Document:

EXECUTIVE EMPLOYMENT AGREEMENT

JAMES M. CUNHA

                This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into by and between James M. Cunha (hereinafter “Executive”)
and VaxGen, Inc. (hereinafter “VaxGen” or the “Company”), as of the date that
it has been signed by both parties (the “Effective Date”). In consideration of the mutual
promises made herein, VaxGen and Executive agree as follows:

                1.              EMPLOYMENT BY THE COMPANY. VaxGen hereby employs Executive, and Executive hereby accepts employment with VaxGen upon the terms
and conditions set forth in this Agreement, as of the Effective Date. On the Effective Date, Executive will be employed as the Company’s Chief Financial Officer (“CFO”)
and Executive will cease serving as Interim Chief Financial Officer.

                2.              WORK RESPONSIBILITIES. As CFO, Executive shall perform the functions and responsibilities provided for that position in the
Company’s by-laws and articles of incorporation, customarily associated with that position,
and as may be assigned from time to time by the Company’s Chief Executive Officer (“CEO”),
including, but not limited to, managing the Company’s Finance and Administration Department.
VaxGen may assign additional or different duties to Executive. Executive will report to the CEO.
Executive shall devote the whole of his professional time, attention and energies to the performance
of his work responsibilities (except for vacation periods and reasonable periods of illness or other
incapacity permitted by the Company’s general employment policies, or as otherwise permitted
by this Agreement). Executive will be located in the Company’s Brisbane, California corporate
headquarters. Executive’s position, title, job description, reporting relationship, office location,
duties and responsibilities may be modified from time to time in the sole discretion of VaxGen.

                3.              COMPENSATION AND BENEFITS.

                                 (a)            Base Salary. VaxGen will pay Executive an initial base salary at the annualized rate of two hundred sixty thousand
dollars ($260,000), less standard payroll deductions and withholdings and payable in accordance with
the Company’s regular payroll schedule. Such compensation is subject to change from time to
time in the Company’s discretion. Executive’ base salary shall be reviewed on the next compensation review date for all executive
employees, and annually thereafter. 

                                 (b)            Signing Bonus.  Executive shall be entitled to a one-time signing bonus of Forty Thousand Dollars ($40,000),
to be paid in a single lump sum (subject to standard payroll deductions and withholdings) within
five (5) business days after the Effective Date.

                                 (c)            Bonus Potential. Executive is eligible to receive an annual bonus of up to thirty percent (30%) of his annual base
salary. Such bonuses, if any, are awarded at the sole discretion of the Company’s Board of Directors
(the “Board”) based on its assessment of Executive’s performance as measured by  the performance standards agreed upon and memorialized in writing between Executive and the CEO, subject to approval
by the Compensation Committee of the Board of Directors (the “Compensation Committee”). No bonuses are earned until the Board confirms such bonuses in writing. The Company shall have

	

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the sole discretion to change or eliminate the annual bonus program at any time, and to determine
the amount of bonus earned by Executive, if any.

                                 (d)            Stock Option Grant. Subject to Board approval, following the Employment Date, the Company will grant to Executive under
the VaxGen, Inc. 1996 Stock Option Plan (“the Plan”) options to purchase one hundred fifty
thousand (150,000) shares of the Company’s common stock at an exercise price equal to the fair
market value of that Common stock as of March 19, 2004, the date Executive commenced employment as
the Company’s Interim Chief Financial Officer (the “Option”). The Option will be subject
to the terms and conditions of the Plan and Executive’s grant agreement, which will include
a four-year vesting schedule under which, during Executive’s continuous service to the Company
(as defined in the Plan), twenty-five percent (25%) of the Option shares will vest on the one-year
anniversary of the Employment Date and the remaining Option shares will vest in equal monthly installments
over the subsequent three (3) years. Executive acknowledges that there are no further commitments
on behalf of the Company to grant to Executive any additional stock options, although the Board may
consider granting additional stock options at its sole discretion. Executive further acknowledges
that the Option will not qualify as an incentive stock option.

                                 (e)            Benefits. Executive shall be entitled to participate in the Company’s employee benefit plans which may be
in effect from time to time and provided by the Company to its senior officers generally, including
paid holidays, leaves of absence, health insurance, dental insurance, life insurance, vacation and
other benefits, if any, in accordance with and subject to the eligibility requirements of such employee
benefit plans and other applicable policies and procedures. Executive’s rights under such employee
benefit plans, or the rights of Executive’s dependents, shall be governed solely by the terms
of such plans and any applicable policies and procedures. The Company’s employee benefit plans,
and policies and procedures related thereto, are subject to termination, modification or limitation
at any time at the Company’s sole discretion.

