EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is dated as of November 9, 2005,
between Novavax, Inc., a Delaware corporation having its principal office at 508
Lapp Road, Malvern, PA 19355, and Raymond J. Hage, Jr., an individual with a
mailing address of 115 Applegate Drive, West Chester, PA 19355 (“Executive”).

The Company and Executive hereby agree as follows:

1. Employment. The Company hereby employs Executive and Executive hereby accepts
employment as Senior Vice President and Chief Operating Officer upon the terms
and conditions hereinafter set forth. As used throughout this Agreement,
“Company” shall mean and include any and all of its present and future
subsidiaries and any and all subsidiaries of a subsidiary. Executive warrants
and represents that he is free to enter into and perform this Agreement and is
not subject to any employment, confidentiality, non-competition or other
agreement which prohibits, restricts, or would be breached by either his
acceptance or his performance of this Agreement.

2. Duties. During the Term (as hereinafter defined), Executive shall devote his
full business time to the performance of services as Senior Vice President and
Chief Operating Officer of Novavax, Inc., performing such services, assuming
such responsibilities and exercising such authority as are set forth in the
Bylaws of the Company for such offices and assuming such other duties and
responsibilities as prescribed by the President and CEO and Board of Directors.
During the Term, Executive’s services shall be completely exclusive to the
Company and he shall devote his entire business time, attention and energies to
the business of the Company and the duties which the Company shall assign to him
from time to time. Executive agrees to perform his services faithfully and to
the best of his ability and to carry out the policies and directives of the
Company. Notwithstanding the foregoing, it shall not be a violation of this
Agreement for the Executive to serve as a director of any company whose products
do not compete with those of the Company and to serve as a director, trustee,
officer, or consultant to a charitable or non-profit entity; provided that such
service does not adversely affect Executive’s ability to perform his obligations
hereunder. Executive agrees to take no action which is in bad faith and
prejudicial to the interests of the Company during his employment hereunder.
Notwithstanding the location where Executive shall be based, as set forth in
this Agreement, he also may be required from time to time to perform duties
hereunder for reasonably short periods of time outside of said area.

3. Term. The term of this Agreement shall be a period beginning on August 10,
2005 and continuing until September 1, 2008, unless earlier terminated pursuant
to Section 7 hereof (the “Term”) and shall be renewable on the terms set forth
herein upon agreement of the Company and Executive of the term of such renewal
and the initial base compensation applicable to the renewal term. The parties
acknowledge that the employment hereunder is employment at will.

4. Compensation.

(a) Base Compensation. For all Executive’s services and covenants under this
Agreement, the Company shall pay Executive at an annual rate of $220,000,
subject to review by the CEO of the Company and the Board of Directors when
compensation is reviewed after the completion of the audit with respect to the
2005 fiscal year (in accordance with the management processes), and each fiscal
year thereafter and payable in accordance with the Company’s payroll policy as
constituted from time to time. The Company may withhold from any amounts payable
under this Agreement all required federal, state, city or other taxes and all
other deductions as may be required pursuant to any law or government regulation
or ruling.

(b) Bonus Program. The Company agrees to pay the Executive a performance and
incentive bonus in respect of Executive’s employment with the Company each year,
payable the following year when bonuses are generally paid to executives, in an
amount determined by the President and CEO and Board of Directors (or any
committee of the Board of Directors authorized to make that determination) to be
appropriate based upon Executive’s, and the Company’s, achievement of certain
specified goals, with a maximum bonus of 40% of Executive’s base salary during
the year to which the bonus relates. The bonus shall be paid out partly in cash
and partly in shares of restricted stock, in the discretion of the Board of
Directors.

(c) Stock Awards. Executive will be eligible for additional stock awards based
upon performance subject to the approval of the President and Chief Executive
Officer and the Board of Directors.

5. Reimbursable Expenses. Executive shall be entitled to reimbursement for
reasonable expenses incurred by him in connection with the performance of his
duties hereunder in accordance with such procedures and policies for executive
officers as the Company has heretofore or may hereafter establish.

6. Benefits. (a) Executive shall be entitled to four weeks of paid vacation time
per year starting from January 1, 2006, calculated and administered in
accordance with Company policies for executive officers in effect from time to
time. The Executive shall be entitled to all other benefits associated with
normal full time employment in accordance with Company policies.

