Document:

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April 22 1999                                          Novavax/Cantab - page: 1

                                  NOVAVAX, INC.

                                     - and -

                     CANTAB PHARMACEUTICALS RESEARCH LIMITED

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                                LICENCE AGREEMENT

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April 22 1999

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April 22 1999                                          Novavax/Cantab - page: 2

THIS AGREEMENT is made the                       day of         1999
BETWEEN

 (1)     NOVAVAX, INC. a company incorporated under the law of the State of
         Delaware, whose principal place of business is at Suite C, 8320
         Guilford Road, Columbia, MD 21046, USA (together with its subsidiaries
         (including without limitation its wholly-owned subsidiaries Micro-Pak,
         Inc. and Micro Vesicular Systems Inc), "Novavax"); and

 (2)     CANTAB PHARMACEUTICALS RESEARCH LIMITED (Company number 2270217) a
         company incorporated under the laws of England whose registered office
         is at 310 Cambridge Science Park, Milton Road, CB4 0WG ("Cantab").

RECITALS

 (A)     Pursuant to an agreement of 23 December 1997 between Novavax and
         Cantab, Novavax granted Cantab an exclusive option to acquire a
         worldwide exclusive licence under the Novavax IP (as defined herein).

 (B)     Cantab has exercised that option and Novavax (including Novavax's
         wholly-owned subsidiaries Micro-Pak, Inc., and Micro Vesicular Systems,
         Inc., which is/are registered owner(s) of patent rights included in the
         Novavax IP as hereinbelow defined, and which have endorsed their
         consent to the transaction hereby effected and their agreement to be
         bound thereby insofar as their proprietary interests are affected)
         hereby grants Cantab an exclusive worldwide licence to the Novavax IP
         on the terms and conditions set out herein.

IT IS AGREED AS FOLLOWS:-

 1.      DEFINITION AND INTERPRETATION

 1.1     In this Agreement and in the Schedules to this Agreement the following
         words and phrases shall have the following meanings unless the context
         requires otherwise:-

 1.1.1   "Affiliate" - any company, partnership or other entity which directly
         or indirectly Controls, is Controlled by or is under common Control
         with, either Party including as a Subsidiary or Holding Company.

 1.1.2   "Agreement" - this agreement and any and all schedules, appendices and
         other addenda to it as may be varied from time to time in accordance
         with the provisions of this agreement.

 1.1.3   "Business Day" - 9.30am to 5.30pm (local time at Cantab offices) on a
         day other than a Saturday, Sunday, bank or other public holiday in
         England and Wales.

 1.1.4   "Cantab Net Sales" - shall mean all sums received by Cantab or an
         affiliate of Cantab upon the sale by Cantab or such affiliate of any
         Licensed Product (net only of any value added or other taxes thereon
         and of deductions for freight charges, insurance, allowances

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         actually made for returned defective products and customary trade,
         quantity or cash discounts to non-affiliated customers to the extent
         actually allowed and taken);

 1.1.5   "Commencement Date" - the date of execution of this Agreement.

 1.1.6   "Competent Authority" - any local or national agency, authority,
         department, inspectorate, minister, ministry official, parliament or
         public or statutory person (whether autonomous or not) of or of any
         government of any country having jurisdiction over either any of the
         activities contemplated by this Agreement or the Parties, including the
         European Commission and the European Court of Justice.

 1.1.7   "Confidential Information" - in the case of obligations on Cantab shall
         mean Novavax IP, in the case of obligations on Novavax shall mean
         Cantab IP and in the case of obligations on both Cantab and Novavax
         shall mean trade secrets, know how or confidential information relating
         to the business affairs or finances of the other supplied or otherwise
         made available to them or coming into their possession in relation to
         the performance of this Agreement.

 1.1.8   "Control" - the ownership of more than 50% of the issued share capital
         or legal power to direct or cause the direction of the general
         management and policies of the Party in question.

 1.1.9   "Directive" - includes any present or future directive, regulation,
         requirement, instruction, direction or rule of any Competent Authority
         including any amendment, extension or replacement thereof then in
         force.

 1.1.10  "Field" - the use of the Novasomes Adjuvant in the development and
         subsequent exploitation of an immunopharmaceutical comprising antigenic
         determinants of human papillomavirus for the prevention or treatment of
         cervical disease including CIN (cervical intraepithelial neoplasia),
         and of an immunopharmaceutical comprising antigenic determinants of
         human papillomavirus type 16 or 18 for any other treatment purposes for
         which that immunopharmaceutical may be used;

1.1.11   "First Commercial Sale" - the first commercial sale by Cantab or its
         sub-licensees or distributors, in any country, of Licensed Product
         after grant of required Marketing Authorisation and pricing approval
         has been granted by the appropriate Regulatory Authority or other
         Competent Authority.

 1.1.12  "Force Majeure - in relation to either Party any event or circumstances
         which is beyond the reasonable control of that Party which event that
         Party could not reasonably be expected to have taken into account at
         the date of this Agreement and which results in or causes the failure
         of that Party to perform any or all of its obligations under this
         Agreement, including act of God, lightning, fire, storm, flood,
         earthquake, accumulation of snow or ice, lack of water arising from
         weather or environmental problems, strike, lockout or other industrial
         disturbance, act of the public enemy, war declared or undeclared,
         threat of war, terrorist act, blockade, revolution, riot, insurrection,
         civil commotion, public demonstration, sabotage, act of vandalism,
         prevention from or hindrance in obtaining in any way materials energy
         or other supplies, explosion, fault or failure of plant or machinery
         (which could not have been prevented by good industry practice),
         Directive or requirement of a Competent Authority governing either
         Party provided that lack of funds shall not be interpreted as a cause
         beyond the reasonable

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         control of that Party.

 1.1.13  "Half Year" - shall mean each six month period in any year ending on 30
         June or 31 December, and "Half Yearly" shall be construed accordingly.

 1.1.14  "Insolvency Event" - in relation to Cantab, means any one of the
         following:
         (a) a notice shall have been issued to convene a meeting for the
         purpose of passing a resolution to wind up Cantab or such a resolution
         shall have been passed; or
         (b) a resolution shall have been passed by Cantab's directors to seek a
         winding up or administration order or a petition for a winding up or
         administration order shall have been presented against Cantab's or such
         an order shall have been made; or
         (c) a receiver, administrative receiver, receiver and manager, interim
         receiver, custodian, sequestrator or similar officer is appointed in
         respect of Cantab or over a substantial part of its assets or any third
         party takes steps to appoint such an officer in respect of Cantab or an
         encumbrancer takes steps to enforce or enforces its security; or
         (d) a proposal for a voluntary arrangement shall have been made in
         relation to Cantab under Part I Insolvency Act 1986; or
         (e) a step or event shall have been taken or arisen outside the United
         Kingdom which is similar or analogous to any of the steps or events
         listed at (a) to (d) above; or
         (f) that Cantab proposes to readjust, reschedule or defer all or
         substantially all of its indebtedness, or proposes or makes any general
         assignment, composition or arrangement with or for the benefit of all
         or some of its creditors or makes or suspends or threatens to suspend
         making payments to all or some of its creditors or submits to any type
         of voluntary arrangement; or
         (g) Cantab is deemed to be unable to pay its debts within the meaning
         of Section 123 Insolvency Act 1986.

 1.1.15  "Know-How" - unpatented technical and other information which is not in
         the public domain including information comprising or relating to
         concepts, discoveries, data, designs, formulae, ideas, information
         relating to materials, inventions, methods, models, assays, research
         plans, procedures, designs for experiments and tests and results of
         experimentation and testing (including results of research or
         development) processes (including manufacturing processes,
         specifications and techniques), laboratory records, chemical,
         pharmacological, toxicological, clinical, analytical and quality
         control data, trial data, case report forms, data analyses, reports,
         manufacturing data or summaries and information contained in
         submissions to an information from ethical committees and regulatory
         authorities, but at any time does not include any matter that has
         become and remains available to the public through no wrongful act or
         omission to act of the party (or its sublicensee or distributor) owing
         obligation to the other in respect of such matter as part of Know-How,
         as from the time when that matter becomes available to the public.
         Know-How includes documents containing Know-How. Information will not
         be excluded from being Know-How hereunder by reason only of the fact
         that it becomes available to the public through a wrongful act or
         omission to act of a Party hereto or a sublicensee or distributor of a
         Party hereto. The fact that an item is known to the public shall not be
         taken to exclude the possibility that a compilation including the item,
         and/or a development relating to the item, is (and remains) not known
         to the public. Know-

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         How includes any rights including copyright, database or design rights
         protecting such Know-How.

1.1.16   "Licensed IP" - the Licensed Patent Rights and the Licensed Know-How.

1.1.17   "Licensed Know-How" - any and all Know How within the Field which is
         owned by or licensed to Novavax at the Commencement Date or which
         becomes owned by or licensed to Novavax during the term of this
         Agreement, in either case insofar as it continues to be Know-How.

 1.1.18  "Licensed Patent Rights" - the Patent Rights listed in Schedule 1 and
         any Patent Rights claiming or covering or otherwise based on inventions
         forming part of the Licensed Know How.

 1.1.19  "Licensed Product" - a product made for use in the Field and either
         sold or to be sold for use in the Field, incorporating or using any
         part of the Licensed IP, such that in the absence of the licence
         granted by this agreement Cantab's (or Cantab's sublicensee's or
         distributor's) acts in relation to manufacture, use or sale of such
         product would constitute an infringement of the Licensed IP;

 1.1.20  "Major Markets" - United States, United Kingdom, France, Germany,
         Spain, Italy and Japan.

 1.1.21  "Marketing Authorisation" - any approval required from a Regulatory
         Authority to market and sell Licensed Product in any country.

 1.1.22  "Materials Transfer Agreement" - the materials transfer agreement
         between the Parties dated 16 May 1997.

 1.1.23  "Net Cantab Receipts" - shall mean all sums received by Cantab upon the
         sale of any Licensed Product by any sublicensee or otherwise received
         under the terms of any sublicense agreement authorised hereunder.

 1.1.24  "Novasomes Adjuvant" - the adjuvant and associated technology specified
         in the Licensed Patent Rights with respect to Paucilamellar
         non-phospholipid liposomes.

 1.1.25  "Novavax Materials" - physical samples of Novasomes Adjuvant and other
         compounds supplied by Novavax to Cantab under the Materials Transfer
         Agreement or corresponding term of this Agreement.

 1.1.26  "Parties" - Cantab and Novavax.

 1.1.27  "Patent Rights" - patent applications or patents, author certificates,
         inventor certificates, utility certificates, improvement patents and
         models and certificates of addition and all foreign counterparts of
         them and includes any divisions, renewals, continuations,
         continuations-in-part, extensions, reissues, substitutions,
         confirmations, registrations, revalidation or additions of or to them,
         as well as any supplementary protection certificate in respect of them.

 1.1.28  "Regulatory Authority" - any national, supranational (e.g., the
         European Commission, the Council of the European Union, the European
         Agency for the Evaluation of Medicinal Products or the FDA), regional,
         state or local regulatory agency, department, bureau, commission,
         council or other governmental entity other in each country of the
         Territory involved in the granting of Marketing Authorisation for the
         Licensed Product.

 1.1.29  "Subsidiary or Holding Company" - as relates to Cantab, shall have the
         meaning ascribed to such expressions by Section 736 of the Companies
         Act 1985 (as amended),

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         and as it relates to Novavax, shall mean any legal entity (such as a
         corporation, partnership, or limited liability company) that is
         controlled by, under common control with, or controls Novavax. For the
         purpose of this definition, control means (i) beneficial ownership of
         at least 50% of the voting securities of a corporation or other
         business organisation with voting securities or (ii) a fifty percent or
         greater interest in the net assets or profits of a partnership or other
         business organisation without voting securities.

 1.1.30  "Valid Claim" - either:
         (a) a claim of an issued and unexpired patent included within Patent
         Rights, which has not been held permanently revoked, unenforceable or
         invalid by a decision of a court or other governmental agency of
         competent jurisdiction, unappealable or unappealed within the time
         allowed for appeal, and which has not been admitted to be invalid or
         unenforceable through reissue or disclaimer or otherwise; or
         (b) a claim of a pending patent application included within Patent
         Rights, which claim was filed in good faith and has not been abandoned
         or finally disallowed without the possibility of appeal or refiling of
         said application.

 1.2     In this Agreement:

 1.2.1   unless the context otherwise requires all references to a particular
         Clause, paragraph or Schedule shall be a reference to that Clause,
         paragraph or Schedule, in or to this Agreement as the same may be
         amended from time to time pursuant to this Agreement;

 1.2.2   a table of contents and headings are inserted for convenience only and
         shall be ignored in construing this Agreement;

 1.2.3   unless the contrary intention appears words importing the masculine
         gender shall include the feminine and vice versa and words in the
         singular include the plural and vice versa;

 1.2.4   unless the contrary intention appears words denoting persons shall
         include any individual, partnership, company, corporation, joint
         venture, trust, association, organisation or other entity, in each case
         whether or not having separate legal personality;

 1.2.5   reference to the words "include" or "including" are to be construed
         without limitation to the generality of the preceding words; and

 1.2.6   reference to any statute or regulation includes any modification or
         re-enactment of that statute or regulation.

 2.      GRANT OF LICENCE

 2.1     Subject to this Agreement and in consideration of all of its terms,
         Novavax grants Cantab an exclusive world-wide licence to develop, use,
         have used, manufacture, have made, exploit, market, sell and have sold
         Licensed Products solely for use in the Field and to use the Licensed
         IP within the Field. Subject to Cantab's rights under this Agreement,
         Novavax shall retain all rights not expressly granted in this Clause
         2.1. The licence shall be for the period in which any Licensed IP shall
         remain valid and enforceable (the "License Period"), unless earlier
         terminated as provided in Section 10

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         hereof.

