (2) Business Days
after the First Closing, the Secretary of the Company shall deliver to King a
certificate dated as of the First Closing, certifying that attached thereto is a
true and complete copy of all documents and agreements
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<PAGE> 15
executed in connection with the consummation of the Fielding Acquisition
Agreement.
(c) Use of Proceeds. Up to Six Million Dollars ($6,000,000) of
the proceeds from the First Note shall be used by the Company to complete the
acquisition of Fielding and the remainder of the proceeds from the First Note
shall be used by the Company for the promotion of Estrasorb(TM), for general
working capital purposes and in the operation of the Company's business. The
proceeds from the Second Note shall be used to fulfill the Company's obligations
in connections with the promotion of Estrasorb(TM), for general working capital
purposes and in the operation of the Company's business.
SECTION 6. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
The obligation of each party to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the date of each of the First Closing and the Second Closing of the following
conditions:
(a) all governmental and other consents and approvals, if any,
necessary to permit the consummation of the transactions contemplated by this
Agreement shall have been obtained; and
(b) no stop order or other order enjoining the sale of the
First Note at the First Closing or the Second Note at the Second Closing shall
have been issued and no proceedings for such purpose shall be pending or, to the
knowledge of the Company, threatened by the SEC or any commissioner of
corporations or similar officer of any state having jurisdiction over the
transactions contemplated by this Agreement and no preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission nor any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority shall be in effect that would restrain or
otherwise prevent the consummation of the transactions contemplated by this
Agreement.
SECTION 7. CONDITIONS OF KING'S OBLIGATIONS AT EACH CLOSING.
The obligations of King to consummate each Closing under this
Agreement are subject to the fulfillment on or before each Closing of the
following conditions, the waiver of which shall not be effective without the
consent of King thereto:
(a) Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true in all material
respects on and as of each Closing with the same effect as though such
representations and warranties had been made on and as of the date of such
Closing (except for representations and warranties that speak as of a specific
time, which need only be true and correct in all material respects as of such
date or time).
(b) Performance. The Company shall have performed and complied
in all material respects with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
by it on or before each Closing.
11
<PAGE> 16
(c) Compliance Certificate. An authorized executive officer of
the Company shall have delivered to King a certificate certifying that the
conditions specified in Section 6(a) and Section 6(b) have been fulfilled.
(d) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at each Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to King, and King shall have received all such counterpart original
and certified or other copies of such documents as King may reasonably request.
(e) Related Agreements. At the First Closing, the Company
shall have entered into the Related Agreements, and such Related Agreements
shall be in full force and effect.
(f) Certificate. At each Closing, the Company shall have
furnished to King a certificate, signed by an authorized executive officer of
the Company, certifying: (i) the due organization and good standing of the
Company; (ii) the corporate resolutions of the Company authorizing the
transactions contemplated by this Agreement; and (iii) the incumbency of
officers of the Company executing this Agreement and the other instruments or
certificates delivered at each Closing.
(g) Opinion of Counsel. At each Closing, the Company shall
have furnished to King an opinion of White & McDermott. P.C. in the form
attached hereto as Exhibit D.
(h) Delivery of the Notes. At the First Closing, the Company
shall have delivered the fully executed First Note and at the Second Closing,
the Company shall have delivered the fully executed Second Note.
(i) Listing. The Note Shares shall have been approved for
listing on the Exchange.
(j) Fielding Acquisition Agreement. The closing of the
Company's acquisition of Fielding shall have occurred or occur simultaneously
with the First Closing, in accordance with the terms and conditions of the
Fielding Acquisition Agreement and the representations and warranties of the
Company set forth in Section 2.15 hereof shall be true and correct in all
respects at and as of the First Closing, as though each such representation and
warranty were made at and as of such time (except for representations and
warranties that speak of a specific date or time other than the First Closing,
which need only be true and correct as of such date or time). An authorized
executive officer of the Company shall have delivered to King a certificate
dated as of the First Closing, certifying (i) that the matters set forth in the
preceding sentence are true and correct and (ii) that attached thereto is a true
and complete copy of the Certificate of Merger accepted by and filed with the
Secretary of State of the State of Delaware in connection with the consummation
of the Company's acquisition of Fielding pursuant to the Fielding Acquisition
Agreement.
12
<PAGE> 17
(k) Broker Releases. At the First Closing, the Company shall
have delivered to King (i) evidence reasonably satisfactory to King that all
amounts due to the Persons identified in Schedule 2.14 will be paid in full at
the First Closing and (ii) releases (conditioned only upon receipt of agreed
upon consideration set forth on Schedule 2.14) from such Persons with respect to
any claims relating thereto, each in a form reasonably acceptable to King.