(b) Executive shall be entitled to participate in the Company’s Change of
Control Severance Benefit Plan adopted August 10, 2005.

7. Termination of Employment.

(a) Notwithstanding any other provision of this Agreement, Executive’s
employment may be terminated, without such action constituting a breach of this
Agreement:

(i) By the Company, for “Cause,” as defined in Section 7(b) below;

(ii) By the Company, upon 30 days’ notice to Executive, if he should be
prevented by illness, accident or other disability (mental or physical) from
discharging his duties hereunder for one or more periods totaling three
consecutive months during any twelve-month period;

(iii) By the Executive with “Good Reason”, as defined in Section 7(c) below,
within 30 days of the occurrence or commencement of such Good Reason;

(iv) By the event of Executive’s death during the Term.

(b) “Cause” shall mean (i) Executive’s willful failure or refusal to perform in
all material respects the services required of him hereby, (ii) Executive’s
willful failure or refusal to carry out any proper and material direction by the
President and CEO or Board of Directors with respect to the services to be
rendered by him hereunder or the manner of rendering such services, (iii)
Executive’s willful misconduct in the performance of his duties hereunder,
(iv) Executive’s commission of an act of fraud, embezzlement or theft or a
felony involving moral turpitude, (v) Executive’s use or disclosure of
Confidential Information (as defined in Section 10 of this Agreement), other
than for the benefit of the Company in the course of rendering services to the
Company or (vi) Executive’s engagement in any activity prohibited by Section 11
of this Agreement. For purposes of this Section 7, the Company shall be required
to provide Executive a specific written warning with regard to any occurrence of
subsections (b)(i), (ii) and (iii) above, which warning shall include a
statement of corrective actions and a 30 day period for the Executive to respond
to and implement such actions, prior to any termination of employment by the
Company pursuant to Section 7(a)(i) above.

(c) “Good Reason” shall mean the Company’s material reduction or diminution of
Executive’s responsibilities and authority, other than for Cause, without his
consent.

8. Separation Pay. (a) Subject to Executive’s execution and delivery to the
Company of the Company’s standard form of Separation and Release Agreement, the
Company shall pay Executive an amount equal to the Separation Pay, or Change of
Control Separation Pay, as applicable and as defined in Section 8(b) below, upon
the occurrence of the applicable Separation Event, as defined in Section 8(c)
below. Separation Pay, Change of Control Separation Pay shall each be payable in
accordance with the Company’s payroll policy as constituted from time to time,
and shall be subject to withholding of all applicable federal, state and local
taxes and any other deductions required by applicable law. In the event of
Executive’s death, the Company’s obligation to pay further compensation
hereunder shall cease forthwith, except that Executive’s legal representative
shall be entitled to receive his fixed compensation for the period up to the
last day of the month in which such death shall have occurred.

(b) “Separation Pay” shall mean a lump sum amount equal to six months of
Executive’s then effective salary.

(c) “Separation Event” shall mean:

(i) the Company’s termination of Executive’s employment by the Company without
Cause, during the Term; or

(ii) the termination of Executive’s employment by the Executive for Good Reason.

9. All Business to be Property of the Company; Assignment of Intellectual
Property.

(a) Executive agrees that any and all presently existing business of the Company
and all business developed by him or any other employee of the Company including
without limitation all contracts, fees, commissions, compensation, records,
customer or client lists, agreements and any other incident of any business
developed, earned or carried on by Executive for the Company is and shall be the
exclusive property of the Company, and (where applicable) shall be payable
directly to the Company.

(b) Executive hereby acknowledges that any plan, method, data, know-how,
research, information, procedure, development, invention, improvement,
modification, discovery, design, process, work of authorship, documentation,
formula, technique, trade secret or intellectual property right whatsoever or
any interest therein whether patentable or non-patentable, patents and
applications therefor, trademarks and applications therefor or copyrights and
applications therefor (herein sometimes collectively referred to as
“Intellectual Property”) made, conceived, created, invested, developed, reduced
to practice and/or acquired by Executive solely or jointly with others during
the Term is the sole and exclusive property of the Company, as work for hire,
and that he has no personal right in any such Intellectual Property. Executive
hereby grants to the Company (without any separate remuneration or compensation
other than that received by him from time to time in the course of his
employment) his entire right, title and interest throughout the world in and to,
all Intellectual Property, which is made, conceived, created, invested,
developed, reduced to practice and/or acquired by him solely or jointly with
others during the Term.

