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                              EMPLOYMENT AGREEMENT

       This EMPLOYMENT AGREEMENT (the "Employment Agreement" or this
"Agreement") dated as of May 13, 1999, between Novavax, Inc., a Delaware
corporation having its principal office at 8320 Guilford Road, Columbia,
Maryland 21046 (the "Company") and John A. Spears ("Employee") residing at 5
White Pine Lane, Guilford, Connecticut 06437.

       The Company and Employee hereby agree as follows:

       1. Employment. The Company hereby employs Employee and Employee hereby
accepts employment 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.)
Employee warrants 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 of or his performance under this Agreement.

       2. Duties. Employee shall devote his full business time to the
performance of services as President and Chief Executive Officer and such other
senior management services as may from time to time be designated by the
Company's Board of Directors. During the term of this Agreement, Employee'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 to which the Company shall assign him from time to time; provided,
however, that nothing contained herein shall prevent Employee from being a
passive investor in any business or venture, except as prohibited pursuant to
Section 10 hereof. Employee agrees to perform his services faithfully and to the
best of his ability and to carry out the policies and directives of the Company.
Employee agrees to take no action which is in bad faith and prejudicial to the
interests of the Company during his employment hereunder. Employee shall be
based in Columbia, Maryland but he may be required from time to time to perform
duties hereunder for reasonably short periods of time outside said area.

       3. Term. The term of this Agreement shall be a period beginning on May
17, 1999 and ending May 16, 2002, provided, however, that this Agreement shall
be automatically extended for periods of one year after such date, unless and
until the Company or Employee shall have delivered to the other written notice
of its or his election to terminate this Agreement as of May 16, 2002, or as of
the end of any such one-year extension period, such notice to be delivered at
least 30 days prior to the date of termination (the "Term").

       4. Compensation.

              (a) Base Compensation. For all Employee's services and covenants
under this Agreement, the Company shall pay Employee an initial annual and
minimum salary of $250,000, subject to annual review by the Board of Directors
of the Company and payable in accordance with the Company's payroll policy as
constituted from time to time.

              (b) Performance Bonus. In addition to the base compensation
payable to Employee, the Employee shall be eligible to receive an annual
performance bonus in such amount, if any, as the Compensation and Stock Option
Committee of the Company's Board of Directors (or any committee of the Board of
Directors which shall replace such committee, or in the absence of any such
committee, the Board of Directors) shall, in its sole discretion, deem
appropriate. Such determination will be based, in part, upon the achievement of
certain specified goals, which shall be determined in consultation with the
Employee. Payment of the performance bonus, if any, will be made in cash or
restricted stock of the Company, or a combination thereof, at the discretion of
the Board of Directors, within 60 days following the end of the Company's fiscal
year.


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              (c) Stock Options. In connection with his employment, Employee has
received stock options to purchase 400,000 shares of the Company's Common Stock,
$.01 par value, at an exercise price equal to the closing price of the Company's
Common Stock on the date of grant, May 7, 1999. The options are subject to a
Incentive Stock Option Agreement (and, to the extent required by the Internal
Revenue Code, a Non-Statutory Stock Option Agreement) which includes an option
vesting schedule as follows: one-third of the shares shall vest on May 7, 2000,
one-third of the shares shall vest on May 7, 2001 and one-third of the shares
shall vest on May 7, 2002. Employee will also be eligible to receive additional
stock options annually, based on job performance, in an amount to be determined
by the Compensation and Stock Option Committee of the Board of Directors at the
December Board meetings.

       5. Reimbursable Expenses.

              (a) Employee is expected to relocate to the Columbia, Maryland
area within six months of the date hereof, for which the Company will reimburse
Employee, or cover expenses in connection with a relocation management service
program established by the Company, for actual moving expenses in an amount not
to exceed $50,000, which expenses may include those related to the sale and
purchase of Employee's residence.

              (b) Employee shall be entitled to reimbursement for reasonable
expenses incurred by Employee in connection with the performance of his duties
hereunder upon receipt of vouchers therefor in accordance with such procedures
as the Company has heretofore or may hereafter establish.

       6. Employee Benefits.

              (a) Employee shall be entitled to four weeks of paid vacation time
per year, calculated on a calendar year basis in accordance with Company
policies in effect from time to time.