 2.2     Cantab shall be entitled to sublicense all or any part of its rights
         granted under Clause 2.1 above to third parties in such manner as it
         considers appropriate: Cantab shall promptly provide Novavax with
         information relating to the terms of such sublicence agreement and
         arrangements made in pursuance of such sublicence agreement to the
         extent appropriate to enable Novavax to ascertain Novavax's legal
         rights and financial expectations and enforce its legal rights arising
         in consequence of such sublicence, and such information shall without
         limitation include: parties to the agreement and its date of execution;
         the scope of the sublicence, as it relates to Licensed IP, including
         technical and geographical scope and whether the scope include the
         right to make, use and/or sell; the nature of measures taken by the
         sublicence terms to protect confidentiality of Novavax's Know-How and
         other confidential, proprietary or nonpublic information; and
         information relating to the development plan to be undertaken under
         such sublicense agreement, sufficient to ascertain the measures to be
         taken to achieve the milestones referred to in this agreement and to
         achieve and advance product marketing and sales.

 2.3     Novavax shall during the term of this Agreement promptly notify Cantab
         of all information relating to improvements and/or developments to the
         Novasomes Adjuvant, the Licensed IP (including the legal status of the
         Licensed Patent Rights) or their application which are of relevance
         within the Field to the manufacturing or marketing of Licensed Product
         and any such improvements or developments shall form part of the
         Licensed IP licensed to Cantab free of any further charge or payment.

 2.4     Novavax agrees to deliver, at the request and administrative expense of
         Cantab, such documents as may reasonably be necessary to permit Cantab
         to record its licensee interest in the Licensed IP, provided That no
         such filing shall contain any confidential proprietary or non-public
         information of Novavax, and Cantab shall take all action necessary to
         ensure that no right title or interest in any licensed IP vests in
         Cantab by such recordal except the licence granted Clause 2.1 hereof,
         and Cantab shall in the event of termination in whole or in part of
         such licence, (upon request of Novavax and at Cantab's administrative
         expense) execute or procure for Novavax the execution of and file all
         such documents as may reasonably be necessary to record the termination
         of any such rights granted to Cantab under this Agreement with any
         relevant registry or agency.

 3.      FEES

 3.1     In consideration of the licence granted to Cantab under Clause 2 Cantab
         will pay to Novavax the following:

 3.1.1   US$ 75,000 on the Commencement Date; and

 3.1.2   US$ 75,000 on the first anniversary of the Commencement Date
         provided that such licence fees set out in Clauses 3.1.1 and 3.1.2 will
         be non-refundable

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         and not subject to deduction or set-off for any reason against any
         amounts owing to Novavax, including future royalties.

 3.1.3   US$ 25,000 upon the execution of the first sub-licence in the United
         States of America;

 3.1.4   US$ 25,000 upon the execution of the first sub-licence in the United
         Kingdom or the European Union;

 3.1.5   US$ 12,500 upon the execution of the first sub-licence in Japan; and

 3.1.6   US$ 15,000 upon the execution of the first sub-licence in any country
         outside the USA, the European Union and Japan;
         provided that all such fees set out in Clauses 3.1.3 to 3.1.6 shall be
         credited against and deducted from royalties payable pursuant to
         paragraph 3.3.

 3.2     In addition to the fees set out in Clause 3.1, Cantab shall pay to
         Novavax the following milestone fees:-

 3.2.1   US$ 50,000 upon the earlier of:  (a) the date of entry of the first
         patient into a Phase I/lI dose ranging study or the equivalent in any
         other country carried out by or on behalf of Cantab or its sublicensee;
         (b) 6 months after completion of a Phase I study or the equivalent in
         any other country carried out by or on behalf of Cantab or its
         sublicensee; or (c) 30 June, 2000;

 3.2.2   US$ 50,000 upon the date of the first patient into a Phase II study or
         the equivalent in any other country carried out by or on behalf of
         Cantab or its sublicensee;

 3.2.3   US$ 75,000 upon the date of the first patient into a pivotal efficacy
         clinical trial in humans or the equivalent in any other country carried
         out by or on behalf of Cantab or its sublicensee; and

 3.2.4   US$ 100,000 upon the first PLA filing by or on behalf of Cantab or its
         sublicensee of a Licensed Product anywhere, or the equivalent in any
         country.

         All such milestone fees described in this Clause 3.2 shall be credited
         against and deducted from any royalties payable pursuant to Clause 3.3.

         Provided that the deduction actually made in any one year of royalty
         account is not more than $50,000.

 3.3     Cantab shall also pay Novavax the following royalties in respect of
         sales of Licensed Product made during the Royalty Period (payable
         within 30 days of the end of each Half Year for sales effected in the
         preceding Half Year):

 3.3.1   10% of Net Cantab Receipts on all sales of Licensed Product effected by
         any sublicensee;

 3.3.2   2% of Cantab Net Sales on all sales of Licensed Product effected by
         Cantab or an affiliate of Cantab, or by a distributor of Cantab or of
         an affiliate of Cantab; Such royalties to continue to be payable in
         respect of sales of Licensed Product on a country by country basis
         until the last to expire of any Licensed Patent Rights in respect of
         such country ("Royalty Period").

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 3.4     Minimum annual fees in line with standard industry norms for minimum
         royalties (but in any event not exceeding US$ 300,000 pa for the first
         12 month period commencing 1st January after the date of launch of a
         Licensed Product and for each subsequent calendar year) shall be
         payable in respect of each calendar year after First Commercial Sale of
         a Licensed Product, in respect of the Major Markets for the period in
         which royalties shall continue to be payable in respect of Licensed
         Product into such Major Markets at a rate to be negotiated in good
         faith prior to commercial launch of a Licensed Product by reference to
         anticipated and forecast sales of Licensed Product. For the
         abovementioned first 12 month period and for each of the three next
         following 12 month periods thereafter the minimum annual royalty shall
         be $50,000 per 12 month period.

 3.5     Cantab shall and shall ensure that its Affiliates and other
         sub-licensees shall keep true and accurate records and books of account
         containing all data necessary for the calculation of the amounts
         payable by it to Novavax pursuant to this Agreement. Those records and
         books of account shall be kept for six years following the end of the
         calendar year to which they relate and shall, upon reasonable notice
         having been given by Novavax, be open on Business Days for inspection,
         under terms of confidentiality, by Novavax's accountants or by an
         independent firm of accountants appointed by agreement between the
         Parties. In the absence of any fraud, obvious error or in connection
         with the payment of taxes or other third party investigations, or
         actions or claims, any such examination shall take place not later than
         two years following the expiration of the period to which it relates
         and there shall be no more than one examination per year.  The cost of
         the inspection shall be the responsibility of Cantab if the certificate
         is shown to have underestimated the monies payable to Novavax by more
         than two percent and the responsibility of Novavax otherwise. Following
         any such certification the Parties shall make any adjustments necessary
         in respect of the monies already paid to Novavax in relation to the
         period in question.

 3.6     Within 60 days of the end of each Half Year, Cantab shall prepare a
         statement which shall show on a Product by Product and a country by
         country basis for the previous Half Year, all monies due to Novavax
         under this Agreement with respect to such Half Year period, including
         payments due under Clause 3.3.  That statement shall be submitted to
         Novavax within 60 days of the end of the period to which it relates
         together with remittance for monies due to Novavax, if any.

 3.7     All payments to Novavax under this Agreement shall be made in US
         Dollars to the account of Novavax at CITIBANK FSB WASHINGTON, sort code
         ABA# 254070116, account no. # 17511640, in the name of Novavax, Inc.,
         by telegraphic transfer.

 3.8     Where revenues are received from sales of Licensed Product or payments
         made under sublicense agreements, and for purposes of calculating the
         Net Cantab Sales and Net Cantab Receipts for purposes of this Section
         3, in a currency other than US Dollars, the

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         rate of exchange to be used for converting such other currency into US
         Dollars, shall be the rate published in the Wall Street Journal under
         the heading "Currency Trading, Exchange Rates, 135$ Equiv." for the
         last business day of the period to which the calculation applies.

 4.      SUPPLY

         It is agreed that the provisions, in regard to supply and purchase, of
         section 4 in Schedule 2 (form of licence) to the Option Agreement shall
         continue to apply until further agreement between the Parties.

 5.      INTELLECTUAL PROPERTY

 5.1     The Licensed Patent Rights shall remain vested in Novavax. Novavax
         shall at Novavax' cost and expense be solely responsible for the
         prosecution and maintenance of the Licensed Patent Rights and for the
         conduct of any claims or proceedings relating to it including any
         interference or opposition proceedings. Should Novavax decide at any
         time that it does not wish to prosecute or maintain any of the Licensed
         Patent Rights it shall notify Cantab in writing and Cantab shall have
         the right, insofar as any such patent is not maintained by Novavax or
         by a party in privity with Novavax having a right to maintain the same,
         to take-over at its own cost and expense the prosecution and
         maintenance of the Licensed Patent Rights or part thereof upon giving
         written notice to Novavax within 30 days of the date of Novavax'
         notice.

 5.2     Each of Novavax and Cantab shall as soon as practicable after it
         becomes aware thereof give to the other in writing reasonable
         particulars of any use or proposed use by another person which in that
         Party's view amounts to or might amount to an infringement of the
         Licensed Patent Rights. Novavax may, but shall not be obliged to, at
         its own cost and expense enforce and defend the Licensed Patent Rights.
         Where Novavax does, it shall notify Cantab and Cantab shall lend its
         name to any infringement proceedings and shall sign any documents that
         Novavax reasonably requests in relation to any such activity or
         proceedings and shall give Novavax all reasonable assistance requested
         by Novavax in relation to them (at no charge or expense to Novavax,
         other than with respect to reasonable out-of-pocket expenses, but
         Cantab shall not be bound to incur unreasonable expenses). Novavax
         shall keep Cantab informed of the progress of such enforcement or
         defence of the Licensed Patent Rights. If Novavax succeeds in any such
         proceedings whether at trial or by way of settlement, the parties shall
         negotiate in good faith for a reasonable share to Cantab of any sums
         recovered or awarded in respect of the infringement to compensate
         Cantab as well as Novavax for losses sustained by reason of the
         infringement, taking into account Cantab's interest relative to other
         interests in the Licensed IP and the nature of the infringement.

5.3      If Novavax decides not to enforce or defend the Licensed Patent Rights,
         it shall notify Cantab in writing and Cantab shall be entitled to do so
         at its own cost and expense upon

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         giving written notice to Novavax within 30 days of the date of Novavax'
         notice. Where Cantab does so, Novavax shall lend its name to any
         infringement proceedings and shall sign any documents that Cantab
         reasonably requests in relation to any such activity or proceedings and
         shall give Cantab all reasonable assistance requested by Cantab in
         relation to them (at no charge or expense to Cantab, other than with
         respect to reasonable out-of-pocket expenses, but Novavax shall not be
         bound to incur unreasonable expenses). If Cantab succeeds in any such
         proceedings whether at trial or by way of settlement, the parties shall
         negotiate in good faith for a reasonable share to Cantab of any sums
         recovered or awarded in respect of the infringement to compensate
         Cantab as well as Novavax for losses sustained by reason of the
         infringement, taking into account Cantab's interest relative to other
         interests in the Licensed IP and the nature of the infringement.

 5.4     If during the term of this Agreement either Party: (a) receives any
         notice, claim or proceedings from any third party alleging infringement
         of that third party's intellectual property as a result of either
         Party's activities or proposed activities in relation to this Agreement
         or use and exploitation of the Licensed Patent Rights; or (b) receives
         any information that could reasonably give rise to a potential claim or
         proceedings alleging such patent infringement, the Party receiving that
         notice shall:

 5.4.1   forthwith notify the other Party of such notice, claim or proceedings;
         and

 5.4.2   make no admission of liability.

         In the event of any such claim which alleges that the Licensed IP
         infringes such third party's patent or copyright, Novavax agrees to
         defend such claim and pay any settlement or judgment arising from such
         claim. Such obligation shall be subject to Novavax' receipt of prompt
         notice of such claim and its sole control of any such defence and/or
         the incurring of any expenses relating thereto. Such obligation shall
         not apply to any modification made to the Licensed IP, the method of
         practice of the Licensed IP by any person other than Novavax and/or the
         combination of any product provided by Novavax with any other product
         or technology.

 5.5     In the event of any such claim which alleges that the Licensed Product
         infringes such third party's intellectual property rights, Cantab
         agrees to defend such claim, pay any settlement or judgment arising
         from such claim and to indemnify and hold Novavax harmless from and
         against any and all liability, loss, damage or expense arising from
         such claim other than a claim arising solely from the Licensed IP or
         the Novasome Adjuvant. Such obligation shall be subject to Cantab's
         prompt notice of such claim and its sole control of any such defence
         and/or the incurring of any expenses relating thereto.

 6.      WARRANTIES

 6.1     Subject to the limitations set forth in Clause 11.2 hereto and to the
         disclosures set forth in Schedule 1 to this Agreement, Novavax warrants
         and undertakes as at the date of this Agreement that:-

<PAGE>   12
April 22 1999                                          Novavax/Cantab - page: 12

 6.1.1   to the best of its knowledge and belief, it is the sole owner with full
         title the Licensed IP and, to the best of its knowledge and belief, the
         use, exploitation or commercialisation of the Licensed IP under the
         terms of this Agreement will not infringe the rights of any third
         party, and Novavax has not received notice of any claim or threat of a
         claim by a third party alleging that the exploitation of the licensed
         IP would infringe such third party's intellectual property;

 6.1.2   it will use commercially reasonable efforts to apply for, pursue to
         grant, maintain and protect against infringement all Licensed Patent
         Rights except as permitted by this Agreement; and

 6.1.3   it will not, subject to Clause 10.5 of this Agreement, at any time
         during the term of this Agreement while Cantab is in compliance with
         its payment and confidentiality obligations hereunder, grant to any
         third party any right, title or licence to manufacture, use or exploit
         the Licensed IP within the Field in any manner whatsoever nor itself
         manufacture, use or exploit any Licensed Product, in the Field (except
         for the benefit of Cantab or except as permitted by this Agreement).

 6.2     Novavax will name a contact who shall be an authorized representative
         of Novavax to conduct Novavax's part in the contacts meetings and
         transfers of documentation and other arrangements with Cantab defined
         in clauses 7.1.6 and 7.1.7 below.

