Document:

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                                                                   EXHIBIT 10.10

          TAX INDEMNIFICATION AND S CORPORATION DISTRIBUTION AGREEMENT

            This TAX INDEMNIFICATION AND S CORPORATION DISTRIBUTION AGREEMENT
(the "Agreement") is entered into as of March___, 2000 between OTG SOFTWARE,
INC., a Delaware corporation (the "Company"), and the persons listed on Schedule
A attached hereto (individually a "Stockholder" and collectively the
"Stockholders"). Capitalized terms not otherwise defined have the meanings
ascribed to them in Section 1.1.

            WHEREAS, the Company and the Stockholders have entered into this
Agreement as a condition to the Public Offering;

            WHEREAS, the Company has been an "S corporation" (as defined in
Section 1361(a)(1) of the Code) for federal tax purposes since March 4, 1992;

            WHEREAS, the Company and the Stockholders understand that the
Company's S corporation status will terminate upon the date of the Public
Offering (the "Termination Date"), and, as a result, the Company will be a "C
corporation" (as defined in Section 1361(a)(2) of the Code) beginning on the
Termination Date;

            WHEREAS, the Company will declare the Tax Dividend which will be
payable as soon as possible on or after the Closing Date;

            WHEREAS, the Company and the Stockholders wish to terminate this
Agreement such that it has no effect should the Public Offering not occur;

            NOW, THEREFORE, the parties agree as follows:

                                   DEFINITIONS

        1.1.    Definitions.  The following terms, as used herein, have the
following meanings:

            (a) "AA Account" means the Company's "accumulated adjustments
account," as defined in Section 1368(e)(1) of the Code, as of the close of
business on the day before the Termination Date.

            (b) "AAA Settlement Date" means the last day of the
"post-termination transition period," as defined in Section 1377(b) of the Code,
of the Company, except shall not include any extension of the post-termination
transition period pursuant to Section 1377(b)(l)(C) as the result of a
determination that the Company's election under Section 1362(a) had terminated
earlier than the Closing Date.

            (c) "Applicable Marginal Tax Rate" means the highest combined
marginal rate of federal, state and local income tax applicable to individuals
subject to taxation in the state in which the Company has its primary place of
business for the year of computation.

            (d) "Closing Date" means the date on which the Public Offering
closes.
<PAGE>   2

            (e) "Code" means the Internal Revenue Code of 1986, as amended.

            (f) "C Short Year" means that portion of the S Termination Year of
the Company beginning on the Termination Date and ending on the last day of the
S Termination Year.

            (g) "C Taxable Year" means any taxable year (or portion thereof) of
the Company, including the C Short Year, during which it is subject to taxation
as a C corporation as defined in Section 1361(a)(2) of the Code.

            (h) "Estimated Tax Dividend" means the estimated Tax Dividend
computed based upon a good faith determination of the Company as soon as
possible after the Closing Date.

            (i) "Final Determination" means the first to occur of

                (i) the expiration of 30 days after IRS acceptance of a Waiver
             of Restrictions on Assessment and Collection of Deficiency of Tax
             and Acceptance of Overassessment on IRS Form 870 or 870-AD (or any
             successor comparable form or the expiration of a comparable period
             with respect to any comparable agreement or form under the laws of
             other jurisdictions);

                (ii) a decision, judgment, decree, or other order by a court of
             competent jurisdiction that is not subject to further judicial
             review and has become final;

                (iii) the execution of a closing agreement under Section 7121 of
             the Code or the acceptance by the IRS of an offer in compromise
             under Section 7122 of the Code, or comparable agreements under the
             laws of other jurisdictions;

                (iv) the expiration of the time for filing a claim for refund or
             for instituting suit in respect for a claim for refund disallowed
             in whole or in part by the IRS or other relevant tax authority;

                (v) any other final disposition of the tax liability for such
             period by reason of the expiration of the applicable statute of
             limitations; or

                (vi) any other event that the parties agree is final and
             irrevocable determination of the liability at issue.

            (j) "Public Offering" means the public offering of the Company's
Common Stock pursuant to the Registration Statement on Form S-1 originally filed
by the Company with the Securities and Exchange Commission on December 23, 1999.

