At Market Issuance Sales
Agreement
Wm Smith &
Co.
1700 Lincoln Street, Suite 2545
Denver CO 80203
Novavax, Inc., a
Delaware corporation (the “ Company ”), confirms
its agreement (this “ Agreement ”) with Wm Smith
& Co., a Colorado corporation (“ Wm Smith
”), as follows:
1.
Issuance and Sale of Shares . The Company agrees that, from
time to time during the term of this Agreement, on the terms and
subject to the conditions set forth herein, it may issue and sell
through Wm Smith, acting as agent and/or principal, up to
$10,000,000 of shares (the “ Shares ”) of the
Company’s common stock, par value $0.01 per share (the
“ Common Stock ”). Notwithstanding anything to
the contrary contained herein, the parties hereto agree that
compliance with the limitations set forth in this Section 1 on
the number of Shares issued and sold under this Agreement shall be
the sole responsibility of the Company and that Wm Smith shall have
no obligation in connection with such compliance. The issuance and
sale of Shares through Wm Smith will be effected pursuant to the
Registration Statement (as defined below) filed by the Company and
declared effective by the Securities and Exchange Commission (the
“ Commission ”), although nothing in this
Agreement shall be construed as requiring the Company to use the
Registration Statement to issue Common Stock or Preferred
Stock.
The Company has
filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder
(collectively, the “ Securities Act ”), with the
Commission a registration statement on Form S-3 (File
No. 333-138893), including a base prospectus, with respect to
equity and other offerings, including the Shares, and which
incorporates by reference documents that the Company has filed or
will file in accordance with the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the “ Exchange Act ”).
The Company will prepare a prospectus supplement (the “
Prospectus Supplement ”) to the base prospectus
included as part of such registration statement. The Company will
furnish to Wm Smith, for use by Wm Smith, copies of the prospectus
included as part of such registration statement, as supplemented by
the Prospectus Supplement, relating to the Shares. Except where the
context otherwise requires, such registration statement, as amended
when it became effective, including all documents filed as part
thereof or incorporated by reference therein, and including any
information contained in a Prospectus (as defined below)
subsequently filed with the Commission pursuant to Rule 424(b)
under the Securities Act and also including any other registration
statement filed pursuant to Rule 462(b) under the Securities Act,
collectively, are herein called the “ Registration
Statement ,” and the base prospectus, including all
documents incorporated therein by reference, included in the
Registration Statement, as it may be supplemented by the Prospectus
Supplement, in the form
in which such
prospectus and/or Prospectus Supplement have most recently been
filed by the Company with the Commission pursuant to Rule 424(b)
under the Securities Act is herein called the “
Prospectus .” Any reference herein to the Registration
Statement, the Prospectus or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated
by reference therein, and any reference herein to the terms
“amend,” “amendment” or
“supplement” with respect to the Registration Statement
or the Prospectus shall be deemed to refer to and include the
filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein. For
purposes of this Agreement, all references to the Registration
Statement, the Prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering Analysis and Retrieval
System, or if applicable, the Interactive Data Electronic
Application system when used by the Commission (collectively,
“ EDGAR ”).
2.
Placements . Each time that the Company wishes to issue and
sell Shares hereunder (each, a “ Placement ”),
it will notify Wm Smith by email notice (or other method mutually
agreed to in writing by the Parties) of the number of Shares (the
“ Placement Shares ”) to be issued, the type of
Shares, the time period during which sales are requested to be
made, any limitation on the number of Shares that may be sold in
any one day and any minimum price below which sales may not be made
(a “ Placement Notice ”), the form of which is
attached hereto as Schedule 1. The Placement Notice shall
originate from any of the individuals from the Company set forth on
Schedule 3 (with a copy to each of the other individuals from
the Company listed on such schedule), and shall be addressed to
each of the individuals from Wm Smith set forth on Schedule 3,
as such Schedule 3 may be amended from time to time. The
Placement Notice shall be effective unless and until (i) Wm
Smith declines to accept the terms contained therein as a result of
any suspension or limitation of trading in the Placement Shares or
in securities generally on the Exchange or any occurrence or event
that causes a material adverse change in the operation or prospects
of the Company, (ii) the entire amount of the Placement Shares
have been sold, (iii) the Company suspends or terminates the
Placement Notice or (iv) the Agreement has been terminated
under the provisions of Section 12. The amount of any
discount, commission or other compensation to be paid by the
Company to Wm Smith in connection with the sale of the Placement
Shares shall be calculated in accordance with the terms set forth
in Schedule 2. It is expressly acknowledged and agreed that
neither the Company nor Wm Smith will have any obligation
whatsoever with respect to a Placement or any Placement Shares
unless and until the Company delivers a Placement Notice to Wm
Smith and Wm Smith does not decline such Placement Notice pursuant
to the terms set forth above, and then only upon the terms
specified therein and herein. In the event of a conflict between
the terms of this Agreement and the terms of a Placement Notice,
the terms of the Placement Notice will control.
