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                                                                    EXHIBIT 10.3


                                   EXHIBIT A
                                       TO
                                  VAXGEN, INC.
                   CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
                                    FORM OF
                         REGISTRATION RIGHTS AGREEMENT



        This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as
of ____________, 199____, by and among VAXGEN, INC., a Delaware corporation (the
"Company"), and the holders of the Common Stock issued pursuant to that certain
Confidential Placement Memorandum dated as of November 2, 1998 (the "Placement
Memorandum").

        In consideration of the mutual covenants set forth in this Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Undersigned each hereby agree as
follows:

        1. DEFINITIONS

        For purposes of this Agreement:

               (a) The term "Commission" shall mean the U.S. Securities and
Exchange Commission or any U.S. federal agency at the time administering the
Securities Act;

               (b) The term "Common Stock" shall mean the common stock of the
Company;

               (c) The term "Initiating Holder" shall have the meaning given in
Section 2(b) hereof;

               (d) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document;

               (e) The term "Registrable Securities" shall mean Common Stock
that has not been registered for sale to the public under the Securities Act and
was issued pursuant to the Placement Memorandum;

               (f) The term "Registration Expenses" and "Selling Expenses" shall
mean the expenses described in Section 7 hereof;

               (g) The term "Securities Act" shall mean the U.S. Securities Act
of 1933, as amended, or any similar United States federal statute, and the rules
and regulations of the Commission thereunder, all as the same shall be in effect
at the time;

               (h) The term "Exchange Act" shall mean the U.S. Securities
Exchange Act of 1934, as amended, or any similar United States federal statutes,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time; and

               (i) The term "Holder" means any person owning or having the right
to acquire Registrable Securities who is a party to this Agreement and any
assignee thereof in accordance with this Agreement.

        2. DEMAND REGISTRATION.

               (a) At any time (i) following the fourth anniversary of the final
closing of the offering of securities pursuant to the Placement Memorandum and
before the filing date of the Company's initial public offering of its Common
Stock ("IPO"), if the Company receives a written request from the holders of at
least sixty percent (60%) of the Registrable Securities outstanding, that the
Company file a registration statement under the Securities Act covering the
registration of Registrable Securities, or (ii) after twelve (12) months from
the effective date of the IPO, if the Company is entitled to use Form S-3 (or
any successor short-form registration statement adopted by the Commission for
the resale of securities) and the Company receives a written request from the
holders of at least forty percent (40%) of the Registrable Securities
outstanding that the Company file a registration statement under the Securities
Act covering the registration of Registrable 



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Securities, then the Company shall promptly give written notice of such request
(together with a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable state securities laws)
to all Holders. As soon as practicable (but in no event later than ninety (90)
days after receipt by the Company of a request pursuant to the preceding clause
(i) or sixty (60) days after receipt by the Company of a request pursuant to the
preceding clause (ii)), and subject to the limitations of Subsection 2(b)
hereof, the Company shall file a registration statement in accordance with
Section 5 hereof, with respect to the registration under the Securities Act of
all Registrable Securities which the Holders may specify in such request in
writing within twenty (20) days after receipt of such notice from the Company.

               (b) If the Holders initiating the registration request (the
"Initiating Holders") intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise the Company as a
part of their request, and the Company shall include such information in the
written notice referred to in Subsection 2(a) hereof. In such event, the right
of any Holder to include securities in such registration shall be conditioned
upon the inclusion of such securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders) as provided
in this Section 2.

               (c) If other Holders request inclusion in such registration, the
Initiating Holders shall offer to such Holders the opportunity to include
Registrable Securities held by them in the underwriting, and may condition such
offer on the acceptance by such other Holders of Registrable Securities of the
further provisions of this Section 2. All Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the representative of the underwriter(s) selected for
such underwriting by a majority in interest of the Initiating Holders and
reasonably acceptable to the Company.