            (k) "Record Date" means the day prior to the date upon which the
Company's Registration Statement on Form S-1, as amended, which was initially
filed with the Securities and Exchange Commission on December 23, 1999, is
declared effective by the Securities and Exchange Commission.

                                      -2-
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            (l) "S Short Year" means that portion of the S Termination Year
beginning on the first day of such taxable year and ending on the day
immediately preceding the Termination Date.

            (m) "S Taxable Year" means any taxable year (or portion thereof) of
the Company, including the S Short Year, during which it is subject to taxation
as an S corporation as defined in Section 1361(a)(1) of the Code.

            (n) "S Termination Year" shall mean the fiscal year of the Company
that includes the Termination Date.

            (o) "Tax Dividend" means the dividend to be declared by the Company
in an amount equal to the aggregate federal, state, and local income tax payable
by the Stockholders on the income of the Company for the calendar years 1998 and
1999 and the S Short Year that passes through to the Stockholders pursuant to
Section 1366 of the Code, using the Applicable Marginal Tax Rate; provided
however that such amount shall not exceed the lesser of $1.6 million or the AA
Account.

            (p) "Taxing Authority" means the United States Internal Revenue
Service and any comparable state or foreign taxing authority.

            (q) "Termination Date" means the date on which the S corporation
status of the Company will terminate pursuant to Section 1362(d) of the Code,
which is expected to be the Closing Date.

                                    ARTICLE 2

           TERMINATION OF S CORPORATION STATUS, ALLOCATION OF INCOME,
          DECLARATION OF TAX DIVIDEND AND ADJUSTMENT OF ESTIMATED TAX
                                    DIVIDEND

            2.1 Termination of S Corporation Status. The Company and the
Stockholders understand that the Company's S corporation status will terminate
upon the consummation of the Public Offering.

            2.2 Pro Rata Allocation of Tax Items. The Company shall be required
to allocate the tax items described in Section 1362(e)(2)(A) of the Code between
the S Short Year and the C Short Year pursuant to the pro rata allocation rules
set forth in Section 1362(e)(2)(B) of the Code.

            2.3 Declaration of Tax Dividend. Prior to the Closing Date, the
Company shall declare the Tax Dividend, subject to the closing of the Public
Offering, to the stockholders of record on the Record Date payable as soon as
possible on or after the Closing Date in the amount of the Estimated Tax
Dividend.

                                      -3-
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            2.4 Adjustment to Estimated Tax Dividend.

            (a) Determination of Estimated Tax Dividend. The parties acknowledge
that the amount of the Estimated Tax Dividend will be based on good faith
determinations by the Company as of the Termination Date.

            (b) Adjustment of Estimated Tax Dividend. The parties agree that if
the Company determines after the Termination Date and on or before the AAA
Settlement Date that the Estimated Tax Dividend does not equal the amount of the
Tax Dividend, then:

                (i) if the amount of the Estimated Tax Dividend exceeds the
             amount of Tax Dividend, the Stockholders who received the Estimated
             Tax Dividend shall thereafter remit to the Company their pro-rata
             share of such excess no later than thirty (30) days after receiving
             notice from the Company that such amount is payable; and

                (ii) if the amount of the Tax Dividend exceeds the amount of the
             Estimated Tax Dividend, the Company shall thereafter distribute to
             the Stockholders their pro-rata shares of such excess within thirty
             (30) days following the date the Company determines an amount is
             payable pursuant to this Section 2.4(b)(ii).

            (c) Interest on Adjustment. Any payment due under this section shall
be increased by interest on the amount of such payment computed from the date of
the payment of the Estimated Tax Dividend until the date of payment pursuant to
this section. The interest rate shall be the Prime Rate of Fleet Bank (or its
successors) as adjusted from time to time.

