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                                                                    EXHIBIT 10.7

NEITHER THE SECURITY EVIDENCED BY THIS WARRANT NOR THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT ("SECURITIES") HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES ACT
(COLLECTIVELY, THE "SECURITIES LAWS"). THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS
THE SECURITIES (I) ARE REGISTERED UNDER THE SECURITIES LAWS OR (II) ARE EXEMPT
FROM REGISTRATION UNDER THE SECURITIES LAWS AND THE COMPANY IS PROVIDED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.

No. __                                              WARRANT TO PURCHASE _______
ISSUED: ____________, 199___                             SHARES OF COMMON STOCK
HOLDER: ________________________

                                  VAXGEN, INC.

                              COMMON STOCK WARRANT

        THIS IS TO CERTIFY that, for value received and subject to the terms and
conditions of this Warrant, the person whose name appears as holder (the
"Holder"), is entitled, at any time before the termination of this Warrant as
provided in Section 4 (the "Exercise Period"), to subscribe for and purchase
upon exercise of this Warrant __________________________ (_______) fully paid
and nonassessable shares of Common Stock (the "Warrant Stock") of Vaxgen, Inc.,
a Delaware corporation (the "Company"), at a price of $_____ per share (the
"Exercise Price"). The Exercise Price and the number of shares of Warrant Stock
purchasable under this Warrant are subject to adjustment as provided in Section
5 of this Warrant.

        This Warrant is subject to the following additional terms and
conditions:

        1. Method of Exercise. This Warrant may be exercised in whole or in
part, but not as to a fractional share of Warrant Stock, by delivering to the
Company during the Exercise Period (i) the attached form of "Election to
Purchase," duly completed and executed by the Holder, (ii) this Warrant, and
(iii) payment of the Exercise Price in cash or cashier's check. In Addition, the
Holder, at its or the Company's option, may pay for all or any portion of the
aggregate exercise price by complying with one or more of the following
alternatives:

                (a) by delivering to the Company shares of Common Stock
previously held by such Holder which shares of Common Stock received shall have
a fair market value at the date of exercise (as determined by the Board) equal
to the aggregate exercise price to be paid by the Holder upon such exercise;

                (b) by delivering a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the Company the
amount of sale or loan proceeds to pay the exercise price;



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                (c) by delivering a full recourse promissory note for all or
part of the aggregate exercise price, payable on such terms and bearing such
interest rate as determined by the Board (but in no event less than the minimum
interest rate specified under the Code at which no additional interest would be
imputed and in no event more than the maximum interest rate allowed under
applicable usury laws), which promissory note may be either secured or unsecured
in such manner as the Board shall approve (including, without limitation, by a
security interest in the shares of the Company);

                (d) by delivering a combination of (a), (b) and (c) above.

                (e) if, at the date of making the calculation set forth below,
the fair market value of one share of Common Stock is greater than the exercise
price of the warrant, then in lieu of exercising the warrant for cash, the
Holder may elect to convert the warrant and receive Common Stock equal to the
value (as determined below) of the warrant (or the portion thereof being
exercised) by surrender of the warrant together with a notice of the Holder's
election to proceed pursuant to this Paragraph (e). In such an event, the
Company shall issue to the Holder that number of shares of Common Stock derived
utilizing the following formula:

        X=     Y (A-B)
               ------
               A

        Where   X= the number of shares of Common Stock to be issued to the
Holder pursuant to election under this Section 1(e)

                Y= the number of shares of Common Stock purchasable under the
warrant or, if only a portion of the warrant is being exercised, the portion of
the warrant being converted and canceled (at the date of such calculation)

                A= the fair market value of one share of Common Stock (at the
date of such calculation)

                B= the exercise price (as adjusted to the date of such
calculation)

For purposes of the above calculation, the "fair market value" of one share of
common Stock shall equal:

                (i) In the event the Warrant is exercised in connection with the
Company's initial public offering of Common Stock, the per share offering price
to the public in such public offering.