                                 (f)             Business Expenses. VaxGen shall reimburse Executive for all reasonable business expenses, including expenses incurred
for travel on VaxGen business, in accordance with the policies and procedures of VaxGen, as may be
adopted or amended from time to time at VaxGen’s sole discretion. To be eligible for reimbursement,
Executive must submit business expense reimbursement requests to VaxGen on a monthly basis, which
includes supporting documentation (including receipts) satisfactory to VaxGen.

                                 (g)            Total Compensation. Executive agrees that the compensation stated above constitutes the full and exclusive monetary consideration
and compensation for all services provided by Executive to the Company, and for all promises and
obligations under this Agreement.

                4.              VAXGEN EMPLOYMENT POLICIES. Executive’s employment relationship will be governed by the general employment policies and
practices of the Company, and Executive agrees to abide by all such policies, practices and procedures,
written and unwritten, as they may from time to time be adopted or modified by VaxGen at its sole
discretion. Executive also agrees to review and abide by the policies in VaxGen’s Employee Handbook
(as they may be 

	

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modified by the Company from time to time) and to acknowledge in writing that he has read and will
abide by the Employee Handbook.

                5.              PROTECTION OF COMPANY INFORMATION. As a condition of his continued employment, Executive agrees to continue to abide by the Employee’s
Proprietary Information and Inventions Agreement (the “Proprietary Information Agreement”)
that he signed on March 19, 2004. A copy of the signed Proprietary Information Agreement is attached
hereto as Exhibit A.

                6.              INDEMNIFICATION. VaxGen shall maintain, for the benefit of Executive, director and officer liability insurance in form
at least as comprehensive as, and in an amount that is at least equal to, that maintained by VaxGen
as of the Effective Date of this Agreement for its other officers and directors. In addition, VaxGen
shall indemnify Executive against liability as an officer and director of VaxGen or any subsidiary
or affiliate of VaxGen to the maximum extent permitted by applicable law. Executive’s rights
under this Paragraph 6 shall continue so long as he may be subject to such liability, whether or
not his employment may have terminated prior thereto. A copy of a signed Indemnity Agreement by Executive
on May 20, 2004 is attached hereto as Exhibit B.

                7.              OUTSIDE ACTIVITIES.

                                 (a)            Non-Company Activities.  Except for Executive’s existing commitments which are noted on a separate writing  signed and dated by Executive and the CEO and which have been approved by the CEO, and any additional
commitments consented to in writing by the CEO after the Effective Date, Executive will not during
the term of this Agreement undertake or engage in any other employment, occupation or business enterprise,
other than ones in which he is a passive investor. Executive may engage in civic and not-for-profit
activities so long as such activities do not materially interfere with the performance of his duties
hereunder.

                                 (b)            No Adverse Interests. During his employment, Executive agrees not to acquire, assume or participate in, directly or indirectly,
any position, investment or interest known by him to be adverse or antagonistic to the Company, its
business or prospects, financial or otherwise, except as permitted by Section 7(c).

                                 (c)            Noncompetition. During the term of his employment by the Company, except on behalf of the Company, Executive will not
directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate,
representative, consultant, employee, or in any capacity whatsoever, engage in, become financially
interested in, be employed by or have any business connection with any other person, corporation,
firm, partnership or other entity whatsoever which competes directly with the Company, anywhere throughout
the world, in any line of business engaged in (or planned to be engaged in) by the Company; provided, however, that Executive may own, as a passive investor, securities of any competing public corporation, so
long as his direct holdings in any one such corporation shall not in the aggregate constitute more
than one percent (1%) of the voting stock of such corporation and any ownership interest in a competitor
is disclosed in writing to the Company’s CEO.

	

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                8.              FORMER EMPLOYMENT.

                                 (a)            Prior Employee Agreements and Information. Executive represents and warrants that his employment by the Company will not conflict with and will
not be constrained by any prior employment or consulting agreement, noncompetition agreement, proprietary
information agreement or other relationship with any third party. Executive further represents and
warrants that he does not possess or control confidential information arising out of prior employment,
consulting, or other third party relationships, which would be utilized in connection with his employment
by the Company, except as expressly authorized by that third party. Executive further warrants that
by entering into this Agreement with VaxGen, he is not violating any of the terms, agreements or
covenants of any agreement with any third party, including but not limited to any previous employer,
and that he is not under any contractual obligation that would restrict his activities on behalf
of the Company.

                                 (b)            Use or Disclosure of Third Party Information. If, in spite of the second sentence of Section 8(a), Executive should find that confidential or proprietary
information belonging to any third party might be usable in connection with the Company’s business,
he will not disclose it to the Company or use it on behalf of the Company except as expressly authorized
by such third party; but during his employment by the Company, Executive will use in the performance
of his duties only information which is generally known and used by persons with training and experience
comparable to his own, common knowledge in the industry, otherwise legally in the public domain,
or which is obtained or developed by the Company or by Executive in the course of his work for the Company.