 7.      CANTAB'S OBLIGATIONS

 7.1     Cantab shall:-

 7.1.1   use all commercially reasonable endeavours to market, distribute,
         promote and sell the Licensed Product within the Field or procure the
         same through a sublicensee;

 7.1.2   only to appoint sub-licensees and distributors who have the requisite
         experience, staff and resources adequately to perform their obligations
         and who will use all reasonable efforts to market, distribute, promote
         and sell the Licensed Products;

 7.1.3   promptly notify Novavax of any infringement of the Licensed IP which
         may come to its attention;

 7.1.4   ensure that all Licensed Products sold and developed by it, its
         distributors or sub-licensees under this Agreement are of satisfactory
         quality and that the manufacture, distribution, promotion, marketing
         and sale of such product complies with all laws and regulations in
         operation in the jurisdiction in which they are supplied; and

 7.1.5   promptly notify Novavax of any product safety, regulatory or marketing
         information of which it becomes aware that has the potential adversely
         to affect sales of the Licensed Product;

 7.1.6   provide personnel including a named contact involved in the development
         of the Licensed Product for meetings with Novavax to review research
         and clinical testing results and developments, not less frequently than
         quarterly unless otherwise agreed between the named contact and the
         corresponding named contact from Novavax, which meetings each Party
         shall use commercially reasonable efforts to hold face-to-face (or if
         agreed impractical to hold face-to-face then by a conference call) at
         each Party's facility

<PAGE>   13
April 22 1999                                          Novavax/Cantab - page: 13

         on an alternating basis. Cantab and Novavax shall include in their
         periodical meetings and reviews under this agreement consideration and
         negotiation in good faith of appropriate performance obligations by
         Cantab concerning the achievement of milestones 3.2.2-3.2.4;

 7.1.7   provide, not less frequently than quarterly, any research reports,
         study records, or other material documents in its possession related to
         the Novavax Materials, by reliable overnight delivery service;

 7.1.8   at Cantab's own expense, comply with, and ensure that each sub-licensee
         and/or distributor complies with, all laws, regulations, rules,
         ordinances or directives relating to the manufacture, marketing, sale
         or distribution of Licensed Products, including any laws, regulations,
         rules, ordinances or directives relating to the export or import of
         Licensed Products to or from any country and/or relating to the recall
         of any Licensed Product.

 7.1.9   Cantab agrees to use its commercially reasonable endeavours to find and
         enter agreement with a suitable sublicensee, and to use its
         commercially reasonable endeavours to ensure that the studies necessary
         for the achievement of milestones 3.2.2 to 3.2.4 inclusive are carried
         out.

 8.      LIABILITY

 8.1     Cantab shall indemnify and hold harmless Novavax against all liability,
         damages or claims arising from the use of the Licensed IP by Cantab for
         research or clinical studies and subsequently by the exploitation of
         the Licensed Product save and to the extent where any such liability
         arises solely from the negligence or willful default of Novavax or
         otherwise by reason of any breach by Novavax of warranties given in
         this Agreement.

 8.2     Novavax shall indemnify and hold harmless Cantab against all liability,
         damages or claims arising from the use and exploitation of the Licensed
         IP authorized under the terms of this Agreement or the sale by Cantab
         (or any sublicense or distributor) of Licensed Product incorporating
         Novasomes Adjuvant manufactured by Novavax where such liability arises
         from the negligence or willful default of Novavax or otherwise by
         reason of any breach by Novavax of warranties given in this Licence
         Agreement.

 8.3     Neither party shall be liable to the other in contract, tort,
         negligence, breach of statutory duty or otherwise for any loss, damage,
         cost or expense of any nature incurred or suffered by that party of an
         indirect or consequential nature including any economic loss or other
         loss of turnover, profits, business or goodwill.

         Notwithstanding anything to the contrary in this Agreement, Novavax
         shall not be liable to Cantab for any amount in excess of the greater
         of the amount actually received by Novavax pursuant to this Agreement
         or US$1,000,000.

<PAGE>   14
April 22 1999                                          Novavax/Cantab - page: 14

 8.4     Each party acknowledges that it shall be solely responsible for the
         performance of its obligations under this Agreement on its premises
         including (without prejudice to the generality of the foregoing) the
         health and safety of its employees and all other regulatory, legal and
         other requirements (including without limitation all health and safety
         and environmental legislation and guidelines) relating to the
         performance of its obligations under this Agreement and that the other
         party shall be in no manner responsible for the same.

 9.      CONFIDENTIALITY AND SECURITY

 9.1     Each Party (the "Recipient Party") shall keep the Confidential
         Information of the other Party (the "Disclosing Party") secret and
         confidential and shall not without the prior consent of the other Party
         directly or indirectly disclose or permit the same to be disclosed to
         any third party for any reason or use the same save as expressly
         provided by this Agreement or the Option Agreement or the Materials
         Transfer Agreement.

 9.2     The obligations of confidence referred to in Clause 9.1 shall not
         extend to all or any part of such Confidential Information which:-

 9.2.1   is or becomes generally available to the public otherwise than by
         reason of breach by the Recipient Party of the provisions of this
         Agreement;

 9.2.2   the Recipient Party can show by documentary evidence was within its
         possession or control prior to the date upon which it was received from
         the disclosing party free from any obligation of confidentiality; or
         which the recipient party can show by documentary evidence came into
         its possession or control from a third party free from any obligation
         of confidentiality by such third party subsequent to the date of the
         Option Agreement; or

 9.2.3   is subsequently disclosed to the Recipient Party without obligations of
         confidence by a third party owing no such obligations to the Disclosing
         Party in respect of that Confidential Information.

         The Recipient Party may disclose Confidential Information to the extent
         such is required by law to be disclosed (including as part of any
         regulatory submission or approval process) and then only after prompt
         written notice of this requirement has been given to the Disclosing
         Party so that it may, if so advised, seek appropriate relief to prevent
         such disclosure provided always that in such circumstances such
         disclosure shall be only to the extent so required and shall be subject
         to prior consultation with the Disclosing Party with a view to agreeing
         timing and content of such disclosure.

 9.3     The obligations of the Parties under Clause 9.1 shall survive the
         expiration or termination of this Agreement for whatever reason for a
         period expiring at the earlier of

<PAGE>   15
April 22 1999                                          Novavax/Cantab - page: 15

         five years following such termination or expiration or ten years
         following disclosure of the Confidential Information.

 10.     TERMINATION

 10.1    Cantab shall have the right to terminate its rights and obligations
         under this Agreement in respect of any part (or the whole) of the
         Licensed IP on 120 days written notice. In the event of any partial
         termination the rights and obligations of Cantab shall cease in respect
         of any terminated part but shall continue thereafter in accordance with
         the terms of this Agreement in respect of any and all non-terminated
         parts of the Licensed IP.

 10.2    Cantab shall have the right to terminate this Agreement upon giving
         written notice of termination to Novavax in the event Novavax commits a
         material breach of this agreement which is not cured within 30 days of
         Novavax's receipt of written notice of breach from Cantab identifying
         the breach and requiring its remedy.

 10.3    Novavax shall have the right to terminate this Agreement upon giving
         written notice of termination to Cantab upon the occurrence of any of
         the following events at any time during this Agreement:-

 10.3.1  Cantab commits a breach of this Agreement relating to the payment of
         money actually due to Novavax which shall not have been cured within 5
         days of receipt by Cantab of written notice of breach from Novavax
         identifying the breach and requiring its remedy;

 10.3.2  Cantab commits any material breach of this Agreement, other than a
         breach specified in clause 10.3.1, which shall not have been remedied
         within 30 days of the receipt by Cantab of a written notice from
         Novavax identifying the breach and requiring its remedy; or

 10.3.3  if an Insolvency Event occurs in relation to Cantab.

 10.4    In the event of any termination hereunder, Cantab shall promptly return
         all Novavax Confidential Information to Novavax. The license granted
         hereunder shall cease immediately upon such termination and Cantab
         shall no longer have any right or interest to use any Licensed IP or to
         manufacture, sell, market, distribute or sublicense the Licensed
         Product; provided however, that Cantab (and/or its sublicensee) shall
         have the right to continue to sell Licensed Product which has already
         been manufactured, for a period of 30 days after the effective date of
         such termination, subject to the continued applicability of Clause 3 of
         this Agreement to any such sale and time period. In case of partial
         termination under clause 10.1, this subclause applies only to the
         terminated part. Termination of this Agreement, in whole or in part,
         shall be without prejudice to obligations and/or rights accrued prior
         to the effective date of such termination.
<PAGE>   16
April 22 1999                                          Novavax/Cantab - page: 16

 10.5    Novavax shall have the right, at its option, in the event Cantab
         breaches its obligations under Clause 3.4 of this Agreement to convert
         the license granted herein to a non-exclusive license, which shall
         result in the termination of Novavax' obligations under Clause 6.1.3 of
         this Agreement. Such right shall be in addition to any other right
         Novavax may have under this Agreement.

         Beginning in 2004, in the event that Cantab does not, directly or
         indirectly, commence sales and/or marketing of a Licensed Product in a
         country in which such sales and/or marketing are planned (a 'Planned
         Country'), within six months of the date such sales or marketing are
         planned in accordance with Cantab's (or its sublicensee's) marketing
         plan, as delivered to Novavax in accordance with Clause 7.1.7 of this
         Agreement, which failure to commence sales and/or marketing is not
         caused directly by the inability to obtain regulatory approval
         necessary to commence such sales and/or marketing after commercially
         reasonable efforts to obtain such approval ('regulatory approval
         failure'), the Parties hereto shall promptly commence and diligently
         pursue discussion regarding such event. Such discussions shall include
         whether commercialization of the Licensed Products is reasonable with
         respect to the Planned Country and whether the exclusivity set forth in
         Clauses 2.1 and 6.1.3 should continue to apply to the Planned Country.
         In the event that Cantab and Novavax do not agree to an alternative
         plan during the period of 24 months from the date of the planned sale
         and/or marketing in the Planned Country, Novavax shall have the right,
         upon 10 days written notice to Cantab at the expiration of such 24
         month period, if sales and/or marketing in the Planned Country have
         not yet commenced and if such failure is not caused directly by
         regulatory approval failure, to convert the license granted herein to a
         non exclusive license with respect to the Planned Country, which shall
         result in the termination of Novavax's obligations under Clause 6.1.3
         of this Agreement with respect to the Planned Country.

 11.     GENERAL

 11.1    This Agreement shall be deemed to have effect from the date hereof and
         shall supersede any other agreement whether written or oral with
         respect to the performance of their respective obligations by the
         parties provided that for the avoidance of doubt the Confidentiality
         Agreements and the Materials Transfer Agreement (save only as expressly
         amended by this Agreement) and clause 4 of Schedule 2 of the Option
         Agreement together with clauses 3.1, 5.1 and 8.2.1 of the Option
         Agreement shall remain in full force and effect in accordance with
         their terms.

 11.2    Each party acknowledges that in entering into this Agreement it does
         not do so on the basis of and does not rely on any representation,
         warranty or other provision save as expressly provided herein and all
         conditions, warranties and other terms implied by statute or common law
         are hereby excluded to the fullest extent permitted by law.

 11.3    Any notice given under this Agreement shall be sufficiently served if
         in writing and sent

<PAGE>   17
April 22 1999                                          Novavax/Cantab - page: 17

         by both facsimile transmission and air mail post or courier to the
         address and fax number of the recipient party set out below:

         NOVAVAX, INC.
         8320 Guilford Road, Suite C
         Columbia, MD 21046 USA
         Fax No.: (00)(1) 301-854-3901

         CANTAB PHARMACEUTICALS RESEARCH LIMITED
         310 Cambridge Science Park
         Milton Road, Cambridge CB4 OWG
         Fax No.: (01l)(44) 1223 423458

         Notice of any modification or amendment to the address or fax number of
         a party must itself be made in writing to the other party in accordance
         with the terms of this Clause.

 11.4    Neither party is authorised to act as the agent of the other for any
         purpose whatsoever and neither party shall on behalf of the other enter
         into, or make, or purport to enter into or make or represent that it
         has any authority to enter into or make any contract or any
         representation or warranty. Nothing in the Agreement shall be deemed to
         constitute a partnership between the other parties and neither of the
         parties shall do or suffer to be done anything whereby it may be
         represented as a partner of the other party.

 11.5    Each of the parties shall bear its own cost and expenses incidental to
         the preparation, negotiation and execution of this Agreement and the
         Supply Agreement.

 11.6    This Agreement is personal to Cantab and shall not be capable of
         assignment, sublicensing (subject and without prejudice to Section 2.2
         of this Agreement) or transfer by Cantab (whether in whole or in part)
         without the prior written consent of Novavax, which shall not be
         unreasonably withheld. Cantab shall have the right to assign or
         transfer this Agreement to an entity into which it is merged or which
         acquires all or substantially all of the assets of the business line
         using the Licensed IP or all or substantially all of Cantab's capital
         stock. Cantab shall give Novavax not less than 45 days advanced written
         notice of any such proposed merger or sale. Novavax agrees to notify
         Cantab in writing within 20 days of receipt of a notice of a proposed
         merger or sale from Cantab, whether the party with which Cantab
         proposes entering such merger or sale transaction is a competitor of
         Novavax, involved in the field of adjuvants, and whether Novavax
         objects to such assignment or transfer of this Agreement on the basis
         that such would result in confidential, proprietary or non-public
         information becoming known by a competitor. If Novavax so objects,
         Cantab shall notify Novavax within 10 days of receipt of Novavax's
         notice whether it intends to complete the sale or merger. In the event
         Cantab does not provide Novavax such notice or notifies Novavax that
         it intends to complete such merger or sale, Novavax may, upon 10 days
         notice to Cantab,

<PAGE>   18
April 22 1999                                          Novavax/Cantab - page: 18

         terminate this Agreement and the license granted hereby, such
         termination to take effect immediately before said sale or merger.

 11.7    Any agreement to amend, vary or modify the terms of this Agreement in
         any manner shall be valid only if the amended, variation or
         modification is effected in writing and signed by duly authorised
         representatives of each of the parties hereto.

 11.8    No delay by either party in enforcing any of the provisions of this
         Agreement shall be deemed a waiver of that party's right subsequently
         to enforce such provision.

