[ * ]
  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
  EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
  1934, AS AMENDED.




EXHIBIT 10.51

PARTNERSHIP
AGREEMENT

BETWEEN

VAXGEN,
INC.

AND

THE
CHEMO-SERO-THERAPEUTIC RESEARCH INSTITUTE

(KAKETSUKEN)








[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

PARTNERSHIP
AGREEMENT

          THIS
PARTNERSHIP AGREEMENT (the “Agreement”), is entered into as
of 1st December, 2003 (the “Effective Date”) by and between VAXGEN, INC., a Delaware corporation,
having a principal place of business at 1000 Marina Boulevard, Brisbane,
California 94005-1841 (“VaxGen”) and THE
CHEMO-SERO THERAPEUTIC RESEARCH INSTITUTE (KAKETSUKEN), a Japanese
Juridical Foundation having a principal place of business at 1-6-1 Okubo,
Kumamoto-shi, Kumamoto 860-8568, Japan (“Kaketsuken”).  Kaketsuken and VaxGen may be referred to
herein individually as a “Party”
and collectively as the “Parties.”

BACKGROUND

          A.
       VaxGen is a company
engaged in the research, development, production and commercialization of
products for the prevention or treatment of human infectious diseases;


          B.
       Kaketsuken is an
institute engaged in research, development, production and commercialization of
vaccines and other healthcare products for the prevention and treatment of
infectious diseases;


          C.
       Kaketsuken has
exclusive rights to a smallpox vaccine known as “LC16m8” developed by the
former Chiba Institute.


          D.
       Kaketsuken has
initiated manufacture of LC16m8 in its own facilities and is currently engaged
in manufacturing activities that will lead to the validation of such
manufacture at these facilities (such vaccine known as “LC16-Kaketsuken”);


          E.
       VaxGen desires, on
an exclusive basis, to conduct such trials as may be necessary to obtain
marketing approval of LC16m8 in the United States, with the purpose of
achieving the rapid commercialization of LC16m8 in the United States, and also
desires to commercialize the vaccine in certain areas outside the U.S.; 


          F.
       Kaketsuken desires
to make available to VaxGen limited supplies of  LC-16-Kaketsuken to facilitate VaxGen’s program to obtain
regulatory approval in the United States. Kaketsuken also desires to
manufacture and supply bulk LC16-m8 for VaxGen’s use in producing Vaccine
product in such formulation as is required for regulatory approval in the
United States.  Subject to
Section 6.6, Kaketsuken does not allow VaxGen or its agent
or contractor to manufacture bulk LC16-m8 or bulk product derived from LC16; 


          G.
       The Parties have
executed a letter of intent, dated as of January 9th, 2003, and as extended on
May 29th 2003 and September 9th, 2003 with respect to the foregoing;


          H.
       In connection with
the activities described herein, Kaketsuken desires to grant to VaxGen, and
VaxGen desires to obtain, certain license rights of first refusal and of
exclusivity with respect to LC16m8 on the terms and conditions set forth in
this Agreement; and 


1.









          I.       The
Parties desire to work in partnership toward the goal of rapid regulatory
approval and broad commercialization of LC16m8 in the United States, and
potentially elsewhere, as mutually agreed under the provisions of this
Agreement, and to commit their best commercial efforts to such goal, including,
but not limited to, increasing production capacity as necessary. 

          NOW,
THEREFORE, in consideration of the foregoing background and
the mutual covenants and agreements contained herein, the Parties hereby agree
as follows:

ARTICLE
1

DEFINITIONS

          The
following terms, when capitalized, shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined) as used in this Agreement:

          1.1     “Affiliate”
means, with respect to a Party, any Person that, directly or indirectly, is
controlled by, controls or is under common control with such Party, but only
for so long as such relationship exists. 
“Control,” as used in this Section 1.1, means having the power to
direct, or cause the direction of, the management and policies of any entity
through ownership of voting securities. 


          1.2     “Asia”
means the countries and territories of the Eurasian land mass and its adjacent
islands, separated from Europe by the Ural mountains, but not including
Australasia. 


          1.3     “BLA”
means a Biologics License Application as defined in the FD&C Act and
applicable regulations and guidelines promulgated thereunder.


          1.4     “Bulk
Product” means the Vaccine in bulk form, prior to
formulation, filling, finishing, packaging and labeling.


          1.5     “Calendar
Year” means the period of time commencing on January 1 of
a given year, and ending on December 31 of such year.


          1.6     “CDC”
means the United States Centers for Disease Control and Prevention.


          1.7     “Chiba”
means the former Chiba Institute owned by the Chiba Prefecture in Japan, the smallpox-related
assets and rights of which were transferred to Kaketsuken. 


          1.8     “Confidential
Information” shall have the meaning set forth in Article
10.


          1.9     “Control”
or “Controlled” means the right to grant a license or
sublicense to intangible property rights (including patent rights, know-how
and/or trade secret information), and the right to provide access to or
cross-reference to regulatory filings, in each case to the extent not in
violation of the terms of any agreement or other arrangement with any Third
Party in existence as of the Effective Date. 


2.









          1.10    “Cost
of Sales” means the Direct Costs incurred by VaxGen, its
Affiliates and sublicensees, whether incurred by VaxGen or its agents in the [ * ] of the Vaccine, and shall
include:  (a) the costs to [ * ]; (b) the costs to [ * ];  (c) the costs to [ * ];
(d) the costs to [ * ]; (e) the
costs [ * ]. 

          1.11    “Development
Expenses” shall have the meaning set forth in Section
8.2(b).

          1.12    “Direct
Costs” means [ * ] incurred in the direct [ * ]
by a Party and/or by its agents at its behest, excluding [ * ].

          1.13    “Europe”
means the countries, territories and islands of Europe west of the Dardanelles,
Black Sea and Ural mountains.  

          1.14    “FDA”
means the United States Food and Drug Administration, or any successor agency.

          1.15    “FD&C
Act” means the United States Federal Food, Drug and
Cosmetics Act, as amended from time to time.

          1.16    “Field”
means the use of the Vaccine for pre or post-exposure inoculation against
smallpox, in any population for which the Vaccine is approved by the FDA, or
other relevant Regulatory Agency.

          1.17    “Finished
Product” means the Vaccine in finished, packaged and
labeled form, and in such formulation as is required in order to obtain
Regulatory Approval in the Territory.

          1.18    “First
Commercial Sale” means the first commercial sale of the
Vaccine in the Territory for use in the Field whether under IND or BLA.


          1.19    “Forecast”
shall have the meaning set forth in Section 6.5.


          1.20    “Good
Manufacturing Practice” or “cGMP” means the then current
standards for the manufacture of biologicals, as set forth in the FD&C Act
and applicable regulations and guidelines promulgated thereunder.


          1.21    “Gross
Sales Revenue” means the sum of [ * ] from persons or entities due to or by reason of the sale,
distribution or use of Finished Product in the Territory.  Sales of Finished Product intended for
resale to Third Parties, and made internally among [ * ] shall not be deemed sales for purposes of calculating “Gross
Sales Revenues” (however the resale by the recipient shall be included in the
calculation of “Gross Sales Revenues”).


          1.22    “IND”
means an Investigational New Drug Application as defined in the FD&C Act
and applicable regulations and guidelines promulgated thereunder.


3.









          1.23    “Information”
means available techniques and data relating to the Vaccine and including (but
not limited to) practices, methods, knowledge, know-how, skill, experience,
test data including pharmacological, toxicological, non-clinical and clinical
test data, analytical and quality control data, marketing, pricing, distribution,
cost, sales and manufacturing data or descriptions.

          1.24    “Invention”
means any patentable invention or discovery. 


          1.25    “Kaketsuken
Know-How” means any Information owned or Controlled by
Kaketsuken either:  (a) as of the Effective
Date; or (b) during the Term of this Agreement, that is useful or necessary in
the clinical development, Regulatory Approval, commercialization, marketing or
manufacture of the Vaccine for use in the Field in the Territory.  


          1.26    “Kaketsuken
Materials” means any Bulk Product, intermediate used in
the production of Bulk Product, or any other biological materials that may be
transferred by Kaketsuken to VaxGen with Kaketsuken’s consent, subject to the
approval of the authority of Chiba Prefecture. 


          1.27    “Kaketsuken
Patents” means any Patents in force now, or coming into
force during the term of this Agreement that are owned or Controlled by
Kaketsuken or its Affiliates that cover the manufacture, use, sale, offer for
sale or importation of the Vaccine in the Field and in the Territory.  


          1.28    “Marketing
Costs” means those Direct Costs incurred by VaxGen in the
marketing, promotion and sale of [ * ]
and shall include, without limitation: (a) the following costs [ * ]; (b) [ * ]; and (c) costs of [ * ], including, without limitation, [ * ].  Marketing Costs shall only be recoverable under this Agreement
pursuant to Section 8.2(d).


          1.29    “Net
Sales” means Gross Sales Revenue less the following
deductions and offsets, but only to the extent such sums are otherwise included
in the computation of Gross Sales Revenue, or are paid or credited by [ * ] and not otherwise reimbursed: 


                     (a)     credits
for free goods, allowances, trade, cash and/or quantity discounts actually
taken by the customer in such amounts as are customary in the trade;


                     (b)     any
tax, excise, or other governmental charges upon or measured by the production,
sales, transportation, delivery or use of said Finished Product contained
therein;


                      (c)     transportation
and insurance charges and discounts other than those described above;


                     (d)     fees
paid to distributors, selling agents, group purchasing organizations, managed
care entities and other non-affiliated Third Parties;


                     (e)     amounts
repaid or credited by reason of rejections, recalls, destruction or returns or
because of rebates or chargebacks; and


4.









                     (f)     taxes
paid by VaxGen or its Affiliates to the United States Government or an
instrumentality thereof under 42 U.S.C. 300 aa-1 et seq.  or other similar legislation, or to a state
of the United States, insuring against liability arising out of the
manufacture, use or sale of Finished Product by VaxGen or its Affiliates.

          1.30    “Operating
Profit” means the profits resulting from commercial sales
of the [ * ] and shall be equal
to:  (a) Net Sales minus (b) the sum of [ * ].

          1.31    “Other
Allowable Expenses” means those direct expenses [ * ] that are specifically
attributable to the commercialization of the [ * ], and shall include, by way of example, and without
limitation:  (i) the [ * ]; (ii) all [ * ] incurred to [ * ]; (iii) [ * ]; and (iv) [ * ].

          1.32    “Patent”
means patents, applications for patent, provisional applications for patent,
and any patents issuing therefrom (including any divisions, continuations,
continued prosecution applications and continuations-in-part thereof), and
reexamination certificates, reissue patents, patent extensions and patent term
restorations.


          1.33    “Person”
means an individual, corporation, partnership trust or unincorporated
organization.


          1.34    “Product
Labeling” means:  (a) the FDA full prescribing information for the Vaccine,
including any required patient information; and (b) all labels and other
written, printed or graphic matter upon any container, wrapper or any package
insert or outsert utilized with or for the Vaccine.


          1.35    Quality
Protocol”means
an agreement that is mutually agreed by the Parties (and appended at Exhibit
C), and that defines and details the cGMP quality and regulatory
responsibilities and authority of VaxGen and Kaketsuken under this
Agreement.   


          1.36    “R&D
Expenses” means the Direct Costs incurred by [ * ], in the conduct [ * ] of the Agreement[ * ].  “R&D Expenses” shall include the [ * ] incurred by [ * ]
in carrying out the functions described in the previous sentence, including [ * ]. Any financial support received
from [ * ] shall be [ * ]. In the event that [ * ].


          1.37    “Regulatory
Agency” means any supranational, national, regional,
state, provincial or local regulatory agency, department, bureau, commission,
council or other governmental entity, responsible for the granting of any
approvals, licenses, registrations or authorizations necessary for the
commercial manufacture, use, storage, importation, export, transport or sale of
the Vaccine in a regulatory jurisdiction.


          1.38    “Regulatory
Approvals” means any approvals (including, but not
limited to, BLA approval, labeling, pricing and reimbursement approvals),
product, biologic and/or establishment licenses, registrations or
authorizations of any federal, state or local regulatory agency, department,
bureau or other governmental entity, necessary for the commercial manufacture,
use, storage, importation, export, transport or sale of the Vaccine in the
Field in such regulatory jurisdiction.