(l) FDA Written Notice. Prior to the Second Closing, the
Company shall have delivered the FDA Written Notice to King.
(m) Consultant Opinion Letters. Prior to the Second Closing,
the Company shall have delivered the Consultant Opinion Letters to King.
(n) Quintiles Efficacy Confirmation. Prior to the Second
Closing, the Company shall have delivered the Quintiles Efficacy Confirmation to
King.
(o) Packaging Requirements. Prior to the Second Closing, the
Company shall have delivered to King (i) a certificate from an authorized
executive officer certifying that Fielding's noncompliance disclosed in Schedule
2.19 to the Fielding Acquisition Agreement shall have been remedied and that
Fielding and the Company are in compliance with 21 CFR 310.518 and (ii) any
correspondence the Company or Fielding has had with the FDA regarding 21 CFR
310.518 since the date of the Fielding Acquisition Agreement.
(p) Other Documentation. The Company shall have furnished to
King such other instruments and documents, in form and substance reasonably
acceptable to King, as may be necessary to effect each Closing.
SECTION 8. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT EACH CLOSING.
The obligations of the Company to consummate each Closing under
this Agreement are subject to the fulfillment on or before each Closing of the
following conditions, the waiver of which shall not be effective without the
consent of the Company thereto:
(a) Representations and Warranties. The representations and
warranties of King contained in Section 3 shall be true in all material respects
on and as of each Closing with the same effect as though such representations
and warranties had been made on and as of such Closing (except for
representations and warranties that speak as of a specific time, which need only
be true and correct in all material respects as of such date or time).
(b) Performance. King shall have performed and complied in all
material respects with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before each Closing, and all corporate or other proceedings in connection with
the transactions contemplated at each such Closing and all documents incident
thereto shall be reasonably satisfactory in form and in substance to the
Company.
(c) Compliance Certificate. An officer of King shall have
delivered to the
13
<PAGE> 18
Company a certificate certifying that the conditions specified in Section 7(a)
and Section 7(b) have been fulfilled.
(d) Payment of Purchase Price. At the First Closing, King
shall have delivered to the Company the amount of the principal of the First
Note in immediately available funds by wire transfer of funds to the Company's
designated bank account, and at the Second Closing King shall have delivered to
the Company the amount of the principal of the Second Note in immediately
available funds by wire transfer of funds to the Company's designated bank
account.
(e) Related Agreements. At the First Closing, King (or
Parkedale in the case of the HPV License Agreement) shall have entered into each
of the Related Agreements and such Related Agreements shall be in full force and
effect.
(f) Other Documentation. King shall have furnished to the
Company such other instruments and documents, in form and substance reasonably
acceptable to the Company, as may be necessary to effect each Closing.
SECTION 9. TERMINATION.
9.1 TERMINATION.
This Agreement may be terminated at any time prior to the
closing:
(a) by mutual written agreement of the Company and
King; or
(b) by either King or the Company if the First Closing
shall not have been consummated on or before January 2, 2001 (provided that the
right to terminate this Agreement under this Section 9.1(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the First Closing
to occur on or before such date); or
(c) by either King or the Company if a court of
competent jurisdiction or governmental, regulatory, or administrative agency or
commission shall have issued a nonappealable final order, decree or ruling or
taken any other action having the effect of permanently reshaping, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement; or
(d) by King if the Second Closing shall not have been
consummated on or before March 1, 2002.
9.2 EFFECT OF TERMINATION.
In the event of the termination of this Agreement pursuant
to Section 9.1, this Agreement shall forthwith become void and there shall be no
liability on the part of any party hereto (or any stockholder director, officer,
partner, employee, agent, consultant or representative
14
<PAGE> 19
of such party) except as set forth in this Section 9.2; provided, that nothing
contained in this Agreement shall relieve any party from liability of any breach
of this Agreement; provided, further, that this Section 9.2 and Section 10 shall
survive such termination and the parties hereto shall have any and all remedies
to enforce such obligations provided at law or in equity or otherwise
(including, without limitation, specific performance); provided, further, that
termination of this Agreement pursuant to Section 9.1 after the First Closing
shall render inapplicable only those provisions of this Agreement obligating the
parties to consummate the Second Closing.
SECTION 10. MISCELLANEOUS.
10.1 SURVIVAL.
All representations, warranties and covenants contained
herein or made in writing by or on behalf of the Company in connection herewith
shall survive the execution and delivery of this Agreement and the Notes, the
transfer by King of any Note or Note Shares or portion thereof or interest
therein and the payment or conversion of any Note, and may be relied upon by any
transferee of any Note or Note Shares, regardless of any investigation made at
any time by or on behalf of King or any transferee. All representations,
warranties and covenants contained herein made by King or any holder of the
Notes shall survive the execution and delivery of this Agreement and the Notes,
and may be relied upon by the Company and its successors and assigns.