                        (ii) In other circumstances in which a public market
exists for the Common Stock at the time of such exercise, the average of the
closing bid and asked prices of the common Stock quoted in the Over-The-Counter
Market Summary or the last quoted sale price of the Common Stock or the closing
price quoted on the Nasdaq National Market or on any exchange on which the
Common Stock is listed, whichever is 



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applicable, as published the The Wall Street Journal for the five (5) trading
days prior to the date of determination of the fair market value.

                        (iii) In all other circumstances, such value as is
established by the Board acting in good faith.

        2. Delivery of Stock Certificates. Within ten (10) days after the
exercise of this Warrant, the Company at its expense (except for the payment of
any applicable issue taxes) shall issue in the name of and deliver to the Holder
a certificate or certificates for the number of fully paid and nonassessable
shares of Warrant Stock to which the Holder shall be entitled upon such
exercise, together with any other securities or property to which the Holder
hereof is entitled upon such exercise. The Holder shall for all purposes be
deemed to have become the holder of record of such shares of Warrant Stock on
the date on which this Warrant is surrendered and payment of the Exercise Price
is made (or immediately upon consummation of a Reorganization, in the case of an
exercise that is contingent upon such an event), irrespective of the date of
delivery of the certificate or certificates representing the Warrant Stock;
provided, that if the date of such surrender and payment is a date when the
stock transfer books of the Company are closed, such person shall be deemed to
have become the holder of record of such shares of Warrant Stock at the close of
business on the next succeeding date on which the stock transfer books are open.
Each certificate representing Warrant Stock to be delivered pursuant to this
Section 2 shall be in such denominations of Warrant Stock as may be requested by
the Holder hereof and shall be registered in the name of such Holder.

        3. Covenants as to Warrant Stock. The Company covenants and agrees that
all shares of Warrant Stock issued pursuant to the terms of this Warrant will,
upon their issuance, be validly issued and outstanding, fully paid and
nonassessable and free from all preemptive rights and liens, other than liens
created by or imposed upon the Holder through no action of the Company. The
Company further covenants and agrees that the Company will at all times have
authorized and reserved a sufficient number of the shares to provide for the
exercise of the rights represented by this Warrant.

        4. Exercise Period. This Warrant shall be exercisable from the date of
issuance until __________, unless sooner terminated pursuant to Section 4(b)
(the "Expiration Date").

        5. Stock Dividend, Reorganization or Liquidation.

                (a) If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Internal Revenue Code of 1986 as
amended (the "Code") or any "corporate transaction" described in the regulations
thereunder; (ii) the Company shall declare a dividend payable in, and shall
subdivide or combine, its Common Stock; or (iii) any other event with
substantially the same effect shall occur, the Board of Directors of the Company
shall, with respect to this Warrant, proportionately adjust the number of shares
of some Common Stock subject to this Warrant, the exercise price per share or
both so as to preserve the rights of the Holder



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substantially proportionate to the rights of the Holder prior to such event, and
to the extent that such action shall include an increase or decrease in the
number of shares of Common Stock subject to this Warrant, the number of shares
available shall automatically be increased or decreased, as the case may be,
proportionately, without further action on the part of the Board, the Company,
the Company's stockholders or the Holder.

               (b) If the Company shall at any time declare an extraordinary
dividend with respect to the Common Stock, whether payable in cash or other
property, the Board may, in the exercise of its sole discretion and with respect
to this Warrant, proportionately adjust the number of shares of Common Stock
subject to this Warrant, the exercise price per share or both so as to preserve
the rights of the Holder substantially proportionate to the rights of the Holder
prior to such event, and to the extent that such action shall include an
increase or decrease in the number of shares of Common Stock, the number of
shares subject to this Warrant shall automatically be increased or decreased, as
the case may be, proportionately, without further action on the Board, the
Company, the Company's stockholders, or any Holder.

               (c) If the Company is liquidated or dissolved, the Board may
allow the Holder to exercise all or any part of the Warrant, provided the Holder
does so prior to the effective date of liquidation or dissolution. If the Holder
does not exercise his, her or its rights prior to such effective date, then this
Warrant shall terminate as of the effective date of the liquidation or
dissolution.

