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Exhibit 10.32 FORBEARANCE AND PLEDGE AGREEMENT
THIS
FORBEARANCE AND PLEDGE AGREEMENT (this "Agreement") is made and
entered into as of this 7th day of May, 2007 by and among DENIS
O’DONNELL, an individual (the "Borrower") and NOVAVAX, INC.,
a Delaware corporation (the "Company"). RECITALS
A.
WHEREAS, in 2002, the Company approved the payment of the exercise
price of options by Borrower through the delivery of a full
recourse, interest-bearing promissory note (the "Note") in the
amount of $1,031,668, (together with accrued interest monthly at
the rate of 5.07%, the "Obligations").
B.
WHEREAS, such Note is secured by 166,667 shares of common stock of
the Company (the "Original Collateral") pursuant to a pledge
agreement between the Borrower and the Company, dated as of
March 21, 2002 (the "Pledge Agreement").
C.
WHEREAS, the Note was originally payable upon the earlier to occur
of the following: (a) payable in full upon the date on which the
Bon’ower ceased for any reason to be a director of the
Company, (b) payable in part to the extent of net proceeds,
upon the date on which the Borrower sold all or any portion of the
Original Collateral, or (c) payable in full on March 21,
2007.
D.
WHEREAS, on March 20, 2007 the Borrower resigned as a director
of the Company and did not repay the Obligations. Failure to repay
the Obligations when due constitutes a default of the Note (the
"Designated Default").
E.
WHEREAS, the Borrower desires to pledge options to acquire an
additional 213,333 shares of Company common stock as collateral for
the Obligations, as more fully set forth in Appendix A (the
"Additional Collateral" and together with the Original Collateral,
the "Collateral").
F.
WHEREAS, the Borrower has requested, and the Company has agreed, to
forebear on the collection of the Obligations, subject to the terms
set forth in this Agreement. AGREEMENT
In
consideration of the Recitals and the mutual promises and covenants
contained herein, the Company and the Borrower agree as follows:
1.
Agreement to Forbear. During the period (the
"Forbearance Period") commencing on the date hereof and ending on
the earlier to occur of (i) June 30, 2009; (ii) any
date on which the closing price of the Company’s common
stock, as reported on the NASDAQ Global Market, exceeds $7.00 per
share, but only to the extent that the Obligations are satisfied in
the manner provided in Section 6(b); and (ii) the date
that any Forbearance Default (as defined in Section 7 hereof)
occurs, the Company will forbear in the exercise of its rights and
remedies under the Note and Pledge Agreement with respect to the
Designated Default. Without limiting the generality of the
foregoing, during the Forbearance Period, Company will not
(i) accelerate the maturity, or initiate proceedings for the
collection, of the Obligations; (ii) file or join in filing
any involuntary petition in bankruptcy with respect to Borrower, or
otherwise initiate or participate in similar insolvency
reorganization, or moratorium proceedings for the benefit of
creditors of Borrower; or (iii) repossess, realize upon or
sell, through judicial proceedings or otherwise, any of the
Collateral, except as expressly set forth herein.
2.
Pledge of Additional Collateral . The Borrower hereby
assigns, transfers, sets over and pledges to the Company the
Additional Collateral to secure the payment of the Obligations and
the performance of any and all liabilities and obligations of the
Borrower to the Company arising under the Note, the Pledge
Agreement or this Agreement. The Borrower hereby grants to the
Company a first priority security interest in the Additional
Collateral.
3.
Stock Powers . Concurrently with the delivery to the
Company of each certificate representing one or more share of
Additional Collateral, the Borrower shall deliver an undated stock
power covering such certificate, duly executed in blank by the
Borrower with, if the Company so requests, signature guaranteed.
4.
Representations and Warranties . Borrower hereby
represents and warrants to the Company as follows:
(a)
Recitals. To the best of Borrower’s knowledge,
the Recitals in this Agreement are true and correct in all material
respects.
(b)
Enforceability. This Agreement is the legal, valid
and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms.
(c)
No Violation. Borrower’s execution, delivery
and performance of this Agreement do not and will not
(i) violate any law, rule, regulation or court order to which
Borrower is subject; (ii) conflict with or result in a breach
of any agreement or instrument to which Borrower is party or by
which it or its properties are bound, or (iii) result in the
creation or imposition of any lien, security interest or
encumbrance on any property of Borrower, whether now owned or
hereafter acquired, other than liens in favor of the Company.
(d)
Title to Additional Collateral. Borrower has good and
marketable title to the Collateral, free and clear of any mortgage,
pledge, lien, encumbrance or charge of any nature whatsoever,
except as set forth herein.
(e)
Indebtedness. There is no material breach or default
of the terms of any other agreement or instrument evidencing
indebtedness of the Borrower, except for the Designated Default.
(f)
Obligations Absolute. The obligation of the Borrower
to repay the Obligations, including all interest accrued thereon,
is absolute and unconditional, and there exists no right of set off
or recoupment, counterclaim or defense of any nature whatsoever to
payment of the Obligations.
(g)
Financial Information. The Borrower has delivered to
the Company true and complete copies of the Borrower’s
personal financial statements, dated as of March 30, 2007,
which is attached hereto as Schedule I. There have been no
material changes to the Borrower’s financial condition since
March 31, 2007.
5.
Covenants of Borrower.
(a) Additional
Financial Information. For each year that the Obligations remain
outstanding, the Borrower will deliver to the Company true and
complete copies of the Borrower’s financial statements, in
substantially the same form as the financial statements attached
hereto as Schedule I, dated as of September 30 and
March 31, as soon as such statements are available, but in no
event later than October 15 and April 15,
respectively.
(b) Change
in Financial Condition. The Borrower shall promptly inform the
Company of any event that could reasonably affect the
Borrower’s financial condition or personal assets, including,
but not limited, any default or material breach of the terms of any
other agreement or instrument evidencing indebtedness, a material
increase or decrease in Borrower’s gross income, a material
gain or loss of any personal asset of the Borrower, the filing of
any suit, action or proceeding or the rendering of any judgment or
order that could have a material impact on the Borrower’s
financial condition or personal assets as reported in most his
recent financial statement.
6.
Collateral.
(a) The
Borrower hereby renounces and waives all rights that are waivable
under Article 9 of the Uniform Commercial Code (the
"UCC") as in effect from time to time in any jurisdiction in
which any Collateral may now or hereafter be located. Without
limiting the generality of the foregoing, the Borrower hereby
(i) renounces any right to receive notice of any disposition
by the Company of the Collateral pursuant to the UCC upon
termination of the Forbearance Period, whether such disposition is
by public or private sale under the UCC or otherwise, and
(ii) waives any rights relating to compulsory disposition of
the Collateral pursuant to the UCC.
(b) At
any time that the closing price of the Company’s common
stock, as reported on the NASDAQ Global Market, exceeds $7.00, the
Company may, on behalf of the Borrower, exercise any options and
sell any shares of common stock of the Company held by the Company
as Collateral, and apply the net proceed
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