               (d) If, in the written opinion of the managing underwriter of any
such offering, a limitation of the number of shares to be underwritten is
required, the Initiating Holders shall so advise all holders of Registrable
Securities, and the number of Registrable Securities to be included in the
underwriting will be allocated among all such Holders in proportion, as nearly
as practicable, to the respective amounts of Registrable Securities that would
otherwise be entitled to inclusion in such registration statement; provided,
however, in the event that less than fifty percent (50%) of the Registrable
Securities requested to be registered are permitted by the managing underwriter
be included in such registration statement, then a majority in interest of the
Initiating Holders may withdraw their request to register Registrable Securities
and their request shall not count as a registration for the purpose of
Subsection 2(e) hereof. No Registrable Securities excluded from the underwriting
by reason of the underwriter's marketing limitation shall be included in such
registration. If any holder of securities to be included in such registration
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company, the underwriter and the Initiating
Holders. The securities so withdrawn shall also be withdrawn from registration.
If the underwriter has not limited the number of Registrable Securities or other
securities to be underwritten, the Company may include its securities for its
own account in such registration with the prior agreement of the underwriter,
provided the number of Registrable Securities and other securities which would
otherwise have been included in such registration and underwriting will not
thereby be limited.

               (e) The Company is obligated to effect no more than two (2) such
registrations at the request of the Holders pursuant to this Section 2.

               (f) Notwithstanding the foregoing, if the Company shall furnish
to the Initiating Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be detrimental to the Company and its shareholders for such
registration statement to be filed, the Company shall have the right to defer
such filing for a period of not more than one hundred twenty (120) days after
receipt of the request from the Initiating Holders; provided, however, that the
Company may not utilize this right more than once in any twelve (12) month
period.

        3. PIGGY-BACK REGISTRATION.

               (a) if the Company proposes to register any of its capital stock
or other securities under the Securities Act in connection with the public
offering of such securities (other than in connection with the IPO or a
registration on Form S-8 or any form which does not include substantially the
same information as would be 



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required to be included in a registration statement covering the public sale of
Common Stock), the Company shall, each such time, promptly give each Holder
written notice of such registration, together with a list of the jurisdictions
in which the Company intends to attempt to qualify such securities under
applicable state securities laws. Upon the written request of each Holder given
within thirty (30) days after mailing of such written notice from the Company in
accordance with this Section 3, the Company shall, subject to the provisions of
Section 3 (b) and Section 9 hereof, include in such registration all of the
Registrable Securities that each such Holder has requested to be registered. In
the event that the Company completes an IPO prior to the first anniversary of
the final closing of the offering of securities pursuant to the Placement
Memorandum (the "Private Placement"), the Company will permit Holders to include
up to 50% of the Registrable Securities acquired in the Private Placement in the
IPO subject to the provisions of Section 3(b) and Section 9 hereof.

               (b) Notwithstanding the foregoing, in the event the IPO or
proposed registration is in whole or in part an underwritten public offering,
the Company shall so advise the Holders as part of the written notice under
Subsection 3(a). If the managing underwriter determines and advises the Company
in writing that the inclusion of such shares of requesting Holders, together
with all shares of the Company's capital stock to be offered by the Company, and
shares to be included pursuant to other registration rights, would materially
adversely affect the successful marketing of such securities, then (i) the
Company shall immediately provide all Holders requesting inclusion in such
registration with a copy of such written advice, and (ii) the number of shares
of capital stock otherwise to be included in the registration statement by
Holders shall be reduced pro rata among such Holders requesting inclusion of
their shares in such registration statement in proportion to the number of
shares of the Company's capital stock then owned by each with respect to which
it has registration rights. The parties agree that in any registration for an
IPO or a public offering the managing underwriter may reduce the number of
shares on a pro rata basis to be included by Holders but in no event shall the
shares to be offered by the Holders be reduced to below fifteen percent (15%) of
the total number of shares to be included in the registration statement, or such
lesser number of shares as are requested to be included by the Holders. If any
Holder disapproves of the terms of such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter.