5.









          1.39    “Regulatory
and Manufacturing Development Expenses”means those Direct Costs incurred by
Kaketsuken in supporting VaxGen’s non-clinical studies and human clinical
trials of Vaccine in the Territory, including without limitation: (a) [ * ];
(b) [ * ]; (c) [ * ]; (d) [ * ].

          1.40    “Secondary
Manufacture” or “Secondary Manufacturing” means the
formulation, filling, finishing and packaging of Bulk Product to create
Finished Product.

          1.41    “Specifications”
means those specifications for Bulk Product and Finished Product (as the case
may be) set forth on Exhibit A.  

          1.42    “Steering
Committee” shall have the meaning set forth in Section
2.3.

          1.43    “Term”
means the period commencing on the Effective Date and ending, unless renewed
per Section 16.1, on the tenth anniversary of the date of FDA marketing
approval of the Vaccine.

          1.44    “Territory”
means the United States.

          1.45    “Third
Party” means any entity other than Kaketsuken or VaxGen
and their respective Affiliates.


          1.46    “Transfer
Price” shall have the meaning set forth in Section
8.1(b).


          1.47    “TSE”
means transmissible spongiform encephalopathy. 


          1.48    “United
States” means the United States, its territories and
possessions and the Commonwealth of Puerto Rico.


          1.49    “USDA”
means the United States Department of Agriculture.


          1.50    “Vaccine”
means that certain live, attenuated, cold-adapted smallpox vaccine incorporating
the LC16m8 vaccinia virus strain, developed originally by Chiba. 


          1.51    “VaxGen
Know-How” means any Information owned or Controlled by
VaxGen either:  (a) as of the Effective
Date; or (b) during the term of this Agreement, that is useful or necessary in
the clinical development, Regulatory Approval, commercialization, marketing or
manufacture of the Vaccine for use in the Field in the Territory.  


          1.52    “VaxGen
Patents” means those Patents owned or Controlled, as of
the Effective Date or thereafter, by VaxGen or its Affiliates that cover the
manufacture, use, sale, offer for sale or importation of the Vaccine in the
Field and in the Territory. 


6.









ARTICLE
2


OVERVIEW


          2.1      Purpose.  The purpose of this Agreement is to
establish a collaboration through which the Parties, collectively, shall
manufacture Vaccine, conduct non-clinical and clinical trials, seek FDA
Regulatory Approval and commercialize Vaccine in the United States in an
expeditious manner.  The Parties may also
collaborate with respect to the exchange of information and further licensing
of intellectual property and conducting non-clinical and clinical trials so as
to obtain Regulatory Approval outside of the United States in an effort to
increase the number of people to whom the Vaccine may be
administered.


          2.2      Commercial
Principles.  The
Parties intend that profits earned from commercial sales of the Finished
Product pursuant to the terms of this Agreement shall be shared [ * ].  The Parties hereby agree that they will so order the commercial
arrangements of the collaboration so as to be consistent with this principle.


          2.3      Steering
Committee.  The
Parties intend to facilitate the successful execution of activities under this
Agreement primarily through a steering committee (the “Steering Committee”)
which will have decision making authority with respect to, without limitation, the
development, clinical trials, regulatory filing and commercialization of the
Vaccine for the Territory. The Steering Committee shall be comprised of an
equal number of representatives from each of VaxGen and Kaketsuken.  The Steering Committee shall meet
telephonically or in person quarterly, or more often as the Parties mutually
agree.  The Parties shall use
commercially reasonable efforts and cooperate with one another in carrying out
their respective obligations hereunder. 



ARTICLE
3


LICENSES


          3.1      License
Grant to VaxGen.  


                     (a)     Subject
to the conditions and limitations set forth in this Agreement, Kaketsuken
hereby grants to VaxGen an exclusive license under Kaketsuken Patents,
Kaketsuken Know-How (and Kaketsuken Inventions (pursuant to Section 11.1(b)) to
use, develop, finish, have finished Bulk Product, and use, offer for sale and
sell the Finished Product, in the Territory for use in the Field.  Notwithstanding the foregoing, Kaketsuken
shall retain the exclusive ownership of Kaketsuken Patents, Kaketsuken Know-How
and Kaketsuken Inventions, and Kaketsuken shall retain the exclusive right to
manufacture Bulk Product. 


                     (b)     Kaketsuken
shall not grant to VaxGen the right to grant sublicenses,
except the right to grant a sublicense to offer for sale and sell the
Finished Product in the Territory in the Field with Kaketsuken’s prior written
approval, which shall not be unreasonably withheld. 


          3.2       Rights
of First Refusal: Europe.     Kaketsuken
hereby grants to VaxGen for the Term of this Agreement, a right of first
refusal to acquire an exclusive license to develop and commercialize the
Vaccine in Europe (or any country thereof) for use in the Field (“European
Project”), as set forth in this Section 3.2.


7.









                     (a)     During
the Term and before Kaketsuken grants to a Third Party any
license for the European Project, except [ * ]  related entities, Kaketsuken
shall provide to VaxGen in writing the opportunity to consider whether it is
interested in acquiring the license for the European Project. Kaketsuken
shall provide to VaxGen under a binder of confidentiality information
and data and offer material terms of a license agreement
concerning the European Project. 

                     (b)     VaxGen
shall have [ * ] following
receipt of such information and terms of offer, in which to
inform Kaketsuken in writing that it is so interested and accept the
material terms of offer of the license agreement.


                     (c)     If
VaxGen informs Kaketsuken that it is so interested, the Parties shall
negotiate in good faith for [ * ]
the details of the license agreement in accordance with the material terms
of offer, which shall be set forth in either an executed license agreement
or an executed legally binding letter of intent.


                     (d)     If VaxGen
fails to notify Kaketsuken of its interest in writing within [ * ], or if the Parties fail to
execute a binding agreement or letter of intent within [ * ], Kaketsuken may proceed to develop and commercialise the
European Project with no further accountability to VaxGen for such opportunity.


                     (e)     In the
case under Section 3.2(d) and if Kaketsuken offers an opportunity to a
Third Party to consider a license agreement, Kaketsuken shall not offer
terms objectively more favorable to the Third Party than those last offered to
VaxGen. If and when Kaketsuken and such Third Party negotiate the terms of a
license agreement and in the course of such negotiation the terms of the
agreement vary from those last offered by Kaketsuken to VaxGen in that they are
more favorable to the Third Party, then in such case, prior to entering into
any binding agreement with such Third Party, Kaketsuken shall first provide
VaxGen an opportunity to enter into that same agreement under the same revised
terms. VaxGen shall have [ * ]
following the offer of such opportunity in which to answer in
writing whether or not it would accept the offer of the agreement.


                     (f)     In the
case under Section 3.2(e) and if VaxGen fails to answer within [ * ] to the offer,
Kaketsuken may proceed to develop and commercialise the European Project
with no further accountability to VaxGen for such
opportunity.   


          3.3       Negotiation
Rights:  Other Territories.  For the territories other than those of the Territory,
Europe, Japan and Asia (“Other Territory”), Kaketsuken shall first seek the
possibility of co-commercializing the Vaccine with VaxGen as its partner, if
VaxGen offers conditions which Kaketsuken deems as substantially non-inferior to
those offered by other entities and acceptable for Kaketsuken for
co-commercializing.


8.







          3.4       Grant-back
and Use of [ * ].


                     (a)     Where
VaxGen [ * ], it shall then
provide to Kaketsuken [ * ].  Kaketsuken shall keep all such [ * ] without prior written notice to
VaxGen.  

                     (b)     Notwithstanding
Section 3.4(a), Kaketsuken [ * ]
in its efforts to [ * ], and if
Kaketsuken seeks to [ * ] it may
[ * ].

                     (c)     Notwithstanding
Section 3.4(a), if Kaketsuken wishes to [ * ], Kaketsuken may [ * ],
and may [ * ], provided that
Kaketsuken shall have first [ * ].

                     (d)     If
Kaketsuken [ * ], it shall then
provide to VaxGen [ * ] relevant
to [ * ]. VaxGen shall maintain
all such [ * ]. 

ARTICLE
4


NON-CLINICAL AND CLINICAL DEVELOPMENT


          4.1       Current
Status.  Prior to
the Effective Date, Chiba, and now Kaketsuken, have developed the Vaccine for
commercialization and use in the Field in Japan.  In that regard, Chiba and Kaketsuken have conducted clinical
trials and have filed for and received Regulatory Approval in Japan, and
Kaketsuken is now in possession of the regulatory dossier and other Information
used in connection with such Regulatory Approval.  


          4.2       Development
Roles in the Territory. 
The Parties shall collaborate with respect to the development of the
Vaccine in the Field in the Territory. 
VaxGen shall be solely responsible for [ * ].  Kaketsuken shall be
responsible for [ * ].  Kaketsuken shall also [ * ] upon VaxGen’s request.  In addition, Kaketsuken shall [ * ].  


          4.3       Consent
for Specific Development Program.  VaxGen shall [ * ]. In the event [ * ],
they shall be conducted in the Territory in compliance with all legal and
regulatory requirements of the Territory. 
As sponsor of any clinical trials of the Vaccine in the Territory,
VaxGen shall properly obtain informed consent from those participating as
clinical trial subjects.  Further,
VaxGen shall be solely responsible for disclosure of known risks of the Vaccine
and shall provide appropriate FDA warnings to those dispensing and those
receiving the Vaccine in the Field and the Territory.  Kaketsuken shall provide non-clinical, clinical and regulatory
advice and consultation upon VaxGen’s reasonable request.


          4.4       Regulatory
Applications.  
VaxGen shall be responsible for preparing and filing and shall own the
applications for Regulatory Approval of the Vaccine in the Territory, i.e. the
IND, the BLA and the drug master file, but excluding any files and applications
concerning the drug substance.  VaxGen
will file all such applications in its own name and shall be responsible for
prosecuting such applications. 
Kaketsuken shall file (via VaxGen as an agent if required by the FDA),
the drug substance master file and site information (IND stage) and other files
describing the drug substance if required by the FDA at the BLA stage.  To support VaxGen in its Regulatory Approval
efforts, Kaketsuken shall review and provide corrections to VaxGen’s draft IND,
VaxGen’s IND amendments, drug master file, draft BLA and BLA Supplements as
well as to their equivalents in areas other than the United States where
Kaketsuken licenses VaxGen to seek marketing approval for the Vaccine.  Likewise, VaxGen shall review and provide
corrections to the Kaketsuken drug substance master file and other regulatory
documents to be filed with the FDA or other Regulatory Agencies in areas other
than the US where Kaketsuken licenses VaxGen to seek marketing approval for the
Vaccine.


9.









          4.5       Regulatory
Meetings and Correspondence.  Notwithstanding anything herein to the contrary, VaxGen or its
agent shall have exclusive responsibility for correspondence and for any
official communications with the FDA or any other Regulatory Authority
regarding the Vaccine in the Field in the Territory.

          4.6       Expenses.  VaxGen shall be responsible for [ * ] incurred by [ * ].  Such costs incurred [ * ]
within [ * ] of receiving a
written invoice [ * ]. VaxGen
shall have [ * ] following
receipt of written notification [ * ].  If VaxGen fails to [ * ] within [ * ],
it shall be deemed that [ * ].

ARTICLE 5

MANUFACTURE
AND SUPPLY OF MATERIALS FOR DEVELOPMENT PROGRAM 

          5.1       Supply
of Bulk Product and Finished Product For Development Program.  Kaketsuken shall manufacture and supply to
VaxGen Finished Product or Bulk Product sufficient for VaxGen’s use to conduct
non-clinical studies and clinical trials in the Territory, free of charge.  Such supply shall consist of:

          a)  [ * ], released under Japanese
specifications for animal studies

          b)  [ * ], to support fill/finish process
development

          c)  [ * ] that meets mutually agreed
specifications and was produced under cGMP, for use in clinical trials.

Notwithstanding any other
section, Kaketsuken’s obligation under this Section 5.1 shall be limited to the
manufacture and supply of the materials detailed in Sections 5.1(a)-(c)
above.  In the event VaxGen requires any
amounts of Bulk Product or Finished Product over and above these amounts, the
Parties shall meet and discuss the matter, with the understanding that [ * ].