3. Sale
of Placement Shares by Wm Smith . Subject to the terms and
conditions herein set forth, upon the Company’s issuance of a
Placement Notice, and unless the sale of the Placement Shares
described therein has been declined, suspended, or otherwise
terminated in accordance with the terms of this Agreement, Wm Smith
will use its commercially reasonable efforts consistent with its
normal trading and sales practices to sell such Placement Shares up
to the amount specified, and otherwise in accordance with the terms
of such Placement Notice. Wm Smith will provide written
confirmation to the Company no later than the opening of the
Trading Day (as defined below) immediately following the Trading
Day on which it has made sales of Placement Shares hereunder
setting forth the number of Placement Shares sold on
such
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day, the
compensation payable by the Company to Wm Smith pursuant to
Section 2 with respect to such sales, and the Net Proceeds (as
defined below) payable to the Company. Wm Smith may sell Placement
Shares by any method permitted by law deemed to be an “at the
market” offering as defined in Rule 415 of the
Securities Act, including without limitation sales made directly on
NASDAQ Capital Market (the “ Exchange ”), on any
other existing trading market for the Common Stock or to or through
a market maker. Wm Smith may also sell Placement Shares in
privately negotiated transactions, subject to approval by the
Company. The Company acknowledges and agrees that (i) there
can be no assurance that Wm Smith will be successful in selling
Placement Shares, and (ii) Wm Smith will incur no liability or
obligation to the Company or any other person or entity if it does
not sell Placement Shares for any reason other than a failure by Wm
Smith to use its commercially reasonable efforts consistent with
its normal trading and sales practices to sell such Placement
Shares as required under this Section 3. For the purposes
hereof, “ Trading Day ” means any day on which
Common Stock is purchased and sold on the principal market on which
the Common Stock is listed or quoted.
4.
Suspension of Sales . The Company or Wm Smith may, upon
notice to the other party in writing (including by email
correspondence to each of the individuals of the other Party set
forth on Schedule 3, if receipt of such correspondence is
actually acknowledged by any of the individuals to whom the notice
is sent, other than via auto-reply) or by telephone (confirmed
immediately by verifiable facsimile transmission or email
correspondence to each of the individuals of the other Party set
forth on Schedule 3), suspend any sale of Placement Shares;
provided, however, that such suspension shall not affect or impair
either party’s obligations with respect to any Placement
Shares sold hereunder prior to the receipt of such notice. Each of
the Parties agrees that no such notice under this Section 4
shall be effective against the other unless it is made to one of
the individuals named on Schedule 3 hereto, as such Schedule
may be amended from time to time.
(a)
Settlement of Placement Shares . Unless otherwise specified
in the applicable Placement Notice, settlement for sales of
Placement Shares will occur on the third (3rd) Trading Day (or such
earlier day as is industry practice for regular-way trading) (each,
a “ Settlement Date ”) following the respective
Point of Sale (as defined below). The amount of proceeds to be
delivered to the Company on a Settlement Date against receipt of
the Placement Shares sold (the “ Net Proceeds ”)
will be equal to the aggregate sales price received by Wm Smith at
which such Placement Shares were sold, after deduction for
(i) Wm Smith’s commission, discount or other
compensation for such sales payable by the Company pursuant to
Section 2 hereof, (ii) any other amounts due and payable
by the Company to Wm Smith hereunder pursuant to Section 7(g)
(Expenses) hereof, and (iii) any transaction fees imposed by
any governmental or self-regulatory organization in respect of such
sales.
