NOVAVAX INC
SECOND AMENDMENT TO THE EXCLUSIVE LICENSE
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<TYPE>EX-10.4
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<DESCRIPTION>SECOND AMENDMENT TO THE EXCLUSIVE LICENSE
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<p align="right"><b>Exhibit 10.4</b>
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<P align="center"><B>SECOND AMENDMENT TO THE EXCLUSIVE LICENSE<BR>
AND DISTRIBUTION AGREEMENT</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This <B>SECOND AMENDMENT TO THE EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT</B>
(hereinafter, the &#147;Second Amendment&#148;) is entered into and is effective as of
this 29th day of June, 2001 (the &#147;Effective Date&#148;), by and between KING
PHARMACEUTICALS, INC., a Tennessee corporation (hereinafter, &#147;KING&#148;), and
NOVAVAX, INC., a Delaware corporation (hereinafter, &#147;NOVAVAX&#148;).

<P align="center"><B>W I T N E S S E T H:</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>KING and NOVAVAX entered into the Exclusive License and
Distribution Agreement dated as of January&nbsp;8, 2001 (hereinafter, &#147;the Exclusive
License and Distribution Agreement&#148;), as amended by the First Amendment to the
Exclusive License and Distribution Agreement dated as of the date hereof
(hereinafter, the &#147;First Amendment&#148;);

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>the parties now desire to modify certain provisions of the
Exclusive License and Distribution Agreement, as more specifically set forth
below;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>KING and NOVAVAX each desire to expand the original Territory in
the Exclusive License and Distribution Agreement to now include Canada, Italy,
the Netherlands, Greece, Switzerland and Spain;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>King desires to pay NOVAVAX and NOVAVAX desires to receive from
KING additional monies for expanding the original Territory in the Exclusive
License and Distribution Agreement to include Canada, Italy, the Netherlands,
Greece, Switzerland and Spain;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>KING and NOVAVAX each desire to amend the definition of the term
Territory in ANNEX I, entitled &#147;DEFINITIONS&#148;, attached to the Exclusive License
and Distribution Agreement and as amended in the First Amendment, to include
Canada, Italy, the Netherlands, Greece, Switzerland and Spain;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>KING and NOVAVAX each desire to amend the definition of the term
Purchase Price in ANNEX I, entitled &#147;DEFINITIONS&#148;, attached to the Exclusive
License and Distribution Agreement and as amended in the First Amendment; and

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>KING and NOVAVAX each desire to add Canadian Territory, European
Territory, and Original Territory, as newly defined terms to
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<P> ANNEX I, entitled &#147;DEFINITIONS&#148;, attached to the Exclusive License and
Distribution Agreement and as amended in the First Amendment.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW, THEREFORE, </B>in consideration of the mutual covenants and agreements
set forth herein, and intending to be legally bound hereby, the parties hereto
agree as follows:

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.01</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING and NOVAVAX agree that capitalized terms used herein but not
otherwise defined shall have the same meanings set forth in the Exclusive
License and Distribution Agreement, as amended by the First Amendment.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.02</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING and NOVAVAX agree that <B>ANNEX I</B>, entitled &#147;<B>DEFINITIONS</B>&#148;, attached
to the Exclusive License and Distribution Agreement, is hereby amended by
adding Original Territory, Canadian Territory, European Territory, Original
Territory Purchase Price, Canadian Purchase Price, and European Purchase Price
and Regulatory Assets as newly defined terms thereto, as follows:

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Canadian Purchase Price</B>&#148; shall have the meaning set forth in
Section&nbsp;5.1(a)(2).

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Canadian Territory</B>&#148; shall mean Canada, its territories and possessions.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>European Purchase Price</B>&#148; shall have the meaning set forth in
Section&nbsp;5.1(a)(3).

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>European Territory</B>&#148; shall mean, collectively, Italy; the Netherlands;
Greece; Switzerland; and Spain, including their territories and possessions.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Original Territory</B>&#148; shall mean anywhere in the world except the United
States, its territories and possessions, the District of Columbia, the
Commonwealth of Puerto Rico, the Canadian Territory, and the European
Territory.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Original Territory Purchase Price</B>&#148; shall have the meaning set forth in
Section&nbsp;5.1(a)(1).