                                    ARTICLE 3

                  TAX PAYMENTS AND INDEMNIFICATION OBLIGATIONS

            3.1 Liability for Taxes Incurred During S Short Year. Each
Stockholder covenants and agrees that: (i) the Stockholder will duly include, in
his own federal and state income tax returns, all items of income, gain, loss,
deduction, or credit attributable to the S Short Year in a manner consistent
with the Form 1120S and the schedules thereto (and the corresponding state
income tax forms and schedules) to be filed by the Company with respect to such
period; (ii) such returns shall be filed no later than the due date (including
extensions, if any) for filing such returns; and (iii) each Stockholder shall
pay any and all taxes required to be paid for its taxable year that includes the
S Short Year.

            3.2 Liability for Taxes Incurred During S Short Year and C Short
Year. The Company covenants and agrees that: (i) the Company shall be
responsible for and shall effect the filing of all federal and state income tax
returns for the Company with respect to the S Short year and the C Short Year;
(ii) such Company returns shall be accurately prepared and timely filed; and
(iii) the Company shall pay any and all taxes required to be paid by the Company
for the periods covered by such returns as required by applicable law.

                                      -4-
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            3.3 Stockholders Indemnification of Company for Tax Liabilities.

            (a) Adjustments Attributable to Company's S Status. If, based on a
Final Determination, the Company is deemed to have been a C corporation for
federal, state or local income tax purposes during any period in which it
reported (or intends to report) its taxable income as an S corporation, each
Stockholder agrees to contribute to the capital of the Company, subject to the
limitations contained in the last sentence of this Section 3.3(a) and in Section
3.3(b), an amount necessary to hold the Company harmless from any taxes (net of
any refunds) and interest arising from such Final Determination. Each
Stockholder's obligation under this Section 3.3(a) shall be several and not
joint and shall be limited to that percentage of the tax (net of any refunds)
and interest due and payable by the Company equal to the fraction, expressed as
a percentage, the numerator of which is the total distributions to such
Stockholder made by the Company from March 4, 1992 through and including the
Termination Date, plus the Tax Dividend and any adjustment thereto pursuant to
this Agreement, and the denominator of which is the total distributions made by
the Company to all Stockholders from March 4, 1992 through and including the
Termination Date, plus the Tax Dividend and any adjustment thereto pursuant to
this Agreement.

            (b) Limit on Indemnification Amount. Any payment by a Stockholder to
the Company pursuant to this Section 3.3 shall not exceed the amount of the
total distributions made to such Stockholder by the Company after January 1,
2000, plus the Tax Dividend and any adjustment thereto pursuant to this
Agreement, reduced by any taxes paid or payable by the Stockholders on the
distributions and increased by any refund of taxes and interest received by the
Stockholders with respect to the Company's S corporation earnings.

            (c) Time of Indemnification Payment. The Stockholders shall
contribute to the capital of the Company amounts set forth in this Section 3.3
within thirty (30) days after notice from the Company that a payment is due by
the Company to the appropriate Taxing Authority.

            3.4 Contests/Cooperation.

            (a) Contests. Each of the Company and the Stockholders agree that
(i) in the event that any of them receives notice, whether orally or in writing,
of any federal, state, local or foreign tax examinations, claims, settlements,
proposed adjustments or related matters that may affect in any way the liability
of any of such persons whether under this Agreement or otherwise, it shall
within ten days notify the other parties in writing thereof (provided that any
failure to give such notice shall not reduce a party's right to indemnification
under this Agreement except to the extent of actual damage incurred by the other
parties as a result of such failure), and (ii) the Company shall be entitled at
its reasonable discretion and sole expense to handle, control and compromise or
settle the defense of any matter of the Company or any Stockholder which may
give rise to a liability under this Agreement or a limitation of liability under
this Agreement, provided that the Stockholders may participate in all
conferences, meetings or proceedings with respect to the issue.

            (b) Cooperation. The parties will make available to one another, as
reasonably requested, and to any Taxing Authority, all information, records or
documents relating to the

                                      -5-
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liability for taxes covered by this Agreement and will preserve such
information, records or documents until the expiration of any applicable statute
of limitations or extensions thereof. The party requesting such information
shall reimburse the other party for all reasonable out-of-pocket costs incurred
in producing such information.

            (c) Claims for Refund. Each party hereto agrees to file a properly
completed claim with the appropriate Taxing Authority for a refund or an
abatement of taxes paid with respect to any matter which may give rise to a
liability under Section 3.4 of this Agreement.