(b)
Delivery of Placement Shares . On or before each Settlement
Date, the Company will, or will cause its transfer agent to,
electronically transfer the Placement Shares being sold by
crediting Wm Smith’s or its designee’s account at The
Depository Trust Company through its Deposit and Withdrawal at
Custodian System (“ DWAC ”) or by such other
means of delivery as may be mutually agreed upon by the parties
hereto which in all cases shall be freely tradeable, transferable,
registered shares in good deliverable form. On each Settlement
Date,
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Wm Smith will
deliver the related Net Proceeds in same day funds to an account
designated by the Company on, or prior to, the Settlement Date. Wm
Smith will be responsible for obtaining DWAC instructions or
instructions for delivery by other means with regard to the
transfer of Placement Shares being sold. The Company agrees that if
the Company, or its transfer agent (if applicable), defaults in its
obligation to deliver Placement Shares on a Settlement Date, the
Company agrees that in addition to and in no way limiting the
rights and obligations set forth in Section 10(a) (Indemnification
and Contribution) hereto, it will (i) hold Wm Smith harmless
against any loss, claim, damage, or expense (including reasonable
legal fees and expenses), as incurred, arising out of or in
connection with such default by the Company and (ii) pay to Wm
Smith any commission, discount, or other compensation to which it
would otherwise have been entitled absent such default.
6.
Representations and Warranties of the Company . The Company
represents and warrants to, and agrees with, Wm Smith that as of
the date of this Agreement and as of each Representation Date (as
defined in Section 7(m) below) on which a certificate is required
to be delivered pursuant to Section 7(m) of this Agreement, as the
case may be, except as may be disclosed in the Registration
Statement or a Disclosure Schedule delivered in connection
herewith:
(a)
Registration Statement and Prospectus . The Company and,
assuming no act or omission on the part of Wm Smith that would make
such statement untrue, the transactions contemplated by this
Agreement meet the requirements for and comply with the conditions
for the use of Form S-3 under the Securities Act. The Registration
Statement has been filed with the Commission and has been declared
effective under the Securities Act. The Prospectus Supplement will
name Wm Smith as an underwriter, acting as principal and/or agent,
that the Company might engage in the section entitled “Plan
of Distribution.” The Company has not received, and has no
notice of, any order of the Commission preventing or suspending the
use of the Registration Statement, or threatening or instituting
proceedings for that purpose. The Registration Statement and the
offer and sale of Shares as contemplated hereby meet the
requirements of Rule 415 under the Act and comply in all
material respects with said Rule. Any statutes, regulations,
contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement have been so described or
filed. Copies of the Registration Statement, the Prospectus, and
any such amendments or supplements and all documents incorporated
by reference therein that were filed with the Commission on or
prior to the date of this Agreement have been delivered, or are
available through EDGAR, to Wm Smith and their counsel. The Company
has not distributed and, prior to the later to occur of each
Settlement Date and completion of the distribution of the Placement
Shares, will not distribute any offering material in connection
with the offering or sale of the Placement Shares other than the
Registration Statement and the Prospectus and any Issuer Free
Writing Prospectus (as defined below) to which Wm Smith has
consented. The Common Stock is currently listed on the NASDAQ
Global Market under the trading symbol “NVAX”. Except
as disclosed in the Registration Statement, the Company has not, in
the 12 months preceding the date hereof, received notice from
the Exchange to the effect that the Company is not in compliance
with the listing or maintenance requirements. The Company has no
reason to believe that it will not in the foreseeable future
continue to be in compliance with all such listing and maintenance
requirements.
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(b)
No Misstatement or Omission . The Registration Statement,
when it became or becomes effective, and the Prospectus, and any
amendment or supplement thereto, on the date of such Prospectus or
amendment or supplement, conformed or will conform in all material
respects with the requirements of the Securities Act. At each
Settlement Date, the Registration Statement and the Prospectus, as
of such date, will conform in all material respects with the
requirements of the Securities Act. The Registration Statement,
when it became or becomes effective, did not, or will not, contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus and any amendment
or supplement thereto, on the date thereof and at each Point of
Sale, did not or will not include an untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The documents incorporated by reference
in the Prospectus or any Prospectus Supplement did not, and any
further documents filed and incorporated by reference therein will
not, when filed with the Commission, contain an untrue statement of
a material fact or omit to state a material fact required to be
stated in such document or necessary to make the statements in such
document, in light of the circumstances under which they were made,
not misleading. The foregoing shall not apply to statements in, or
omissions from, any such document made in reliance upon, and in
conformity with, information furnished to the Company by Wm Smith
specifically for use in the preparation thereof. “ Point
of Sale ” means, for a Placement, the time at which an
acquiror of Placement Shares entered into a contract, binding upon
such acquiror, to acquire such Shares.