                9.              NONINTERFERENCE.

                                While employed by the Company and for a period of one (1) year immediately following the termination
of his employment, Executive agrees that he will not, without the express consent of an officer of
the Company, or in the course and scope of performing his duties for the Company, interfere with
the business of the Company by, either directly or indirectly:

                                 (a)            soliciting, recruiting, inducing, encouraging, or otherwise causing any employee of VaxGen to terminate
his or her employment in order to become an employee, consultant or independent contractor to or
for any other person or entity, or attempting to do so;

                                 (b)            disclosing to any person or entity the names or addresses of, or any information pertaining to, any
current or former employees of VaxGen; or

                                 (c)            using Proprietary Information (as defined in the Proprietary Information Agreement) to call on, solicit
or take away any clients or customers of VaxGen or any other persons, entities, or corporations with
which VaxGen has had or contemplated any business transaction or relationship during Executive’s
employment with VaxGen (such Proprietary Information to include, but not be limited to, investments,
licenses, joint ventures, and agreements for development), or attempting to do so.

	

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                10.           TERMINATION OF EMPLOYMENT.

                                 (a)          At-Will Employment Relationship.  Executive’s employment relationship is at-will. This means that Executive’s employment
and/or this Agreement may be terminated with or without Cause (as defined herein), and with or without
advance notice, at any time by either Executive or by VaxGen. Nothing in this document shall limit
the right to terminate employment at will or to terminate this Agreement at any time. This at-will
employment relationship can only be changed in a written agreement approved by the Board and signed
by Executive and a duly authorized officer of the Company.

                                 (b)           Termination Without Cause. In the event that Executive’s employment is terminated without Cause by the Company, Executive
shall be eligible to receive the following as his sole severance benefits (collectively, the “Severance
Benefits”): (i) severance pay in the amount of twelve (12) months of his base salary in
effect as of the termination date (such severance being limited strictly to base salary and will
not include any amount paid or payable as a bonus or stock option grant), less standard withholdings
and deductions, and payable in the Company’s ordinary payroll cycle as salary continuation until
fully paid unless a different payment schedule is agreed upon in writing by the parties; and (ii)
all stock option grants then held by Executive shall be subject to accelerated vesting such that
all unvested shares will become fully vested and exercisable effective as of the employment termination
date (the “Accelerated Vesting”). In the event that Executive’s employment is terminated
without Cause by the Company within thirteen (13) months after a Change of Control (defined below),
then in addition to receiving the Severance Benefits, Executive shall receive a bonus payment for
the compensation year in which the termination occurs, such payment to be prorated based on the termination
date and calculated based on the target bonus amount for which Executive is eligible for the compensation
year in which the termination occurs, if any, provided that Executive will not be entitled to such bonus payment if he otherwise received a bonus payment for the
compensation year in which the termination occurs (the “Prorated Bonus”). Also in the event
that Executive’s employment is terminated without Cause by the Company after a Change in Control,
Executive may be entitled to receive a Gross-Up Payment, as defined in Section 10(b)(ii), in accordance
with the provisions of Sections 10(b)(ii)-(iv). As a condition of and prior to the receipt of all
or any of the Severance Benefits, Accelerated Vesting, or Prorated Bonus, Executive shall provide
the Company with an effective general release of all known and unknown claims, in the form attached
as Exhibit C.

                                                (i)             Definition of Change in Control.  For the purposes of this Agreement, Change in Control shall be deemed to have occurred if: (i)
there is an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (for
the purposes of this Section, a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the voting power of the then outstanding
voting securities of VaxGen entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this subsection 10(b), any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by VaxGen or any corporation controlled by VaxGen shall not constitute
a Change in Control; or (ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual 

	

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(other than an individual whose initial assumption of office occurs as a result of an actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board) who becomes
a director subsequent to the date hereof whose election or nomination for election by VaxGen’s
shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the Incumbent Board; or (iii)
there is a consummation of a reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of VaxGen (a “Business Combination”) unless,
following such Business Combination, (A) individuals and entities who were the beneficial owners
of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the voting power of the then Outstanding Company Voting
Securities of the corporation resulting from such Business Combination (including, without limitation,
a corporation which as a result of such transaction owns VaxGen or all or substantially all of VaxGen’s
assets either directly or through one or more subsidiaries) and (B) at least a majority of the members
of the board of directors of the corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or (iv) approval by the shareholders of VaxGen
of a complete liquidation or dissolution of VaxGen.