            3.5 Costs.  Except to the extent otherwise provided herein, each
party shall bear its own costs in administering this Agreement.

            3.6 Correction of a Final Determination. In the event a party makes
a payment pursuant to this Agreement based on the expected outcome of a Final
Determination which subsequently is determined to have been incorrect, the
parties shall adjust the payments hereunder in order to reflect the subsequent
determination as if it was the Final Determination upon which the original
payment was based.

                                    ARTICLE 4

                                  MISCELLANEOUS

            4.1 Disputes. If the parties are, after negotiation in good faith,
unable to agree upon the appropriate application of this Agreement, the
controversy shall be settled by the accounting firm remaining on the list of
firms set forth on Schedule B hereto after the Company and the representative of
the Stockholders, commencing with the Company, shall have objected seriatim to
the other firms of the list (the "Accounting Firm"). The decision of the
Accounting Firm shall be final, and each of the Company and the Stockholders
agree immediately to pay to the other any amount due under this Agreement
pursuant to such decision. The expenses of the Accounting firm shall be borne
one-half by the Company and one-half by the Stockholders, in the same proportion
that the Stockholders share liability under Section 3.3 hereof, unless the
Accounting Firm specifies otherwise.

            4.2 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
counterparts collectively shall constitute an instrument representing the
Agreement between the parties hereto.

            4.3 Construction of Terms. Nothing herein expressed or implied is
intended, or shall be construed, to confer upon or give any person, firm or
corporation, other than the parties hereto or their respective successors and
assigns, any rights or remedies under or by reason of this Agreement.

            4.4 Governing Law. This Agreement and the legal relations between
the parties hereto shall be governed by and construed in accordance with the
substantive laws of the Commonwealth of Delaware without regard to Delaware
choice of law rules.

                                      -6-
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            4.5 Amendment and Modification.  This Agreement may be amended,
modified or supplemented only by a written agreement executed by the parties.

            4.6 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties, nor
is this Agreement intended to confer upon any other person except the parties
any rights or remedies hereunder.

            4.7 Interpretation. The title, article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Agreement.

            4.8 Severability. In the event that any one or more of the
provisions of this Agreement shall be held to be illegal, invalid or
unenforceable in any respect, the same shall not in any respect affect the
validity, legality or enforceability of the remainder of this Agreement, and the
parties shall use their best efforts to replace such illegal, invalid or
unenforceable provisions with an enforceable provision approximating, to the
extent possible, the original intent of the parties.

            4.9 Entire Agreement. This Agreement embodies the entire agreement
and understanding of the parties hereto in respect to the subject matter
contained herein. There are no representations, promises, warranties, covenants,
or undertakings, other than those expressly set forth or referred to herein.
This Agreement supersedes all prior agreements and the understandings between
the parties with respect to such subject matter.

            4.10 Interest on Overdue Payments. Any payment pursuant to this
Agreement not made when due under this Agreement shall bear interest at the rate
of the Prime Rate of BankBoston (or its successors), as published from time to
time.

            4.11 Setoff. All payments to be made by any party under this
Agreement shall be made without setoff, counterclaim or withholding, all of
which are expressly waived.

            4.12 Notices. All notices provided for in this Agreement shall be
validly given if in writing and delivered personally or sent by registered mail,
postage prepaid

            if to the Company, to:

            Chief Financial Officer
            OTG Software, Inc.
            6701 Democracy Boulevard, Suite 800
            Bethesda, MD 20817

                                      -7-
<PAGE>   8

            copy to:

            Brent B. Siler, Esq.
            Hale and Dorr LLP
            11951 Freedom Drive, Suite 1400
            Reston, VA  20190

            if to any Stockholder, to:

            Name of Stockholder
            c/o Richard A. Kay
            President and Chief Executive Officer
            OTG Software, Inc.
            6701 Democracy Boulevard, Suite 800
            Bethesda, MD 20817

            4.14 Termination of Agreement.  This Agreement shall terminate and
be void, as if it never had been executed, if the Closing Date shall occur after
April 30, 2000.

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

                                   OTG SOFTWARE, INC.