ARTICLE 6


COMMERCIAL
MANUFACTURE AND SUPPLY


          6.1       General
Rights and Responsibilities of the Parties.


                     
(a)     Kaketsuken
shall have the exclusive right and obligation, using commercially reasonable
efforts, to manufacture and supply VaxGen’s requirements for Bulk Product for
Secondary Manufacture by VaxGen or its subcontractor, for commercial
distribution and sale in the Territory.


10.









                     (b)     VaxGen
shall have the right and obligation to use commercially reasonable efforts to
perform or have performed all Secondary Manufacture of Bulk Product supplied by
Kaketsuken, provided that prior written notice of subcontractors is supplied to
Kaketsuken.  

          6.2       General
Principles.  The
Parties shall closely coordinate their activities hereunder in order to:  (i) minimize the time of the Vaccine’s
production cycle; (ii) minimize the time required to bring the Vaccine to
market; (iii) maintain low production cost; and (iv) comply with cGMP in their
manufacturing efforts.

          6.3       Kaketsuken
Advisory Role. 
Kaketsuken shall:  (i) deliver to
VaxGen all available documentation regarding the manufacturing and quality
control processes used by Kaketsuken in Secondary Manufacture; (ii) provide to
VaxGen reasonable manufacturing expertise, advice and know-how in its
possession and control and consultation services with respect to the
manufacture and supply of the Finished Product; and (iii) transfer to VaxGen
all Kaketsuken Know-How Information or Kaketsuken Materials necessary or useful
to the Secondary Manufacture, in each case in order to effect the general
principles in Section 6.2. 

          6.4       Kaketsuken’s
Production Capacity and Scale-Up.


                     (a)     The
total amount of production of Bulk Product by Kaketsuken less the amount of
Bulk Product used by Kaketsuken for its internal demand shall be considered the
“Capacity Limit”, and the total production amount, the amount of internal
demand and the Capacity Limit of each year shall be mutually decided by the
Parties. Kaketsuken’s obligations to supply VaxGen’s requirements of Bulk
Product are limited to amounts within this Capacity Limit, subject to Section
6.4(b).


                     (b)     In
the event that VaxGen determines that its requirements for Bulk Product exceed
the Capacity Limit, and provided that: 
i) VaxGen delivers to Kaketsuken written notice [ * ] to its requested delivery date of such additional Bulk
Product; and ii) the Parties have exchanged such assurances and put in place
such risk sharing and risk mitigation measures as are consistent with good
business judgment, then Kaketsuken agrees that it shall scale-up production of
the Bulk Product, in an amount to be mutually agreed by the Parties. 


          6.5       Forecasting.  


                     (a)     No
later than [ * ] before delivery
of Bulk Product is needed, VaxGen shall present to Kaketsuken a [ * ] forecast for Bulk Product based
on the anticipated market demand for the Vaccine in the Territory for each
quarter and, on acceptance by Kaketsuken, the forecast shall become an agreed
forecast between the Parties (“Forecast”). 
The Forecast shall be updated [ * ].  The [ * ] of the Forecast will be a firm commitment to purchase Bulk
Product (the “Firm Order”) and projections for the [ * ] of such forecast shall represent VaxGen’s good faith
estimates of future purchase amounts. 
VaxGen agrees to purchase all Bulk Product supplied by Kaketsuken in
accordance with a Firm Order and accepted by VaxGen pursuant to Section 6.10.  


                     (b)     In
the event that VaxGen decreases or cancels a Firm Order for a given quarter,
Kaketsuken shall use commercially reasonable efforts to wind down or reduce any
manufacturing then occurring or planned to produce doses of the applicable Bulk
Product, and VaxGen shall reimburse Kaketsuken for all [ * ] by Kaketsuken in the manufacture and supply of Bulk Product
in fulfilling its obligation to meet the Firm Order.


11.









          6.6       Failure
to Supply.  

                     (a)     In
the event that Kaketsuken reasonably believes that it will fall short of its
obligations to manufacture Bulk Product under a Forecast for a given quarter by
[ * ], it shall give prompt
written notice of such belief to VaxGen. 


                     (b)     In
the event: Kaketsuken fails on [ * ]
in [ * ] to deliver to VaxGen [ * ] of VaxGen’s Firm Order for Bulk
Product for a given quarter (“Supply Disruption”), except when such Supply
Disruption is the result of Force Majeure as defined in Section 18.3; or
Kaketsuken is unable to or declines to scale-up production capacity as agreed
between the Parties in accordance with Section 6.4(b) (and where VaxGen has
supplied the required notice under such Section 6.4(b)) (“Capacity
Shortage”);or if the Parties mutually agree that it is otherwise in their best
interests that VaxGen undertake some or all of the manufacture of Bulk Product
for sale in the Territory the following shall occur:

                               (i)     Kaketsuken
shall use its reasonable[ * ]
best efforts to obtain the requisite consents from Chiba Prefecture, the
Japanese Government and any and all other authorities for technology transfer
of all relevant Information, Kaketsuken Know-How, Kaketsuken Materials and
other technology necessary or useful for the commercial manufacture of Bulk Product
for the Territory, to VaxGen or to its contract manufacturer.

                               (ii)     Kaketsuken
shall, upon VaxGen’s request, and to the extent under Kaketsuken’s Control,
make available to VaxGen or its contract manufacturer for Bulk Product, and
grant the right to use, all relevant Information, Kaketsuken Know-How,
Kaketsuken Materials and other technology necessary or useful to the commercial
manufacture of Bulk Product for the Territory, provided that Kaketsuken
obtained the consents as described in  (i)
above.


                               (iii)     Kaketsuken
shall [ * ]; and


                               (iv)     With
respect to all doses of Vaccine that Kaketsuken is no longer supplying to
VaxGen in Bulk Product form based upon the mutual agreement of the Parties
pursuant to this Section 6.6(b), VaxGen shall not be obligated to pay to
Kaketsuken the Transfer Price set forth in Section 8.1 with respect to such
doses, but instead shall owe to Kaketsuken the amounts set forth in Section
8.3.


          6.7       Facilities.  Kaketsuken agrees to undertake the capital
investment and staffing commitments and to take all other actions necessary to
enable it to meet its manufacturing and supply obligations hereunder, including
the establishment of new facilities or remodeling of existing facilities, and
validating and obtaining licensure for such facility for such manufacture and
supply.  VaxGen agrees to undertake, or
to cause its contract manufacturer to undertake, the capital investment and
staffing commitments and to take all other actions necessary to enable it to
meet its fill/finish Secondary Manufacturing obligations hereunder, including
the establishment of new facilities or remodeling of existing facilities, and
validating and obtaining licensure for such facility for such Secondary
Manufacture.  


12.









          6.8       Specifications.  Kaketsuken shall manufacture and supply Bulk
Product and Finished Product for the specific development program in accordance
with the applicable Specifications. 
Kaketsuken shall manufacture and supply Bulk Product for commercial
supply to VaxGen in accordance with the applicable Specifications, cGMP, and/or
any requirements mutually agreed upon by the Parties, VaxGen Quality Standards
as described in the Quality Protocol, and other relevant governmental laws,
rules and regulations.  VaxGen shall, or
shall cause its Third Party fill/finish contract manufacturer, to conduct all
Secondary Manufacture in accordance with the applicable Specifications, cGMP,
VaxGen Quality Standards as described in a relevant Quality Protocol, as
appropriate, and other relevant governmental laws, rules and regulations in the
Territory.

          6.9       Delivery
and Shipment. 
Kaketsuken shall provide VaxGen with all information needed to enable
VaxGen to obtain import permits, USDA permits and CDC permits for the Bulk
Product and Finished Product. Kaketsuken shall be responsible for labeling and
packaging such Bulk Product and Finished Product consistent with exportation,
importation and carrier guidelines. 
VaxGen shall be responsible for obtaining in a timely fashion the
appropriate importation permits. 
Finished Product and Bulk Product shall be shipped [ * ] site.  Each lot of Bulk Product or Finished Product so received shall be
accompanied by an official certificate of analysis attesting that such lot
meets the relevant Specifications.  Each
lot will be shipped labeled as “Quarantine”, unless Kaketsuken has been
notified in writing, prior to shipment, of an alternative shipment designation
by VaxGen Quality Assurance.  A copy of
the certificate of analysis, as well as other relevant documentation (as
specified in Exhibit C) will be supplied to VaxGen Quality Assurance prior to
shipment. 


          6.10    Acceptance and Rejection.


                     (a)     Any lot of
Finished Product or Bulk Product released to VaxGen by Kaketsuken hereunder
shall be received and accepted by VaxGen subject to inspection, testing by
VaxGen or its designated agent to ensure that such lot meets the applicable
Specifications and complies with the warranties provided in this
Agreement.  VaxGen shall be allowed a
maximum of [ * ] from the date
of receipt of all relevant documents (as set forth in the Quality Protocol),
after being translated into English, or [ * ] after receipt of the lot, which ever is later, (“Inspection Period”)
to provide written notice to Kaketsuken of VaxGen’s acceptance or rejection of
any portion or all of that lot.  If
VaxGen does not deliver such written notice to Kaketsuken by the end of the
Inspection Period, VaxGen shall be deemed to have accepted the shipment.  Kaketsuken shall, as soon as is commercially
feasible and after completion of any corrective actions that are reasonably identified
by a VaxGen quality investigation and accepted by Kaketsuken, replace the
rejected quantity of Vaccine, subject to Section 6.10(b) and Section 6.10(c).


                     (b)     Promptly
following any rejection by VaxGen of a lot of Vaccine based upon reviewing it
against the Specifications and warranties, Kaketsuken can determine whether the
rejected lot conformed to the applicable Specifications and warranties.  If Kaketsuken does not agree with VaxGen on
the test results, the Parties shall select a mutually acceptable independent
laboratory to carry out tests on representative samples from the rejected
portion of the lot for the purposes of determining appropriate payment
liability.  The determination of the
independent laboratory shall be binding on both Parties, and shall determine
VaxGen’s obligations to pay for, or Kaketsuken’s obligations to replace, the
lot in question.  However, VaxGen
Quality Assurance is solely responsible for releasing any lot of Vaccine for
its intended use, as described in the Quality Protocol. 

13.








                     (c)     If it is
determined, either by the Parties’ mutual agreement or by such independent
laboratory, that the rejected lot of Vaccine did not conform to the applicable
Specifications and/or warranties, Kaketsuken shall, as promptly as is
commercially reasonable, replace such rejected lot with a conforming lot as
provided in Section 6.10(a) above.  [ * ] 
Rejected lots shall be disposed of [ * ] in accordance with Kaketsuken’s instructions and VaxGen’s
quality assurance procedures. 

                     (d)     In the
event that VaxGen has paid the Transfer Price to Kaketsuken for Vaccine which
Kaketsuken agrees or the independent laboratory determines does not conform to
the Specifications and warranties, VaxGen shall receive a credit to its account
for such amounts actually paid to Kaketsuken for such non-conforming Vaccine[ * ].

                     (e)     If the
independent laboratory determines that the rejected lot did conform to the
Specifications and warranties[ * ].


ARTICLE 7

REGULATORY
ISSUES

          7.1     Compliance.

                     (a)     Kaketsuken
shall obtain and maintain, and shall require all of its contractors to obtain
and maintain, all necessary permits, registrations and licenses required to
manufacture and supply Bulk Product and/or Finished Product under this
Agreement.  Kaketsuken shall, and shall
require all of its agents to manufacture and handle Bulk Product and/or Finished
Product manufactured and supplied by Kaketsuken hereunder in accordance with
all laws, rules and regulations promulgated by the applicable Regulatory
Agency, and in compliance with cGMP, and/or any requirements mutually agreed
upon by the parties, and the Quality Protocol.

                     (b)     VaxGen, or
its Third Party fill/finish contract manufacturer, shall obtain and maintain
all necessary permits, registrations and licenses required to manufacture
Finished Product under this Agreement. 
VaxGen shall manufacture, and/or require its agents and licensees to
manufacture, Finished Product in accordance with all applicable federal, state
and local laws, government regulations, and in compliance with cGMP.