 11.9    If any term or provision or any part thereof contained herein shall be
         declared or become unenforceable invalid or illegal in any respect
         under the law of any relevant jurisdiction: (i) such term or provision
         or part thereof shall be deemed to have been severed from the remaining
         terms of this Agreement and the terms and conditions hereof shall
         remain in full force and effect as if this Agreement had been executed
         without the offending provision appearing herein; and (ii) the parties
         shall endeavour to agree and amend which to the fullest extent possible
         will give lawful effect to their intentions as expressed in any term or
         provision severed under this Clause 11.9.

 11.10   Any controversy or claim of whatsoever nature arising out of or
         relating in any manner whatsoever to this Agreement or any breach of
         any terms of this Agreement shall be governed by and construed in all
         respects in accordance with the laws of England, except that claims or
         controversies arising out of or relating to Cantab's obligations of
         confidentiality and non-disclosure hereunder shall be governed by and
         construed in all respects in accordance with the laws of the State of
         Maryland, USA. At the request of either party, any claim, dispute or
         controversy arising out of or in connection with this Agreement or a
         breach thereof shall be settled by arbitration conducted in London in
         accordance with the commercial arbitration rules then in effect of the
         American Arbitration Association. The costs of arbitration shall be
         divided equally between the parties except that the arbitrator(s) shall
         have the authority to allocate the costs according to equitable
         principles upon the request by either party. The arbitrator(s) shall
         have the express authority to award equitable remedies at the request
         of either party.

[Schedule 1 follows next:]

<PAGE>   19
April 22 1999                                          Novavax/Cantab - page: 19

SCHEDULE 1
LICENSED PATENT RIGHTS

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
USA Patent                    Patent Title                             Date of          USA            EC
  Number                                                             Issuance in     Expiration     Expiration
                                                                         USA            Date           Date
---------------------------------------------------------------------------------------------------------------
<S>             <C>                                                  <C>            <C>             <C>
4,853,228       Method of Manufacturing Paucimellar Lipid            8/1/89          7/28/07
                Vesicles

---------------------------------------------------------------------------------------------------------------
4,855,090       Method of Producing High Aqueous Volume              8/8/69          3/13/07
                Multilamellar Vesicles

---------------------------------------------------------------------------------------------------------------
4,895,452       Method and Apparatus for Producing Lipid             1/23/90         3/3/08
                Vesicles

---------------------------------------------------------------------------------------------------------------
4,911,928       Paucilamellar Lipid Vesicles                         3/27/90         3/7/07

---------------------------------------------------------------------------------------------------------------
4,917,951       Lipid Vesicles Formed of Surfactants and             4/17/90         11/24/07
                Steroids

---------------------------------------------------------------------------------------------------------------
5,000,960       Protein Coupling Lipid Vesicles                      3/19/91         1/19/09

---------------------------------------------------------------------------------------------------------------
5,013,497       Method and Apparatus for Producing Lipid             5/7/91
                Vesicles

---------------------------------------------------------------------------------------------------------------
5,032,457       Paucilamellar Lipid Vesicles Using Charge-           8/16/91         7/16/06
                localised, single chain, non-phospholipid
                Surfaciants

---------------------------------------------------------------------------------------------------------------
5,104,736       Reinforced paucilamellar Lipid Vesicles              4/14/92         6/26/09

---------------------------------------------------------------------------------------------------------------
4,147,723       Paucilamellar Lipid Vesicles                         9/15/92         6/8/06

---------------------------------------------------------------------------------------------------------------
5,234,767       Hybrid Paucilamellar Lipid Vesicles                  8/10/93         3/27/07

---------------------------------------------------------------------------------------------------------------
5,256,422       Lipid Vesicles Containing Water-in-Oil               10/23/93        3/28/11
                Emulsions

---------------------------------------------------------------------------------------------------------------
5,474,848       Paucilamellar Lipid Vesicles                         12/12/95        3/13/07        3/8/08

---------------------------------------------------------------------------------------------------------------
5,561,062       Method of Inhibiting viral Reproduction Using        10/1/96         10/1/93
                non-phospholipid Paucilamellar Liposomes

---------------------------------------------------------------------------------------------------------------
,*NVR-          Vaccines Containing Paucilamellar Lipid              *CIP
213CP           Vesicles as Immunological Adjuvants

---------------------------------------------------------------------------------------------------------------
</TABLE>

OTHER LICENSED PATENT AND APPLICATIONS INCLUDE:
European Patents and Applications:      PCT Applications:
0 349 583                               WO 88/06881
0 349 579                               WO 88/06882
0 352 282                               WO 88/06883
0 406 273                               WO 89/07929
0 746 338                               WO 95/22989
                                        WO 91/04013

Disclosure: L'Oreal opposed European Patent No 0 352 282 of Micro-Pak, Inc. Such
opposition was denied. L'Oreal has appealed such denial.

DISCLOSURE: NOVAVAX HAS LEARNED OF THE FOLLOWING PATENTS AND/OR APPLICATIONS,
WHICH INCLUDE CLAIMS WHICH MAY BE ARGUED TO BE EMCOMPASSED BY THE LICENSED IP:
US PATENT NO. 5,579,353 (WITH WO3/19781) AND W095/109751. NOVAVAX BELIEVES THAT
TO THE EXTENT THAT ANY SUCH CLAIMS WOULD BE INFRINGED BY THE LICENSED
PRODUCTS, SUCH CLAIMS MAY NOT BE VALID

<PAGE>   20
April 22 1999                                          Novavax/Cantab - page: 20

   ==========================================================================

IN WITNESS WHEREOF the Parties have caused this Licence Agreement to be
executed:

         for and on behalf of Novavax, Inc.: [date] 29 April 1999
         [signature]     /s/ Mitchell J. Kelly
                        --------------------------------------------

         [name and official position of signatory]
          Mitchell J. Kelly             President & CEO
         -----------------------------------------------------------

         for and on behalf of Cantab Pharmaceuticals Research Limited
         [date] 22 April 1999
         [signature]     /s/ Jurek S. Sikorski
                        --------------------------------------------

         [name and official position of signatory]
          Jurek S. Sikorski         CHIEF EXECUTIVE OFFICER
         -----------------------------------------------------------

         This Agreement is endorsed in accordance with its terms with an
         execution for and on behalf of Novavax Inc.'s subsidiaries Micro-Pak,
         Inc. and Micro Vesicular Systems, Inc., who agree to be bound hereby to
         the extent within written:-

         for and on behalf of Micro-Pak, Inc. [date] 29 April 1999
         [signature]     /s/ Mitchell J. Kelly
                        --------------------------------------------

         [name and official position of signatory]
          Mitchell J. Kelly             President
         -----------------------------------------------------------

         for and on behalf of Micro Vesicular Systems, Inc. [date] 29 April 1999
         [signature]      /s/ Mitchell J. Kelly
                        --------------------------------------------

         [name and official position of signatory]
          Mitchell J. Kelly             President
         -----------------------------------------------------------<PAGE>   1
                           STOCK AND WARRANT PURCHASE AGREEMENT

         This Stock and Warrant Purchase Agreement (the "Agreement") is made as
of January 28, 2000 between Novavax, Inc., a Delaware corporation (the
"Company"), and the purchasers who are signatories hereto (the "Purchasers").

         WHEREAS, the Company wishes to sell and the Purchasers desire to
purchase shares (the "Shares") of the Company's Common Stock, $.01 par value per
share ("Common Stock") and Warrants (as defined in Section 1.3), as such are
being offered by the Company pursuant to an Offering Circular dated January 4,
2000 (together with its Appendices, the "Offering Circular");

         NOW, THEREFORE, the parties hereto hereby agree as follows:

          1.  Purchase and Sale of Shares and Warrants.

                  1.1 Sale to the Purchasers. Subject to the terms and
conditions hereof, the Company will issue and sell to each Purchaser the number
of Shares set forth opposite such Purchaser's name on the signature page hereto
at a purchase price of $4.00 per share (the "Purchase Price") and a Warrant to
purchase the number of shares of Common Stock as set forth opposite such
Purchaser's name on the signature page hereto. The obligations of each Purchaser
hereunder are several and not joint and no Purchaser shall be obligated to
purchase any number of Shares in excess of the number set forth opposite such
Purchaser's name on the signature page hereto.

                  1.2 Aggregate Sale. Pursuant to this Agreement, the Company
shall sell an aggregate number of Shares not less than 1,500,000 Shares for an
aggregate Purchase Price of $6,000,000 (the "Minimum Investment Amount") nor
more than 2,500,000 Shares for an aggregate Purchase Price of $10,0000,000 (the
"Maximum Investment Amount").

                  1.3 Warrant Coverage. In consideration of the purchase by each
Purchaser of the Shares to be purchased by it, and of fifty dollars, the Company
agrees to issue such Purchaser at Closing a warrant (the "Warrant") to purchase
the number of shares of Common Stock, rounded down to the nearest whole number
(the "Warrant Shares"), equal to the product of (x) .25 and (y) the number of
Shares purchased by such Purchaser. The Warrant shall be exercisable for a term
of three years from the date of issuance at an exercise price equal to $6.75 per
share.

                  1.4 Payment of Purchase Price. On or prior to the Closing
Date, each Purchaser will deliver to Continental Stock Transfer & Trust Co., as
Escrow Agent (the "Escrow Agent") the full amount of the aggregate Purchase
Price for the Shares purchased by such Purchaser hereunder, by wire transfer of
funds or by check to Jesup & Lamont Securities Corporation (the "Placement
Agent"). The Purchase Price shall be maintained in a segregated account until
the Closing Date and shall be released either (a) upon the consummation of the
transaction contemplated hereunder; or (b) upon the termination of this
Agreement in accordance with Section 7.

          2.  Closing Date and Delivery.

                  2.1 Closing Date. The closing of the purchase and sale of the
Shares and Warrants hereunder (the "Closing") will be held at such time (the
"Closing Date") as shall be agreed upon by the Company, Jesup & Lamont

<PAGE>   2

Securities Corporation (the "Placement Agent") and the Purchasers at the offices
of the Placement Agent, 650 Fifth Avenue, New York, NY 11019. The Closing Date
shall occur upon the Closing of the sale of Shares resulting in the Maximum
Investment Amount (or such lesser amount as determined by the Company, but not
less than the Minimum Investment Amount), but in no event shall the Closing Date
be later than March 10, 2000.

                  2.2 Deliveries at Closing. At the Closing the Company shall
deliver the following to each Purchaser: (a) a stock certificate registered in
such Purchaser's name, or in such nominee name(s) as designated by the Purchaser
in writing, representing the Shares purchased by such Purchaser; (b) a Warrant
in such Purchaser's name, or in such nominee name(s) as designated by the
Purchaser in writing; (c) an opinion of White & McDermott, P.C. dated the
Closing Date and substantially in the form attached hereto as Exhibit A
("Opinion of Counsel"); and (d) a certificate, signed by the President of the
Company, to the effect that (i) the representations and warranties of the
Company contained in this Agreement are true and correct in all material
respects on and as of the Closing Date as though newly made on and as of that
date (except for representations and warranties which speak as of the date of
the Agreement or as of another specific date or period, which shall continue to
be true and correct in all material respects as of the respective dates and for
the respective periods covered thereby) and (ii) the Company has performed and
complied with, in all material respects, all of its covenants contained in this
Agreement and required to be performed or complied with on or before the
Closing. Each Purchaser's obligation to purchase the Shares shall be subject to
the following conditions: (a) the accuracy of the representations and warranties
made by the Company herein and the fulfillment of those undertakings of the
Company to be fulfilled prior to Closing; and (b) delivery of the Opinion of
Counsel.

                      Upon satisfaction of all the conditions to Closing set
forth in this Agreement and the delivery of the certificates representing the
Shares and of the Warrants to the Purchaser, the Escrow Agent shall be directed
to deliver to the Company the Purchase Price for the Shares, less the Placement
Agent fee due to the Placement Agent and any expense that the Company has agreed
to reimburse to the Placement Agent and its counsel, which the Escrow Agent
shall pay directly to them in accordance with the Company's engagement letter
with the Placement Agent.

          3. Representations and Warranties by the Company. The Company
represents and warrants to each Purchaser as of the date hereof and as of the
Closing Date that:

                  3.1 Organization and Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has the requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. The Company is qualified to do business and is in good standing as a
foreign corporation in every jurisdiction in which the failure to so qualify
would have a material adverse effect on the financial condition or business of
the Company.

                  3.2 Changes. Except as set forth in the Offering Circular,
since September 30, 1999, the Company has not, to the extent material to the
Company, (i) incurred any debts, obligations or liabilities, absolute, accrued
or contingent, whether due or to become due, other than in the ordinary course
of business, (ii) mortgaged, pledged or subjected to lien, charge, security
interest or other encumbrance any of its assets, tangible or intangible, (iii)
waived any debt owed to the Company or its subsidiaries, (iv) satisfied or
discharged any lien, claim or encumbrance or paid any obligation other than in
the ordinary course of business, (v) declared or paid any dividends, or (vi)
entered into any transaction other than in the usual and ordinary course of
business.
<PAGE>   3

                  3.3 Litigation. Except as set forth in the Disclosure
Schedule, there are no legal actions, suits, arbitrations or other legal,
administrative or governmental proceedings pending or, to the best of the
Company's knowledge, threatened against the Company or its properties, assets or
business, and the Company is not aware of any facts which might result in or
form the basis for any such action, suit or other proceeding, in each case
which, if adversely determined, would individually or in the aggregate have a
material adverse effect on the financial condition or business of the Company.