                                                (ii)            Gross-Up Payment.  Subject to the limitation of Section 10(b)(iv), if it shall be determined that any payment or
distribution of any type to or for the benefit of Executive, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”),
is or will be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”), or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties, are collectively referred to as the “Excise
Tax”), then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”)
in an amount such that after payment by Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

                                                (iii)          Determination By Accountant.  All mathematical determinations, and all determinations as to whether any of the Total Payments
are “parachute payments” (within the meaning of Section 280G of the Code), that are required
to be made under Section 10(b)(ii), including determinations as to whether a Gross-Up Payment is
required and the amount of such Gross-Up Payment, shall be made by an independent accounting firm
selected by Executive from among the four (4) largest accounting firms in the United States (the
“Accounting Firm”), subject to the limitation of Section 10(b)(iv). The Accounting Firm
shall provide its determination (the “Determination”), together with detailed supporting
calculations regarding the amount of any Gross-Up Payment and any other relevant matter, both to
the Company and Executive by no later than ten (10) days following the date of Executive’s termination
of employment, if applicable, or such earlier time as is requested by the Company or Executive (if
Executive reasonably believes that any of the Total Payments may be subject to the Excise Tax). If
the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive
and the Company with a written statement that such Accounting Firm has concluded that no Excise Tax
is payable (including the reasons therefor) and that Executive has substantial authority not to report
any Excise Tax on his federal income tax return. If a Gross-Up Payment is determined to 

	

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be payable, it shall be paid to Executive within twenty (20) days after the Determination (and all
accompanying calculations and other material supporting the Determination) is delivered to the Company
by the Accounting Firm. Any determination by the Accounting Firm shall be binding upon the Company
and Executive, absent manifest error. As a result of uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments not made by the Company should have been made (“Underpayment”),
or that Gross-Up Payments will have been made by the Company which should not have been made (“Overpayments”).
In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment
that has occurred. In the case of an Underpayment, the amount of such Underpayment shall be promptly
paid by the Company to or for the benefit of Executive. In the case of an Overpayment, Executive
shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including
the filing of returns and claims for refund), follow reasonable instructions from, and procedures
established by, the Company, and otherwise reasonably cooperate with the Company to correct such Overpayment; provided, however, that (i) Executive shall not in any event be obligated to return to the Company an amount greater
than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund
from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent
with the intent of Section 10(b)(ii), which is to make Executive whole, on an after-tax basis, from
the application of the Excise Tax, it being understood that the correction of an Overpayment may
result in Executive repaying to the Company an amount which is less than the Overpayment.

                                                (iv)          Certain Limitations.  Notwithstanding Sections 10(b)(ii) and 10(b)(iii), the amount of the Gross-Up Payment shall
be subject to the limitation that the aggregate amount of gross-up payments in respect of the excise
tax imposed by Section 4999 of the Code, including the Gross-Up Payment, that may be paid to employees
of the Company, including Executive, shall not exceed 2.5% of the aggregate cash equivalent value
of consideration delivered by the individuals or entities effecting the Change in Control, excluding
from this calculation any consideration that is contingent on uncertain future events (such limitation
is hereinafter referred to as the “Gross-Up Payment Limitation”). If the Gross-Up Payment
Limitation would be exceeded, then the gross-up payment of each employee, including Executive, shall
be reduced pro rata so that the sum of all gross-up payments, including the Gross-Up Payment, will
equal the Gross-Up Payment Limitation. Moreover, if gross-up payments may be paid to employees
of the Company in addition to Executive, the Accounting Firm for purposes of Section 10(b)(iii) shall
be the accounting firm engaged by the Company for general audit purposes as of the day prior to the
effective date of the Change in Control; provided, however, that if such accounting firm is serving as accountant or auditor for the individual or entity effecting
the Change in Control, the Company shall appoint a nationally recognized accounting firm as the Accounting
Firm for purposes of Section 10(b)(iii). Upon the occurrence of a Change in Control, the Accounting
Firm shall calculate the Gross-Up Payment Limitation. The limitation on the gross-up payment of each
employee, including the Gross-Up Payment of Executive, as a result of the Gross-Up Payment
Limitation shall be applied as if all employees, including Executive, had terminated employment and
become entitled to gross-up payments on the earliest date that any employee, including Executive,
terminates employment with entitlement to a gross-up payment, including the Gross-Up Payment, and
there shall be no re-determination of such limitations at any time thereafter, even if one or more
of such employees thereafter do not become entitled to receive a gross-up payment.

	

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                                 (c)           Termination for Cause.

                                                (i)             No Severance. In the event Executive’s employment is terminated at any time for Cause, Executive will be entitled
to payment of all accrued salary and accrued and unused vacation, but Executive will not be entitled
to the Severance Benefits, pay in lieu of notice, or any other such compensation.