          7.2     Audits By VaxGen.  VaxGen shall have the right during normal
business hours and upon reasonable notice to Kaketsuken, to inspect and audit
in a reasonable manner Kaketsuken’s manufacturing and other facilities in order
to ensure its compliance with its obligations under Section 7.1(a),
including the inspection and audit of all batch records and lot release records
for all lots of Bulk Product and Finished Product supplied by Kaketsuken
hereunder.  VaxGen will perform such an
audit [ * ] according to VaxGen
vendor qualification procedures. 
VaxGen’s Quality Department retains the right to inspect or audit
Kaketsuken on a “for cause” basis as a result of any product quality
investigation or suspected failure of Kaketsuken to meet its obligations.   VaxGen will notify Kaketsuken of an impending
“for cause” audit in writing and will schedule the audit at the first available
opportunity for VaxGen personnel. 
Kaketsuken shall use commercially reasonable efforts to obtain for
VaxGen substantially similar audit rights from its contractors hereunder.  

14.








          7.3     Regulatory Audits.

                     (a)     Kaketsuken
shall allow, and shall require all of its contractors to allow, representatives
of the FDA and any other Regulatory Agency with jurisdiction over the
manufacture, marketing and distribution of the Product in a relevant territory
to tour and inspect all facilities utilized by Kaketsuken and its contractors
in the manufacture, testing, packaging, storage, and shipment of Vaccine sold
under this Agreement, and shall cooperate with such representatives in every
reasonable manner.  Kaketsuken shall
promptly notify VaxGen of any impending inspection (prior notice) or of the
arrival of FDA representatives, or other Regulatory Agency at Kaketsuken (no
prior notice), and shall allow representatives of VaxGen to be present at the
facilities so inspected.  Kaketsuken
shall provide VaxGen with a copy of any FDA Form 483 notices of adverse
findings, establishment inspection reports (EIRs), regulatory letters (e.g.
Warning Letters) or similar notifications it receives from any other
governmental authority setting forth adverse findings or non-compliance with
any applicable laws, regulations or standards relating to the Vaccine within [ * ] of its own receipt thereof.  Kaketsuken shall also provide VaxGen with a
copy of its proposed written response to such governmental authority before
submission and shall incorporate any changes thereto which VaxGen may
reasonably request.

                     (b)     For
regulatory inspections that are not specifically related to the manufacture,
testing, packaging, storage, or distribution of the Vaccine under this
Agreement, but may impact activities performed pursuant to this agreement,
Kaketsuken will promptly notify VaxGen of the impending inspection.  Kaketsuken will provide, either in a
redacted form or in written summary form, copies of any regulatory notice of
adverse findings.  Where specific
findings may directly impact the quality of the Vaccine supplied under this
Agreement, Kaketsuken will provide VaxGen with a proposed written response
before submission to the authority and shall incorporate any changes thereto
which VaxGen may reasonably request.

          7.4     Quality
Protocol.  As required by
cGMP, VaxGen has sole responsibility for assuring the quality and releasing any
Bulk Product manufactured by Kaketsuken for VaxGen’s use.  The roles and responsibilities of both
Kaketsuken and VaxGen under cGMP are specifically defined in the Quality
Protocol attached at Exhibit C.  The
Quality Protocol has been approved by the responsible Quality and Regulatory
officials of both Kaketsuken and VaxGen. The Parties shall fully comply with
the obligations and responsibilities as set forth in the Quality Protocol.

ARTICLE 8

TRANSFER
PRICE; PROFIT SHARING; OTHER PAYMENTS

          8.1     Transfer
Price.

                     (a)     In
consideration of Kaketsuken’s supply of Bulk Product to VaxGen for commercial
use, VaxGen shall pay Kaketsuken a transfer price.

15.








                     (b)     The
Parties agree that for the Term of this Agreement the transfer price for Bulk
Product shall be [ * ] (the
“Transfer Price”).

                     (c)     The first
Transfer Price for each US-dose equivalent [ * ] of Bulk Product having a titer sufficient to meet US
standards [ * ]  supplied by Kaketsuken to VaxGen hereunder
for commercial use is provisionally set at [ * ] (the “Provisional Transfer Price”), equating to [ * ].

                     (d)     The
Parties understand that [ * ],
and that, as [ * ] it may be
necessary to [ * ].  The Parties agree that [ * ], they will meet and agree in
good faith upon [ * ].

                     (e)     The
Transfer Price shall be subject to an annual adjustment upon each anniversary
of the Effective Date to account for [ * ].   Such adjusted Transfer Price
shall be the Transfer Price for the following calendar year (e.g., an
adjustment in March 2004 is applicable to 2005 calendar rates), subject to
further adjustment on the following anniversary of the Effective Date.

                     (f)     All payments
due under this Section 8.1 shall be made within [ * ] of VaxGen’s receipt of Bulk Product.

                    (g)     At any
time, either Party may request an adjustment to the Transfer Price, based on
reasonable grounds, including without limitation, material changes in the
economic, marketing and regulatory environments or in manufacturing costs that
affect the transactions described in this Agreement.  In such an event, the Parties shall meet and negotiate such new
Transfer Price in good faith, governed by the terms in Section 8.1(b).

          8.2     Profit
Sharing.

                     (a)     During the
Term, for as long as Kaketsuken supplies Bulk Product to VaxGen for commercial
sale, VaxGen and Kaketsuken shall share in all Operating Profit in the ratio: [ * ] VaxGen; [ * ] Kaketsuken.  Within [ * ] of the end of each of the [ * ] and within [ * ] of the end of the [ * ] calendar quarter of each of
VaxGen’s fiscal years following the First Commercial Sale, VaxGen shall report
to Kaketsuken its Gross Sales Revenue and Net Sales derived therefrom and the
basis of calculation of such Net Sales, as well as [ * ] factored into the computation of Operating Profit and
accrued during such quarter with respect to the Vaccine.  VaxGen shall make payment to Kaketsuken of
Kaketsuken’s share of such Operating Profit with each such quarterly report[ * ].  The reports and payments for the [ * ] of each fiscal year may include reconciliations and year-end
adjustments with respect to previous quarters. 


                     (b)     Upon first
commercial sale, the Parties shall mutually agree as to a certain Net Sales
volume target (the “Sales Target”) for sales of the Vaccine for the [ * ].  VaxGen shall recoup its [ * ], and Kaketsuken shall recoup its [ * ] (collectively, “Development Expenses”), up to that date on a
[ * ] over such [ * ] on a per unit basis as a
function of the following:  [ * ]. VaxGen [ * ] incurred after the First Commercial Sale shall be considered
an [ * ] and deducted from Net
Sales to calculate Operating Profit.  In
the event that Kaketsuken has [ * ]
after First Commercial Sale, the Parties shall meet and agree in good faith via
the Steering Committee whether to [ * ].  After the First Commercial Sale, the parties
will meet and agree in good faith upon a revised Sales Target if necessary.

16.








                     (c)     In the
event that Operating Profit as defined in Section 1.30 is [ * ] in a particular quarter[ * ].

                     (d)     In the
event that Operating Profit as defined in Section 1.30) is [ * ] in a particular quarter, costs
attributed to [ * ] during such
quarter and calculated according to GAAP shall be reimbursed to the Parties
from Net Sales in the following order:

                              (i)          First,
[ * ]

                              (ii)        Then,
[ * ]

                              (iii)       Then
[ * ]

                              (iv)        Then
[ * ]

                              (v)         Then,
in equal absolute amounts, each Parties’ [ * ] above until one Party has received the appropriate quarterly
reimbursement. 

                              
(vi)        Any
remaining balance shall be applied to the partial reimbursement of the other
Party’s [ * ], and any
unreimbursed amount remaining shall be carried over to the next quarter and
reimbursed prior to any reimbursement of [ * ] in such quarter.

                     (e)     In any
given quarter, the [ * ]
deduction in calculating Operating Profit shall not exceed [ * ] without the prior approval of
the Steering Committee.

                     (f)     For the
avoidance of doubt, only those [ * ]
directly and specifically related to [ * ] shall be deducted from Net Sales in calculating at Operating Profit
per Section 8.2 (a).

                     (g)     Kaketsuken
shall be responsible for [ * ].

          8.3     Royalty
and Tech Transfer Payments. 
In the event VaxGen or its contract manufacturer manufactures Bulk
Product, VaxGen shall pay to Kaketsuken [ * ]. In such event, VaxGen shall not pay Kaketsuken any Transfer Price
for such Bulk Product, nor share with Kaketsuken any Operating Profit.  VaxGen shall pay Kaketsuken a [ * ] payable upon [ * ] of VaxGen’s or its contract
manufacturer’s manufacturing site, as well as [ * ].

ARTICLE 9

PROMOTION
AND MARKETING; TRADEMARKS

          9.1     VaxGen’s
Sales. VaxGen shall have the exclusive right to
commercialize the Vaccine in the Field in the Territory.  As appropriate, VaxGen may consult
Kaketsuken with respect to the prices for the Vaccine, provided that VaxGen
shall solely determine the pricing of the Vaccine in the Territory.

          9.2     Vaccine
Trademark.  VaxGen shall
consult in good faith with Kaketsuken prior to VaxGen determining what
trademark to use with the Vaccine for sales in the Territory (the “Vaccine
Trademark”).  VaxGen shall register and
maintain registration of the Vaccine Trademark in the Territory, and shall pay
for [ * ].  VaxGen shall determine in its sole
discretion what action, if any, to take in response to the infringement, or
threatened infringement of such trademark.

17.








          9.3     Promotional
Materials.  VaxGen will
provide review copies of promotional materials to Kaketsuken and will take
Kaketsuken’s comments into account during the finalization of such
materials.  After such consultation,
VaxGen will file all sales representative training materials and all written,
printed, graphic, electronic, audio or video matter, including but not limited
to, journal advertisements, sales visual aids, leave items, formulary binders,
reprints, direct mail, direct-to-consumer advertising, internet postings,
broadcast advertisements, and sales reminder aids intended for use or used by
VaxGen in connection with any promotion of the Vaccine in the Territory (“Product
Promotional Materials”) with the FDA. 
VaxGen shall own all right, title and interest in and to the Product
Promotional Materials, including all copyrights appurtenant thereto.

          9.4     Trade
Dress, Logos, and the Like. 
VaxGen shall be the sole owner of all trade dress, logos, slogans,
designs and copyrights specifically developed for or used on or in connection
with the Vaccine in the Territory.

ARTICLE 10

CONFIDENTIAL
INFORMATION

          10.1    Confidential
Information.  Except to
the extent expressly authorized by this Agreement or otherwise agreed in
writing, the Parties agree that the receiving Party shall keep confidential,
and shall not publish or otherwise disclose or use for any purpose other than
as provided for in this Agreement, any Information and other information and
materials furnished to it by the other Party pursuant to this Agreement or any
Information developed during the course of the activities performed hereunder
(collectively, “Confidential Information”), except to the extent that it can be
established by the receiving Party that such Confidential Information:

                     (a)     was
already known to the receiving Party, other than under an obligation of
confidentiality, at the time of disclosure by the other Party, as evidenced by
the prior written records of the receiving Party;

                     (b)     was
generally available to the public or otherwise part of the public domain at the
time of its disclosure to the receiving Party;

                     (c)     became
generally available to the public or otherwise part of the public domain after
its disclosure to the receiving Party, and other than through any act or
omission of the receiving Party in breach of this Agreement; 

                     (d)     was
disclosed to the receiving Party, other than under an obligation of
confidentiality, by a Third Party who had no obligation to the disclosing Party
not to disclose such information to others; or 

                     (e)     was
independently developed by employees of the receiving Party who had no
knowledge of or access to the Confidential Information of the other Party.

18.








          The
non-disclosure and non-use obligations under this Section 10.1 shall terminate
upon the later of:  (i) [ * ] following the expiration or
termination of this Agreement, or (ii) [ * ] from the Effective Date.