                  3.4 Compliance with Other Instruments. Except for such matters
which, either individually or in the aggregate, would not have a material
adverse effect on the financial condition or business of the Company, the
execution and delivery of, and the performance and compliance with, this
Agreement and the Warrants and the transactions contemplated hereby or thereby,
with or without the giving of notice or passage of time, will not (i) result in
any breach of, or constitute a default under, or result in the imposition of any
lien or encumbrance upon any asset or property of the Company pursuant to any
agreement or other instrument to which the Company is a party or by which it or
any of its properties, assets or rights is bound or affected, (ii) violate the
Certificate of Incorporation or Bylaws of the Company, or any law, rule,
regulation, judgment, order or decree, or (iii) except for the registration of
the Shares and the Warrant Shares under the Securities Act of 1933, as amended
(the "Securities Act"), the listing of the Shares and the Warrant Shares on the
American Stock Exchange, Inc. and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and applicable state securities
laws in connection with the purchase of the Shares and the Warrants by the
Purchasers, require any consent, approval, authorization or order of or filing
with any court or governmental agency or body. The Company is not in violation
of its Certificate or Bylaws nor in violation of, or in default under, any lien,
mortgage, lease, agreement or instrument, except for such defaults which would
not, individually or in the aggregate, have a material adverse effect on the
financial condition or business of the Company. The Company is not subject to
any restriction which would prohibit the Company from entering into or
performing its obligations under this Agreement or the Warrants, except for such
restrictions which would not, individually or in the aggregate, have a material
adverse effect on the ability of the Company to perform their obligations under
this Agreement and the Warrants.

                  3.5 Reports and Financial Statements. The Company has
delivered to the Purchasers true and complete copies of the Company's Form 10-K
for the year ended December 31, 1998, the Company's Proxy Statement in
connection with the 1999 Annual Meeting of Stockholders and all Forms 10-Q and
8-K filed by the Company with the Securities and Exchange Commission (the "SEC")
after January 1, 1999, in each case without exhibits thereto (the "SEC
Reports"). As of their respective filing dates, the Company SEC Reports were
prepared in all material respects in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Company SEC Reports. The
Company SEC Reports, when read as a whole, as updated by the Offering Circular,
do not contain any untrue statements of a material fact and do not 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 audited
consolidated financial statements and unaudited interim financial statements of
the Company included in the Company SEC Reports have been prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis (except as may be indicated therein or in the notes thereto)
and fairly present, in all material respects, the financial position of the
Company as at the dates thereof and the results of its operations and cash flows
for the periods then ended subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments and any other adjustments
described in such financial statements.
<PAGE>   4

                  3.6 Shares. The Shares and the Warrant Shares, when issued and
paid for pursuant to the terms of this Agreement or the Warrants, as the case
may be, will be duly and validly authorized, issued and outstanding, fully paid,
nonassessable and free and clear of all pledges, liens, encumbrances and
restrictions (other than arising under federal or state securities laws). The
authorized capital stock of the Company, including the Shares, conforms, and
when issued, the Warrant Shares will conform, to all statements relating thereto
included in the Offering Circular. The issuance of the Shares, the Warrants and
the Warrant Shares is not subject to any preemptive or other similar rights. The
Company has duly reserved 875,000 shares of its authorized but unissued Common
Stock for issuance upon exercise of the Warrants by the Purchasers and the
Placement Agent, and such shares shall remain so reserved (subject to reduction
from time to time for Common Stock issued upon the exercise of the Warrants), as
long as the Warrants are exercisable.

                  3.7 Securities Laws. Subject to the accuracy of the
representations and warranties of the Purchasers contained in Article 4 of this
Agreement, the offer, sale and issuance of the Shares, the Warrants and the
Warrant Shares as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act, and from the registration or
qualifications requirements of the laws of any applicable state or other U.S.
jurisdiction.

                  3.8 Capital Stock. As of November 30, 1999, 15,011,389 shares
of the Company's Common Stock were issued and outstanding, no shares of the
Company's Preferred Stock were issued and outstanding, options to purchase
3,936,741 shares of the Company's Common Stock were issued and outstanding and
warrants to purchase 1,712,775 shares of the Company's Common Stock were issued
and outstanding. All of the outstanding shares of the Company's capital stock
are validly issued, fully paid and nonassessable. Except as set forth in this
Section 3.8 or the Offering Circular, as of November 30, 1999, there are no
outstanding subscriptions, options, warrants, calls, contracts, demands,
commitments, conversion rights or other agreements or arrangements of any
character or nature whatever under which the Company is or may be obligated to
issue its Common Stock, Preferred Stock or warrants or options to purchase
Common Stock or Preferred Stock. No holder of any security of the Company is
entitled to any preemptive or similar rights to purchase any securities of the
Company.

                  3.9 Corporate Acts and Proceedings. This Agreement has been
duly authorized by the requisite corporate action and has been duly executed and
delivered by an authorized officer of the Company, and is a valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and as to limitations on the enforcement of the remedy of
specific performance and other equitable remedies. The requisite corporate
action necessary to the authorization, reservation, issuance and delivery of the
Shares, the Warrants and the Warrant Shares has been taken by the Company. Upon
execution and delivery thereof by a duly authorized officer of the Company, the
Warrants will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and as to limitations
on the enforcement of the remedy of specific performance and other equitable
remedies.

                  3.10 No Implied Representations. All of the Company's
representations and warranties are contained in this Agreement, and no other
representations or warranties by the Company shall be implied.

<PAGE>   5

                  3.11 Filing of Reports. Since the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996, the Company has filed
with the SEC all reports and other material required to be filed by it therewith
pursuant to Section 13, 14 or 15(d) of the Exchange Act and the Company is
eligible to register the offer and resale of the Shares and the Warrant Shares
on a Registration Statement on Form S-3, or a successor form.

                  3.12 Compliance with Laws. The business and operations of the
Company have been conducted in accordance with all applicable laws, rules and
regulations of all governmental authorities, except for such violations which
would not, individually or in the aggregate, have a material adverse effect on
the financial condition or business of the Company.

                  1.13 Offering Circular. The information contained in the
Offering Circular is true and correct in all material respects; and the Offering
Circular does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statement therein, in light of the circumstances under which they were made, not
misleading.

                  1.14 Closing Date. All the representations and warranties made
by the Company in this Section 3 shall be true and complete from the date of
this Agreement through the Closing Date and the Company shall provide each
Purchaser, before the Closing, with any documents or information necessary for
such representations and warranties to remain true and complete as of the
Closing Date.

                  3.15 Proprietary Rights. The Company owns or is licensed to
use all patents, patent applications, inventions, trademarks, trade names,
applications for registration of trademarks, service marks, service mark
applications, copyrights, know-how, manufacturing processes, formulae, trade
secrets, licenses and rights in any thereof and any other intangible property
and assets (herein called the "Proprietary Rights") which are material to the
business of the Company, as now conducted or as proposed to be conducted. The
Company does not have any knowledge of, and the Company has not given or
received any notice of, any pending conflicts with or infringement of the rights
of others with respect to any Proprietary Rights or with respect to any license
of Proprietary Rights. No action, suit, arbitration, or legal, administrative or
other proceeding, or investigation is pending or, to the knowledge of the
Company, threatened, which involves any Proprietary Rights. The Company is not
subject to any judgment, order, writ, injunction or decree of any court or any
Federal, state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or any
arbitrator, has not entered into or is a party to any contract which restricts
or impairs the use of any such Proprietary Rights in a manner which would have a
material adverse effect on the use of any of the Proprietary Rights. To the
knowledge of the Company, no Proprietary Rights used by the Company, and no
services or products sold by the Company, conflict with or infringe upon any
proprietary rights owned or licensed by any third party. The Company has not
received written notice of any pending conflict with or infringement upon such
third-party proprietary rights. No claims have been asserted by any person with
respect to the validity of the Company's ownership or right to use the
Proprietary Rights and, to the knowledge of the Company, there is no reasonable
basis for any such claim to be successful. To the knowledge of the Company, the
Proprietary Rights are valid and enforceable.

         3.16 Compliance with Environmental Laws. Except as would not, singly or
in the aggregate, have a material adverse effect on the Company, the Company is
not in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to the Company's knowledge,
no expenditures material to the Company are or will be required to comply with
any such existing statute, law or regulation. To the Company's knowledge, the
Company does not have any liability to any governmental authority or other third
party

<PAGE>   6

arising under or as a result of any such past or existing statute, law or
regulation, which liability would be material to the Company.

                  3.17 Permits, Licenses, Etc. The Company owns, possesses or
has obtained, and is operating in compliance with, all governmental,
administrative and third party licenses, permits, certificates, registrations,
approvals, consents and other authorizations (collectively, "Permits") necessary
to own or lease (as the case may be) and operate its properties, whether
tangible or intangible, and to conduct its businesses or operations as currently
conducted, except such licenses, permits, certificates, registrations,
approvals, consents and authorizations the failure of which to obtain would not
have a material adverse effect on the business, properties, operations,
financial condition or results of operations of the Company, and the Company has
not received any notice of proceedings relating to the revocation, modification
or suspension of any Permits or any circumstance which would lead it to believe
that such proceedings are reasonably likely.

                  3.18 Insurance. The Company maintains insurance of the type
and in the amount reasonably adequate for its business, including, but not
limited to, insurance covering all real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.

                  3.19 Registration Rights. Except as set forth in the
Disclosure Schedule, there are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration Statement
or otherwise registered by the Company under the Securities Act.

          4. Representations and Warranties by the Purchasers; Restrictions on
Transfer.

          Each Purchaser severally represents and warrants to, and covenants and
agrees with, the Company, as of the Closing Date, as follows:

                  4.1 Authorization. Purchaser has all requisite legal and
corporate or other power and capacity and has taken all requisite corporate or
other action to execute and deliver the Agreement, to purchase the Shares and
the Warrants to be purchased by it and to carry out and perform all of its
obligations under the Agreement. This Agreement constitutes the legal, valid and
binding obligation of Purchaser, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and as to limitations on the enforcement of the
remedy of specific performance and other equitable remedies.

                  4.2 Accredited Investor Status. Purchaser is an "Accredited
Investor" as defined in Rule 501 of Regulation D under the Securities Act.
Purchaser acknowledges receiving and reviewing the Offering Circular (including
its Appendices). Purchaser is aware of the Company's business affairs and
financial condition and has had access to and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to
acquire the Shares and the Warrants. Purchaser has such business and financial
experience as is required to give it the capacity to protect its own interests
in connection with the purchase of the Shares and the Warrants and is able to
bear the risks of an investment in the Shares and the Warrants. Purchaser is not
itself a "broker" or a "dealer" as defined in the Exchange Act of 1934 and is
not an "affiliate" of the Company as defined in Rule 405 of the Securities Act.
<PAGE>   7

                  4.3 Investment Intent. Purchaser is purchasing the Shares and
the Warrants for its own account as principal, for investment purposes only, and
not with a present view to or for resale, distribution or fractionalization
thereof, in whole or in part, within the meaning of the Securities Act.
Purchaser understands that its acquisition of the Shares and the Warrants has
not been registered under the Securities Act or registered or qualified under
any state securities law in reliance on specific exemptions therefrom, which
exemptions may depend upon, among other things, the bona fide nature of
Purchaser's investment intent as expressed herein. Purchaser has, in connection
with its decision to purchase the number of Shares and the Warrants set forth in
this Agreement, relied solely upon the Offering Circular and the representations
and warranties of the Company contained herein. Purchaser will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Shares or Warrants, except in compliance with the Securities Act and the rules
and regulations promulgated thereunder.

                  4.4 Registration or Exemption Requirements. Purchaser further
acknowledges and understands that neither the Shares nor the Warrants may be
resold or otherwise transferred except in a transaction registered under the
Securities Act or unless an exemption from such registration is available.
Purchaser understands that until the Shares and Warrant Shares have been
registered for resale by the Purchasers in compliance with applicable securities
laws, the certificates evidencing the Shares, the Warrants and Warrant Shares
will be imprinted with a legend that prohibits the transfer of the Shares,
Warrants and Warrant Shares unless (a) such transaction is registered or such
registration is not required, and (b) if the transfer is pursuant to an
exemption from registration an opinion of counsel reasonably satisfactory to the
Company is obtained to the effect that the transaction is not required to be
registered or is so exempt.

                  4.5 Restriction on Sales, Short Sales and Hedging
Transactions. Purchaser represents and agrees that during the period from the
date Purchaser was first contacted with respect to the potential purchase of
Shares and Warrants through the date of the execution of the Agreement by
Purchaser, Purchaser did not, and from such date through the effectiveness of
the Registration Statement (as defined below), Purchaser will not, directly or
indirectly, execute or effect or cause to be executed or effected any short
sale, option or equity swap transactions in or with respect to the Company's
Common Stock or any other derivative security transaction the purpose or effect
of which is to hedge or transfer to a third party all or any part of the risk of
loss associated with the ownership of the Shares and Warrants by the Purchaser.

                  4.6 No Legal, Tax Or Investment Advice. Purchaser understands
that nothing in the Offering Circular, this Agreement or any other materials
presented to Purchaser in connection with the purchase and sale of the Shares
and the Warrants constitutes legal, tax or investment advice. Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Shares and the Warrants.

                  4.7 Closing Date. All the representations and warranties made
by each Purchaser in this Section 4 shall be true and complete from the date of
this Agreement through the Closing Date and each Purchaser shall provide the
Company, before the Closing, with any documents or information necessary for
such representations and warranties to remain true and complete as of the
Closing Date.

          5.  Covenants

<PAGE>   8

                  5.1  Registration Requirements.

                           (a) Promptly after, but not later than 45 days after,
the Closing Date, the Company shall prepare and file a registration statement
(the "Registration Statement") with the SEC under the Securities Act to register
the offer and resale of the Shares and the Warrant Shares by the Purchasers
(together, the "Registrable Securities"), and shall use its best efforts to
cause such Registration Statement to become effective within 105 days from the
Closing Date or not more than five days from the date upon which the Securities
and Exchange Commission shall allow the Company to accelerate effectiveness,
whichever is shorter. In the event that the Company shall fail to file the
Registration Statement within the 45-day period following the Closing Date or
shall fail to obtain effectiveness of the Registration Statement within the
105--day period following the Closing Date, the Company hereby agrees that it
shall issue to each Purchaser Warrants to purchase such number of shares of
Common Stock equal to 5% of the total number of shares purchased by such
purchaser for each and every thirty (30) day period with respect to which such
Registration Statement shall not be filed or effective, as the case may be (the
"Penalty Warrant"); provided, however, that if the Placement Agent received an
opinion of counsel to the Company to the effect that the delay in obtaining
effectiveness of the Registration Statement was in no way attributable to any
actions taken or failed to be taken by the Company, then, such 105-day period
shall be extended to 135 days without any Penalty Warrants required to be
issued. The Penalty Warrants shall have an exercise price per share equal to the
market price of the Common Stock as quoted by AMEX on the Closing Date and shall
be exercisable for a period of three years from the date of issuance and shall
contain anti-dilution provisions and other provisions similar to those contained
in the Warrants. Until such time as the Registration Statement is effective, the
Company shall not grant any registration rights or other rights to register
securities under the Securities Act unless such rights are subordinate to the
rights of the Purchasers under this Section 5.1 or will not have the effect of
delaying a sale or limiting the number of securities which may be sold by the
Purchasers pursuant to the Registration Statement or otherwise adversely affect
the rights of the Purchasers under this Section 5.1.