                                                (ii)            Cause Definition. For purposes of this Agreement, “Cause” for termination shall mean any of the following: (A) fraud
or illegal acts committed by Executive; (B) Executive’s material breach of any written agreement
with the Company, including but not limited to this Agreement or the Proprietary Information Agreement;
(C) Executive’s material failure to perform his job duties as determined by the Company in its
reasonable judgment, and after notice of such failure has been given to Executive by the CEO and
Executive has had a fifteen (15) business-day period within which to cure such failure (such notice
to be provided only if Executive’s failure is reasonably susceptible to cure); or (D) a material
violation of any VaxGen employment policy, including but not limited to VaxGen’s policies
against harassment and discrimination, and/or VaxGen’s substance abuse policy, which violation
causes harm to the Company.

                                 (d)            Voluntary or Mutual Termination. In the event Executive terminates his employment, or in the event that Executive’s employment
terminates at the parties’ mutual agreement, Executive will be entitled to payment of all accrued
salary and accrued and unused vacation, but Executive will not be entitled to Severance Benefits,
pay in lieu of notice, or any other such compensation.

                                 (e)            Termination Due to Death. In the event of Executive’s death, Executive’s employment will terminate on the date thereof,
and Executive and Executive’s heirs or estate will be entitled to payment of all accrued salary
and accrued and unused vacation, but Executive will not be entitled to Severance Benefits, pay in
lieu of notice or any other such compensation.

                11.           GENERAL PROVISIONS.

                                 (a)            Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of
California without regard to conflict of laws principles that would otherwise apply the law of another
jurisdiction. Any ambiguity in this Agreement shall not be construed against either party as the
drafter.

                                 (b)            Complete Agreement.  This Agreement, including the Proprietary Information Agreement and the Indemnity Agreement,
constitutes the complete, final and exclusive embodiment of the entire agreement and understanding
of the parties with regard to the subject matter hereof. It is entered into without reliance on any
promise, warranty or representation other than those expressly contained herein, and it supersedes
and replaces any and all prior or contemporaneous agreements, promises or representations between
VaxGen and Executive, whether oral, written or implied, including but not limited to Executive’s
March 19, 2004 offer letter agreement concerning the Interim Chief Financial Officer position. The
terms of this Agreement and any changes in Executive’s employment terms (other than those 

	

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employment terms expressly reserved to the Company’s discretion in this Agreement), require a
written amendment to the Agreement signed by Executive and a duly authorized officer of the Company.

                                 (c)            Waiver.  Any waiver of a breach of this Agreement shall be in writing and shall not be deemed to be a
waiver of any successive breach.

                                 (d)           Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability will not affect any other provision or any other
jurisdiction, and such invalid, illegal or unenforceable provision will be reformed, construed and
enforced in such jurisdiction so as to render it valid, legal, and enforceable consistent with the
general intent of the parties insofar as possible.

                                 (e)            Voluntary Agreement.  Executive and VaxGen represent and warrant that each has reviewed all aspects of this Agreement,
has carefully read and fully understands all provisions of this Agreement, and is voluntarily entering
into this Agreement. Each party represents and agrees that such party has had the opportunity to
review any and all aspects of this Agreement with the legal and tax advisors of such party’s
choice before executing this Agreement, and each party has had a full opportunity to negotiate the
terms of this Agreement prior to signing this Agreement.

                                 (f)             Headings. The headings and captions of the various paragraphs of this Agreement are placed herein for the convenience
of the parties and the reader, do not constitute a substantive term or terms of this Agreement, and
shall not be considered in the interpretation or application of this Agreement.

                                 (g)            Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures
of more than one party, but all of which taken together will constitute one and the same Agreement.
Signatures transmitted via facsimile shall be deemed the equivalent of originals.

                                 (h)            Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of and shall be enforceable by
and against Executive and the Company, and their respective successors, assigns, heirs, executors
and administrators; except that it is agreed that Executive may not assign any of his duties hereunder;
and Executive may not assign any of Executive’s rights hereunder without the written consent
of the Company, which shall not be unreasonably withheld.

                                 (i)             Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon, as applicable,
the date of personal delivery (including personal delivery by facsimile transmission), the date of
delivery by express delivery service (e.g. Federal Express), or the third day after mailing by certified
or registered mail, return receipt requested, to the attention of the CEO sent to the Company’s
corporate headquarters, and to Executive at his address as listed on the Company’s payroll,
or as otherwise provided in writing by Executive to the CEO.