               (d) The foregoing adjustments in the shares subject to this
Warrant shall be made by the Board or by any applicable terms of any assumption
or substitution document.

               (e) The grant of this Warrant shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge,
consolidate or dissolve, to liquidate or to sell or transfer all or any part of
its business or assets.

        6. Change of Control.

               (a) This Warrant shall be fully exercisable for the periods
indicated below (each such exercise referred to as an "Acceleration Window"):

                        (i) For a period of forty-five (45) days beginning on
the day on which any Person together with all Affiliates and Associates (as such
terms are defined below) of such Person shall become the Beneficial Owner (as
defined below) of fifty percent (50%) or more of the shares of Common Stock then
outstanding, but "Person" shall not include the Company, any subsidiary of the
Company, any employee benefit plan of the Company, or any subsidiary of the
Company or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such employee benefit plan;



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                        (ii) Beginning on the date that a tender or exchange
offer for Common Stock by any Person (other than the Company, any subsidiary of
the Company, any employee benefit plan of the Company, or any subsidiary of the
Company or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such employee benefit plan) is first
published or sent or given within the meaning of Rule 14d-2 under the Security
Exchange Act of 1934 (the "Exchange Act") and continuing so long as such offer
remains open (including any extension or renewals of such offer), unless by the
terms of such offer the offeror, upon consummation thereof, would be the
Beneficial Owner of less than fifty percent (50%) of the shares of Common Stock
then outstanding;

                        (iii) For a period of twenty (20) days beginning on the
day on which the stockholders of the Company (or, if later, approval by the
stockholders of any Person) duly approve any merger, consolidation,
reorganization or other transaction providing for the conversion or exchange of
more than fifty percent (50%) of the outstanding shares of Common Stock into
securities of any Person, or cash, or property, or a combination of any of the
foregoing, unless the holders of the voting stock of the Company immediately
prior to such transaction hold not less than fifty percent (50%) of the voting
rights in the surviving entity; or

                        (iv) For a period of twenty (20) days beginning on the
day on which, at any meeting of the stockholders of the Company involving a
contest for the election of directors, individuals constituting a majority of
the Board who were not the Board's nominees for election immediately prior to
the meeting are elected.

               (b) The exercisability of the Warrant if unexercised following
expiration of an Acceleration Window shall be governed by the other terms of
this Agreement.

               (c) If the stockholders of the Company receive shares of capital
stock of another Person ("Exchange Stock") in exchange for or in place of shares
of Common Stock in any transaction involving any merger, consolidation,
reorganization or other transaction providing for the conversion or exchange of
all or substantially all outstanding shares of Common Stock into Exchange Stock,
then at the closing of such transaction the Warrant granted hereunder shall be
converted into a Warrant to purchase shares of Exchange Stock unless the Company
(by the affirmative vote of a majority of all of the directors of the Company,
excluding for such purposes the votes of directors who are directors or officers
of, or have a material financial interest in the Person issuing the Exchange
Stock and any Affiliate of such Person), in its sole discretion, determines that
any portion of or all of the exercise rights granted hereunder shall not be so
converted but instead shall terminate. The amount and price of a converted
Warrant shall be determined by adjusting the amount and price of the
Warrants granted hereunder in the same proportion as used for consolidation,
reorganization or other transaction.

        For purposes of this Section 6: (i) "Person shall include any
individual, firm, corporation, partnership or other entity; (ii) "Affiliate" and
"Associate" shall have the 



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meanings assigned to them in Rule 12b-2 under the Exchange Act; and (iii)
"Beneficial Owner" shall have the meaning assigned to it in Rule 16a-1 of the
Exchange Act.

        7. Restrictions on Transfer. The Holder is acquiring this Warrant for
its own account for investment and not with a view to, or for sale in connection
with, any distribution or sale of any part thereof and with no present intention
of selling, granting participation in or otherwise distributing the same. The
Holder acknowledges that this Warrant and the underlying Warrant Stock have not
been registered under the Securities Act or qualified under applicable state
securities laws and confirms to the Company that it understands the restrictions
on resale imposed by the Securities Act. The Holder understands that the Warrant
is neither transferable nor assignable, except by will or by the laws of descent
and distribution, and therefore the Holder may never be able to sell or dispose
of this Warrant, unless an exemption from registration under the Securities Act
is available.