               (c) The Company is not obligated to include Holders' Securities
in more than three (3) such registrations.

        4. SHELF REGISTRATION.

        Upon expiration of a period of twelve (12) months following completion
of an IPO, if it occurs, and at any later time that the Company receives from
any Holder a written request that the Company effect a registration on Form S-3
(or any successor short-form registration statement adopted by the Commission
for the resale of securities) or any related qualification or compliance with
respect to all or a part of the Registrable Securities, the Company will:

               (a) Promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders.

               (b) As soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of the Registrable
Securities as are to be covered by the registration statement and are requested
by Holders to be included, all as specified in a written request from Holders
given within thirty (30) days after such written notice by the Company under
Subsection 4(a).

               (c) The Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 4: (i) if the
Company is not qualified as a registrant entitled to use Form S-3 (or any
similar successor form of registration statement); (ii) if the Holders propose
to sell Registrable Securities in an aggregate amount less than two million
($2,000,000), except for the S-3 registration statement filed after the
expiration of a period of twelve (12) months after the IPO pursuant to this
Section 4 (the "Initial S-3"), or unless all Registration Expenses are borne by
requesting Holders; or (iii) subject to the next sentence, if the Company shall
furnish to the Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for such Form S-3 or similar registration to be effected at such time. In the
case 



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of the circumstances described in the preceding clause (iii), the Company
shall have the right to defer the filing of the registration statement for a
period of not more than one hundred twenty (120) days after receipt of the
request of the Holder under this Section 4; provided, however, that the Company
shall not utilize this right more than once in any twelve (12) month period.

               (d) Registrations effected pursuant to this Section 4 shall not
be counted as demands for registration or registrations effected pursuant to
Section 2 hereof.

        5. OBLIGATIONS TO THE COMPANY.

        Whenever required under this Agreement to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:

               (a) Prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become and remain effective until the first to
occur of (i) twelve (12) months, in the case of the Initial S-3; (ii) one
hundred eighty (180) days, in the case of any other registration statement; or
(iii) the completion of the distribution described in the registration
statement.

               (b) Respond promptly to any comments of the Commission related to
the registration statement and prepare and file with the Commission such
amendments (including post-effective amendments) and supplements to the
registration statement, and to the prospectus used in connection with the
registration statement, as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by the registration statement.

               (c) Furnish to the Holders of Registrable Securities and to the
underwriters of the securities being registered such numbers of copies of the
registration statement, the prospectus, including a preliminary prospectus and a
final prospectus, and all amendments (including post-effective amendments) and
supplements thereto, in conformity with the requirements of the Securities Act,
and such other documents as they may reasonably request, in order to facilitate
the disposition of their Registrable Securities covered by the registration
statement.

               (d) Use its best efforts to register and qualify the Registrable
Securities covered by such registration statement under the securities laws of
such states as shall be reasonably requested by the selling Holders of such
securities or underwriters; provided, however, that the Company shall not be
required to take action to effect such registration in any particular
jurisdiction in which the Company would be required to file a general consent to
service of process in any such state in effecting such registration unless the
Company is already subject to service of process in such jurisdiction and except
as may be required by the Securities Act; and provided, further, that (anything
in this Agreement to the contrary notwithstanding with respect to the bearing of
expenses) if applicable law in any state in which the Registrable Securities
shall be qualified shall require that all or any portion of the Registration
Expenses (as defined in Section 7) be borne by selling Holders, then to the
extent required by that state, such Registration Expenses shall be payable by
the selling Holders pro rata.

               (e) Keep each Holder of Registrable Securities covered by a
registration statement under this Agreement generally advised in writing as to
the initial filing of each registration, qualification and compliance and as to
the completion thereof.

               (f) In the event of an underwritten public offering, enter into
and perform its obligations under the underwriting agreement with the managing
underwriter of such offering. Each Holder participating in such underwriting
shall also enter into and perform its obligations under such underwriting
agreement.