	

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                                 (j)             Alternative Dispute Resolution. To ensure rapid and economical resolution of any disputes which may arise concerning the relationship
between Executive and the Company, the parties hereby agree that any and all claims, disputes or
controversies of any nature whatsoever arising out of, or relating to, this Agreement, Executive’s
employment with the Company, or the termination of such employment, shall be resolved, to the fullest
extent permitted by law, by final, binding and confidential arbitration in San Francisco, California
conducted before a single arbitrator by JAMS, Inc. (“JAMS”) or its successor, under the
then applicable JAMS arbitration rules. The parties each acknowledge that by agreeing to this arbitration procedure, they waive the right to
resolve any such dispute, claim or demand through a trial by jury or judge or by administrative proceeding. Executive will have the right to be represented by legal counsel at any arbitration proceeding. The
arbitrator shall: (i) have the authority to compel adequate discovery for the resolution of
the dispute and to award such relief as would otherwise be available under applicable law in a court
proceeding; and (ii) issue a written statement signed by the arbitrator regarding the disposition
of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the
arbitrator’s essential findings and conclusions on which the award is based. The arbitrator,
and not a court, shall also be authorized to determine whether the provisions of this paragraph apply
to a dispute, controversy, or claim sought to be resolved in accordance with these arbitration procedures.
The Company shall bear all JAMS’ arbitration fees and administrative costs. Nothing in this
Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief
in court to prevent irreparable harm pending the conclusion of any arbitration.

                                 (k)            Right To Work. As required by law, this Agreement is subject to satisfactory proof of Executive’s right to work
in the United States.

                IN WITNESS WHEREOF, the parties have executed this Agreement on the dates specified below.

	 	 
	 	VAXGEN, INC.
	 	 
	 	By: 	  /s/ Lance Gordon
	 	 	

	 	 	     Lance Gordon, Ph.D.
	 	 	     Chief Executive Officer
	 	 
	 	Date:     May 20, 2004
	 	 	

	 

	ACCEPTED AND AGREED:
	 
	   /s/ James M. Cunha
	

	James M. Cunha
	 
	   May 20, 2004
    
	

	Date

	

10._

Void after June 1, 2010                                                                            Warrant No. SC-01 2005

 

 
This Warrant and any shares acquired upon the exercise of this Warrant have not been registered under the Securities Act of 1933.  This Warrant and such shares may not be sold or transferred in the absence of such registration or an exemption therefrom under said Act.  This Warrant and such shares may not be transferred except upon the conditions specified in this Warrant, and no transfer of this Warrant or such shares shall be valid or effective unless and until such conditions shall have been complied with.

 

 

LIGHTPATH TECHNOLOGIES, INC. 

COMMON STOCK PURCHASE WARRANT

 

LightPath Technologies, Inc. (the "Company"), having its principal office at 2603 Challenger Tech Ct., Suite 100, Orlando, Florida 32826 hereby certifies that, for value received, Shadow Capital, LLC, or its assigns, is entitled, subject to the terms set forth below, to purchase from the Company at any time on or from time to time after March 1, 2006 (the "Initial Exercisable Date") and before 5:00 P.M., New York City time, on June 1, 2010, or as extended in accordance with the terms hereof (the "Expiration Date"), 133,320 fully paid and non-assessable shares of Common Stock of the Company, at the initial Purchase Price per share (as defined below) of $4.30.  The number and character of such shares of Common Stock and the Purchase Price per share are subject to adjustment as provided herein.

Background.The Company agreed to issue this warrant to purchase an aggregate of 133,320 shares of Common Stock (subject to adjustment as provided herein) in connection with the Company's private placement of 35 units ("Units"), each Unit consisting of (i) 10,000 shares of Common Stock and (ii) warrant rights entitling the Holders thereof to purchase 4,000 shares of Common Stock at $4.30 per share (the "Warrants").

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

The term "Company" includes the Company and any corporation which shall succeed to or assume the obligations of the Company hereunder. The term "corporation" shall include an association, joint stock company, business trust, limited liability company or other similar organization.

The term "Common Stock" includes all stock of any class or classes (however designated) of the Company, authorized upon the Original Issue Date or thereafter, the Holders of which shall have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference, and the Holders of which shall ordinarily, in the absence of contingencies, be entitled to vote for the election of a majority of directors of the Company (even though the right so to vote has been suspended by the happening of such a contingency).

The term "Convertible Securities" means (i) options to purchase or rights to subscribe for Common Stock, (ii) securities by their terms convertible into or exchangeable for Common Stock or (iii) options to purchase or rights to subscribe for such convertible or exchangeable securities.  

The term "Exchange Act" means the Securities Exchange Act of 1934 as the same shall be in effect at the time.

The term "Excluded Stock" shall mean shares of Common Stock issued or issuable by the Corporation (i) to employees, directors or consultants pursuant to any equity compensation plan approved by the Company's stockholders, including all existing equity plans for the benefit of employees, (ii) to bona fide leasing companies, strategic partners, or major lenders, (iii) as the purchase price in a bona fide acquisition or merger (including reasonable fees paid in connection therewith) or (iv) upon issuance upon conversion or exercise of the Warrants or other Convertible Securities outstanding on the date hereof. 