          10.2    Authorized
Disclosure.

                     (a)     Each Party
may disclose Confidential Information hereunder to the extent such disclosure
is allowed under Section 10.1.  Each
Party may disclose Confidential Information as is reasonably necessary in
sublicensing its rights, (and, in the case of Kaketsuken, provided that
Kaketsuken first offered VaxGen the opportunity to obtain a license pursuant to
Section 3.2 and Section 3.3 prior to sublicensing such rights), to the extent
such sublicensing is permitted under this Agreement, or in prosecuting or
defending litigation, or in complying with applicable governmental regulations,
provided, however, that if a Party is required by law or regulation to make any
such disclosures of the other Party’s Confidential Information it will, except
where impracticable for necessary disclosures (for example in the event of
medical emergency) give reasonable advance notice to the other Party of such
disclosure requirement (e.g., filings with the Securities and Exchange
Commission and stock markets) and, will use its reasonable efforts to secure
confidential treatment of such Confidential Information required to be disclosed,
unless in the judgment of such disclosing Party’s legal counsel such
Confidential Information is legally required to be fully disclosed.  

                     (b)     In
addition, and with prior notice to the other Party of each Third Party with
whom a confidential disclosure agreement is being entered into, each Party
shall be entitled to disclose, under a binder of confidentiality containing
provisions at least as protective as those of this Article 10, Confidential
Information to any Third Party for the purpose of carrying out the purposes of
this Agreement.  Nothing in this Article
10 shall restrict any Party from using for any purpose in accordance with this
Agreement any Confidential Information independently developed by it during the
course of conducting hereunder, or from using Confidential Information that is
specifically derived from non-clinical or clinical trials to carry out
marketing, sales or professional services support functions as is customary in
the pharmaceutical industry.

          10.3    Publicity.  The Parties agree that the public
announcement of the execution of this Agreement shall be substantially in the
form of the press release to be mutually agreed to by the Parties.  Any other publication, news release or other
public announcement relating to this Agreement or to the performance hereunder,
shall first be reviewed and approved by both Parties, which approval shall not
be unreasonably withheld; provided, however, that any disclosure which is
required by law as advised by the disclosing Party’s counsel may be made
without the prior consent of the other Party, although the other Party shall be
given prompt notice of any such legally required disclosure and to the extent
practicable shall provide the other Party an opportunity to comment on the
proposed disclosure.  In this regard,
the Parties recognize that VaxGen is a publicly-held company, and that VaxGen
will need to provide information regarding the status of the Vaccine to the investment
community from time to time, subject to the procedures set forth in the
preceding sentence.  The Parties
acknowledge that VaxGen will be obligated to file a redacted copy of this
Agreement with the U.S. Securities and Exchange Commission.  

19.








ARTICLE 11

OWNERSHIP
OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

          11.1    Ownership.

                     (a)     Subject to
the licenses granted hereunder, Kaketsuken shall solely own all right, title
and interest in the Kaketsuken Know-How and Kaketsuken Patents, and VaxGen
shall solely own all right, title and interest in the VaxGen Know-How and
VaxGen Patents.  

                     (b)     Kaketsuken
shall own all Inventions and Information discovered, generated, conceived or
reduced to practice solely by one or more employees or consultants of
Kaketsuken during the Term of and pursuant to the Agreement (“Kaketsuken
Inventions”).  Kaketsuken shall also
retain sole ownership and exclusive rights to patent of all Inventions,
improvements or materials that are developed and approved in the Territory
under Article 5 and Article 4.

                     (c)     VaxGen
shall own all Inventions discovered, generated, conceived, or reduced to
practice solely by one or more employees or consultants of VaxGen during the
Term of and pursuant to the Agreement, subject to Section 11.1(b) (‘‘VaxGen
Inventions”).  VaxGen shall [ * ], provided that Kaketsuken
obtains VaxGen’s prior written approval, not to be unreasonably withheld.

                     (d)     Subject to
Section 11.1(b) and (c), Inventions or improvements conceived or reduced to
practice during the Term and pursuant to the Agreement jointly by both Parties
shall be [ * ]. 

          11.2    Patent
Prosecution.   Kaketsuken
shall have the sole right, but not the obligation, to file applications for,
prosecute and maintain the Kaketsuken Patents. 
VaxGen shall have the sole right, but not the obligation, to file
applications for, prosecute and maintain the VaxGen Patents.  VaxGen shall have the first right, but not
the obligation to file applications for, prosecute and maintain patents on
Joint Inventions in the Territory.  In
the event VaxGen chooses not to so file an application, prosecute or maintain a
patent on a Joint Invention, it shall inform Kaketsuken in writing, at which
time Kaketsuken shall have the right to file an application for, prosecute and
maintain the patent on such Joint Inventions. 


          11.3    Enforcement
Rights.

                     (a)     If either
Party learns of any infringement or threatened infringement by a Third Party of
the VaxGen Patents and/or the Kaketsuken Patents, in each case, in the Field
and in the Territory, such Party shall promptly notify the other Party and
shall provide such other Party with all available evidence of such
misappropriation or infringement.


                     (b)     VaxGen
shall have the right, but not the obligation, to institute, prosecute and
control [ * ] any action or
proceeding with respect to infringement of any VaxGen Patents, Joint Patents or
Kaketsuken Patents in the Field and in the Territory, by counsel of its own
choice.  Kaketsuken shall have the right[ * ] to be represented in any such
action by counsel of its own choice.  If
VaxGen fails to bring an action or proceeding or otherwise take appropriate
action in VaxGen’s discretion to abate such infringement in the Field and in
the Territory within a period of



20.







[ * ]
of notice by Kaketsuken to VaxGen requesting such action, Kaketsuken will have
the right, but not the obligation, to bring and control any such infringement
action relating to the VaxGen Patents, Joint Patents or the Kaketsuken Patents
by counsel of its own choice.  VaxGen
will cooperate with Kaketsuken in any such action or proceeding brought by
Kaketsuken against a Third Party, and shall have the right to consult with
Kaketsuken and to participate in and be represented by independent counsel in
such litigation at its own expense.  If
one Party brings any such action or proceeding under this Section 11.3(b), the
other Party agrees to be joined as a party plaintiff to the extent necessary to
prosecute the action or proceeding and to give the first Party reasonable
assistance and authority to file and prosecute the suit.  Any amounts recovered by either Party pursuant
to this Section 11.3(b) shall first be used to reimburse the Parties for any
legal expenses incurred pursuant to such enforcement, and any remaining amounts
shall be paid [ * ] to the
enforcing Party and [ * ] to the
non-enforcing Party. 




                     (c)     The Party
that controls the prosecution of a given action under this Section 11.3 shall
also have the right to control settlement of such action.

          11.4    Defense
and Settlement of Third Party Claims.  If a Third Party asserts that a patent, trade secret, or other intangible
right owned by it is infringed or misappropriated by the manufacture, use,
sale, or offer for sale of the Vaccine in the Field and in the Territory, then
the Parties shall meet and discuss in good faith the Parties’ responsibilities
and strategy for the defense or settlement of such Third Party claim.

ARTICLE 12

REPRESENTATIONS
AND WARRANTIES

          12.1    Mutual
Representations and Warranties. 
Each of the Parties hereby represents and warrants to the other Party as
follows:

                     (a)     such
Party:  (i) is a corporation or
institute duly organized, validly existing and in good standing under the laws
of the state or prefecture in which it is incorporated; (ii) has the corporate
power and authority and the legal right to own and operate its property and
assets, to lease the property and assets it operates under lease, and to carry
on its business as it is now being conducted; and (iii) is in compliance with
all requirements of applicable law, except to the extent that any noncompliance
would not have a material adverse effect on the properties, business, financial
or other condition of such Party and would not materially adversely affect such
Party’s ability to perform its obligations under this Agreement;

                     (b)     this
Agreement is a legal and valid obligation binding upon such Party and
enforceable in accordance with its terms, and the execution, delivery and
performance of the Agreement by such Party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a Party
or by which it is bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over
it.  Each Party expressly represents and
warrants that it has the full power and authority to enter into this Agreement
and to carry out the obligations contemplated hereby;

21.








                     (c)     such Party
has not, and during the term of the Agreement will not, grant any right to any
Third Party relating to its respective Patents and know-how in the Field in the
Territory which would conflict with the rights granted to the other Party
hereunder; and

                     (d)     it has
taken all necessary corporate action on its part to authorize the execution and
delivery of this Agreement.  Each Party
expressly represents and warrants that it owns (in whole or in part) or
Controls all intellectual property that is the subject of the licenses and
rights granted to the other Party herein.

          12.2    Kaketsuken
Representations and Warranties. 
Kaketsuken represents and warrants to VaxGen as follows:

                     (a)     that to
the best of its knowledge as of the Effective Date, the manufacture, use,
importation, offer for sale or sale of the Vaccine as contemplated hereunder
does not infringe any Third Party intellectual property right in the Territory;

                     (b)     that to
the best of its knowledge as of the Effective Date, all and only the true
inventors of the subject matter claimed are named in the Kaketsuken Patents and
all such inventors have irrevocably assigned all their rights and interests
therein to Kaketsuken; 

                     (c)     that with
respect to all regulatory filings to obtain Regulatory Approvals, the data and
information in Kaketsuken’s submissions are and will be, to the best of
Kaketsuken’s knowledge, free from fraud or material falsity, that the data and
information in Kaketsuken’s submissions are and will be accurate and reliable
for purposes of supporting approval of the submissions;

                     (d)     that all
Bulk Product manufactured by Kaketsuken and/or supplied to VaxGen for
commercial sale under this Agreement: 
(a) will conform to the applicable Specifications, cGMP and/or any
requirements mutually agreed upon by the Parties; (b) will not be adulterated
or misbranded within the meaning of any applicable U.S. or other governmental
law, rule, order or regulation; and (c) will comply with all U.S. laws,
regulations, rules, standards, FDA approvals, registrations or permits, and all
other regulatory permits, approvals and licenses applicable to the manufacture
and supply of such Bulk Product;

                     (e)     Finished
Product supplied to VaxGen for clinical and non-clinical purposes under this
Agreement will conform to the applicable Specifications and any requirements
mutually agreed upon by the Parties; and,

                     (f)     that it
has sufficient rights to and interest in the Kaketsuken Materials and the intellectual
property relating to the composition and manufacture of the Vaccine to grant to
VaxGen the rights set forth hereunder without infringing any Third Party
rights.

          12.3    VaxGen’s
Responsibility for Registration.   During the term of the Agreement, VaxGen shall use its Best
Efforts [ * ] in [ * ] and [ * ] in [ * ],
from the date of this Agreement, and shall create and maintain competent and
appropriate number of staff in divisions of regulatory affairs, production,
R&D organization for this purpose. 
In this context, “Best Efforts” means the same level of effort as VaxGen
would make to promote any major vaccine originated or sold by VaxGen, with
competent and appropriate number of staff in the divisions.  VaxGen shall keep Kaketsuken advised of
general market, economic, and regulatory development that may affect the
development and sale of the Vaccine. 

22.








          12.4    Kaketsuken’s Responsibility for Registration.  During the Term of the agreement, Kaketsuken
shall provide appropriate levels of resource to enables it to provide in a
timely fashion other consultation and consents provided for in this Agreement,
and specifically those requested pursuant to Section 4.3.

ARTICLE 13

COMPETITIVE
TRANSACTIONS

          13.1    VaxGen
shall not, for a period of five (5) years after termination of this Agreement,
develop, to file for obtain regulatory approval, sell, commercialize and/or
otherwise deal in the any product having a similar activity to the Vaccine, and
shall not during the term of this Agreement develop, sell, commercialize and/or
otherwise deal in any products which substantially compete with, or adversely
affect, the sales or commercialization of the Vaccine in the Territory or Other
Territory agreed including Europe, without the prior written consent of
Kaketsuken.

          13.2    The restriction
under Section 13.1 shall be waived under the following circumstances:

                     (a)     Termination
of this Agreement by VaxGen for Kaketsuken’s uncured material breach.

                     (b)     A
determination by the FDA that the Vaccine is not approvable in the Territory.

ARTICLE 14

INFORMATION
AND REPORTS

          14.1    Records.  Each Party agrees to keep complete and
accurate records of its other activities carried out pursuant to this
Agreement.  Kaketsuken agrees to
maintain all records according to cGMP requirements and to provide copies of
relevant records, as described in the Quality Protocol, for VaxGen review and approval
(where applicable). VaxGen and Kaketsuken shall disclose and make available to
each other upon written request and free of charge all such records directly
concerning Vaccine in the Field and in Territory at any time during the Term.