                           (b) The Company shall pay all Registration Expenses
(as defined below) in connection with any registration, qualification or
compliance hereunder and each Purchaser shall pay all Selling Expenses (as
defined below) and other expenses that are not Registration Expenses relating to
the Registrable Securities resold by such Purchaser. "Registration Expenses"
shall mean all expenses, except for Selling Expenses, incurred by the Company in
complying with the registration provisions herein described, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses and the expense of any special audits incident to or required by
any such registration. "Selling Expenses" shall mean all selling commissions,
underwriting fees and stock transfer taxes applicable to the Registrable
Securities and all fees and disbursements of counsel for any Purchaser.

                           (c) If the Registration Statement becomes effective,
the Company will use its best efforts to: (i) keep such registration effective
until the second anniversary of the date such Registration Statement is declared
effective (or, in the case of Warrant Shares, the first anniversary of the date
of issuance of such Warrant Shares, but in any event not later than the fourth
anniversary of the date such Registration Statement is declared effective);
provided, however, if Rule 144 is amended so that the longest period that Rule
144 restricts the manner in which privately placed securities may be sold is a
period shorter than two years, then the period required by this clause shall be
reduced to (A) such shorter period, (B) such date as all of the Registrable
Securities have been resold, or (C) such date as all Registrable Securities may
be sold pursuant to Rule 144 (or any successor rule); (ii) except as provided in
Section 5.1(f), prepare and file with the SEC such amendments and supplements to
the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply

<PAGE>   9

with the provisions of the Securities Act with respect to the disposition of all
securities covered by the Registration Statement; (iii) furnish such number of
prospectuses and other documents incident thereto, including any amendment of or
supplement to the prospectus, as Purchaser from time to time may reasonably
request; (iv) cause the Shares and the Warrant Shares to be listed on the
American Stock Exchange or any securities exchange or quoted on each quotation
service on which the Common Stock of the Company is then listed or quoted; (v)
provide a transfer agent and registrar for all securities registered pursuant to
the Registration Statement and a CUSIP number for all such securities; and (vi)
file the documents required of the Company and otherwise use its best efforts to
maintain requisite blue sky clearance in all U.S. jurisdictions in which any of
the Shares are originally sold and all other states specified in writing by
Purchaser, provided, however, that the Company shall not be required to qualify
to do business in any state in which it is not now so qualified or has not so
consented.

                           (d) The Company shall furnish to each Purchaser upon
request a reasonable number of copies of a supplement to or an amendment of the
prospectus used in connection with the Registration Statement as may be
necessary to facilitate the public sale or other disposition of all or any of
the Registrable Securities held by Purchaser.

                           (e) With a view to making available to Purchasers
the benefits of Rule 144 and any other rule or regulation of the Commission that
may at any time permit Purchaser to sell Registrable Securities to the public
without registration or pursuant to a registration statement on Form S-3, the
Company covenants and agrees to use its best efforts to: (i) make and keep
public information available as those terms are understood and defined in Rule
144 until the earlier of (A) the date on which the Shares may be sold pursuant
to Rule 144(k) (or any successor rule) or (B) such date as all of the
Registrable Securities shall have been resold; (ii) file with the Commission in
a timely manner all reports and other documents required of the Company under
the Securities Act and Exchange Act; and (iii) furnish to any Purchaser upon
request, as long as the Purchaser owns any Registrable Securities, (A) a written
statement by the Company that it has complied with the reporting requirements of
the Securities Act and the Exchange Act, (B) a copy of the most recent annual or
quarterly report of the Company, and (C) such other information as may be
reasonably requested in order to avail any Purchaser of any rule or regulation
of the Commission that permits the selling of any such Registrable Securities
without registration or pursuant to such registration statement on Form S-3.

                           (f) Purchaser hereby acknowledges that there
may occasionally be times when the Company must suspend the use of the
prospectus forming a part of the Registration Statement until such time as an
amendment to such Registration Statement has been filed by the Company and
declared effective by the SEC or until the Company has amended or supplemented
such prospectus. The Purchaser hereby covenants that it will not sell any
securities pursuant to said prospectus during the period commencing at the time
at which the Company gives the Purchaser notice of the suspension of the use of
said prospectus and ending at the time the Company gives the Purchaser notice
that Purchaser may thereafter effect sales pursuant to said prospectus.
Notwithstanding anything herein to the contrary, the Company shall not suspend
use of the Registration Statement by Purchaser unless such suspension is
required by the federal securities laws and the rules and regulations
promulgated thereunder. Notwithstanding the foregoing, the Company shall not be
entitled to exercise its right to block such sales or suspend use of such
prospectus more than three times during the effectiveness of the Registration
Statement nor more than one time in any four month period.

                  5.2.  Indemnification and Contribution

<PAGE>   10

                           (a) The Company agrees to indemnify and hold harmless
each Purchaser from and against any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) to which such Purchaser may become
subject (under the Securities Act or otherwise) (including in settlement of
litigation) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in the Registration Statement , including all
documents filed as a part thereof and information deemed to be a part thereof,
on the effective date thereof, or any amendment or supplements thereto, or arise
out of any failure by the Company to fulfill any undertaking or covenant
included in the Registration Statement or to perform its obligations hereunder
or under law, and the Company will, as incurred, reimburse such Purchaser for
any legal or other expenses reasonably incurred in investigating, defending or
preparing to defend, settling, compromising or paying any such action,
proceeding or claim; provided, however, that the Company shall not be liable in
any such case to the extent that such loss, claim, damage or liability arises
out of, or is based upon (i) an untrue statement or omission in such
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Purchaser
specifically for use in preparation of the Registration Statement and not
corrected by the Purchaser in writing or (ii) an untrue statement or omission in
any prospectus that is corrected in any subsequent prospectus, or supplement or
amendment thereto, that was delivered to a Purchaser prior to the pertinent sale
or sales by such Purchaser and not delivered by such Purchaser to the entity to
which it made such sale(s) prior to such sale(s).

                           (b) Each Purchaser, severally and not jointly, agrees
to indemnify and hold harmless the Company from and against any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) to which
the Company may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon (i) an untrue statement or
alleged untrue statement of a material fact or omission to state a material fact
in the Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Purchaser
specifically for use in preparation of the Registration Statement (provided,
however, that no Purchaser shall be liable in any such case for any untrue
statement or omission in any prospectus or Registration Statement which
statement has been corrected, in writing, by such Purchaser and delivered to the
Company at least 14 days before the sale from which such loss occurred), or (ii)
an untrue statement or omission in any prospectus that is corrected in any
subsequent prospectus or supplement or amendment thereto, that was delivered to
a Purchaser at least 1 day prior to the pertinent sale or sales by such
Purchaser and not delivered by such Purchaser to the entity to which it made
such sale(s) prior to such sale(s), and each Purchaser, severally and not
jointly, will, as incurred, reimburse the Company for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim. Notwithstanding the foregoing, no
Purchaser shall be liable, or required to indemnify the Company, in the
aggregate, for any amount in excess of the net proceeds received by the
Purchaser from the sale of the Shares or the Warrant Shares, as the case may be,
to which such loss, claim, damage or liability relates.

                           (c) Promptly after receipt by any indemnified person
of a notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 5.2, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action and, subject to the
provisions hereinafter stated, in case any such action shall be brought against
an indemnified person, the indemnifying person shall be entitled to participate
therein, and, to the extent that it shall wish, to assume the defense thereof,
with counsel reasonably satisfactory to the indemnified person. After notice

<PAGE>   11

from the indemnifying person to such indemnified person of the indemnifying
person's election to assume the defense thereof, the indemnifying person shall
not be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof;
provided, however, that if there exists or shall exist a conflict of interest
that would make it inappropriate in the reasonable judgment of the indemnified
person for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such
indemnifying person; provided, further, that the indemnifying person shall not
be obligated to assume the expenses of more than one counsel to represent all
indemnified persons.

                           (d) If the indemnification provided for in this
Section 5.2 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and each Purchaser
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or a Purchaser on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Purchasers agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Purchasers were treated as one entity for such purpose)
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Purchaser shall be required to contribute in the aggregate any amount in
excess of the net proceeds received by the Purchaser from the sale of the Shares
or Warrant Shares, as the case may be, to which such loss, claim, damage or
liability relates. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchaser's obligations in this subsection (d) to
contribute are several in proportion to their sales of Shares or Warrant Shares,
as the case may be, to which such loss relates and not joint.

                           (e) The obligations of the Company and the Purchasers
under this Section 5.2 shall be in addition to any liability which the Company
and the respective Purchasers may otherwise have and shall extend, upon the same
terms and conditions, to directors, officers, employees and agents of the
Company and the Purchasers and to each person, if any, who controls the Company
or any Purchaser within the meaning of the Securities Act and the Exchange Act.

          6. Restrictions on Transferability of Shares and Warrants; Compliance
with Securities Act.

                  6.1 Restrictions on Transferability. Neither the Shares nor
the Warrants shall be transferable in the absence of registration under the
Securities Act or an exemption therefrom or in the absence of compliance with
any term of the Agreement.

<PAGE>   12

                  6.2 Restrictive Legend. Until and unless the Shares and
Warrant Shares are registered under the Securities Act, each certificate
representing the Shares and the Warrant Shares and each Warrant shall bear
substantially the following legend (in addition to any legends required under
applicable state securities laws):

 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED OR THE SECURITIES LAWS OF ANY STATE. THE
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM.

                  6.3 Transfer of Shares and Warrants. Each Purchaser hereby
covenants with the Company not to make any sale of the Shares or Warrants except
either (a) a sale of Shares or Warrant Shares in accordance with the
Registration Statement, in which case the Purchaser covenants to comply with the
requirement of delivering a current prospectus, (b) a sale of Shares or Warrant
Shares in accordance with Rule 144, in which case the Purchaser covenants to
comply with Rule 144 and to deliver such additional certificates and documents
as the Company may reasonably request, or (c) in accordance with another
exemption from the registration requirements of the Securities Act. The legend
set forth in Section 6.2 will be removed from a certificate representing Shares
or the Warrant Shares, as the case may be, following and in connection with any
sale of Shares or Warrant Shares pursuant to subsection (a) or (b) hereof but
not in connection with any sale of Shares or Warrant Shares pursuant to
subsection (c) hereof. The Company will substitute one or more replacement
certificates without the legend at the request of the Purchaser promptly after
such time as the Registration Statement becomes effective.

          7.    Termination.

                  (a) By the Purchaser. The Purchaser may terminate this
Agreement immediately, if at any time prior to the Closing, the Company shall
cease conducting business in the normal course; become insolvent or become
unable to meet its obligations as they become due; make a general assignment for
the benefit of creditors; petition, apply for, suffer or permit with or without
its consent the appointment of custodian, receiver, trustee in bankruptcy or
similar officer for all or any substantial part of its business or assets; avail
itself or become subject to any proceeding under the Federal Bankruptcy Code or
any similar state, federal or foreign statute relating to bankruptcy,
insolvency, reorganization, receivership, arrangement, adjustment of debts,
dissolutions or liquidation.

                  (b) By the Company. The Company may terminate this Agreement
at any time prior to the Closing if the Purchasers have not agreed to purchase
an aggregate of at least 1,500,000 Shares pursuant to this Agreement prior to
March 11, 2000 or such later date as the Company and the Placement Agent shall
have agreed to extend the offering of the Shares with notice to the purchasers
in accordance with the terms of Section 4(a) hereof.

          8.  Miscellaneous.

                  8.1 Survival of Representations and Warranties. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement, any investigation at any time made by or on behalf
of the Purchaser, and the sale and purchase of the Shares and the Warrants and
payment therefor.

<PAGE>   13

                  8.2 Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and do not constitute a
part of this Agreement.

                  8.3 Choice of Law. It is the intention of the parties that the
internal laws of the State of Delaware, without regard to the body of law
controlling conflicts of law, shall govern the validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
parties set forth herein.

                  8.4 Counterparts. This Agreement may be executed concurrently
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

                  8.5 Assignment; Parties in Interest. This Agreement may not be
pledged, assigned or otherwise transferred by the Purchasers except by operation
of law but all the terms and provision of this Agreement shall be binding upon
and inure to the benefit of and be enforced by the successors in interest of the
parties hereto. Each successive transferee of the Purchasers shall be deemed to
be a Purchaser for the purpose of Section 5 of this Agreement.

                  8.6 Amendments. No amendment, modification, waiver, discharge
or termination of any provision of this Agreement nor consent to any departure
by the Purchasers or the Company therefrom shall in any event be effective
unless the same shall be in writing and signed by the party to be charged with
enforcement, and then shall be effective only in the specific instance and for
the purpose for which given. No course of dealing between the parties hereto
shall operate as an amendment of, or a waiver of any right under, this
Agreement.

          IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized representatives as of
the day and year first above written.

                                              NOVAVAX, INC.

                                              By:________________________

                                              Title:_______________________

[PURCHASER SIGNATURE PAGE CONTINUES ON THE FOLLOWING PAGE]

<PAGE>   14

                   PURCHASER SIGNATURE PAGE AND QUESTIONNAIRE

          The undersigned Purchaser hereby executes the Stock and Warrant
Purchase Agreement with Novavax, Inc. (the "Company") and hereby authorizes this
signature page to be attached to a counterpart of such document executed by a
duly authorized officer of the Company.