                                   By:
                                      --------------------------
                                      Ronald W. Kaiser
                                      Chief Financial Officer

                                   STOCKHOLDERS:

                                   ------------------------------
                                   Richard A. Kay

                                   ------------------------------
                                   Alexandra Kay

                                   ------------------------------
                                   The Amanda Jean Kay November 1999 Grantor
                                   Retained Annuity Trust
                                   dated November 10, 1999

                                   -------------------------------
                                   The Bradley Evan Kay November 1999 Grantor
                                   Retained Annuity Trust
                                   dated November 10, 1999

                                   -------------------------------
                                   The Brandon Kay June 1999 Grantor
                                   Retained Annuity Trust
                                   dated June 15, 1999

                                   -------------------------------
                                   The Brandon Kay June 1999 Grantor
                                   Retained Annuity Trust
                                   dated November 10, 1999

                                      -9-
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                                   -------------------------------
                                   F. William Caple

                                   -------------------------------
                                   Ronald W. Kaiser

                                   -------------------------------
                                   Gabriel A. Battista

                                   -------------------------------
                                   John Burton

                                   -------------------------------
                                   Joseph R. Chinnici

                                   -------------------------------
                                   Geaton A. DeCesaris, Jr.

                                   -------------------------------
                                   Scott Nickel

                                   -------------------------------
                                   Stewart Nickel

                                   -------------------------------
                                   Paul Matsko

                                   -------------------------------
                                   Robert Alan Depelteau

                                   -------------------------------
                                   Mark Hanson

                                      -10-
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                                   -------------------------------
                                   Angela Duffy

                                   -------------------------------
                                   JoAnn DeCesaris

                                   -------------------------------
                                   Elizabeth DeCesaris

                                   -------------------------------
                                   Kristin DeCesaris

                                   -------------------------------
                                   Maria DeCesaris

                                      -11-
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                                   SCHEDULE A

                              LIST OF STOCKHOLDERS

            Richard A. Kay

            Alexandra Kay

            The Amanda Jean Kay November 1999
            Grantor Retained Annuity Trust
            dated November 10, 1999

            The Bradley Evan Kay November 1999
            Grantor Retained Annuity Trust
            dated November 10, 1999

            The Brandon Kay June 1999 Grantor
            Retained Annuity Trust dated June 15, 1999

            The Brandon Kay June 1999 Grantor
            Retained Annuity Trust  dated November 10, 1999

            F. William Caple

            Ronald W. Kaiser

            Gabriel A. Battista

            John Burton

            Joseph R. Chinnici

            Geaton A. DeCesaris, Jr.

            Scott Nickel

            Stewart Nickel

            Paul Matsko

            Robert Alan Depelteau

            Mark Hanson

            Angela Duffy

            JoAnn DeCesaris

            Elizabeth DeCesaris

<PAGE>   13

            Kristin DeCesaris

            Maria DeCesaris

                                      -13-
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                                   SCHEDULE B

                            LIST OF ACCOUNTING FIRMS

            PricewaterhouseCoopers LLP

            KPMG Peat Marwick LLP

            Arthur Andersen LLP

            Deloitte & Touche LLP

            Ernst & Young LLP

                                      -14-<PAGE>   1
                              EMPLOYMENT AGREEMENT

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

       The Company and Employee hereby agree as follows:

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

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

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

       4. Compensation.

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

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

<PAGE>   2

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

       5. Reimbursable Expenses.

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

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

       6. Employee Benefits.

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

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

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

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

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

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

                                       2
<PAGE>   3

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

              (d) By the event of Employee's death during the term of his
employment; whereupon the Company's obligation to pay further compensation
hereunder shall cease forthwith, except that Employee's legal representative
shall be entitled to receive his fixed compensation for the period up to the
last day of the month in which such death shall have occurred.