          14.2    Complaints.  Each Party shall maintain a record of all
complaints it receives with respect to the Vaccine regardless of whether the
complaint pertains to the use of the Vaccine within or outside of the
Territory.  Each Party shall notify the
other Party of any complaint pertaining to Vaccine quality or with regulatory
implications received by it in sufficient detail and within two (2) business
days after receipt of such complaint.  
The Parties shall investigate and respond to product quality complaints pursuant to the procedures set
forth in the Quality Protocol. 

23.








          14.3    Adverse
Drug Experiences.  To the
extent either Party receives any information regarding adverse drug experiences
related to the use of the Vaccine, whether such use is within or outside of the
Territory, such Party shall promptly provide the other Party with such
information in accordance with: (a) the Vaccine Adverse Event Reporting Form
set forth in Exhibit B; and (b) the Global Drug Safety Agreement as
drafted and agreed to by the Drug Safety/Pharmacovigilance Departments of the
two Parties.

          14.4    Records
of Revenues and Expenses. 
VaxGen will maintain complete and accurate records which are relevant to
revenues, costs, expenses and payments under this Agreement, and such records
shall be open during reasonable business hours for a period of [ * ] from the creation of individual
records for examination at  Kaketsuken’s
expense, and not more often than [ * ]
each Calendar Year, by an independent certified public accountant selected by
Kaketsuken and reasonably acceptable to VaxGen for the sole purpose of
verifying for Kaketsuken the correctness of calculations and classifications of
such revenues, costs, expenses or payments made under this Agreement.  In the absence of material shortfalls [ * ] in any request for reimbursement
resulting from such audit, the accounting expense shall be paid by
Kaketsuken.  If material shortfalls do
result, VaxGen shall bear the accounting expense.  [ * ]  Any records or accounting information
received from VaxGen shall be Confidential Information for purposes of Article
10.  Results of any such audit shall be
provided to both Parties, subject to Article 10. 

ARTICLE 15

INDEMNIFICATION

          15.1    Indemnification
by VaxGen.  Except as set
forth in Section 15.2, VaxGen shall indemnify, defend and hold Kaketsuken and
its directors, officers, employees, agents and Affiliates harmless from and
against any liabilities, damages, costs or expenses, including reasonable
attorneys’ fees (collectively “Liabilities”) which: (a) arise from any claim,
lawsuit or other action by a Third Party caused by the manufacture, storage,
distribution, marketing, sale or use of Bulk Product (furnished to VaxGen) or
Finished Product; or (b) arise from VaxGen’s or it’s Affiliates’ or sublicensees’
negligent or willful acts or omissions; or (c) arise out of, relate to or
result from the breach by VaxGen of any of its representations or warranties
contained within this Agreement . 
VaxGen shall acquire and maintain for the term of this Agreement
adequate clinical trials, product liability insurance, other appropriate
insurance and/or  government
indemnification (to the extent available) to meet its indemnification
obligations hereunder.  VaxGen shall
name Kaketsuken as a co-insured on all such policies.  Kaketsuken shall have the right to review and inspect such
policies and government indemnification arrangements (if any) upon reasonable
written notice.  If VaxGen fails, as
determined objectively, to maintain adequate product liability insurance and
government indemnification (if any), it shall be considered a material breach
of this agreement.

          15.2    Indemnification
by Kaketsuken.  Except as set forth in Section 15.1,
Kaketsuken shall indemnify, defend and hold VaxGen and its directors, officers,
employees, agents and Affiliates harmless from and against any Liabilities
which:  (a) arise from Kaketsuken’s or
it’s Affiliates’ or sublicensees’ negligent or willful acts or omissions; or  (b) which arise out of, relate to or result
from the breach by Kaketsuken of any of its representations or warranties
contained within this Agreement.

24.








          15.3    Indemnification
Procedures.  A Party
which intends to claim indemnification under Section 15.1 or Section 15.2
hereof (the “Indemnitee”) shall promptly notify the other Party (the
“Indemnitor”) in writing of any claim, lawsuit or other action in respect of
which the Indemnitee or any of its directors, officers, employees, agents and
Affiliates intend to claim such indemnification.  The Indemnitee shall permit, and shall cause its directors,
officers, employees, agents and Affiliates to permit, the Indemnitor, at its
discretion, to settle any such claim, lawsuit or other action and agrees to the
complete control of such defense or settlement by the Indemnitor; provided, however, that such settlement
does not adversely affect the Indemnitee’s rights hereunder or impose any
obligations on the Indemnitee in addition to those set forth herein in order
for it to exercise such rights.  No such
claim, lawsuit or other action shall be settled without the prior written
consent of the Indemnitor, and the Indemnitor shall not be responsible for any
legal fees or other costs incurred other than as provided herein.  The Indemnitee, its directors, officers,
employees, agents and Affiliates shall cooperate fully with the Indemnitor and
its legal representatives in the investigation and defense of any claim,
lawsuit or other action covered by the provisions of this Article 15.  The Indemnitee shall have the right, not the
obligation, to be represented by counsel of its own selection and expense.

          15.4    Payment of Damages.

                     (a)     Any
Liability for which an Indemnitor is or may become liable under Section 15.1 or
Section 15.2 shall be paid first from any funds available through the Vaccine
Injury Compensation Program (“VICP”) established pursuant to 42 U.S.C. 300 aa-1
et seq. or other similar state or federal legislation, if applicable.

                     (b)     Any
Liabilities not subject to subsection (a) above shall be the responsibility of
the Indemnitor.

          15.5    Limitation
of Liability.  Except as
expressly provided hereunder, neither Party shall be liable to the other for
indirect, incidental, special or consequential damages arising out of any of
the terms or conditions of this Agreement or with respect to its performance
hereunder, whether or not foreseeable, except where such damages were caused by
gross negligence or willful misconduct of a Party.

ARTICLE 16

TERM
AND TERMINATION

          16.1    Term.  This
Agreement shall commence as of the Effective Date and, unless sooner terminated
as provided herein, shall continue in effect for a period of ten (10) years and
shall be renewable by mutual agreement of the Parties.

          16.2    Termination for Material Breach. 
Subject to the provisions of this Section 16.2, if either Party (the
“Breaching Party”) shall have committed a material breach of this Agreement and
such material breach shall remain uncured and shall be continuing for a period
of [ * ] following receipt of
notice thereof by the other Party (the “Non-Breaching Party”), or if such
breach is not cured during the applicable notice period, because the Breaching
Party fails to make good faith efforts to cure such breach, then the
Non-Breaching Party shall have the right to
terminate this Agreement by written
notice to the Breaching Party.  Any such
notice of alleged material breach shall include a reasonably detailed
description of all relevant facts and circumstances demonstrating, supporting
and/or relating to each such alleged material breach by the other Party.

25.






          16.3    Termination
by VaxGen.  VaxGen may terminate this Agreement in whole or in part
on sixty (60) days written notice, in the event that the FDA does not approve
the Vaccine for commercial sale in the Territory within four (4) years from the
effective date of this agreement.

          16.4    Termination
by Kaketsuken. 
Kaketsuken may terminate this Agreement in whole or in part:

                     (a)     on sixty
(60) days notice if the FDA does not approve the Vaccine for commercial sale in
the Territory within four (4) years from the effective date of this agreement.;

                     (b)     on thirty
(30) days written notice, for VaxGen’s failure to make payments due Kaketsuken
hereunder; or 

                     (c)     on sixty
(60) days written notice, at any time for failure on VaxGen’ part to share
documents and Information as required under this Agreement, which would
constitute a material breach of this Agreement, noting that this Agreement
contains mutual obligations to share Information, and such a failure on
Kaketsuken’s part would also constitute a material breach of the Agreement.   



          16.5    Bankruptcy.  This Agreement may be terminated by
either Party upon at least [ * ]
prior written notice thereof if the other Party becomes insolvent, makes an
assignment for the benefit of creditors, is the subject of proceedings in
voluntary or involuntary bankruptcy instituted on behalf of or against such
Party, or has a receiver or trustee appointed for all or substantially all of
its property, provided that in the case of an involuntary bankruptcy proceeding
such right to terminate shall only become effective if the Party consents to
the involuntary bankruptcy or such proceeding is not dismissed within [ * ] after the filing thereof.   In case of termination by Kaketsuken for
VaxGen’s bankruptcy, Kaketsuken shall recover 
those materials fully owned by Kaketsuken, and may seek recovery of any
money owed to Kaketsuken by VaxGen pursuant to federal United States bankruptcy
code.


          16.6    Effect
of Termination and Expiration.


                     (a)     Upon
expiration of this Agreement [ * ]
by one Party to the other Party under this Agreement shall [ * ]. 
VaxGen shall [ * ].  Kaketsuken shall [ * ].


                     (b)     Upon
Kaketsuken’s termination of this Agreement for VaxGen’s uncured material
breach, [ * ] VaxGen under this
Agreement by Kaketsuken shall [ * ].  VaxGen shall [ * ] to Kaketsuken [ * ].



                     (c)     Upon
VaxGen’s termination of this Agreement for Kaketsuken’s uncured material
breach, [ * ] Kaketsuken under
this Agreement shall [ * ].  VaxGen shall retain ownership of the drug
masterfile, BLA and trademark for the Vaccine. 



26.









                     (d)     For
any termination or expiration of this Agreement, any and all claims and payment
obligations that accrued prior to the date of such termination or expiration
shall survive, and each Party shall, within [ * ] of such termination or expiration, return all of the other
Party’s Confidential Information.  

          16.7    Vaccine Inventory.  Upon termination or
expiration of this Agreement, VaxGen may sell any unsold Finished Product
within [ * ] after termination or
expiration of this Agreement, in which case the terms of this Agreement or such
of them as are relevant shall continue to operate until [ * ] or the [ * ] expires, whichever first occurs. 

          16.8    Surviving Rights.  The following provisions will survive
expiration or termination of this Agreement as follows :  Articles 10, 11, 12, 14, 15, 16, and 17.

ARTCILE 17

DISPUTE RESOLUTION; GOVERNING LAW

          17.1    Disputes.

                     (a)     The
Parties recognize that disputes as to certain matters may from time to time
arise during the term of this Agreement that relate to either Party’s rights
and/or obligations hereunder.  It is the
objective of the Parties to establish procedures to facilitate the resolution
of disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation. 
To accomplish this objective, the Parties agree to follow the procedures
set forth in this Article 17 if and when a dispute arises under this Agreement.

                     (b)     Unless
otherwise specifically recited in this Agreement, disputes between the Parties
shall first be discussed by the Steering Committee.  If such a dispute cannot be resolved in [ * ], it shall be referred by written
notice to the respective executive officers of the Parties designated below or
their designees, for attempted resolution by negotiations within [ * ] after such notice is received.  The designated officers are as follows:

                               For
VaxGen:                Chief
Executive Officer of VaxGen, Inc.

                               For
Kaketsuken:           President
of Kaketsuken

                     (c)     In
the event such designated officers are unable to resolve such dispute, within [ * ], either Party shall then be permitted
to submit the dispute to final and binding arbitration conducted in the English
language.  All such disputes,
controversies or differences which may arise between the Parties hereto, out of
or in relation to or in connection with this Agreement shall be finally settled
by arbitration in either Tokyo or Osaka (as shall be mutually agreed), Japan in
accordance with the Commercial Arbitration Rules of the Japan Commercial
Arbitration Association.  The award
rendered by the arbitrator(s) shall be final and binding upon the Parties
hereto.  For purposes of clarification,
the Parties agree neither to initiate nor to reopen any disputed matter in a
court proceeding following arbitration, but may use the assistance of the
courts only to enforce an arbitration award. 
VaxGen and Kaketsuken shall equally share the out-of-pocket costs of
said arbitration, including the fees for the arbitrators, except that VaxGen and
Kaketsuken each shall pay its respective expenses for legal representation and
expert witnesses, if any.  

27.








          17.2    Governing Law.  This Agreement shall be governed by and
interpreted under the laws of the country of Japan. 

ARTICLE 18

MISCELLANEOUS

          18.1    Assignment.  Neither Party may assign its rights or
obligations under this Agreement without the prior written consent of the other
Party, except in connection with a merger, acquisition nor similar
reorganization or the sale of all or substantially all of its assets, or, the
sale or transfer of substantially all of their vaccine business.  This Agreement shall survive any such merger
or reorganization of either Party with or into, or such sale of assets to,
another party and no consent for such merger, reorganization or sale shall be
needed; provided, however, that this Agreement may not be assigned or
transferred to an acquiring corporation which has a product that competes
directly in the Field with the Vaccine, consistent with the provisions of
Section 13.1; and further provided, that in the event of such merger,
reorganization or sale, no intellectual property rights of the acquiring
corporation shall be included in the technology licensed hereunder.