10.2 ASSIGNMENT; SUCCESSORS AND ASSIGNS.
Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by the parties hereto without the
prior written consent of the other party. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
10.3 GOVERNING LAW.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
10.4 COUNTERPARTS.
This 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.
15
<PAGE> 20
10.5 TITLES AND SUBTITLES.
The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.
10.6 NOTICES.
All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when (a) delivered personally to
the recipient, (b) telecopied to the recipient (with hard copy sent to the
recipient by reputable overnight courier service (charges prepaid) that same
day) if telecopied before 5:00 p.m. Eastern time on a business day, and
otherwise on the next business day, or (c) one business day after being sent to
the recipient by reputable overnight courier service (charges prepaid). Such
notices, demands and other communications shall be sent to the following Persons
at the following addresses:
To the Company:
Novavax, Inc.
8320 Guilford Road
Columbia, Maryland 21046
Attn: Chief Executive Officer
Telecopy: (301) 854-3902
with a copy (which shall not constitute notice) to:
White & McDermott, P.C.
65 William Street, Suite 250
Wellesley, Massachusetts 02481
Attn: David A. White
Telecopy: (781) 237-8120
To King:
King Pharmaceuticals, Inc.
501 Fifth Street
Bristol, Tennessee 37620
Attn: Executive Vice President
and General Counsel
Telecopy: (423) 989-6282
16
<PAGE> 21
with a copy (which shall not constitute notice) to:
Hogan & Hartson L.L.P.
8300 Greensboro Drive
McLean, Virginia 22102
Attn: Richard T. Horan, Jr.
Thomas E. Repke
Telecopy: (703) 610-6200
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
10.7 EXPENSES.
Irrespective of whether the Closings are effected, each
party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement.
Notwithstanding the foregoing, the Company shall pay any and all stamp, transfer
and other similar taxes payable or determined to be payable in connection with
the execution and delivery of this Agreement or any securities purchased from
the Company hereunder, and shall save and hold King harmless from and against
any and all liabilities with respect to or resulting from any delay in paying,
or omission to pay, such taxes.
10.8 PUBLICITY.
Except for information which is required to be disclosed
by applicable law, neither party hereto shall issue any press releases or public
statements with regard to this Agreement, the Notes or the Related Agreements
without first seeking the approval of the other party, which shall not be
unreasonably withheld or delayed.
10.9 AMENDMENTS AND WAIVERS.
Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and King. Any amendment or waiver effected in
accordance with this Section 10.9 shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding, each future
holder of all such securities, and the Company.
10.10 SEVERABILITY.
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
17
<PAGE> 22
10.11 ENTIRE AGREEMENT.
This Agreement and the documents referred to herein
constitute the entire agreement among the parties and no party shall be liable
or bound to any other party in any manner by any warranties, representations, or
covenants except as specifically set forth herein or therein.
10.12 JURISDICTION; VENUE.
(a) Each of the Company and King hereby waives personal
service of any process upon it in connection with any suit, action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, and hereby covenants and agrees that all such service of process may be
made in the manner set forth in Section 10.6 with the same effect as though
served on it personally.
(b) The Company hereby covenants and agrees that any
suit, action or proceeding initiated by the Company against King, its
affiliates, subsidiaries, successors and/or assigns arising out of or relating
to this Agreement or the transactions contemplated hereby shall be brought
exclusively in the federal courts located in and/or state courts of the State of
Tennessee. In the event of any such suit, action or proceeding initiated by the
Company, each of the Company and King hereby submits to the exclusive
jurisdiction and venue of the federal courts located in and state courts of the
State of Tennessee and hereby waives any and all objections based on
jurisdiction or venue that such party may have under applicable law or the
Federal Rules of Civil Procedure. Each of the parties hereby irrevocably
designates CT Corporation in the State of Tennessee (the "Tennessee Process
Agent") as its designee, appointee and agent to receive, for and on its behalf,
service of process in the State of Tennessee in any such suit, action or
proceedings. Service on the Tennessee Process Agent shall be deemed complete
upon delivery thereof to the Tennessee Process Agent, provided that, in the case
of any such service upon the Tennessee Process Agent, the party effecting such
service shall also deliver a copy thereof to the other parties in accordance
with the notice provision set forth in Section 10.6. Each such party shall take
all such action as may be necessary to continue the appointment of the Tennessee
Process Agent in full force and effect or to appoint another agent, who shall
thereafter be referred to herein as the "Tennessee Process Agent", so that each
such party shall at all times have an agent for service for the foregoing
purposes in the State of Tennessee.