10. Confidentiality. Executive acknowledges his obligation of confidentiality
with respect to all proprietary, confidential and non-public information of the
Company, including all Intellectual Property. Executive shall not, either during
the Term or thereafter, use for any purpose other plan the furtherance of the
Company’s business, or disclose to any person other than a person with a need to
know such confidential, proprietary or non-public information for the
furtherance of the Company’s business who is obligated to maintain the
confidentiality of such information, any information concerning any Intellectual
Property, or other confidential, proprietary or non-public information of the
Company, whether Executive has such information in his memory or such
information is embodied in writing or other tangible form. All originals and
copies of any of the foregoing, however and whenever produced, shall be the sole
property of the Company. Upon the termination of Executive’s employment in any
manner or for any reason, Executive shall promptly surrender to the Company all
copies of any of the foregoing, together with any documents, materials, data,
information and equipment belonging to or relating to the Company’s business and
in his possession, custody or control, and Executive shall not thereafter retain
or deliver to any other person any of the foregoing or any summary or memorandum
thereof.

11. Non-Competition Covenant. As the Executive has been granted options to
purchase stock in the Company and as such has a financial interest in the
success of the Company’s business and as Executive recognizes that the Company
would be substantially injured by Executive competing with the Company,
Executive agrees and warrants that within the United States, he will not, unless
acting with the Company’s express prior written consent, directly or indirectly,
while an employee of the Company and during the Non-Competition Period, as
defined below, own, operate, join, control, participate in, or be connected as
an officer, director, employee, partner, stockholder, consultant or otherwise,
with any business or entity which competes with the business of the Company (or
its successors or assigns) as such business is now constituted or as it may be
constituted at any time during the Term of this Agreement; provided, however,
that Executive may own, and exercise rights with respect to, less than one
percent of the equity of a publicly traded company. The “Non-Competition Period”
shall be a period of six months following termination of employment.

Executive and the Company are of the belief that the period of time and the area
herein specified are reasonable in view of the nature of the business in which
the Company is engaged and proposes to engage, the state of its business
development and Executive’s knowledge of this business; however, if such period
or such area should be adjudged unreasonable in any judicial proceeding, then
the period of time shall be reduced by such number of months or such area shall
be reduced by elimination of such portion of such area, or both, as are deemed
unreasonable, so that this covenant may be enforced in such area and during such
period of time as is adjudged to be reasonable.

12. Non-Solicitation Agreement. Executive agrees and covenants that he will not,
unless acting with the Company’s express written consent, directly or
indirectly, during the Term of this Agreement or during the Non-Competition
Period (as defined in Section 11 above) solicit, entice or attempt to entice
away or interfere in any manner with the Company’s relationships or proposed
relationships with any customer, officer, employee, consultant, proposed
customer, vendor, supplier, proposed vendor or supplier or person or entity or
person providing or proposed to provide research and/or development services to,
on behalf of or with the Company.

13. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given on actual receipt after having been
delivered by hand, mailed by first class mail, postage prepaid, or sent by
Federal Express or similar overnight delivery services, as follows: (a) if to
Executive, at the address shown at the head of this Agreement, or to such other
person(s) or address(es) as Executive shall have furnished to the Company in
writing and, if to the Company, to it at the address set forth in the preamble
hereto with a copy to David A. White, Esq., White White & Van Etten, LLP, 55
Cambridge Parkway, Cambridge, Massachusetts 02142, or to such other person(s) or
address(es) as the Company shall have furnished to Executive in writing.

14. Assignability. In the event of a change of control (as defined in the
Company’s Change of Control Severance Benefit Plan adopted August 10, 2005), the
terms of this Agreement shall inure to the benefit of, and be assumed by, the
acquiring person (as defined in the Company’s Change of Control Severance
Benefit Plan adopted August 10, 2005). This Agreement shall not be assignable by
Executive, but it shall be binding upon, and to the extent provided in Section 8
shall inure to the benefit of, his heirs, executors, administrators and legal
representatives.