               (g) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number of all such
Registrable Securities, in each case not later than the effective date of such
registration.

               (h) In the event of a public offering, on the closing date
thereof if such Registrable Securities are being sold through underwriters, or,
if such securities are not being sold through underwriters, on the date that the
registration statement with respect to such Registrable Securities becomes
effective, the Company shall furnish (i) an opinion dated such date, of counsel
representing the Company for the purposes of such 



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registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders of Registrable Securities requesting registration of Registrable
Securities, to the effect that (A) the registration statement has become
effective under the Securities Act and, to the best knowledge of such counsel,
no stop order or proceedings with respect thereto are threatened or pending, and
(B) the registration statement and each prospectus forming a part thereof and
supplement or amendment thereto (except for the financial statements and
schedules) complies in all material respects with the Securities Act, and (ii) a
letter dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of such
Registrable Securities.

               (i) Notwithstanding the above, no Holder of Registrable
Securities shall be entitled to include such Registrable Securities in any
registration pursuant to this Agreement unless such selling Holder shall furnish
to the Company such information regarding such Holder, the securities held by
such Holder, and the intended method of disposition of such Registrable
Securities held by such Holder, as shall be required to effect the registration
of such securities held by such Holder.

        6. FURNISH INFORMATION.

        It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement with respect to any selling Holder
that such selling Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of such securities as shall be required to effect the registration
of its Registrable Securities and to execute such documents in connection with
such registration as the Company may reasonably request, and in any case only as
shall be necessary to allow the Company to comply with the provisions hereof.

        7. DEFINITION OF EXPENSES.

               (a) "Registration Expenses" shall mean all expenses, incurred by
the Company in complying with Sections 2, 3, 4 and 5 hereof, including, without
limitation, registration and filing fees, printing expenses, accounting 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
(but excluding the compensation of regular employees) of the Company which would
be paid in any event by the Company) and the fees and disbursements of one
special counsel for the participating Holders designated by the majority in
interest thereof.

               (b) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of the securities registered, and all
fees and disbursements of separate counsel for any Holder other than as set
forth in Section 7(a).

        8. EXPENSES OF REGISTRATION.

        All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant Sections 2 and 3 of this Agreement shall be
borne by the Company, and all Registration Expenses incurred in connection with
the Initial S-3 and up to four (4) additional registrations or qualifications,
all pursuant Section 4 of this Agreement, shall be borne by the Company, except
as provided in Subsection 5 (d) hereof to the extent required by applicable
state securities laws. All Selling Expenses shall be borne by the Holders of the
securities so registered pro rata on the basis of the number of shares so
registered.

        9. UNDERWRITING REQUIREMENTS.

        The right of any Holder to registration pursuant to Section 3 hereof
shall be conditioned upon the Holder's participation in the underwriting and the
inclusion of the Holder's Registrable Securities in the underwriting to the
extent provided therein and herein. All Holders proposing to distribute their
Registrable Securities through the underwriting shall (together with the Company
and the other Holders distributing their Registrable Securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter(s). Notwithstanding any other provision of Section 3 hereof and this
Section 9, if the managing underwriter determines that marketing factors require
a limitation of the number of shares to be 



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underwritten, then the managing underwriter may (subject to the allocation
priority set forth in Subsection 3(b) hereof) exclude some or all Registrable
Securities from such registration and underwriting. The Company shall so advise
all Holders requesting registration of any such limitations imposed by the
managing underwriter.