(c) King hereby covenants and agrees that any suit,
action or proceeding initiated by King against the Company, its affiliates,
subsidiaries, successors and/or assigns arising out of or relating to this
Agreement or the transactions contemplated hereby shall be brought exclusively
in the federal courts located in and/or state courts of the State of Maryland.
In the event of any such suit, action or proceeding initiated by King, each of
the Company and King hereby submit to the exclusive jurisdiction and venue of
the federal courts located in and state courts of the State of Maryland and
hereby waive any and all objections based on jurisdiction or venue that such
party may have under applicable law or the, Federal Rules of Civil Procedure.
Each of the foregoing parties hereby irrevocably designates CT Corporation in
the State of Maryland (the "Maryland Process Agent"), as its designee, appointee
and agent to receive, for and on its behalf, service of process in the State of
Maryland in any such suit, action or proceedings with respect to this Agreement
and the transactions contemplated
18
<PAGE> 23
hereby. Service on the Maryland Process Agent shall be deemed complete upon
delivery thereof to the Maryland Process Agent, provided that in the case of any
such service upon the Maryland Process Agent, the party effecting such service
shall also deliver a copy thereof to the other parties in accordance with the
notice provision set forth in Section 10.6. Each such party shall take all such
action as may be necessary to continue the appointment of the Maryland Process
Agent in full force and effect or to appoint another agent, who shall thereafter
be referred to herein as the "Maryland Process Agent", so that each such party
shall at all times have an agent for service for the foregoing purposes in the
State of Maryland.
10.13 SPECIFIC PERFORMANCE.
The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled, in addition to any other
remedy provided by this Agreement or in law or at equity, to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
19
<PAGE> 24
IN WITNESS WHEREOF, the parties have executed this Note Purchase
Agreement as of the date first above written.
NOVAVAX, INC.
By:
----------------------------------------
Name:
-------------------------------
Title:
-------------------------------------
KING PHARMACEUTICALS, INC.
By:
----------------------------------------
Name:
-------------------------------
Title:
-------------------------------------
<PAGE> 25
EXHIBIT A
FORM OF CONVERTIBLE NOTE
THIS NOTE AND THE SHARES OF COMMON STOCK OF NOVAVAX, INC. (OR OTHER SECURITIES)
WHICH MAY BE ISSUABLE AS INTEREST ON OR UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY OF THE STATES OF THE UNITED STATES, AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
AND UNTIL (I) SUCH SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, OR
(II) THE HOLDER HEREOF PROVIDES (A) A WRITTEN OPINION OF LEGAL COUNSEL, WHICH
COUNSEL AND OPINION (IN FORM AND SUBSTANCE) SHALL BE REASONABLY SATISFACTORY TO
NOVAVAX, INC., TO THE EFFECT THAT THE PROPOSED TRANSFER OF SUCH SECURITIES MAY
BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT, OR (B) A "NO ACTION"
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") REASONABLY
SATISFACTORY TO NOVAVAX, INC. TO THE EFFECT THAT UNDER THE SECURITIES ACT THE
PROPOSED TRANSFER OF THE SECURITIES WITHOUT REGISTRATION WILL NOT RESULT IN A
RECOMMENDATION BY THE STAFF OF THE COMMISSION THAT ACTION BE TAKEN WITH RESPECT
THERETO, OR (C) SUCH OTHER EVIDENCE AS MAY BE REASONABLY SATISFACTORY TO
NOVAVAX, INC. THAT THE PROPOSED TRANSFER OF SUCH SECURITIES MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT.
4% CONVERTIBLE SENIOR NOTE
No. ___ ___________ ___, 200_
$-------------
NOVAVAX, INC., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to the order of KING PHARMACEUTICALS, INC., a
Tennessee corporation, or its registered assigns ("Payee"), the principal amount
of _____________________________ Dollars ($_______________), on December 19,
2007, with interest from the date hereof on the unpaid balance of such principal
amount as provided herein, which interest is payable semi-annually on June 30
and December 31 of each year commencing _________________, 200_, and on the date
such unpaid balance shall become due and payable in full (whether at maturity or
at a date fixed for repurchase or by declaration or otherwise) (each an
"Interest Payment Date"). Capitalized terms used and not defined in this Note
shall have the meanings assigned to them in the Investor Rights Agreement dated
as of December 19, 2000 (the "Investor Rights Agreement") by and between the
Company and King Pharmaceuticals, Inc.
Interest payable on this Note shall be computed on the basis of a
360-day year of
<PAGE> 26
twelve 30-day months and applied to the actual number of days elapsed and shall
accrue at a fixed rate equal to four percent (4%) per annum. All payments with
respect to this Note shall be credited first to the payment of accrued but
unpaid interest and then to the repayment of principal. The rate of interest
payable hereunder shall in no event exceed the maximum rate permitted by
applicable law.