The term "Fair Market Value" shall mean the fair market value of assets or securities as reasonably determined by the Board of Directors of the Corporation in good faith in accordance with generally accepted accounting principles.

The term "Holder" means any record owner of Warrants or Underlying Securities.

The term "Nasdaq" means the Nasdaq SmallCap Market or Nasdaq Stock Market.

The "Original Issue Date" means June 1, 2005.

The term "Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the Holders of the Warrants at any time shall be entitled to receive, or shall have received, upon the exercise of the Warrants, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 6 or otherwise.

The term "Purchase Price per share" means $4.30 per share, as adjusted from time to time in accordance with the terms hereof.

The terms "registered" and "registration" refer to a registration effected by filing a registration statement in compliance with the Securities Act, to permit the disposition of Common Stock (or Other Securities) issued or issuable upon the exercise of the Warrants, and any post-effective amendments and supplements filed or required to be filed to permit any such disposition.

The term "Securities Act" means the Securities Act of 1933 as the same shall be in effect at the time.

The term "Underlying Securities" means any Common Stock or Other Securities issued or issuable upon exercise of Warrants.

The term "Warrant" means, as applicable, this Warrant or each right as set forth in this Warrant to purchase one share of Common Stock, as adjusted.

 

1.Registration, etc.  The Holder shall have the rights to registration of Underlying Securities issuable upon exercise of this Warrant that are set forth in the Investor Rights Agreement, dated the Original Issue Date, among the Company and the Holders (the "Investor Rights Agreement").

2.Sale or Exercise Without Registration.  If, at the time of any exercise, transfer or surrender for exchange of a Warrant or of Underlying Securities previously issued upon the exercise of Warrants, such Warrant or Underlying Securities shall not be registered under the Securities Act, the Company may require, as a condition of allowing such exercise, transfer or exchange, that the Holder or transferee of such Warrant or Underlying Securities, as the case may be, furnish to the Company from counsel reasonably satisfactory to the Company an opinion in form and substance reasonably satisfactory to the Company, to the effect that such exercise, transfer or exchange may be made without registration under the Securities Act, provided that the disposition thereof shall at all times be within the control of such Holder or transferee, as the case may be, and provided further that nothing contained in this Section 2 shall relieve the Company from complying with any registration obligation pursuant to the Investor Rights Agreement. 

3.Exercise of Warrant.

3.1.Exercise in Full.  Subject to the provisions hereof, this Warrant may be exercised in full by the Holder hereof by surrender of this Warrant, with the form of subscription at the end hereof duly executed by such Holder, to the Company at its principal office accompanied by payment, in cash or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock issuable upon exercise of this Warrant by the Purchase Price per share, after giving effect to all adjustments through the date of exercise.

3.2.Partial Exercise.  Subject to the provisions hereof, this Warrant may be exercised in part by surrender of this Warrant in the manner and at the place provided in Section 3.1 except that the amount payable by the Holder upon any partial exercise shall be the amount obtained by multiplying (a) the number of shares of Common Stock (without giving effect to any adjustment therein) designated by the Holder in the subscription at the end hereof by (b) the Purchase Price per share.  Upon any such partial exercise, the Company at its expense will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant or Warrants of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares designated by the Holder in the subscription at the end hereof.

 
3.3.Exercise by Surrender of Warrant or Shares of Common Stock.  Except during any period when  (i) a Registration Statement under the Investor Rights Agreement (as defined therein) is effective covering all Underlying Securities or (ii) during any Suspension (as defined in the Investor Rights Agreement), in addition to the method of payment set forth in Sections 3.1 and 3.2 and in lieu of any cash payment required thereunder, the Holder(s) of the Warrants shall have the right at any time and from time to time to exercise the Warrants in full or in part by surrendering shares of Common Stock, this Warrant or other securities issued by the Company in the manner and at the place specified in Section 3.1 as payment of the aggregate Purchase Price per share for the Warrants to be exercised.  The number of Warrants or shares of Common Stock to be surrendered in payment of the aggregate Purchase Price for the Warrants to be exercised shall be determined by multiplying the number of Warrants to be exercised by the Purchase Price per share, and then dividing the product thereof by an amount equal to the Market Price (as defined below) . The number of shares of Common Stock or such other securities to be surrendered in payment of the aggregate Purchase Price for the Warrants to be exercised shall be determined in accordance with the preceding sentence as if the other securities had been converted into Common Stock immediately prior to exercise or, in the case the Company has issued other securities which are not convertible into Common Stock, at the Market Price thereof.  