        10. INDEMNIFICATION.

        In the event any Registrable Securities are included in a registration
statement under this Agreement:

               (a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder of any such Registrable Securities included
therein, each underwriter (if any), each of the partners, affiliates, officers,
agents, employees and directors of each Holder and underwriter and each person,
if any, who controls such Holder or underwriter within the meaning of the
Securities Act, against any and all losses, claims, damages, liabilities, costs
or expenses (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law (including any of
the foregoing incurred in settlement of any litigation commenced or threatened),
insofar as such losses, claims, damages, liabilities, costs or expenses (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omission or violations (collectively, a "Violation"):

                        (i) any untrue statement or alleged untrue statement of
                a material fact contained in such registration statement,
                including any preliminary prospectus or final prospectus,
                offering circular or other document, or any amendments or
                supplements thereto, incident to any such registration,
                qualification or compliance,

                        (ii) the omission or alleged omission to state therein a
                material fact required to be stated therein, or necessary to
                make the statements therein, in light of the circumstances in
                which they were made, not misleading, or

                        (iii) any violation or alleged violation by the Company
                of the Securities Act, the Exchange Act, any state or federal
                securities law or any role or regulation promulgated under the
                Securities Act, the Exchange Act or any state or federal
                securities law;

and the Company will reimburse each such Holder, underwriter, partner, officer,
agent, affiliate, employee or director or controlling person, subject to the
provisions of Section I0 (c), for any legal and any other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 10(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation that occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by, or on behalf of, any such Holder, underwriter or
controlling person.

               (b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each other Holder with Registrable
Securities included therein, each of the officers, directors, agents and
employees of each of the foregoing persons with Registrable Securities included
therein, and each person, if any, who controls the Company, or an underwriter or
another Holder within the meaning of the Securities Act, against any losses,
claims, damages or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by, or on behalf of, such
Holder expressly for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company, other Holder(s) with Registrable Securities included therein (or any
partner, agent, employee, director, officer, or controlling person of such
person) and underwriters, in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 10(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action 



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if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld.

               (c) Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action (including any
governmental action) or other actual knowledge of any claim as to which
indemnity may be sought such hereunder, such indemnified party will, if a claim
in respect thereof is to be made against any indemnifying party under this
Section 10 deliver to the indemnifying party a written notice thereof and the
indemnifying party shall, jointly with any other indemnifying party similarly
notified, assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
indemnifying party, if, in the opinion of counsel for the indemnifying party,
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict of
interest between such indemnified party and any other party represented by such
counsel in such proceeding. It is understood, however, that the indemnifying
parties shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys at any time for all indemnified persons. The failure
to deliver written notice to the indemnifying party within a reasonable period
of time of the commencement of any such action shall relieve such indemnifying
party of any liability to the indemnified party under this Section 10 solely to
the extent that such failure is materially prejudicial to its ability to defend
such action, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 10.

               (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 10
is for any reason held to be unenforceable by a court of competent jurisdiction
although applicable in accordance with its terms, the Company and the selling
Holders shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company and the selling Holders, in such proportion as is appropriate to
reflect the relative fault of and benefits to the Company on the one hand and
the selling Holders on the other (in such proportions that the selling Holders
are severally, not jointly, responsible for the balance), in connection with the
statements or omissions that resulted in such losses, claims damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits to the indemnifying party and indemnified parties shall be
determined by reference to, among other things, the total proceeds received by
the indemnified party and indemnified parties in connection with the offering to
which such losses, claims, damages, liabilities or expenses relate. The relative
fault of the indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether the action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or the indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action.

        The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 10 were determined by pro rata allocation
or by any other method if such allocation does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 10, if the total price at which
the Registrable Securities of a selling Holder were offered to the public
exceeds the amount of any damages which such selling Holder would otherwise have
been required to pay by reason of an untrue statement or omission, such selling
Holder shall not be required to contribute any amount in excess of the total
price at which the Registrable Securities of such selling Holder were offered to
the public.

        Notwithstanding the foregoing, 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. For purpose of this Section 10, each person, if
any, who controls a Holder within the meaning of Section 15 of the Securities
Act and directors and officers of a Holder shall have the same rights to
contribution as such Holder, and each director of the Company, each officer of
the Company 



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who signed the registration statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act shall have the
same rights to contribution as the Company.