Payments of principal on this Note shall be made in lawful money
of the United States in immediately available funds at the address of Payee set
forth below.
Except as provided in the following sentence, payments of
interest on this Note shall be made in lawful money of the United States in
immediately available funds at the address of Payee set forth below. If the
Average Closing Price calculated with respect to an Interest Payment Date is
equal to or greater than the Initial Conversion Price and no Event of Default
shall have occurred and be continuing as of such Interest Payment Date, the
Company, at its option, shall have the right to pay up to the full amount of the
Stock Interest Portion of the interest due on such Interest Payment Date by
issuing to Payee the number of fully paid and nonassessable shares of Common
Stock which is determined by dividing such Stock Interest Portion by the Average
Closing Price calculated with respect to such Interest Payment Date and by
delivering a certificate or certificates for shares of such Common Stock in such
denomination or denominations as Payee may request at the address specified by
Payee. For purposes of the foregoing provision:
"Average Closing Price" means, with respect to any Interest
Payment Date, the average Closing Price per share, rounded up to four (4)
decimal points, of the Common Stock during the twenty (20) consecutive trading
days ending with and including the third trading day immediately preceding such
Interest Payment Date.
"Closing Price" means, with respect to each share of Common
Stock, for any day, the reported last sales price regular way per share or, in
case no such reported sale takes place on such day, the average of the reported
closing bid and asked prices regular way, in either case (a) on the American
Stock Exchange as reported in The Wall Street Journal (or other similar
newspaper) for American Stock Exchange Composite Transactions or, if the Common
Stock is not listed or admitted to trading on such exchange, on the principal
(as determined by the Board of Directors) national securities exchange on which
the Common Stock is listed or admitted to trading or (b) if not listed or
admitted to trading on any national securities exchange, on the Nasdaq National
Market, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange or quoted on the Nasdaq National Market, the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any American Stock Exchange member firm selected from time to time
by the Company for that purpose. If no such prices are available, the Closing
Price per share of Common Stock shall be the fair value of a share as determined
in good faith by the Board of Directors.
"Initial Conversion Price" means $________ 1/.
-----------------------
1/ For the First Note, this price will be Ten Dollars ($10). The Initial
Conversion Price of
-2-
<PAGE> 27
"Stock Interest Portion" shall mean one-half of the interest due
and payable on this Note at any Interest Payment Date.
This Note is one of the Company's 4% Convertible Senior Notes
authorized for issuance in the aggregate original principal amount of
$25,000,000 pursuant to the Note Purchase Agreement. The registered holder of
this Note is entitled to the benefits of the Investor Rights Agreement and may
enforce the agreements of the Company contained therein and exercise the
remedies provided for thereby or otherwise available in respect thereof and is
subject to the provisions thereof and limitations of rights provided therein.
The Investor Rights Agreement contains provisions permitting the amendment or
waiver of certain of the terms thereof.
Except in connection with a prepayment of a portion of this Note
pursuant to Section 4 of the Investor Rights Agreement, a mandatory redemption
of this Note pursuant to Section 3 of the Investor Rights Agreement, or a
repurchase of the Notes pursuant to Section 6 of the Investor Rights Agreement,
this Note may not be prepaid by the Company without the prior written consent of
Payee.
At the option of the holder hereof, the principal amount of this
Note or any portion of such principal amount may, at the times and upon the
conditions set forth in the Investor Rights Agreement, be converted into fully
paid and nonassessable shares of Common Stock, as such shares shall be
constituted at the time of such conversion at the Conversion Price in effect at
the time of such conversion.
At the option of the holder hereof, the Company may be required
to prepay or repurchase this Note in whole or in part under certain
circumstances as specified in the Investor Rights Agreement. At the option of
the Company, the Company may have the right to redeem this Note (in whole, but
not in part) under certain circumstances as specified in the Investor Rights
Agreement.
If any payment of principal or interest on this Note shall become
due on a Saturday, Sunday, or a public holiday under the laws of the State of
Maryland, such payment shall be made on the next succeeding business day and
such extension of time shall be included in computing interest in connection
with such payment.
Upon payment in full of all principal and interest payable
hereunder, this Note shall be surrendered to the Company for cancellation.
The Company waives presentment, demand, notice of nonperformance,
protest, notice of protest, and notice of dishonor. No delay on the part of
Payee in exercising any right or remedy hereunder, under the Investor Rights
Agreement or under applicable law shall operate as a waiver of such right or
remedy.
-------------
the Second Note will be equal to the Conversion Price of the First Note as of
the date that the Second Note is issued.