          This
Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of the Parties.  Any
assignment not in accordance with this Agreement shall be void.

          18.2    Consents Not Unreasonably Withheld or
Delayed. 
Whenever provision is made in this Agreement for either Party to secure
the consent or approval of the other, that consent or approval shall not
unreasonably be withheld or delayed, unless specifically otherwise provided.

          18.3    Force Majeure.  Neither Party shall lose any rights
hereunder or be liable to the other Party for damages or losses on account of
failure of performance by the defaulting Party if the failure is occasioned by
government action, war, fire, explosion, acts of terrorism, flood, strike, lockout,
embargo, act of God, or any other similar cause beyond the control of the
defaulting Party, provided that the Party claiming force majeure has exerted
all reasonable efforts to avoid or remedy such force majeure and has given the
other Party prompt notice describing such event, the effect thereof and the
actions being taken to avoid or remedy such force majeure; provided, however,
that in no event shall a Party be required to settle any labor dispute or
disturbance.

          18.4    Further Actions.  Each Party agrees to execute, acknowledge
and deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.



28.








          18.5    Notices.  All notices hereunder shall be in writing
and shall be deemed to have been served properly if:  (a) delivered personally; (b) delivered by facsimile transmission
(receipt verified); (c) telexed; (d) mailed by registered or certified air mail
(return receipt requested) postage prepaid; or (e) sent by express courier
service and properly addressed, to the Parties at the following addresses (or
at such other address for a Party as shall be specified by like notice;
provided that notices of a change of address shall be effective only upon
receipt thereof).  Facsimile and telex transmissions shall be deemed received on the first business day following a
confirmed transmission, and a mailed notice or document shall be deemed received on the fifth (5th) business day following the date of posting.

	
   
	
  If to
  VaxGen:
	
  VaxGen, Inc.
  
	
   

	
   
	
   
	
  1000 Marina
  Boulevard
	
   

	
   
	
   
	
  Brisbane,
  California  94005-1841 
	
   

	
   
	
   
	
  Attention:       Chief
  Executive Officer 
	
   

	
   
	
   
	
  Telephone:      (650)
  624-1002
	
   

	
   
	
   
	
  Facsimile:       (650)
  624-1003
	
   








	
   
	
  With copies
  to:
	
  Cooley
  Godward LLP
	
   

	
   
	
   
	
  5 Palo Alto
  Square
	
   

	
   
	
   
	
  3000 El
  Camino Real
	
   

	
   
	
   
	
  Palo Alto,
  California  94306
	
   

	
   
	
   
	
  Attention:       Barbara
  A. Kosacz
	
   

	
   
	
   
	
  Telephone:      (650)
  843-5818
	
   

	
   
	
   
	
  Facsimile:       (650)
  849-7400
	
   

	
   
	
   
	
   
	
   

	
   
	
  If to
  Kaketsuken:
	
  Kaketsuken 
	
   

	
   
	
   
	
  1-6-1 Okubo,
  Kumamoto-shi
	
   

	
   
	
   
	
  Kumamoto
  860-8568, Japan
	
   

	
   
	
   
	
  Attention:
	
   

	
   
	
   
	
  Telephone:
	
   

	
   
	
   
	
  Facsimile:
	
   




          With copies
to:

          18.6    Waiver.  Except as specifically provided for herein,
the waiver from time to time by either of the Parties of any of their rights or
their failure to exercise any remedy shall not operate or be construed as a
continuing waiver of same or any other of such Party’s rights or remedies
provided in this Agreement.


          18.7    Severability.  If any term, covenant or condition of this
Agreement or the application thereof to any Party or circumstances shall, to
any extent, be held to be invalid or unenforceable, then:  (i) the remainder of this Agreement, or the
application of such term, covenant or condition to Parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Agreement shall
be valid and be enforced to the fullest extent permitted by law; and (ii) the
Parties hereto covenant and agree to renegotiate any such term, covenant or
application thereof in good faith in order to provide a reasonably acceptable
alternative to the term, covenant or condition of this Agreement or the
application thereof that is invalid or unenforceable, it being the intent of
the Parties that the basic purposes of this Agreement are to be effectuated.


29.







          18.8    Headings.  The Articles and Sections headings contained
herein are for the purposes of convenience only and are not intended to define
or limit the contents of the Articles or Sections paragraphs to which they
apply.

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

          18.10   Entire Agreement; Amendments.  This Agreement, including all Exhibits
attached thereto, sets forth all the covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties
hereto with respect to the subject matter thereof, and supersede and terminate
all prior agreements and understandings between the Parties with respect to
such subject matter.  There are no
covenants, promises, agreements, warranties, representations, conditions or
understandings, either oral or written, between the Parties with respect to the
subject matter thereof other than as set forth therein.  No subsequent alteration, amendment, change
or addition to the Agreement shall be binding upon the Parties hereto unless
reduced to writing and signed by the respective authorized officers of the
Parties.  The Agreement, including
without limitation the Exhibits and attachments thereto, are intended to define
the full extent of the legally enforceable undertakings of the Parties thereto
with respect to the subject matter thereof, and no promise or representation,
written or oral, which is not set forth explicitly is intended by either Party
to be legally binding.  Both Parties
acknowledge that in deciding to enter into the Agreement and to consummate the
transaction contemplated thereby neither Party has relied upon any statement or
representations, written or oral, other than those explicitly set forth
therein.

          18.11   Independent Contractors.  The status of the Parties under this
Agreement shall be that of independent contractors.  Neither Party shall have the right to enter into any agreements
on behalf of the other Party, nor shall it represent to any person that it has
any such right or authority.  Nothing in
this Agreement shall be construed as establishing a partnership or joint
venture relationship between the Parties.


          18.12   Currency.  The references in this Agreement to amounts
expressed in dollars ($) shall mean United States dollars.


          18.13   English Language.  This Agreement has
been drafted in the English language, and the English language shall control
its interpretation. 


30.









[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

31.








          IN WITNESS
WHEREOF, Kaketsuken and VaxGen have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.

	
  VAXGEN
	
   
	
  KAKETSUKEN
	
   

	
   
	
   
	
   
	
   

	
  By:  /s/ Lance Gordon
	
   
	
  By:  /s/ Kyoji Uchino
	
   

	
   
	
  



  	
   
	
   
	
  



  	
   

	
   
	
   
	
   
	
   

	
  Name:  Lance Gordon
	
   
	
  Name:  Kyoji Uchino
	
   

	
   
	
   
	
   
	
   

	
  Title:  Chief Executive Officer
	
   
	
  Title:  Director General, President
	
   

						




[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

32.








	
  ARTICLE 1  

  	
   
	
  DEFINITIONS
	
  2

	
   
	
  1.1
	
  “Affiliate”
	
  2

	
   
	
  1.2
	
  “Asia”
	
  2

	
   
	
  1.3
	
  “BLA”
	
  2

	
   
	
  1.4
	
  “Bulk
  Product”
	
  2

	
   
	
  1.5
	
  “Calendar
  Year”
	
  2

	
   
	
  1.6
	
  “CDC”
	
  2

	
   
	
  1.7
	
  “Chiba”
	
  2

	
   
	
  1.8
	
  “Confidential
  Information”
	
  2

	
   
	
  1.9
	
  “Control”
  or “Controlled”
	
  2

	
   
	
  1.10
	
  “Cost
  of Sales”
	
  3

	
   
	
  1.11
	
  “Development
  Activities”
	
  3

	
   
	
  1.12
	
  “Direct
  Costs”
	
  3

	
   
	
  1.13
	
  “Europe”
	
  3

	
   
	
  1.14
	
  “FDA”
	
  3

	
   
	
  1.15
	
  “FD&C
  Act”
	
  3

	
   
	
  1.16
	
  “Field”
	
  3

	
   
	
  1.17
	
  “Finished
  Product”
	
  4

	
   
	
  1.18
	
  “First
  Commercial Sale”
	
  4

	
   
	
  1.19
	
  “Forecast”
	
  4

	
   
	
  1.20
	
  “Good
  Manufacturing Practice” or “cGMP”
	
  4

	
   
	
  1.21
	
  “Gross
  Sales Revenue”
	
  4

	
   
	
  1.22
	
  “IND”
	
  4

	
   
	
  1.23
	
  “Information”
	
  4

	
   
	
  1.24
	
  “Invention”
	
  4

	
   
	
  1.25
	
  “Kaketsuken
  Know-How”
	
  4

	
   
	
  1.26
	
  “Kaketsuken
  Materials”
	
  4

	
   
	
  1.27
	
  “Kaketsuken
  Patents”
	
  4

	
   
	
  1.28
	
  “Marketing
  Costs”
	
  5

	
   
	
  1.29
	
  “Net
  Sales”
	
  5

	
   
	
  1.30
	
  “Operating
  Profit”
	
  5

	
   
	
  1.31
	
  “Other
  Allowable Expenses”
	
  6

	
   
	
  1.32
	
  “Patent”
	
  6













	
   
	
  1.33
	
  “Person”
	
  6

	
   
	
  1.34
	
  “Product
  Labeling”
	
  6

	
   
	
  1.35
	
  “Quality
  Protocol”
	
  6

	
   
	
  1.36
	
  “R&D
  Expenses”
	
  6

	
   
	
  1.37
	
  “Regulatory
  Agency”
	
  7

	
   
	
  1.38
	
  “Regulatory
  Approvals”
	
  7

	
   
	
  1.39
	
  “Regulatory
  and Manufacturing Development Expenses
	
  7

	
   
	
  1.40
	
  “Secondary
  Manufacture” or “Secondary Manufacturing”
	
  7

	
   
	
  1.41
	
  “Specifications”
	
  7

	
   
	
  1.42
	
  “Steering
  Committee”
	
  7

	
   
	
  1.43
	
  “Term”
	
  7

	
   
	
  1.44
	
  “Territory”
	
  7

	
   
	
  1.45
	
  “Third
  Party”
	
  7

	
   
	
  1.46
	
  “Transfer
  Price”
	
  7

	
   
	
  1.47
	
  “TSE”
	
  7

	
   
	
  1.48
	
  “United
  States”
	
  7

	
   
	
  1.49
	
  “USDA”
	
  8

	
   
	
  1.50
	
  “Vaccine”
	
  8

	
   
	
  1.51
	
  “VaxGen
  Know-How”
	
  8

	
   
	
  1.52
	
  “VaxGen
  Patents”
	
  8

	
  ARTICLE 2
	
   
	
  OVERVIEW
	
  8

	
   
	
  2.1
	
  Purpose
	
  8

	
   
	
  2.2
	
  Commercial
  Principles
	
  8

	
   
	
  2.3
	
  Steering
  Committee
	
  8

	
  ARTICLE 3
	
   
	
  LICENSES
	
  9

	
   
	
  3.1
	
  License
  Grant to VaxGen
	
  9

	
   
	
  3.2
	
  Rights
  of First Refusal: Europe
	
  9

	
   
	
  3.3
	
  Negotiation
  Rights:  Other Territories
	
  10

	
   
	
  3.4
	
  Grant-back
  and Use of [ * ]
	
  10

	
  ARTICLE 4  
	
   
	
  NON-CLINICAL
  AND CLINICAL DEVELOPMENT
	
  11

	
   
	
  4.1
	
  Current
  Status
	
  11

	
   
	
  4.2
	
  Development
  Roles in the Territory
	
  11

	
   
	
  4.3
	
  Consent
  for Specific Development Program
	
  11













	
   
	
  4.4
	
  Regulatory
  Applications
	
  12

	
   
	
  4.5
	
  Regulatory
  Meetings and Correspondence
	
  12

	
   
	
  4.6
	
  Expenses
	
  12

	
  ARTICLE 5
	
   
	
  MANUFACTURE
  AND SUPPLY OF MATERIALS FOR DEVELOPMENT PROGRAM
	
  12

	
   