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Regulatory Assets</B>&#148; shall mean all registrations, regulatory files,
applications, approvals, licenses, franchises, certificates of compliance and
permits relating to the Products from any governmental authority which
regulates the manufacturing, marketing and/or the sale of drugs or medical
products in the Territory, including, without limitation, any and all NDAs,
whether issued, pending, or in draft form, and all records, reports, data and
other information concerning any of the Products required to be kept under
applicable laws in the
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<P>Territory and all correspondence to or from all governmental authorities in the
Territory which relates to the Products.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.03</B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING and NOVAVAX agree that the terms &#147;Cost of Products&#148;, &#147;Purchase
Price&#148; and &#147;Territory&#148;, and, as set forth in ANNEX I, entitled DEFINITIONS,
attached to the Exclusive License and Distribution Agreement, are hereby
deleted and replaced in their entirety with the following definitions:

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Cost of Products</B>&#148; shall mean (i)&nbsp;the amount equal to the fully allocated
costs of the Products incurred by NOVAVAX in connection with manufacturing the
Products, and NOVAVAX&#146;s performance of this Agreement, in accordance with GAAP
or (ii)&nbsp;in the event the Products are being manufactured by a third party for
NOVAVAX, then the &#147;Cost of Products&#148; shall mean the invoice amounts actually
paid by NOVAVAX to such third party to purchase the Products.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Purchase Price</B>&#148; shall mean either the Original Territory Purchase Price,
Canadian Purchase Price and/or European Purchase Price, as applicable.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Territory</B>&#148; shall mean anywhere in the world except the United States, its
territories and possessions, the District of Columbia, and the Commonwealth of
Puerto Rico.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.04</B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING and NOVAVAX agree that the following Section&nbsp;2.5 shall be added
to the Exclusive License and Distribution Agreement:

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional Trademark Filings.</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOVAVAX shall file and register the NOVAVAX Trademarks in such additional
countries in the Territory as KING shall reasonably request, and each such
filing and registration shall be included in the trademarks licensed to KING
under this Agreement.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.05</B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING and NOVAVAX agree that the following sentence shall be added to
the end of Section&nbsp;4.2 of the Exclusive License and Distribution Agreement:

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary contained in this Agreement, KING
shall own all right, title and interest in and to the Regulatory Assets.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.06</B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING and NOVAVAX agree that original Section&nbsp;5, entitled FEES and
EXPENSES, of the Exclusive License and Distribution Agreement is hereby deleted
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<P> and replaced in its entirety with the following new Section&nbsp;5, entitled
FEES and EXPENSES:

<P align="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FEES and EXPENSES</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchase Price.</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING and NOVAVAX agree that the Purchase Price for Product shall be as
follows:

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For those Products sold by KING in the Original Territory, KING shall
purchase from NOVAVAX, and NOVAVAX shall sell to KING, the Products at the
price equal to the Cost of Products plus ten percent (10%) (the &#147;Original
Territory Purchase Price&#148;). NOVAVAX may, from time to time, upon thirty (30)
calendar days written notice to KING, increase the Original Territory Purchase
Price for one or more Products sold by King in the Original Territory by an
amount equal to the increase in NOVAVAX&#146;s costs for labor and materials used in
connection with the manufacture, storage and/or delivery to KING of such
Products; provided, however, that during the twelve (12)&nbsp;month period following
the Effective Date, NOVAVAX shall not increase the Original Territory Purchase
Price for any Product because of any increased labor cost experienced by
NOVAVAX. Notwithstanding anything to the contrary in the above Section
5.1(a)(1), in no event shall the total percentage increase in the Original
Territory Purchase Price in any calendar year during the Term exceed the
percentage increase in the Pharmaceutical Producer Price Index, Pharmaceutical
Preparations, Ethical (Prescription) series code PCU-2834 #1, published by the
United States Department of Labor, Bureau of Labor Statistics (the &#147;PPPI&#148;) for
such calendar year.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For those Products sold by KING in the Canadian Territory, KING shall
purchase from NOVAVAX, and NOVAVAX shall sell to KING, the Products at the
price equal to the Cost of Products plus twelve percent (12%) (the &#147;Canadian
Purchase Price&#148;). NOVAVAX may, from time to time, upon thirty (30)&nbsp;calendar
days written notice to KING, increase the Canadian Purchase Price for one or
more Products sold by King in the Canadian Territory by an amount equal to the
increase in NOVAVAX&#146;s costs for labor and materials used in connection with the
manufacture, storage and/or delivery to KING of such Products; provided,
however, that during the twelve (12)&nbsp;month period following the Effective Date
of this Second Amendment, NOVAVAX shall not increase the Canadian Purchase
Price for any Product because of any increased labor cost experienced by
NOVAVAX. Notwithstanding anything to the contrary in the above Section
5.1(a)(2), in no event shall the total percentage increase in the Canadian
Purchase Price in any calendar year during the Term exceed the percentage
increase in the PPPI for such calendar year.
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For those Products sold by KING in the European Territory, KING shall
purchase from NOVAVAX, and NOVAVAX shall sell to KING, the Products at the
price equal to the Cost of Products plus twenty percent (20%) (the &#147;European
Purchase Price&#148;). NOVAVAX may, from time to time, upon thirty (30)&nbsp;calendar
days written notice to KING, increase the European Purchase Price for one or
more Products sold by KING in the European Territory by an amount equal to the
increase in NOVAVAX&#146;s costs for labor and materials used in connection with the
manufacture, storage and/or delivery to KING of such European Products;
provided, however, that during the twelve (12)&nbsp;month period following the
Effective Date of this Second Amendment, NOVAVAX shall not increase the
European Purchase Price for any Product because of any increased labor cost
experienced by NOVAVAX. Notwithstanding anything to the contrary in the above
Section&nbsp;5.1(a)(3), in no event shall the total percentage increase in the
European Purchase Price in any calendar year during the Term exceed the
percentage increase in the PPPI for such calendar year.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the Purchase Price, KING shall pay all actual freight,
insurance and government sales, use, excise, property, import, export or
similar taxes or excises imposed on purchases for resale, and duties and other
fees (except tax on income to NOVAVAX) incurred in connection with the sale and
shipment of the Products to KING.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOVAVAX shall keep adequate and complete records, in accordance with
GAAP, of all Costs of Products. Such records shall include all information
necessary to verify the total amount and computation of the Purchase Price due
hereunder and NOVAVAX&#146;s compliance with the terms and conditions of this
Agreement, and shall be available once per year to inspection by or on behalf
of KING during normal business hours, upon reasonable notice, to verify such
costs and whether an increase in such costs has occurred and to verify
NOVAVAX&#146;s compliance with this Agreement. NOVAVAX shall retain such records
for not fewer than twenty-four (24)&nbsp;months after the close of any calendar year
to which they relate or such period as required by the FDA. NOVAVAX agrees to
make prompt adjustment, if necessary, to compensate for any errors or omissions
disclosed by such inspection. Should such inspection reveal a shortfall of
more than three percent (3%) between the costs actually incurred and the Costs
of Products reported to KING, the cost of such inspection shall be paid by
NOVAVAX.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments to NOVAVAX for the Purchase Price of delivered Products shall
be made by KING within thirty (30)&nbsp;days after the later of (i)&nbsp;the date of
delivery thereof to the destination specified by KING, or (ii)&nbsp;the date of
invoice from NOVAVAX.
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Royalty Payment.</b>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the amounts paid under Section&nbsp;5.1:

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to Products sold in the Original Territory, KING agrees
to pay royalties only on the Net Sales of such Products at a rate of seven and
one-half percent (7.5%) of Net Sales of such Products. Such royalties are
payable forty-five (45)&nbsp;days after the end of each Calendar Quarter in which
such Products are sold in the Original Territory during the Term of this
Agreement;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to Products sold in the Canadian Territory, KING agrees
to pay royalties only on the Net Sales of such Products at a rate of nine
percent (9.0%) of Net Sales of such Products. Such royalties are payable
forty-five (45)&nbsp;days after the end of each Calendar Quarter in which such
Products are sold in the Canadian Territory during the Term of this Agreement;
and