(c)
Conformity with Securities Act and Exchange Act . The
documents incorporated by reference in the Registration Statement,
the Prospectus or any amendment or supplement thereto, when such
documents were or are filed with the Commission under the
Securities Act or the Exchange Act or became or become effective
under the Securities Act, as the case may be, conformed or will
conform in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable.
(d)
Financial Information . The consolidated financial
statements and the related notes thereto included or incorporated
by reference in the Registration Statement and the Prospectus
comply with the applicable requirements of the Act and the Exchange
Act, as applicable, and present fairly, the financial position of
the Company as of the dates indicated and the results of its
operations and the changes in its consolidated cash flows for the
periods specified; such financial statements have been prepared in
conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods covered thereby (except
(i) as may be otherwise indicated in such financial statements
or the notes thereto or (ii) in the case of unaudited interim
financial statements, to the extent that they may not include
footnotes or may be condensed or summary statements), and the other
financial information included or incorporated by reference in the
Registration Statement and the Prospectus has been derived from the
accounting records of the Company and presents fairly the
information shown thereby. Any pro forma financial statements or
data included or incorporated by reference in the Registration
Statement and the Prospectus comply with the requirements of
Regulation S-X of the Securities Act, including, without
limitation, Article 11 thereof, and the assumptions used in
the preparation of such pro forma financial statements and data are
reasonable, the pro forma adjustments used therein are appropriate
to give effect to the circumstances referred to therein and the pro
forma adjustments have been properly applied to the historical
amounts in the
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compilation of
those statements and data. No other financial statements or
schedules of the Company or any other entity are required by the
Act to be included in the Registration Statement or the Prospectus.
All disclosures contained in the Registration Statement, the
Pricing Disclosure Materials and the Prospectus regarding
“non-GAAP financial measures” (as such term is defined
by Item 10 of Regulation S-K under the Act) comply with
Regulation G of the Exchange Act and Item 10 of
Regulation S-K under the Act, to the extent applicable. The
Company does not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations
and any “variable interest entities” within the meaning
of Financial Accounting Standards Board Interpretation
No. 46(R) or Statement of Financial Accounting Standards
No. 167), not disclosed in the Registration Statement, the
Pricing Disclosure Materials and the Prospectus.
(e)
Conformity with EDGAR Filing . The Prospectus delivered to
Wm Smith for use in connection with the sale of the Placement
Shares pursuant to this Agreement will be identical to the versions
of the Prospectus created to be transmitted to the Commission for
filing via EDGAR, except to the extent permitted by
Regulation S-T.
(f)
Organization . The Company is, and will be, duly organized,
validly existing as a corporation and in good standing under the
laws of its jurisdiction of organization. The Company is, and will
be, duly licensed or qualified as a foreign corporation for
transaction of business and in good standing under the laws of each
other jurisdiction in which its ownership or lease of property or
the conduct of its businesses requires such license or
qualification, and has all corporate power and authority necessary
to own or hold its properties and to conduct its business as
described in the Registration Statement and the Prospectus, except
where the failure to be so qualified or in good standing or have
such power or authority would not, individually or in the
aggregate, have a material adverse effect or would reasonably be
expected to have a material adverse effect on or affecting the
business, properties, management, consolidated financial position,
stockholders’ equity or results of operations of the Company
(a “ Material Adverse Effect ”).
(g)
Subsidiaries . The Company has no active
subsidiaries.
(h)
No Violation or Default . The Company is not (i) in
violation of its charter or by-laws or similar organizational
documents; (ii) in default, and no event has occurred that,
with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant
or condition contained in any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any
of the property or assets of the Company is subject; or
(iii) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of each
of clauses (ii) and (iii) above, for any such violation
or default that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. To the
Company’s knowledge, no other party under any material
contract or other agreement to which it is a party is in default in
any respect thereunder where such default would have a Material
Adverse Effect.