<TABLE>
<S>                                                <C>
No. of Shares to be                                  __________________________________________________
Purchased: ____________                                       Name of Purchaser (PLEASE PRINT OR TYPE)

No. of Shares Underlying
Warrants: _____________

Aggregate Purchase                                            [SIGN HERE]
Price:  $____________

                                                              By:________________________________________

                                                              Title: ______________________________________

Purchaser is a _______ qualified institutional buyer  OR

_____ an accredited investor as defined in the Offering Circular

Name in which Shares and Warrants are to be registered:       __________________________________________

Address of registered holder:                                 __________________________________________

Social Security or Tax ID No. of registered holder:           __________________________________________

Contact name and telephone number regarding
Settlement and registration:                                  __________________________________________
                                                                                Name

                                                              __________________________________________
                                                                                Telephone Number
</TABLE>

Number of shares of common stock of the Company beneficially owned (meaning
shares owned or controlled or which the Purchaser has the right to acquire or
vote) by the Purchaser, other than the Shares and Warrants being purchased
pursuant hereto: _________________________________________
<PAGE>   15

Have you or your organization had any position, office or other material
relationship with the Company within the past three years?

                  __________ Yes                              __________ No

Do you or your organization have any direct or indirect affiliation or
association with any NASD member?

                  _________ Yes                               __________ No

If yes to either of the last two questions, please indicate the nature of any
such

<PAGE>   16
           DISCLOSURE SCHEDULE TO STOCK AND WARRANT PURCHASE AGREEMENT

           3.3 In January 2000, certain officers and directors of the Company
were sued by a former employee o the Company, alleging that he should have
received 12 months of severance pay. The Company, which is not a party to the
lawsuit, has offered to pay the former employee 6 months severance pay.

           3.19 Two holders of warrants to purchase an aggregate of 100,000
shares of Common Stock of the Company currently have registration rights.

<PAGE>   17

                                    EXHIBIT A

 FORM OF OPINION OF COUNSEL TO BE DELIVERED TO THE PURCHASERS ON CLOSING DATE.

       The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.

       The Company has corporate power and authority to own, lease and operate
its properties and to conduct its business as now being conducted and to enter
into and perform its obligations under this Agreement.

       The Shares, the Warrants and the Warrant Shares have been duly authorized
for issuance and sale to the Purchasers pursuant to this Agreement and the
Warrants and, when issued and delivered by the Company pursuant to this
Agreement or the Warrants against payment of the consideration set forth herein,
will be validly issued and fully paid and non-assessable; and the issuance of
the Shares, the Warrants and the Warrant Shares is not subject to pre-emptive or
other rights to subscribe for or purchase securitites.

       This Agreement and each Warrant have been duly authorized, executed and
delivered by the Company and are enforceable in accordance with their terms
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and as to limitations on the enforcement of the
remedy of specific performance and other equitable remedies.

       Except for such matters which, either individually or in the aggregate,
would not have a material adverse effect on the financial condition or business
of the Company, the execution, delivery and performance of this Agreement and
the consummation of the transactions in the manner contemplated herein and the
compliance by the Company with its obligations hereunder and thereunder will not
(i) conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, any contract or other instrument or agreement
to which the Company is a party or by which it OR ANY OF THEM may be bound, or
to which any of the property or assets of the Company is subject, (ii) result in
any violation of the provisions of the charter or bylaws of the Company or any
applicable statute, law, rule, regulation, ordinance, code, or any applicable
decision or order of any court or regulatory agency exercising appropriate
jurisdiction, and (iii) except for the registration of the Shares and the
Warrant Shares under the Securities Act and the listing of the Shares and the
Warrant Shares on the American Stock Exchange, Inc. and such consents,
approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in connection with
the purchase of the Shares or the Warrants by the Purchasers, no consents,
approval, authorization or order of or filing with any court or governmental
agency or body is required for the execution, delivery and performance of the
Agreement by the Company and the consummation of the transactions contemplated
by the Agreement.

       To our knowledge, as of November 30, 1999, 15,011,389 shares of the
Company's Common Stock were issued and outstanding, no shares of the Company's
Preferred Stock were issued and outstanding, options to purchase 3,936,741
shares of the Company's Common Stock were issued and outstanding and warrants to
purchase 1,712,775 shares of the Company's Common Stock were issued and
outstanding. All of the outstanding shares of the Company's capital stock are
validly issued, fully paid and non-assessable. Except as set forth in Section
3.8 of the Agreement or the Offering Circular and except for options to purchase
not more then 100,000 shares, to our knowledge, there are no outstanding
subscriptions, options, warrants, calls, contracts, demands, commitments,
conversion rights or other agreements or arrangements of any character or nature
whatever under which the Company is or may be obligated to issue its Common
Stock, Preferred Stock or warrants or options to purchase Common Stock or
Preferred Stock. No holder
<PAGE>   18

of any security of the Company is entitled to any preemptive or similar rights
to purchase any securities of the Company.

       The form of certificate used to evidence the Shares and the form of
Warrant are in due and proper form and comply with all applicable statutory
requirements.

<PAGE>   19

                                    EXHIBIT B

                                 FORM OF WARRANT
<PAGE>   20
    THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
    NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
    NOT BE TRANSFERRED EXCEPT AS PERMITTED HEREIN AND PURSUANT TO (i) AN
    EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
    AMENDED, AND SUCH REGISTRATION OR QUALIFICATION AS MAY BE REQUIRED UNDER THE
    SECURITIES LAWS OF ANY STATE OR (ii) AN EXEMPTION FROM REGISTRATION UNDER
    SUCH ACT OR SUCH SECURITIES LAWS.

            NONTRANSFERABLE WARRANT FOR THE PURCHASE OF COMMON STOCK

No. 2000-                                                        _______ Shares

        THIS CERTIFIES that, for receipt in hand of $50.00 and other value
received, __________________________ (the "Holder") is entitled to subscribe for
and purchase from Novavax, Inc., a Delaware corporation (the "Company"), upon
the terms and conditions set forth herein, at any time or from time to time
after the date hereof, and before 5:00 p.m. on January 28, 2003, eastern time
(the "Exercise Period"), _________ fully paid and nonassessable shares (the
"Warrant Shares") of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), at a price of $6.75 per share (the "Exercise Price"). This
Warrant is issued in connection with a Stock and Warrant Purchase Agreement
dated as of January 28, 2000 by and between the Company and the Purchasers
signatory thereto (the "Purchase Agreement"). This Warrant may not be sold,
transferred, assigned or hypothecated, in whole or in part, at any time except
in accordance with Section 5 hereof (a "Permitted Transfer"). As used herein the
term "this Warrant" shall mean and include this Warrant and any Warrant or
Warrants hereafter issued as a consequence of the exercise of this Warrant in
whole or in part.

        The number of shares of Common Stock issuable at the Exercise Price may
be adjusted from time to time as hereinafter set forth.

        1.  Exercise of Warrant.

               (a) Manner of Exercise. This Warrant may be exercised in whole or
in part at any time or from time to time during the Exercise Period by the
surrender of this Warrant (with the form of election to exercise attached hereto
duly executed) to the Company at its office at 8320 Guilford Road, Columbia, MD
21046 or such other place as is designated in writing by the Company, together
with a certified or bank cashier's check payable to the order of the Company in
an amount equal to the Exercise Price multiplied by the number of Warrant Shares
for which this Warrant is being exercised.

               (b) Delivery of Stock Certificates, etc. Upon each exercise of
the Holder's rights to purchase the Warrant Shares granted pursuant to this
Warrant, as reissued from time to time, the Holder shall be deemed to be the
holder of record of the Warrant Shares issuable upon such exercise,
notwithstanding that the transfer books of the Company shall then be closed or
certificates representing such Warrant Shares shall not then have been actually
delivered to the Holder. As soon as practicable after each such exercise of this
Warrant, the Company shall issue and deliver to the Holder a certificate or
certificates for the Warrant Shares issuable upon such exercise, registered in
the name of the Holder or its designee. If this Warrant should be exercised in
part only, the Company shall, upon surrender of this Warrant for cancellation,
execute, and deliver a new Warrant evidencing the right of the Holder to
purchase the balance of the Warrant Shares (or portions thereof) subject to
purchase hereunder.

<PAGE>   21

               (c) Warrant Register. Any Warrants issued hereunder upon a
Permitted Transfer or exercise in part of this Warrant (together with this
Warrant, the "Warrants") shall be numbered and shall be registered in a warrant
register as they are issued. The Company shall be entitled to treat the
registered holder or his permitted transferees of any Warrant on the Warrant
Register as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any registration or
transfer of such Warrants which are registered or to be registered in the name
of a fiduciary or the nominee of a fiduciary. Such Warrants shall be
transferable on the books of the Company only upon delivery thereof duly
endorsed by the Holder or by his duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment, or authority to
transfer. In all cases of transfer by an attorney, executor, administrator,
guardian, or other legal representative, duly authenticated evidence of his or
its authority shall be produced. Upon any registration of transfer, the Company
shall deliver a new Warrant or Warrants to the person entitled thereto. The
Warrants may be exchanged, at the option of the Holder thereof, for another
Warrant, or other Warrants of different denominations, of like tenor, and
representing in the aggregate the right to purchase a like number of Warrant
Shares (or portions thereof) upon surrender to the Company or its duly
authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to any person if, in
the written opinion of counsel to the Company, such transfer does not comply
with the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations thereunder or the provisions of Section 5
hereunder.

        2. Authorized Stock; Listing. The Company shall at all times reserve and
keep available out of its authorized and unissued Common Stock, solely for the
purpose of providing for the exercise of the rights to purchase all Warrant
Shares granted pursuant to this Warrant, such number of shares of Common Stock
as shall, from time to time, be sufficient therefor. The Company covenants that
all shares of Common Stock issuable upon exercise of this Warrant, upon receipt
by the Company of the purchase price therefor, shall be validly issued, fully
paid, nonassessable, and free of preemptive or similar contractual rights to
subscribe for shares of Common Stock. The Company shall list and maintain the
listing of the Warrant Shares on the American Stock Exchange (or other national
securities exchange upon which the Common Stock is listed).

        3.  Adjustments.

               (a) Stock Dividends, Splits, Combinations, etc. In case the
Company shall at any time after the date of this Warrant (i) declare a dividend,
or make a distribution, on the outstanding Common Stock in shares of its capital
stock, (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the Exercise
Price, and the number and kind of shares of Common Stock receivable upon
exercise of this Warrant, in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision,
combination, or reclassification, shall be proportionately adjusted so that the
Holder after such time shall be entitled to receive the aggregate number and
kind of shares which if such Warrant had been exercised immediately prior to
such time, it would have owned upon such exercise and been entitled to receive
by virtue of such dividend, distribution, subdivision, combination or
reclassification. Such adjustment shall be made successively whenever any event
listed above shall occur.

               (b) Sale of Stock, Options, Rights, etc. In case the Company
shall issue, or fix a record date for the issuance of, shares of Common Stock or
rights, options, or warrants entitling the holders thereof to subscribe for or
purchase Common Stock (or securities convertible into or exchangeable for Common
Stock) at a price per share (or

<PAGE>   22

having a conversion price per share, if a security convertible into or
exchangeable for Common Stock) less than the Current Market Price, (as defined
in Section 3(d)) the Exercise Price shall be reduced to a price determined by
multiplying the then current Exercise Price by a fraction (i) numerator of which
shall be (a) the number of shares of Common Stock outstanding immediately prior
to such issue or sale plus (b) the number of shares of Common Stock which the
aggregate consideration received by the Company in connection with such issuance
or sale would purchase at the Current Market Price, and (ii) the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after such issuance or sale. Such adjustment shall become effective at the close
of business on such date of issuance or record date; provided, however, that, to
the extent the shares of Common Stock (or securities convertible into or
exchangeable for shares of Common Stock) are not delivered, the Exercise Price
shall be readjusted after the expiration of such rights, options, or warrants
(but only with respect to Warrants exercised after such expiration), to the
Exercise Price which would then be in effect had the adjustments made upon the
issuance of such rights, options, or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or securities convertible
into or exchangeable for shares of Common Stock) actually issued. No
readjustment shall have the effect of increasing the Exercise Price by an amount
greater than the original adjustment. In case part or all of any consideration
may be paid in a form other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive absent manifest error. Shares of Common Stock
owned by or held for the account of the Company or any majority-owned subsidiary
shall not be deemed outstanding for the purpose of any such computation.

               In the case of the issuance of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock or options to purchase or rights to subscribe for
such convertible or exchangeable securities, the following provisions shall
apply:

                      (i) the shares of Common Stock deliverable upon exercise
of such options to purchase or rights to subscribe for Common Stock shall be
deemed to have been issued at the time such options or rights were issued and
for a consideration equal to the consideration, if any, received by the Company
upon the issuance of such options or rights plus the purchase price provided in
such options or rights for the Common Stock covered thereby;

                      (ii) the shares of Common Stock deliverable upon
conversion of or in exchange for any such convertible or exchangeable securities
or upon the exercise of options to purchase or rights to subscribe for such
convertible or exchangeable securities and subsequent conversion or exchange
thereof shall be deemed to have been issued at the time such securities were
issued or such options or rights were issued and for a consideration equal to
the consideration, if any, received by the Company for any such securities and
related options or rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the additional consideration, if any, to be
received by the Company upon the conversion or exchange of such securities or
the exercise of any related options or rights;

                      (iii) in the event of any increase in the consideration
payable to the Company upon exercise of such options or rights or upon
conversion of or in exchange for such convertible or exchangeable securities,
including, but not limited to, a change resulting from any antidilution
provisions thereof, the Exercise Price with respect to the adjustment which was
made upon the issuance of such options, rights or securities, and any subsequent
adjustments based thereon, shall be recomputed to reflect such change, but no
further adjustment shall be made for the actual issuance of Common Stock or any
payment of such consideration upon the exercise of any such options or rights or
the conversion or exchange of such securities.