        8. Legend. A legend setting forth or referring to the above restrictions
shall be placed on this Warrant, any replacement hereof and any certificate
representing a security issued pursuant to the exercise of this Warrant and a
stop transfer restriction or order may be placed on the books of the Company and
with any transfer agent until such securities may be legally sold or otherwise
transferred.

        9. No Rights as Shareholder. This Warrant shall not entitle the Holder
to any voting rights or to any other rights as a shareholder of the Company or
to any other rights whatsoever except the rights stated herein; and no cash
dividend or interest shall be payable or shall accrue in respect of this Warrant
or the Warrant Stock purchasable hereunder unless, until and to the extent that
this Warrant shall be exercised. The Company shall provide each Holder during
the period such Holder holds this Warrant, and to each holder of Common Stock
acquired upon exercise of this Warrant for so long as such Person is a holder of
such Common Stock, annual financial statements of the Company as prepared either
by the Company or the independent certified public accountants of the Company.
Such financial statements shall include, at a minimum, a balance sheet and an
income statement, and shall be delivered as soon as practicable following the
end of the Company's fiscal year.

        10. Construction. The validity and interpretation of the terms and
provisions of this Warrant shall be governed by the laws of the State of
Delaware. The descriptive headings of the several sections of this Warrant are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions thereof.

        11. Expiration. This Warrant shall be void and all rights represented
hereby shall cease unless exercised on or before the Expiration Date. All
restrictions set forth herein on the shares of capital stock issued upon
exercise of any rights hereunder shall survive such exercise and expiration of
the rights granted hereunder.

        12. Exchange of Warrant. This Warrant is exchangeable upon the surrender
hereof by the Holder at the office of the Company for new Warrants of like tenor
but of different denominations representing in the aggregate the rights to
subscribe for and 



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purchase the number of shares that may be subscribed for and purchased
hereunder, each of such new Warrants to represent the right to subscribe for and
purchase such number of shares as shall be designated by the Holder at the time
of such surrender.

        13. Lost Warrant Certificate. If this Warrant is lost, stolen, mutilated
or destroyed, the Company shall issue a new Warrant of like denomination, tenor
and date as this Warrant, subject (a) in the case of any loss, theft or
destruction, to the Company's right to require the Holder to give the Company a
bond or other satisfactory security sufficient to indemnify the Company against
any claim that may be made against it (including any expense or liability) on
account of the alleged loss, theft or destruction of this Warrant or the
issuance of such new Warrant and (b) in the case of any mutilation, upon
surrender and cancellation of such Warrant.

        14. Waivers and Amendments. This Warrant or any provision hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought.

        15. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be mailed by United States mail
first-class postage prepaid, or by registered or certified mail with return
receipt requested, addressed as follows:

               If to the Holder:

                      To the address last furnished in writing to the Company by
                      the Holder.

               If to the Company:

                      VaxGen, Inc.
                      1420 Fifth Avenue, Suite 2200
                      Seattle, WA  98101
                      Attention:  Chief Financial Officer

        Each of the foregoing parties shall be entitled to specify a different
address by giving five (5) days' advance written notice as aforesaid to the
other party.

        IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.


                                            VAXGEN, INC.



                                            By
                                            -----------------------------------
                                                  Its                        
                                                      -------------------------



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                              ELECTION TO PURCHASE


To:     VAXGEN, INC.

        (1) The undersigned hereby elects to purchase _____________ shares of
Common Stock of VAXGEN, INC. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price in full, together with all
applicable transfer taxes, if any.

        (2) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:



                                            ------------------------------------
                                                         (Name)




                                            ------------------------------------
                                                         (Address)


        (3) The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares.

        (4) The undersigned represents and warrants that the representations,
warranties and covenants set forth in Section 5 of the Agreement are true and
correct as of the date hereof.

                                            By:
-----------------------------------            ---------------------------------
               (Date)                                    (Signature)


                                               ---------------------------------
                                                     (Print or Type Name)


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