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<PAGE> 28
In the case of the happening of any of the following events
(herein called "Events of Default"):
(a) any representation or warranty made by the Company in or
in connection with this Note, the Note Purchase Agreement, the Investor Rights
Agreement or the Registration Rights Agreement, or the borrowings hereunder or
thereunder, shall prove to have been false or misleading in any material respect
when made or deemed to be made;
(b) default shall be made by the Company in the payment of any
interest of this Note when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise and such default shall continue for fifteen
(15) days after such payment shall have become due and payable;
(c) default shall be made by the Company in the payment of any
principal of this Note when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment or redemption
thereof or by acceleration thereof or otherwise;
(d) the Company shall have failed to make or consummate an
Offer to Purchase in accordance with the Investor Rights Agreement;
(e) default shall be made by the Company in the due observance
or performance of any covenant or agreement contained in this Note, the Note
Purchase Agreement or the Related Agreements and such default shall continue for
thirty (30) days after written notice thereof to the Company by the holder of
this Note; ; provided, that a breach by the Company of the representation and
warranty made by the Company in Section 7.15 of the HPV License Agreement (as
defined in the Note Purchase Agreement) shall not constitute an Event of Default
hereunder if such breach was not caused in whole or in part by any actions or
inactions of the Company;
(f) default shall be made by the Company or any subsidiary of
the Company in the due observance or performance of any covenant or agreement
contained in any Material Contract (as defined below) and the other party to
such Material Contract shall have declared default thereunder;
(g) there occurs with respect to any Material Indebtedness (as
defined below), whether such Material Indebtedness now exists or shall hereafter
be created, (i) an event of default that has caused the holder thereof to
declare such Material Indebtedness to be due and payable prior to its stated
maturity and such Material Indebtedness has not been discharged in full or such
acceleration has not been rescinded or annulled within fifteen (15) days of such
acceleration and/or (ii) the failure to make a principal payment at the final
fixed maturity and such defaulted payment shall not have been made, waived or
extended within fifteen (15) days of such payment default;
(h) the Company or any subsidiary shall (i) voluntarily commence
any
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<PAGE> 29
proceeding or file any petition seeking relief under Title 11 of the United
States Code or any other federal, state or foreign bankruptcy, insolvency,
liquidation or similar law, (ii) consent to the institution of, or fail to
contravene in a timely and appropriate manner, any such proceeding or the filing
of any such petition, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar official for the Company
or for a substantial part of its property or assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors, (vi)
become unable, admit in writing its inability or fail generally, to pay its
debts as they become due or (vii) take corporate action for the purpose of
effecting any of the foregoing;
(i) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of the Company or of a substantial part of its property or
assets under Title 11 of the United States Code or any other federal, state or
foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator or similar official
for the Company or for a substantial part of the property or assets of the
Company, or (iii) the winding-up or liquidation of the Company, and such
proceeding or petition shall continue undismissed for ninety (90) days or an
order or decree approving or ordering any of the foregoing shall continue
unstayed and in effect for thirty (30) days;
(j) this Note, the Note Purchase Agreement or any Related
Agreements shall for any reason cease to be, or be asserted by the Company not
to be, a legal, valid and binding obligation of the Company enforceable against
the Company in accordance with its terms;
(k) any final judgment or order (not covered by insurance) for
the payment of money in excess of Fifty Thousand Dollars ($50,000) in the
aggregate for all such final judgments or orders shall be rendered against the
Company or any subsidiary which shall not be paid or discharged within thirty
(30) days following entry of the final judgment or order that causes the
aggregate amount of all such final judgments and orders outstanding and not paid
or discharged to exceed Fifty Thousand Dollars ($50,000); or
(l) the Initial Shelf Registration Statement (as defined in
the Registration Rights Agreement) with respect to the shares of Common Stock
issuable upon the conversion of this Note shall not have been declared effective
by the Commission within one hundred eighty (180) calendar days after the
issuance of this Note;
then, and in any such event (other than an event described in paragraph (h) or
(i) above, and at any time thereafter during the continuance of such event, (i)
the unpaid principal of this Note shall bear interest (computed on the basis of
a 360-day year of twelve 30-day months), at a fixed rate equal to ten (10%) per
annum, (ii) the holder of this Note may, by written notice to the Company,
accelerate the maturity of this Note whereupon the entire principal amount of
this Note, together with all accrued and unpaid interest thereon and all other
liabilities of the Company hereunder, shall become due and payable immediately,
without presentment, demand, notice of nonperformance, protest, notice of
protest, and notice of dishonor, all of which are hereby expressly waived by the
Company, anything contained herein to the contrary
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<PAGE> 30
notwithstanding; provided, however, that with respect to a default described in
paragraph (h) or (i) above, this Note, and all of such principal, interest and
other liabilities shall automatically become due and payable without
presentment, demand, notice of nonperformance, protest, notice of protest, and
notice of dishonor, all of which are hereby expressly waived by the Company,
anything contained herein to the contrary notwithstanding, and (iii) the holder
of this Note may exercise all or any other remedies provided by the Investor
Rights Agreement or available at law or equity.