              (b) Employee shall be entitled to participate in all group
insurance programs, stock option plans or other fringe benefit plans which the
Company may now or hereafter in its sole and absolute discretion make available
generally to its employees, but the Company shall not be required to establish
any such program or plan.

       7. Termination of Employment. Notwithstanding any other provision of this
Agreement, Employee's employment may be terminated:

              (a) By the Company, in the event of (i) Employee's willful failure
or refusal to perform in all material respects the services required of him
hereby, or his willful failure or refusal to carry out any proper direction by
the Board of Directors with respect to the services to be rendered by him
hereunder or the manner of rendering such services, or his willful misconduct in
the performance of his duties hereunder, in each case after a specific written
warning with regard thereto, which shall include a statement of corrective
actions and a 30 day period for the Employee to respond and implement such
actions, has been given to Employee by the Board of Directors, or (ii)
Employee's commission of a felony involving moral turpitude;

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

              (c) By the Company, without cause, or by Employee with "Good
Reason" (as hereinafter defined), provided that if Employee's employment is
terminated pursuant to this Section 7(c), Employee shall be entitled to receive
his then current salary as set forth in Section 4(a) above, but not a
performance bonus, for one year from the date of termination, payable in
accordance with


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the Company's payroll policy as constituted from time to time, together with any
accrued vacation pay at his then current salary and in the amounts set forth in
Section 4(a) above. The Employee shall be entitled to terminate his employment
for "Good Reason" if his responsibilities or authority are reduced or diluted in
any material way without his consent or if he is relocated to another Company
office or facility more than 50 miles from Columbia, Maryland without his
consent.

              (d) By the event of Employee's death during the term of his
employment; whereupon the Company's obligation to pay further compensation
hereunder shall cease forthwith, except that Employee'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.

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

              (a) Employee 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 Employee for the
Company is and shall be the exclusive property of the Company, and (where
applicable) shall be payable directly to the Company.

              (b) Employee 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 research, information, procedures, developments, all
inventions and improvements whether patentable or nonpatentable, patents and
applications therefor, trademarks and applications therefor, copyrights and
applications therefor, programs, trade secrets, plans, methods, and all other
data and know-how (herein sometimes "Intellectual Property") made, conceived,
developed and/or acquired by him solely or jointly with others during the period
of his employment with the Company, which are either (i) made, conceived,
developed or acquired during regular business hours or on the premises of, or
using properties of, the Company or in the regular scope of Employee's
employment by the Company or (ii) if related to the Company's business, whether
or not made, conceived, developed or acquired during regular business hours or
on the premises of, or using properties of, the Company or in the regular scope
of Employee's employment by the Company.

       9. Confidentiality. Except as necessary in performance of services for
the Company or if required by law and except for such information that becomes
generally available to the public through no fault of Employee, Employee shall
not, either during the period of his employment with the Company or thereafter,
use for his own benefit or disclose to or use for the benefit of any person
outside the Company, any information concerning any Intellectual Property, or
other confidential or proprietary information of the Company, including without
limitation, any of the materials listed in Section 8(a), whether Employee has
such information in his memory or 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, not to be removed from the premises
or custody of the Company without in each instance first obtaining authorization
of the Company, which authorization may be revoked by the Company at any time.
Upon the termination of Employee's employment in any manner or for any reason,
Employee 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 Employee shall not thereafter retain or
deliver to any other person any of the foregoing or any summary or memorandum
thereof.

       10. Non-Competition Covenant. As the Employee is being granted options to
purchase stock in the Company and as such has a financial interest in the
success of the Company's


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business and as Employee recognizes that the Company would be substantially
injured by Employee competing with the Company, Employee 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 Employee may own
less than one percent of the equity of a publicly traded company. The
"Non-Competition Period" shall be a period of one year following termination of
employment.

       Employee 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 Employee'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.

       11. Non-Solicitation Agreement. Employee 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 for a period of one year
thereafter solicit, entice away or interfere with the Company's contractual
relationships with any customer, client, officer or employee of the Company.