(i)
No Material Adverse Change . Except as set forth in or
otherwise contemplated by the Registration Statement (exclusive of
any amendment thereof) or the
6
Prospectus
(exclusive of any supplement thereto), since the date of the most
recent financial statements of the Company included or incorporated
by reference in the Registration Statement and the Prospectus and
prior to each Settlement Date, (i) there has not been and will
not have been any change in the capital stock of the Company
(except for changes in the number of outstanding shares of Common
Stock of the Company due to the issuance of shares upon the
exercise or conversion of securities exercisable for, or
convertible into, shares of Common Stock outstanding on the date
hereof) or long-term debt of the Company or any dividend or
distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital stock, that has
resulted in or that would reasonably be expected to result in a
Material Adverse Effect to the Company taken as a whole;
(ii) other than this Agreement, the Company has not entered
and will not enter into any transaction or agreement, not in the
ordinary course of business, that is material to the Company taken
as a whole or incurred and will not incur any liability or
obligation, direct or contingent, not in the ordinary course of
business, that is material to the Company taken as a whole; (iii)
there has not been any material adverse change in the business,
properties, management, financial position, stockholders’
equity, or results of operations of the Company, taken as a whole;
and (iv) the Company has not sustained any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
disturbance or dispute or any action, order or decree of any court
or arbitrator or governmental or regulatory authority.
(j)
Capitalization . The issued and outstanding shares of
capital stock of the Company have been validly issued, are fully
paid and nonassessable and, other than as disclosed in or
contemplated by the Registration Statement or the Prospectus, are
not subject to any preemptive rights, rights of first refusal or
similar rights. The Company has an authorized, issued and
outstanding capitalization as set forth in the Registration
Statement and the Prospectus as of the dates referred to therein
(other than the grant of additional options under the
Company’s existing stock option plans, or changes in the
number of outstanding shares of Common Stock of the Company due to
the issuance of shares upon the exercise or conversion of
securities exercisable for, or convertible into, shares of Common
Stock outstanding on the date hereof) and such authorized capital
stock conforms to the description thereof set forth in the
Registration Statement and the Prospectus. The description of the
securities of the Company in the Registration Statement and the
Prospectus is complete and accurate in all material respects.
Except as disclosed in or contemplated by the Registration
Statement or the Prospectus, as of the date referred to therein,
the Company does not have outstanding any options to purchase, or
any rights or warrants to subscribe for, or any securities or
obligations convertible into, or exchangeable for, or any contracts
or commitments to issue or sell, any shares of capital stock or
other securities.
(k)
Authorization; Enforceability . The Company has full legal
right, power and authority to enter into this Agreement and perform
the transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Company and is a legal,
valid and binding agreement of the Company enforceable in
accordance with its terms, except to the extent that
(i) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general equitable
principles and (ii) the indemnification and contribution
provisions of Section 10 hereof may be limited by federal or
state securities laws and public policy considerations in respect
thereof.
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(l)
Authorization of Placement Shares . The Placement Shares,
when issued and delivered pursuant to the terms approved by the
Board of Directors or a duly designated committee thereof, against
payment therefor as provided herein, will be duly and validly
authorized and issued and fully paid and nonassessable, free and
clear of any pledge, lien, encumbrance, security interest or other
claim, including any statutory or contractual preemptive rights,
resale rights, rights of first refusal or other similar rights, and
will be registered pursuant to Section 12 of the Exchange Act.
The Placement Shares, when issued, will conform in all material
respects to the description thereof set forth in or incorporated
into the Prospectus.
(m)
No Consents Required . No consent, approval, authorization,
order, registration or qualification of or with any court or
arbitrator or governmental or regulatory authority is required for
the execution, delivery and performance by the Company this
Agreement, the issuance and sale by the Company of the Placement
Shares, except for the registration of the Placement Shares under
the Act and such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under applicable
state securities laws or by the by-laws and rules of the Financial
Industry Regulatory Authority (“ FINRA ”) or the
Exchange in connection with the sale of the Placement Shares by Wm
Smith.
(n)
No Preferential Rights . Except as set forth in the
Registration Statement and the Prospectus, (i) no person, as
such term is defined in Rule 1-02 of Regulation S-X
promulgated under the Securities Act (each, a “ Person
”), has the right, contractual or otherwise, to cause the
Company to issue or sell to such Person any shares of Common Stock
or shares of any other capital stock or other securities of the
Company, (ii) no Person has any preemptive rights, resale
rights, rights of first refusal, or any other rights (whether
pursuant to a “poison pill” provision or otherwise) to
purchase any shares of Common Stock or shares of any other capital
stock or other securities of the Company, (iii) no Person has
the right to act as an underwriter or as a financial advisor to the
Company in connection with the offer and sale of the Shares, and
(iv) no Person has the right, contractual or otherwise, to
require the Company to register under the Securities Act any shares
of Common Stock or shares of any other capital stock or other
securities of the Company, or to include any such shares or other
securities in the Registration Statement or the offering
contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the
Placement Shares as contemplated thereby or otherwise.
(o)
Independent Public Accountant . G
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