For purposes of the foregoing provisions:
"Material Contract" shall mean (i) any supply or packaging
agreement related to Estrasorb(TM); and (ii) any other contract, agreement or
commitment that involves performance of services or delivery of goods or
materials by or to the Company or any of its subsidiaries in an amount or value
in excess of Two Million Dollars ($2,000,000) during any twelve (12) month
period.
"Material Indebtedness" shall mean any Indebtedness of the
Company and/or its subsidiaries having an outstanding principal or other amount
of more than Fifty Thousand Dollars ($50,000).
The Company agrees to pay, in addition to all other sums payable
hereunder, reasonable attorneys' fees and costs incurred by Payee in connection
with the collection of this Note.
All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Note shall be in writing
and shall be deemed to have been given when (i) delivered personally to the
recipient, (ii) telecopied to the recipient (with hard copy sent to the
recipient by reputable overnight courier service (charges prepaid) that same
day) if telecopied before 5:00 p.m. Eastern time on a business day, and
otherwise on the next business day, or (iii) one business day after being sent
to the recipient by reputable overnight courier service (charges prepaid). Such
notices, demands and other communications shall be sent to the following Persons
at the following addresses:
To the Company:
Novavax, Inc.
8320 Guilford Road
Columbia, Maryland 21046
Attn: Chief Executive Officer
Telecopy: (301) 854-3902
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<PAGE> 31
with a copy (which shall not constitute notice) to:
White & McDermott, P.C.
65 William Street
Suite 250
Wellesley, Massachusetts 02481
Attn: David A. White
Telecopy: (781) 237-8120
To King:
King Pharmaceuticals, Inc.
501 Fifth Street
Bristol, Tennessee 37620
Attn: Executive Vice President
and General Counsel
Telecopy: (423) 989-6282
with a copy (which shall not constitute notice) to:
Hogan & Hartson L.L.P.
8300 Greensboro Drive
McLean, Virginia 22102
Attn: Richard T. Horan, Jr.
Thomas E. Repke
Telecopy: (703) 610-6200
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
Notice to any other holder shall be addressed to such holder at the address set
forth for such holder in the Company's records or at such other address and/or
to the attention of such other person as such holder may designate by written
notice to the Company.
This Note may be modified or amended only by a writing signed by
the Company and Payee.
This Note may be transferred only upon surrender of the original
Note for registration of transfer, duly endorsed, or accompanied by a duly
executed written instrument of transfer in form reasonably satisfactory to the
Company. Thereupon, a new Note or Notes of denominations of One Million Dollars
($1,000,000) (or integral multiples thereof) having an aggregate principal
amount and accrued and unpaid interest equal to the principal amount and accrued
and unpaid interest of such original Note will be issued to, and registered in
the name of, the transferee or transferees. Interest and principal are payable
only to the registered holder of this Note.
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<PAGE> 32
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law or
other law which would prohibit or forgive the Company from paying all or any
portion of the principal of, or interest on, or other amount payable under this
Note as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this Note, and
the Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law.
Each of the Company and Payee each hereby waives personal service
of any process upon it in connection with any suit, action or proceeding arising
out of or relating to this Note or the transactions contemplated hereby, and
hereby covenants and agrees that all such service of process may be made in the
manner set forth above with the same effect as though served on it personally.
The Company hereby covenants and agrees that any suit, action or
proceeding initiated by the Company against Payee, its affiliates, subsidiaries,
successors and/or assigns arising out of or relating to this Note or the
transactions contemplated hereby shall be brought exclusively in the federal
courts located in and/or state courts of the State of Tennessee. In the event of
any such suit, action or proceeding initiated by the Company, each of the
Company and Payee hereby submits to the exclusive jurisdiction and venue of the
federal courts located in and state courts of the State of Tennessee and hereby
waives any and all objections based on jurisdiction or venue that such party may
have under applicable law or the Federal Rules of Civil Procedure. Each of the
parties hereby irrevocably designates CT Corporation in the State of Tennessee
(the "Tennessee Process Agent") as its designee, appointee and agent to receive,
for and on its behalf, service of process in the State of Tennessee in any such
action, suit or proceedings with respect to this Note and the transactions
contemplated hereby. Service shall be deemed complete upon delivery thereof to
the Tennessee Process Agent, provided that, in the case of any such service upon
the Tennessee Process Agent, the party effecting such service shall also deliver
a copy thereof to the other parties in accordance with the notice provision set
forth herein. Each such party shall take all such action as may be necessary to
continue the appointment of the Tennessee Process Agent in full force and effect
or to appoint another agent, who shall thereafter be referred to herein as the
"Tennessee Process Agent", so that each such party shall at all times have an
agent for service for the foregoing purposes in the State of Tennessee.