       12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given upon the earlier of actual
receipt or three days after having been mailed by first class mail, postage
prepaid, or twenty-four hours after having been sent by Federal Express or
similar overnight delivery services, as follows: (a) if to Employee, at the
address shown at the head of this Agreement, or to such other person(s) or
address(es) as Employee shall have furnished to the Company in writing; and (b)
if to the Company, at the address shown at the head of this Agreement,
Attention: Chairman of the Board, with a copy to David A. White, Esq., White &
McDermott, P.C., 65 William Street, Wellesley, Massachusetts 02481, or to such
other person(s) or address(es) as the Company shall have furnished to the
Employee in writing.

       13. Assignability. In the event that the Company shall be merged with, or
consolidated into, any other corporation, or in the event that it shall sell and
transfer substantially all of its assets to another corporation, the terms of
this Agreement shall inure to the benefit of, and be assumed by, the corporation
resulting from such merger or consolidation, or to which the Company's assets
shall be sold and transferred. This Agreement shall not be assignable by
Employee, but it shall be binding upon, and to the extent provided in Section 7
shall inure to the benefit of, his heirs, executors, administrators and legal
representatives.

       14. Entire Agreement. This Agreement contains the entire agreement
between the Company and Employee 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.

       15. Equitable Relief. Employee recognizes and agrees that the Company's
remedy at law for any breach of the provisions of Sections 8, 9, 10 or 11 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
Employee engage in


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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 Employee
which such parties may have under this Agreement or applicable law.

       16. 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 Employee.

       17. 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.

       18. 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.

       19. 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
principles of conflict of law.

       20. Resolution of Disputes. With the exception of proceedings for
equitable relief brought pursuant to Section 15 of this Agreement or any stock
option agreement, any controversy, claim or dispute of whatever nature arising
between the parties, including but not limited to those arising out of or
relating to this Agreement or any stock option agreement or the construction,
interpretation, performance, breach, termination, enforceability or validity of
such agreements or the arbitration provisions contained in this Agreement,
whether such claim existed prior to or arises on or after the date of this
Agreement, including the determination of the scope of this agreement to
arbitrate, shall be determined by arbitration in Baltimore, Maryland by one
arbitrator in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, except that (a) every person named on all lists of
potential arbitrators shall be a neutral and impartial lawyer with excellent
academic and professional credentials (i) who has practiced law for at least 15
years, specializing in either general commercial litigation or general corporate
and commercial matters, with substantial experience in the preparation,
negotiation and/or litigation of employment agreements and the grant of stock
options, and (ii) who has had experience, and is generally available to serve,
as an arbitrator, and (b) each party shall be entitled to strike on a peremptory
basis, for any reason or no reason, any or all of the names of potential
arbitrators on any list submitted to the parties by the AAA as well as any
person selected by the AAA to serve as an arbitrator by administrative
appointment. In the event the parties cannot agree on the selection of the
arbitrator from the one or more lists submitted by the AAA within 30 days after
the AAA transmits to the parties its first list of potential arbitrators, the
President of the Maryland Bar Association shall nominate three persons who, in
his or her opinion, meet the criteria set forth herein, which nominees may not
include persons named on any list submitted by the AAA. Each party shall be
entitled to strike one of such three nominees on a peremptory basis within 10
days after its receipt of such list of nominees, indicating its order of
preference with respect to the remaining nominees. If two such nominees have
been stricken by the parties, the unstricken nominee shall be the arbitrator.
Otherwise, the selection of the arbitrator shall be made by the AAA from the
remaining nominees in accordance with the parties' mutual order of preference,
or by random selection in the absence of a mutual order of preference. The
arbitrator shall base his award on applicable law and judicial precedent, shall
include in such award written findings of fact and conclusions of law upon which
the award is based and shall not grant any remedy or relief that a court could
not grant under applicable law. Judgment on the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.


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       21. Indemnification. The Employee shall be entitled to liability and
expense indemnification to the fullest extent permitted by the Company's current
By-laws and Certificate of Incorporation, whether or not the same are
subsequently amended.

       22. Survivorship. The respective rights and obligations of the parties to
this Agreement shall survive any termination of this Agreement or the Employee's
employment hereunder for any reason to the extent necessary to the intended
preservation of such rights and obligations.

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

                                     NOVAVAX, INC.

[SEAL]

                                     By:
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                                        Mitchell J. Kelly, Interim President and
                                        Chief Executive Officer


                                     -------------------------------------------
                                     John A. Spears








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