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to Products sold in the European Territory, KING agrees
to pay royalties only on the Net Sales of such Products at a rate of eight
percent (8.0%) of Net Sales of such Products. Such royalties are payable
forty-five (45)&nbsp;days after the end of each Calendar Quarter in which such
Products are sold in the European Territory during the Term of this Agreement.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING shall keep adequate and complete records, in accordance with
GAAP, showing all Net Sales of Products with respect to which royalties are due
under this Agreement. Such records shall include all information necessary to
verify the total amount and computation of royalties due hereunder and KING&#146;s
compliance with the terms and conditions of this Agreement, and shall be
available once per year to inspection by or on behalf of NOVAVAX during normal
business hours, upon reasonable notice, to verify the amounts thereof or to
ascertain such amounts in the event of a failure of KING to report and to
verify KING&#146;s compliance with this Agreement. KING shall retain such records
for not fewer than twenty-four (24)&nbsp;months after the close of any calendar year
to which they relate or such period as required by the FDA. KING agrees to
make prompt adjustment, if necessary, to compensate for any errors or omissions
disclosed by such inspection. Should such inspection reveal a shortfall of
more than three percent (3%) between the royalties reported and those actually
owed by KING, the cost of such inspection shall be paid by KING.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distribution, Warehousing, Billing, Pricing.</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING (and/or its Affiliates) shall have the sole responsibility for the
distribution, warehousing, billing and order confirmation of the Products to be
sold in the Territory after receipt at the designated destination and for the
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<P> collection of receivables resulting from sales of the Products in the
Territory. KING shall have the sole authority to determine the price of the
Products in the Territory during the Term, including resale price increases and
decreases and the timing thereof.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.4 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Milestones Payments.</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the satisfaction of the conditions set forth below, KING shall
pay NOVAVAX a total of Six Million Dollars ($6,000,000) in milestone payments
for acquiring the exclusive right hereunder to promote, market, distribute and
sell Product in the Canadian Territory and the European Territory, as follows:

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING shall pay NOVAVAX a one time fee in the amount of Three Million
Dollars ($3,000,000) upon execution of this Second Amendment;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING shall pay NOVAVAX a one time fee in the amount of One Million
Dollars ($1,000,000) upon receipt of written notice issued by an appropriate
regulatory authority in the Canadian Territory which grants final approval to
market ESTRASORB&#153; in the Canadian Territory; and

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KING shall pay NOVAVAX a one time fee in the amount of Two Million
Dollars ($2,000,000) upon receipt of written notice issued by an appropriate
regulatory authority in any one of the countries in the European Territory
which grants final approval to market ESTRASORB&#153; in at least one of
the countries in the European Territory. Other than the one time payment of
Two Million Dollars ($2,000,000) described in the previous sentence, no
additional fees or consideration shall be payable to NOVAVAX in connection with
any subsequent notices issued by any authorities in the European Territory.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.07</B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise expressly provided in this Second Amendment, KING
and NOVAVAX agree that all provisions of the Exclusive License and Distribution
Agreement, as amended by the First Amendment, are hereby ratified and agreed to
be in full force and effect, and are incorporated herein by reference.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.08</B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Exclusive License and Distribution Agreement, as amended by the
First Amendment and this Second Amendment, and the Confidentiality Agreements
contain the entire agreement among the parties with respect to the transactions
contemplated herein and supersede any prior agreements, understandings or
arrangements between them, whether oral or in writing. This Second Amendment
may not be amended, modified, altered or supplemented except by means of a
written agreement or other instrument executed by both of the parties hereto.
No course of
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<P>conduct or dealing between the parties shall act as a modification or waiver of
any provisions of this Second Amendment.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.09</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This Second Amendment 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 Second
Amendment 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. Original signatures transmitted by facsimile shall be acceptable to
purposes of executing this Second Amendment. If original signatures are
transmitted by facsimile, the parties shall endeavor in good faith to deliver
to each other executed counterpart originals as soon as practicable after the
date of this Second Amendment.
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF,</B> each of the parties hereto has executed this Second
Amendment, or has caused this Second Amendment to be duly executed and
delivered in its name on its behalf, all as of the Effective Date first above
written.

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        <TD nowrap><FONT size="2"><B>KING PHARMACEUTICALS,&nbsp;INC.</B></FONT></TD>
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        <TD align="left"><FONT size="2"><B>NOVAVAX, INC.</B></FONT></TD>
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