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

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

              (b) Employee hereby grants to the Company (without any separate
remuneration or compensation other than that received by him from time to time
in the course of his employment) his entire right, title and interest throughout
the world in and to, all research, information, procedures, developments, all
inventions and improvements whether patentable or nonpatentable, patents and
applications therefor, trademarks and applications therefor, copyrights and
applications therefor, programs, trade secrets, plans, methods, and all other
data and know-how (herein sometimes "Intellectual Property") made, conceived,
developed and/or acquired by him solely or jointly with others during the period
of his employment with the Company, which are either (i) made, conceived,
developed or acquired during regular business hours or on the premises of, or
using properties of, the Company or in the regular scope of Employee's
employment by the Company or (ii) if related to the Company's business, whether
or not made, conceived, developed or acquired during regular business hours or
on the premises of, or using properties of, the Company or in the regular scope
of Employee's employment by the Company.

       9. Confidentiality. Except as necessary in performance of services for
the Company or if required by law and except for such information that becomes
generally available to the public through no fault of Employee, Employee shall
not, either during the period of his employment with the Company or thereafter,
use for his own benefit or disclose to or use for the benefit of any person
outside the Company, any information concerning any Intellectual Property, or
other confidential or proprietary information of the Company, including without
limitation, any of the materials listed in Section 8(a), whether Employee has
such information in his memory or embodied in writing or other tangible form.
All originals and copies of any of the foregoing, however and whenever produced,
shall be the sole property of the Company, not to be removed from the premises
or custody of the Company without in each instance first obtaining authorization
of the Company, which authorization may be revoked by the Company at any time.
Upon the termination of Employee's employment in any manner or for any reason,
Employee shall promptly surrender to the Company all copies of any of the
foregoing, together with any documents, materials, data, information and
equipment belonging to or relating to the Company's business and in his
possession, custody or control, and Employee shall not thereafter retain or
deliver to any other person any of the foregoing or any summary or memorandum
thereof.

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

                                       3
<PAGE>   4

business and as Employee recognizes that the Company would be substantially
injured by Employee competing with the Company, Employee agrees and warrants
that within the United States, he will not, unless acting with the Company's
express prior written consent, directly or indirectly, while an employee of the
Company and during the Non-Competition Period, as defined below, own, operate,
join, control, participate in, or be connected as an officer, director,
employee, partner, stockholder, consultant, or otherwise with, any business or
entity which competes with the business of the Company (or its successors or
assigns) as such business is now constituted or as it may be constituted at any
time during the term of this Agreement; provided, however, that Employee may own
less than one percent of the equity of a publicly traded company. The
"Non-Competition Period" shall be a period of one year following termination of
employment.

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

       11. Non-Solicitation Agreement. Employee agrees and covenants that he
will not, unless acting with the Company's express written consent, directly or
indirectly, during the term of this Agreement or for a period of one year
thereafter solicit, entice away or interfere with the Company's contractual
relationships with any customer, client, officer or employee of the Company.

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

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

       14. Entire Agreement. This Agreement contains the entire agreement
between the Company and Employee with respect to the subject matter hereof and
there have been no oral or other prior agreements of any kind whatsoever as a
condition precedent or inducement to the signing of this Agreement or otherwise
concerning this Agreement or the subject matter hereof.

       15. Equitable Relief. Employee recognizes and agrees that the Company's
remedy at law for any breach of the provisions of Sections 8, 9, 10 or 11 hereof
would be inadequate, and he agrees that for breach of such provisions, the
Company shall, in addition to such other remedies as may be available to it at
law or in equity or as provided in this Agreement, be entitled to injunctive
relief and to enforce its rights by an action for specific performance. Should
Employee engage in

                                       4
<PAGE>   5

any activities prohibited by this Agreement, he agrees to pay over to the
Company all compensation, remuneration or monies or property of any sort
received in connection with such activities; such payment shall not impair any
rights or remedies of the Company or obligations or liabilities of Employee
which such parties may have under this Agreement or applicable law.

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

       17. Severability. If any part of any term or provision of this Agreement
shall be held or deemed to be invalid, inoperative or unenforceable to any
extent by a court of competent jurisdiction, such circumstances shall in no way
affect any other term or provision of this Agreement, the application of such
term or provision in any other circumstances, or the validity or enforceability
of this Agreement.

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

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

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

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<PAGE>   6

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

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

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

                                     NOVAVAX, INC.

[SEAL]

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

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

                                       6

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