15. Entire Agreement. This Agreement contains the entire agreement between the
Company and Executive with respect to the subject matter hereof and there have
been no oral or other prior agreements of any kind whatsoever as a condition
precedent or inducement to the signing of this Agreement or otherwise concerning
this Agreement or the subject matter hereof. Notwithstanding the foregoing,
Executive acknowledges that he is required as a condition to continued
employment, to comply at all times, with the Company’s policies affecting
employees, including the Company’s published Code of Ethics, as in effect from
time to time. Executive also acknowledges that the Non-Disclosure and
Non-Competition Agreement he signed upon becoming an employee remains in full
force and effect despite the changes in his employment status with the Company.

16. Equitable Relief. Executive recognizes and agrees that the Company’s remedy
at law for any breach of the provisions of Sections 9, 10, 11 or 12 hereof would
be inadequate, and he agrees that for breach of such provisions, the Company
shall, in addition to such other remedies as may be available to it at law or in
equity or as provided in this Agreement, be entitled to injunctive relief and to
enforce its rights by an action for specific performance. Should Executive
engage in any activities prohibited by this Agreement, he agrees to pay over to
the Company all compensation, remuneration or monies or property of any sort
received in connection with such activities; such payment shall not impair any
rights or remedies of the Company or obligations or liabilities of Executive
which such parties may have under this Agreement or applicable law.

17. Amendments. This Agreement may not be amended, nor shall any change, waiver,
modification, consent or discharge be effected except by written instrument
executed by the Company and Executive.

18. Severability. If any part of any term or provision of this Agreement shall
be held or deemed to be invalid, inoperative or unenforceable to any extent by a
court of competent jurisdiction, such circumstances shall in no way affect any
other term or provision of this Agreement, the application of such term or
provision in any other circumstances, or the validity or enforceability of this
Agreement. Executive agrees that the restrictions set forth in Sections 11 and
12 above (including, but not limited to, the geographical scope and time period
of restrictions) are fair and reasonable and are reasonably required for the
protection of the interests of the Company and its affiliates. In the event that
any provision of Section 11 or 12 relating to time period and/or areas of
restriction shall be declared by a court of competent jurisdiction to exceed the
maximum time period or areas such court deems reasonable and enforceable, said
time period and/or areas of restriction shall be deemed to become and thereafter
be the maximum time period and/or areas which such court deems reasonable and
enforceable.

19. Paragraph Headings. The paragraph headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation hereof.

20. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the law of the State of Delaware, without regard to
the principles of conflict of laws thereof.

21. Resolution of Disputes. With the exception of proceedings for equitable
relief brought pursuant to Section 16 of this Agreement, any disputes arising
under or in connection with this Agreement including, without limitation, any
assertion by any party hereto that the other party has breached any provision of
this Agreement, shall be resolved by arbitration, to be conducted in
Philadelphia, Pennsylvania, in accordance with the rules and procedures of the
American Arbitration Association. The parties shall bear equally the cost of
such arbitration, excluding attorneys’ fees and disbursements which shall be
borne solely by the party incurring the same; provided, however, that if the
arbitrator rules in favor of Executive, Company shall be solely responsible for
the payment of all costs, fees and expenses (including without limitation
Executive’s reasonable attorneys’ fees and disbursements) of such arbitration.
The provisions of this Section 21 shall survive the termination for any reason
of the Term (whether such termination is by the Company, by Executive or upon
the expiration of the Term).

22. Indemnification; Insurance. The Executive shall be entitled to liability and
expense indemnification and reimbursement to the fullest extent permitted by the
Company’s current By-laws and Certificate of Incorporation, whether or not the
same are subsequently amended. During the Term, the Company will use
commercially reasonable efforts to maintain in effect directors’ and officers’
liability insurance no less favorable to Executive than that in effect as of the
date of this Agreement.

23. Survival. Sections 8 through 21 shall survive the expiration or earlier
termination of this Agreement, for the period and to the extent specified
therein.

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

         
 
  NOVAVAX, INC.  

 
       
[SEAL]
 
 

 
       
 
  By:   /s/ Rahul Singhvi
 
  Name:
Title:   Rahul Singhvi
President and Chief Executive Officer
 
       
 
      /s/ Raymond J. Hage, Jr.
 
       
 
  Raymond J. Hage, Jr.