Payee hereby covenants and agrees that any suit, action or
proceeding initiated by Payee against the Company, its affiliates, subsidiaries,
successors and/or assigns arising out of or relating to this Note or the
transactions contemplated hereby shall be brought exclusively in the federal
courts located in and/or state courts of the State of Maryland. In the event of
any such suit, action or proceeding initiated by Payee, each of the Company and
Payee hereby submit to the exclusive jurisdiction and venue of the federal
courts located in and state courts of the State of Maryland and hereby waive any
and all objections based on jurisdiction or venue that such party may have under
applicable law or the Federal Rules of Civil Procedure. Each of the foregoing
parties hereby irrevocably designates CT Corporation in the State of Maryland
(the
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<PAGE> 33
"Maryland Process Agent"), as its designee, appointee and agent to receive,
for and on its behalf, service of process in the State of Maryland in any such
suit, action or proceedings with respect to this Note and the transactions
contemplated hereby. Service shall be deemed complete upon delivery thereof to
the Maryland Process Agent, provided that, in the case of any such service upon
the Maryland Process Agent, the party effecting such service shall also deliver
a copy thereof to the other parties in accordance with the notice provision set
forth herein. Each such party shall take all such action as may be necessary to
continue the appointment of the Maryland Process Agent in full force and effect
or to appoint another agent, who shall thereafter be referred to herein as the
"Maryland Process Agent", so that each such party shall at all times have an
agent for service for the foregoing purposes in the State of Maryland.
This Note shall be governed by, and construed in accordance with,
the laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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<PAGE> 34
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed and delivered on its behalf on and as of the day and year first written
above.
NOVAVAX, INC.
By:
---------------------------------
Name:
------------------------
Title:
------------------------------
<PAGE> 35
OPTION OF THE HOLDER TO ELECT PURCHASE
TO: NOVAVAX, INC.
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from NOVAVAX, INC. (the "Company") as to the
occurrence of a Change of Control with respect to the Company and requests and
instructs the Company to repay the entire principal amount of this Note, or the
portion thereof (which is $100,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Investor Rights Agreement
referred to in this Note at the repurchase price, together with accrued interest
to, but excluding, such date, to the registered holder hereof.
Date:
------------------------ ------------------------------------
------------------------------------
Signature(s)
NOTICE: The above signatures
of the holder(s) hereof must
correspond with the name as
written upon the face of the
Note in every particular
without alteration or
enlargement or any change
whatever.
Principal amount to be repaid
(if less than all):
$--------------
------------------------------------
Social Security or Other
Taxpayer Identification Number
<PAGE> 36
CONVERSION NOTICE
TO: NOVAVAX, INC.
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion thereof (which is One
Thousand Dollars ($1,000) or an integral multiple thereof) below designated,
into shares of Common Stock of Novavax, Inc. in accordance with the terms of the
Investor Rights Agreement referred to in this Note, and directs that the shares
issuable and deliverable upon such conversion, together with any check in
payment for fractional shares and any Notes representing any unconverted
principal amount hereof, be issued and delivered to the registered holder hereof
unless a different name has been indicated below. If shares or any portion of
this Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below and
pay all transfer taxes payable with respect thereto. Any amount required to be
paid to the undersigned on account of interest accompanies this Note.
Date:
-------------------------------
---------------------------
---------------------------
Signature(s)
<PAGE> 37
EXHIBIT B
INVESTOR RIGHTS AGREEMENT
<PAGE> 38
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
<PAGE> 39
EXHIBIT D
FORM OF LEGAL OPINION
<PAGE> 40
SCHEDULE 5(a)(iii)
EFFICACY CONFIRMATION
The efficacy results claimed by the Company for the E98-2 Study must be
confirmed by Quintiles. Specifically, it must be confirmed that the efficacy
analysis (reduction in the incidence of hot flushes), when replicated by
Quintiles per the a priori protocol-specified methodology, demonstrates
statistical significance for the 2.5 mg and 7.5 mg dose. The efficacy results
for the 5 mg dose (expected to be non-significant) must also be replicated and
confirmed.
Quintiles must also provide a consultant opinion with respect to the
appropriateness of the statistical methodology specified in the original
protocol for E98-2 and that specified for the ongoing study (E99-1). Given FDA's
preference for a Change Score analysis, the comparisons between each dose and
placebo must be calculated as a change score at each efficacy assessment point
specified in the protocol, using the a priori specified statistical methodology.