        11. REPORTS UNDER THE SECURITIES ACT.

        With a view to making available to the Holders the benefits of Rule 144
under the Securities Act and any other rule or regulation of the Commission that
may at any time permit a Holder to sell securities of the Company to the public
without registration, the Company agrees to:

               (a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after 90 days after the effective date of the first registration statement filed
by the Company for the offering of its securities to the general public;

               (b) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and

               (c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon written request (i) a written statement
by the Company that it has complied with the reporting requirements of Rule 144
under the Securities Act (at any time after 90 days after the effective date of
the first registration statement filed by the Company), the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements), or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information in the
possession of or owned by the Company as may be reasonably requested in availing
any Holder of any role or regulation of the Commission that permits the selling
of any such securities without registration or pursuant to such form.

        12. AMENDMENTS AND WAIVERS.

        The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given without the written
consent of the Company and the Holders of a majority of the then outstanding
Registrable Securities; provided however, that no amendment, modification,
supplement, waiver, or consent, with respect to the provisions of Sections 2, 3,
4, 9, 10, 11 or 12 hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder of
Registrable Securities. Notice of any amendment, modification or supplement to
this Agreement adopted in accordance with this Section 12 shall be provided by
the Company to each Holder of Registrable Securities at least thirty (30) days
prior to the effective date of such amendment, modification or supplement.

        13. NOTICES.

        All notices and other communications provided for or permitted hereunder
shall be made in writing by hand-delivery, registered first-class mail, telex,
telecopier, or any courier guaranteeing overnight delivery, (i) if to a Holder,
at the most current address given by such Holder to the Company by means of a
notice given in accordance with the provisions of this Section 13, which address
initially is, with respect to each Holder, the address set forth next to such
Holder's name attached hereto, or (ii) if to the Company, at 1420 Fifth Avenue,
Suite 2200, Seattle, WA 98101, Attention: Chairman, or such other address as the
Company shall notify the Holders in writing.

        All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; upon written confirmation of receipt by the telecopy machine
or when receipt is acknowledged, if telecopied; or at the time delivered if
delivered by an air courier guaranteeing overnight delivery.

        14. SUCCESSORS AND ASSIGNS.

        This Agreement shall inure to the benefit of and be binding upon the
successors, assigns and transferees of each of the parties, including, without
limitation and without the need for an express assignment, 



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subsequent Holders. If any successor, assignee or transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Registrable Securities such
person shall be entitled to receive the benefits hereof and shall be
conclusively deemed to have agreed to be bound by all of the terms and
provisions hereof. Notwithstanding the foregoing provisions of this Section 14,
a transferee of Registrable Securities shall not be deemed to be a party to, and
shall not be bound by or entitled to the benefits of, the provisions of this
Agreement, if immediately following the transfer of the Registrable Securities
to such transferee, the further disposition of such Registrable Securities by
the transferee is not restricted under the Securities Act.

        15. TERMINATION.

        This Agreement shall terminate on the fifth anniversary of the Company's
IPO, and shall terminate with respect to each Holder at such time as the
Registrable Securities held by Holder may be sold pursuant to Rule 144(k) under
the Securities Act.

        16. COUNTERPARTS.

        This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.

        17. HEADINGS.

        The headings in this Agreement are for convenience of reference only and
shall not limited or otherwise affect the meaning hereof.

        18. GOVERNING LAW.

        THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW
PROVISIONS THEREOF.

        19. SPECIFIC PERFORMANCE.

        The parties hereto acknowledge that there would be no adequate remedy at
law if any party fails to perform any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of any other party under this Agreement in
accordance with the terms and conditions of this Agreement in any court of the
United States or any State thereof having jurisdiction.

        20. ENTIRE AGREEMENT.

        This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.



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        21. SEVERABILITY.

        If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement, and
the balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.


THE COMPANY

VaxGen, Inc.




By:_____________________________
          Its Chairman


INVESTORS:


SEE INVESTORS SIGNATURE PAGES ATTACHED HERETO



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