	
  5.1
	
  Supply
  of Bulk Product and Finished Product For Development Program
	
  12

	
  ARTICLE 6
	
   
	
  COMMERCIAL
  MANUFACTURE AND SUPPLY
	
  13

	
   
	
  6.1
	
  General
  Rights and Responsibilities of the Parties
	
  13

	
   
	
  6.2
	
  General
  Principles
	
  13

	
   
	
  6.3
	
  Kaketsuken
  Advisory Role
	
  13

	
   
	
  6.4
	
  Kaketsuken’s
  Production Capacity and Scale-Up
	
  13

	
   
	
  6.5
	
  Forecasting
	
  14

	
   
	
  6.6
	
  Failure
  to Supply
	
  14

	
   
	
  6.7
	
  Facilities
	
  15

	
   
	
  6.8
	
  Specifications
	
  15

	
   
	
  6.9
	
  Delivery
  and Shipment
	
  15

	
   
	
  6.10
	
  Acceptance
  and Rejection
	
  16

	
  ARTICLE 7
	
   
	
  REGULATORY
  ISSUES
	
  17

	
   
	
  7.1
	
  Compliance
	
  17

	
   
	
  7.2
	
  Audits
  By VaxGen
	
  17

	
   
	
  7.3
	
  Regulatory
  Audits
	
  18

	
   
	
  7.4
	
  Quality
  Protocol
	
  18

	
  ARTICLE 8
	
   
	
  TRANSFER
  PRICE; PROFIT SHARING; OTHER PAYMENTS
	
  18

	
   
	
  8.1
	
  Transfer
  Price
	
  18

	
   
	
  8.2
	
  Profit
  Sharing
	
  19

	
   
	
  8.3
	
  Royalty
  and Tech Transfer Payments
	
  21

	
  ARTICLE 9
	
   
	
  PROMOTION
  AND MARKETING; TRADEMARKS
	
  21

	
   
	
  9.1
	
  VaxGen’s
  Sales
	
  21

	
   
	
  9.2
	
  Vaccine
  Trademark
	
  21

	
   
	
  9.3
	
  Promotional
  Materials
	
  22

	
   
	
  9.4
	
  Trade
  Dress, Logos, and the Like
	
  22

	
  ARTICLE 10
	
   
	
  CONFIDENTIAL
  INFORMATION
	
  22

	
   
	
  10.1
	
  Confidential
  Information
	
  22













	
   
	
  10.2
	
  Authorized
  Disclosure
	
  23

	
   
	
  10.3
	
  Publicity
	
  23

	
  ARTICLE 11
	
   
	
  OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS
	
  24

	
   
	
  11.1
	
  Ownership
	
  24

	
   
	
  11.2
	
  Patent Prosecution
	
  24

	
   
	
  11.3
	
  Enforcement Rights
	
  24

	
   
	
  11.4
	
  Defense and Settlement of Third Party Claims
	
  25

	
  ARTICLE 12
	
   
	
  REPRESENTATIONS AND WARRANTIES
	
  25

	
   
	
  12.1
	
  Mutual Representations and Warranties
	
  25

	
   
	
  12.2
	
  Kaketsuken Representations and Warranties
	
  26

	
   
	
  12.3
	
  VaxGen’s Responsibility for Registration
	
  27

	
   
	
  12.4
	
  Kaketsuken’s Responsibility for Registration
	
  27

	
  ARTICLE 13
	
   
	
  COMPETITIVE TRANSACTIONS
	
  27

	
  ARTICLE 14
	
   
	
  INFORMATION AND REPORTS
	
  28

	
   
	
  14.1
	
  Records
	
  28

	
   
	
  14.2
	
  Complaints
	
  28

	
   
	
  14.3
	
  Adverse Drug Experiences
	
  28

	
   
	
  14.4
	
  Records of Revenues and Expenses
	
  28

	
  ARTICLE 15
	
   
	
  INDEMNIFICATION
	
  29

	
   
	
  15.1
	
  Indemnification by VaxGen
	
  29

	
   
	
  15.2
	
  Indemnification by Kaketsuken
	
  29

	
   
	
  15.3
	
  Indemnification Procedures
	
  29

	
   
	
  15.4
	
  Payment of Damages
	
  30

	
   
	
  15.5
	
  Limitation of Liability
	
  30

	
  ARTICLE 16
	
   
	
  TERM AND TERMINATION
	
  30

	
   
	
  16.1
	
  Term
	
  30

	
   
	
  16.2
	
  Termination for Material Breach
	
  30

	
   
	
  16.3
	
  Termination by VaxGen
	
  30

	
   
	
  16.4
	
  Termination by Kaketsuken
	
  30

	
   
	
  16.5
	
  Bankruptcy
	
  31

	
   
	
  16.6
	
  Effect of Termination and Expiration
	
  31

	
   
	
  16.7
	
  Vaccine Inventory.
	
  32













	
   
	
  16.8
	
  Surviving Rights
	
  32

	
  ARTICLE 17
	
   
	
  DISPUTE RESOLUTION; GOVERNING LAW
	
  32

	
   
	
  17.1
	
  Disputes
	
  32

	
   
	
  17.2
	
  Governing Law
	
  32

	
  ARTICLE 18
	
   
	
  MISCELLANEOUS
	
  33

	
   
	
  18.1
	
  Assignment
	
  33

	
   
	
  18.2
	
  Consents Not Unreasonably Withheld or Delayed
	
  33

	
   
	
  18.3
	
  Force Majeure
	
  33

	
   
	
  18.4
	
  Further Actions
	
  33

	
   
	
  18.5
	
  Notices
	
  33

	
   
	
  18.6
	
  Waiver
	
  34

	
   
	
  18.7
	
  Severability
	
  34

	
   
	
  18.8
	
  Headings
	
  35

	
   
	
  18.9
	
  Counterparts
	
  35

	
   
	
  18.10
	
  Entire Agreement; Amendments
	
  35

	
   
	
  18.11
	
  Independent Contractors
	
  35

	
   
	
  18.12
	
  Currency
	
  35

	
   
	
  18.13
	
  English Language
	
  35




[ * ] = CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.









EXHIBIT A


VACCINE
SPECIFICATIONS


Bulk Product Specifications


              [
* ]


Finished Product Specifications


              [
* ]


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.








EXHIBIT B


VACCINE
ADVERSE EVENT REPORTING


	
  
	
  VACCINE ADVERSE EVENT REPORTING SYSTEM
24 Hour Toll Free Information 1-800-822-7967

  P.O. Box 1100, Rockville, MD 20849-1100

  PATIENT IDENTITY KEPT CONFIDENTIAL
	
    For CDC/FDA Use Only

    VAERS Number _________________


    Date Received _____________________

	
     Patient Name:
	
    Vaccine administered by
  (Name):
	
    Form completed by (Name):

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
      Last 
	
  First
	
  M.I.  
	
     Responsible 
	
     Relation

     to Patient
	
  o Vaccine Provider   
	
  o Patient/Parent

	
   
	
     Physician
	
   
	
   
	
  o Manufacturer
	
  o Other

	
      Address
	
     Facility
  Name/Address
	
     address (if different from patient or provider)

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
      City
	
  State
	
  Zip
	
     City
	
  State
	
  Zip
	
     City
	
  State
	
  Zip

	
      Telephone no.
  (____) _____________________
	
     Telephone no.
  (____) _______________________
	
     Telephone no.
  (____) _____________________

	
   
	
   
	
   

	
      1. State
	
    2. County where
  administered
	
   3. 
	
   Date of birth
	
   4.
	
   Patient age
	
    5. Sex
	
    6. Date form completed

	
   
	
   
	
   
	
          /       /         
	
   
	
   
	
         o M  o F
	
   
	
          /       /         
	
   

	
   
	
   
	
   
	
  mm    dd    yy   
	
   
	
   
	
   
	
   
	
  mm    dd    yy   
	
   

	
      7. Describe adverse
  events(s) (symptoms, signs, time course) and treatment, if any
	
   8. 
	
   Check all appropriate:

	
   
	
     o Patient died
	
   
  (date
	
          /       /         
	
  )  

	
   
	
     o Life threatneing illness
	
  mm    dd    yy   
	
   

	
   
	
     o Required emergency room/doctor visit

	
   
	
     o Required hospitalization (_ _ _ _ _
  _ _days)

	
   
	
     o Resulted in prolongation of
  hospitalization

	
   
	
     o Resulted in permanent disability

	
   
	
     o None of the above 

	
      9. Patient
  recovered          o  YES  o  NO  o  UNKNOWN
	
   10. 
	
   Date of vaccination
	
   11. 
	
   Adverse event onset

	
    12. Relevant
  diagnostic tests/laboratory data
	
   
	
          /       /         
	
   
	
   
	
          /       /         
	
   

	
   
	
   
	
  mm    dd    yy   
	
   
	
   
	
  mm    dd    yy   
	
   

	
   
	
  AM
  Time _ _ _ _ _
  _ _  PM
	
  AM
  Time _ _ _ _ _
  _ _  PM

	
   
	
  13.
	
   Enter all vaccines given on
  date listed in no. 10  

	Vaccine
  (type)
	Manufacturer
	Lot
  number
	Route/Site
	No.
  Previous

  Doses

	    a. ______________________
	  ________________________
	  ________________________
	  ________________________
	  ________________________

	    b. ______________________
	  ________________________
	  ________________________
	  ________________________
	  ________________________

	    c. ______________________
	  ________________________
	  ________________________
	  ________________________
	  ________________________

	    d. ______________________
	  ________________________
	  ________________________
	  ________________________
	  ________________________

	  
	  
	  
	  
	  

	
    14. Any other
  vaccinations within 4 weeks prior to the date listed in no. 10

	Vaccine
  (type)
	Manufacturer
	Lot
  number
	Route/Site
	No.
  Previous

  Doses
	
  Date

  given

	
      a. __________________
	
    ___________________
	
    ___________________
	
    ___________________
	
    ___________________
	
    ___________________

	
      b. __________________
	
    ___________________
	
    ___________________
	
    ___________________
	
    ___________________
	
    ___________________

	
   
	
   
	
   
	
   
	
   
	
   

	
    15. Vaccinated at:
	
    16. Vaccine purchased
  with:
	
    17. Other medications

	
      o Private doctor’s office/hospital
	
    o Military clinic/hospital
	
     o Private funds
	
    o Military funds
	
   

	
      o Public health clinic/hospital
	
    o Other/unknown
	
     o Public funds
	
    o Other/unknown
	
   

	
    18. Illness at time of
  vaccination (specify)
	
    19. Pre-existing
  physician-diagnosed allergies, birth defects, medical conditions(specify)



	
    20.
	
  Have you reported 

  this adverse event

  previously?
	
  o No 
	
  o To health department 
	
  Only for children 5 and under 

	
   
	
  o To doctor
	
  o To manufacturer
	
    22. Birth weight
	
    23. No. of brother and sisters

	
   
	
    
	
    
	
   _ _ _ _ _ _ _ lb.  _ _ _ _ _ _ 
  oz.   
	
   

	
    21.
	
  Adverse event following  prior vaccination (check all applicable, specify) 
	
   Only for reports submitted by manufacturer/Immunization project

	
   
	
   
	
  Adverse

  Event
	
  Onset

  Age
	
  Type

  Vaccine
	
  Dose no.

  in series
	
    24.
  Mfr./imm. proj. report no.
	
    25.
  Date received by mfr./imm.proj.

	
  o 
	
  In patient
	
  _________
	
  _________
	
  _________
	
  _________
	
   
	
   

	
  o 
	
  In brother
	
  _________
	
  _________
	
  _________
	
  _________
	
    26. 15 day
  report?
	
    27. Report type

	
   
	
  or sister
	
  _________
	
  _________
	
  _________
	
  _________
	
        o Yes     o  No
	
        o 
  Initial      o  Follow-Up

	
  Health
  care providers and manufacturers are required by law (42 USC 300aa-25) to
  report reactions to vaccines listed in the Table of Reportable Events
  Following Immunization Reports for reactions to other vaccines are voluntary except when required as
  a condition of immunization grant awards.

	
  Form VAERS-1(FDA)

																																																												




ii.











EXHIBIT
C

QUALITY PROTOCOL

(There was no Exhibit C attached to the final
signature document.)

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

iii.