               (c) Extraordinary Dividends. In case the Company shall distribute
to all holders of Common Stock (including any such distribution made to the
stockholders of the Company in connection with a consolidation

<PAGE>   23

or merger in which the Company is the continuing corporation) evidences of its
indebtedness or assets (other than dividends payable in shares of Common Stock),
or subscription rights, options, or warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock (excluding those referred to in paragraph 3(b) hereof), then, in each
case, the Exercise Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to the record date for the determination of
stockholders entitled to receive such distribution by a fraction, the numerator
of which shall be the current Exercise Price per share of Common Stock on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be conclusive
absent manifest error) of the portion of the evidences of indebtedness or assets
so to be distributed, or of such subscription rights, options, or warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock, applicable to one share, and the denominator of
which shall be such current Exercise Price per share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of such distribution retroactive to the record date
for the determination of stockholders entitled to receive such distribution.

               (d) Current Market Price. For the purpose of any computation
under this paragraph 3, Current Market Price per share of Common Stock on any
date shall be deemed to be the average daily closing price for the ten trading
days immediately preceding such day. The closing price for any day shall be the
last reported sales price regular way or, in case no such reported sale takes
place on such day, the closing bid price regular way, in either case on the
principal national securities exchange (including the NASDAQ National Market
System) on which the Common Stock is listed or admitted to trading or, if the
Common Stock is not listed or admitted to trading on any national securities
exchange, the highest reported bid price as furnished by the National
Association of Securities Dealers, Inc. through NASDAQ or a similar organization
if NASDAQ is no longer reporting such information. If on any such date the
Common Stock is not quoted by any such organization, the fair value of a share
of Common Stock on such date, as determined in good faith by the Board of
Directors of the Company, whose determination shall be conclusive absent
manifest error, shall be used.

               (e) De Minimis Exception. No adjustment in the Exercise Price
shall be required if such adjustment is less than $.05; provided, however, that
any adjustments which by reason of this paragraph 3 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this paragraph 3 shall be made to the nearest cent or to
the nearest one-thousandth of a share, as the case may be.

               (f) Date of Issuance. In any case in which this paragraph 3 shall
require that an adjustment in the Exercise Price be made effective as of a
record date for a specified event, the Company may elect to defer, until the
occurrence of such event, issuing to any Holder who exercised any Warrants after
such record date, the shares of Common Stock, if any, issuable upon such
exercise over and above the shares of Common Stock, if any, issuable upon such
exercise on the basis of the Exercise Price in effect prior to such adjustment.

               (g) Adjustment to Number of Shares. Upon each adjustment of the
Exercise Price as a result of the calculations made in paragraphs 3(a), 3(b), or
3(c) hereof, each Warrant outstanding prior to the making of the adjustment in
the Exercise Price shall thereafter evidence the right to purchase, at the
adjusted Exercise Price, that number of shares (calculated to the nearest
thousandth) obtained by dividing (i) the product obtained by multiplying the
number of shares purchasable upon exercise of a Warrant prior to adjustment of
the number of shares by the Exercise Price in effect prior to adjustment of the
Exercise Price by (ii) the Exercise Price in effect after such adjustment of the
Exercise Price.

<PAGE>   24

               (h) Notice of Adjustments. Whenever there shall be an adjustment
as provided in this paragraph 3, the Company shall promptly cause written notice
thereof to be sent by overnight courier, to the Holder, at its principal office,
which notice shall be accompanied by an officer's certificate setting forth the
number of Warrant Shares purchasable upon the exercise of this Warrant and the
Exercise Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment and the computation thereof, which officer's
certificate shall be conclusive evidence of the correctness of any such
adjustment absent any error.

               (i) No Fractional Shares. The Company shall not be required to
issue fractions of shares of Common Stock or other capital stock of the Company
upon the exercise of the Warrants. If any fraction of a share would be issuable
on the exercise of any Warrant (or specified portions thereof), the Company
shall purchase such fraction for an amount in cash equal to the same fraction of
the Current Market Price on the date of exercise of the Warrant.

               (j) Employee Stock Options; Outstanding Options/Warrants. No
adjustment in the Exercise Price shall be required in the case of the issuance
of shares under or grant by the Company of options to employees, directors or
consultants of the Company under any stock option plan of the Company approved
by the stockholders of the Company, or the issuance of any and all shares of
Common Stock upon exercise of such options or upon the issuance of shares under
any options, warrants, or convertible securities outstanding as of the date
hereof.

        4.  Business Combinations.

               (a) In case the Company, after the date hereof (i) shall
consolidate with or merge into any other person and shall not be the continuing
or surviving corporation of such consolidation or merger, or (ii) shall permit
any other person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving person but, in connection with such
consolidation or merger, the Common Stock or other securities of the Company
which the Holder of this Warrant may receive upon exercise ("Other Securities")
shall be changed into or exchanged for stock or other securities of any other
person or cash or any other property, or (iii) shall transfer all or
substantially all of its properties or assets to any other person, or (iv) shall
effect a capital reorganization or reclassification of the Common Stock or Other
Securities (other than a capital reorganization or reclassification resulting in
the issue of additional shares of Common Stock for which adjustment in the
Exercise Price is provided in paragraph 3(a) or 3(b)), then, and in the case of
each such transaction, proper provision shall be made so that, upon the basis
and the terms and in the manner provided in this Warrant, the Holder of this
Warrant, upon the exercise hereof at any time after the consummation of such
transaction, shall be entitled to receive (at the aggregate Exercise Price in
effect at the time of such consummation for all Common Stock or Other Securities
issuable upon such exercise immediately prior to such consummation), in lieu of
the Common Stock or Other Securities issuable upon such exercise prior to such
consummation, the highest amount of securities, cash or other property to which
such Holder would actually have been entitled as a shareholder upon such
consummation if such Holder had exercised the rights represented by this Warrant
immediately prior thereto, subject to adjustments (subsequent to such
consummation) as nearly equivalent as possible to the adjustments provided in
paragraph 3; provided that if a purchase, tender or exchange offer shall have
been made to and accepted by the holders of more than 50% of the outstanding
shares of Common Stock, and if the Holder of this Warrant so designates in a
notice given to the Company on or before the date immediately preceding the date
of the consummation of such transaction, the Holder of this Warrant shall be
entitled to receive the highest amount of securities, cash or other property to
which such Holder would actually have been entitled as a shareholder if the
Holder of this Warrant had exercised such Warrant prior to the expiration of
such purchase, tender or exchange offer and accepted such offer, less the
Exercise Price

<PAGE>   25

that would have been payable upon such exercise, subject to adjustments (from
and after the consummation of such purchase, tender or exchange offer) as nearly
equivalent as possible to the adjustments provided for in paragraph 3.

               (b) In the event of any transaction described in clauses (i)
through (iv) of paragraph 4(a), each person (other than the Company) which may
be required to deliver any stock, securities, cash or property upon the exercise
of this Warrant as provided herein shall assume in writing (i) the obligations
of the Company under this Warrant (and if the Company shall survive the
consummation of such transaction, such assumption shall be in addition to, and
shall not release the Company from, any continuing obligations of the Company
under this Warrant) and (ii) the obligation to deliver to such Holder such
shares of stock, securities, cash or property as, in accordance with the
foregoing provisions of this paragraph 4, such Holder may be entitled to
receive.

        5.  Transfer.

        5.1 Securities Laws. Neither the Warrant nor the Warrant Shares has
been registered under the Securities Act. The Company will not transfer this
Warrant or the Warrant Shares unless (i) there is an effective registration
statement covering such Warrant or Warrant Shares, as the case may be, under the
Securities Act and applicable states securities laws; (ii) in the case of
Warrant Shares, it first receives a letter from an attorney, acceptable to the
Company's Board of Directors or its agents, stating that in the opinion of the
attorney the proposed transfer is exempt from registration under the Securities
Act and under all applicable state securities laws; or (iii) in the case of
Warrant Shares the transfer is made pursuant to Rule 144 under the Securities
Act.

        5.2 Conditions to Transfer. Prior to any such proposed transfer, and as
a condition thereto, if such transfer is not made pursuant to an effective
registration statement under the Securities Act, the Holder will, if the
restrictive legend has not been removed pursuant to the Purchase Agreement and
if requested by the Company, deliver to the Company (i) an Investment covenant
signed by the proposed transferee; (ii) an agreement by such transferee that the
restrictive investment legend set forth above be placed on the certificate or
certificates representing the securities acquired by such transferee; and (iii)
an agreement by such transferee that the Company may place a "stop transfer
order" with its transfer agent or registrar, and (iv) an agreement by the
transferee to indemnify the Company to the same extent as set forth in the next
succeeding paragraph.

        5.3 Indemnity. The Holder acknowledges that the Holder understands the
meaning and legal consequences of this Section 5, and the Holder hereby agrees
to indemnify and hold harmless the Company, its representatives and each officer
and director thereof from and against any and all loss, damage or liability
(including all attorney's fees and costs incurred in enforcing this indemnity
provision) due to or arising out of (a) any transfer by the Holder of any of
this Warrant or the Warrant Shares in violation of the Securities Act, the
Securities Exchange Act of 1934, as amended or the rules and regulations
promulgated under either of such acts, (b) any transfer by the Holder of this
Warrant or any of the Warrant Shares not in accordance with this Warrant or (c)
any untrue statement by the Holder or omission by the Holder to state any
material fact in connection with the investment representations or with respect
to the facts and representations supplied by the Holder to counsel to the
Company upon which its opinion as to proposed transfer shall have been based.

        5.4 Assignment and Transfer. Except as set forth in Section 5.1 (i),
this Warrant may only be transferred to an affiliate of the Holder. Upon
surrender of this Warrant certificate to the Company with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer tax, and
upon compliance with the foregoing provisions, the Company shall without charge,
execute and deliver a new Warrant certificate in the name of the assignee named
on such instrument of assignment, and this Warrant certificate shall promptly be
cancelled. An

<PAGE>   26

assignment, transfer, pledge, hypothecation or other disposition of this Warrant
attempted contrary to the provision of this Warrant, or any levy of execution,
attachment or other process attempted upon this Warrant, shall be null and void
and without effect.

        6.  Notice.  In case at any time the Company shall propose:

               (a) to pay any dividend or make any distribution on shares of
Common Stock in shares of Common Stock or make any other distribution to all
holders of Common Stock; or

               (b) to issue any rights, warrants, or other securities to all
holders of Common Stock entitling them to purchase any additional shares of
Common Stock or any other rights, warrants, or other securities; or

               (c) to effect any consolidation, merger, sale, reorganization or
reclassification described in paragraph 4; or

               (d) to effect any liquidation, dissolution, or winding-up of the
Company; or

               (e) to take any other action which would cause an adjustment to
the Exercise Price;

then, and in any one or more of such cases, the Company shall give written
notice thereof, by overnight courier, to the Holder at the Holder's address as
it shall appear in the Warrant Register, mailed at least 20 business days prior
to (i) the date as of which the holders of record of shares of Common Stock to
be entitled to receive any such dividend, distribution, rights, warrants, or
other securities are to be determined, (ii) the date on which any such
consolidation, merger, sale, reorganization or reclassification, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares or warrants for securities or other property,
if any, deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up; or (iii) the earlier of the date or record date in
respect of such action which would require an adjustment to the Exercise Price.

        7. Taxes. The issuance of any shares or warrants or other securities
upon the exercise of this Warrant, and the delivery of certificates or other
instruments representing such shares, warrants, or other securities, shall be
made without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of any
certificate in a name other than that of the Holder and the Company shall not be
required to issue or deliver any such certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.

        8.  Certain Rights.

               (a) In case any event shall occur as to which the provisions of
paragraph 3 or 4 are not strictly applicable but the failure to make any
adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles of such
paragraphs, then in each such case, the Exercise Price and/or the amount of any
Common Stock, cash, securities or other assets to be delivered upon

<PAGE>   27

exercise of this Warrant shall be adjusted on a basis consistent with the
essential intent and principles established in paragraph 3 or 4, as necessary to
preserve the purchase rights represented by this Warrant.

               (b) The Company will not, by amendment of its Certificate of
Incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant.

        9.  Legend.  The securities issued upon exercise of the Warrants shall
be subject to a stop transfer order and the certificate or certificates
evidencing any such securities shall bear the following legend:

        THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
        AS AMENDED, AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO (i) AN
        EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
        AMENDED, OR ANY STATE SECURITIES LAW AND SUCH REGISTRATION OR
        QUALIFICATION AS MAY BE REQUIRED UNDER THE SECURITIES LAWS OF ANY STATE
        OR (ii) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH SECURITIES
        LAWS.

        10.  Miscellaneous.

               (a) Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction, or mutilation of any Warrant (and upon surrender of
any Warrant if mutilated), and upon reimbursement of the Company's reasonable
incidental expenses, the Company shall execute and deliver to the Holder thereof
a new Warrant of like date, tenor, and denomination.

               (b) The Holder of any Warrant shall not have, solely on account
of such status, any rights of a stockholder of the Company, either at law or in
equity, or to any notice of meetings of stockholders or of any other proceedings
of the Company, except as provided in this Warrant.

               (c) This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

               (d) This Warrant shall be construed in accordance with the laws
of the State of Delaware, without giving effect to conflict of laws.

        IN WITNESS WHEREOF, the undersigned have set their hand to this Warrant
Agreement as of January 28, 2000.

                                              NOVAVAX, INC.

                                              By:
                                                 -----------------------------
                                                 John A. Spears, President and
                                                 Chief Executive Officer

<PAGE>   28

To:  Novavax, Inc.
     8320 Guilford Road
     Columbia, MD  21046
     Attention:  President

                              ELECTION TO EXERCISE

                    The undersigned hereby exercises its or his rights to
purchase Warrant Shares covered by the within Warrant and tenders payment
herewith in the amount of $______ in accordance with the terms thereof, and
requests that certificates for such securities be issued in the name of, and
delivered to:

------------------------------------------------------------------------------

------------------------------------------------------------------------------

------------------------------------------------------------------------------

     (Print Name, Address and Social Security or Tax Identification Number)

and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.

Dated:                                            Name:
      -------------------------                         --------------
                                                           (Print)

Address:
        ----------------------------------------------------------------------

                           --------------------------
                                   (Signature)

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