3.3.Definition of Market Price.  As used herein, the phrase "Market Price" at any date shall be deemed to be (i) if the principal trading market for such securities is an exchange, the average of the high reported sale prices per share for the last ten (10) previous trading days in which a sale was reported, as officially reported on any consolidated tape, (ii) if the principal market for such securities is the over-the-counter market, the average of the high reported sale prices per share on such trading days as set forth by Nasdaq or, (iii) if the security is not quoted on Nasdaq, the average of the high sale prices per share on such trading days as set forth in the National Quotation Bureau sheet listing such securities for such days.  Notwithstanding the foregoing, if there is no reported high sale price, as the case may be, reported on any of the ten trading days preceding the event requiring a determination of Market Price hereunder, then the Market Price shall be the average of the high bid and asked prices for such days;  and if there is no reported high bid and asked prices, as the case may be, reported on any of the ten trading days preceding the event requiring a determination of Market Price hereunder, then the Market Price shall be determined in good faith by resolution of the Board of Directors of the Company, based on the best information available to it. 

3.5.Company to Reaffirm Obligations.  The Company will, at the time of any exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights (including, without limitation, any right to registration of the Underlying Securities) to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant, provided that if the Holder of this Warrant shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford such Holder any such rights.  Otherwise, any other rights of the Holder pursuant to this Warrant shall terminate when this Warrant has been fully exercised.

3.6.Certain Exercises.  If an exercise of a Warrant or Warrants is to be made in connection with a registered public offering or sale of the Company, such exercise may, at the election of the Holder, be conditioned on the consummation of the public offering or sale of the Company, in which case such exercise shall not be deemed effective until the consummation of such transaction.

3.7Representations of Holder.  Holder will, at the time of any exercise of this Warrant and as a condition to such exercise, affirm in writing to the Company that Holder is acquiring the Underlying Shares issuable upon the exercise of this Warrant for investment for Holder's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof such that Holder would constitute an "underwriter" under the Securities Act, other than pursuant to an effective registration statement under the Securities Act.  Holder acknowledges that the Underlying Securities may not be sold by Holder without registration under the Securities Act or an exemption therefrom.

4.Delivery of Stock Certificates, etc., on Exercise.  As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three business days thereafter, the Company at its own expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, a certificate or certificates for the number of fully paid and non-assessable shares of Common Stock or Other Securities to which such Holder shall be entitled upon such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then current Market Price of one full share, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 5 or otherwise.

5.Adjustment for Dividends in Other Stock, Property, etc.; Reclassification, etc.  In case at any time or from time to time after the Original Issue Date the holders of Common Stock (or, if applicable, Other Securities) shall have received, or (on or after the record date fixed for the determination of stockholders eligible to receive) shall have become entitled to receive, without payment therefor

(i)other or additional stock or other securities or property (other than cash) by way of dividend, or

(ii)any cash paid or payable (including, without limitation, by way of dividend), or

(iii)other or additional stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, recapitalization, combination of shares or similar corporate rearrangement,

then, and in each such case the Holder of this Warrant, upon the exercise hereof as provided in Section 3, shall be entitled to receive the amount of stock and other securities and property (including cash in the cases referred to in subdivisions (ii) and (iii) of this Section 5(a)) which such Holder would hold on the date of such exercise if on the Original Issue Date such Holder had been the Holder of record of the number of shares of Common Stock called for on the face of this Warrant and had thereafter, during the period from the Original Issue Date to and including the date of such exercise, retained such shares and all such other or additional stock and other securities and property (including cash in the cases referred to in subdivisions (ii) and (iii) of this Section 5(a)) receivable by such Holder as aforesaid during such period, giving effect to all adjustments called for during such period by Sections 6 and 7 hereof.  If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination or reverse stock split of the outstanding shares of Common Stock, the Purchase Price per share shall be increased, and the number of shares of Common Stock purchasable under this Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.

6.Reorganization, Consolidation, Merger, etc.  In case the Company after the Original Issue Date shall (a) effect a reorganization, (b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, the Holder of this Warrant, upon the exercise hereof as provided in Section 3 at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall be entitled to receive (and the Company shall be entitled to deliver), in lieu of the Underlying Securities issuable upon such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if such Holder had so exercised this Warrant immediately prior thereto, all subject to further adjustment thereafter as provided in Sections 5 and 7 hereof. The Company shall not effect any such reorganization, consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof, the successor corporation resulting from such consolidation or merger or the corporation purchasing such assets or the appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to each Holder the shares of stock, cash, other securities or assets to which, in accordance with the foregoing provisions, each Holder may be entitled to and all other obligations of the Company under this Warrant. In any such case, if necessary, the provisions set forth in this Section 6 with respect to the rights thereafter of the Holders shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any Other Securities or assets thereafter deliverable on the exercise of the Warrants.

  7.Intentionally omitted.

8.Further Assurances.  The Company will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of stock upon the exercise of all Warrants from time to time outstanding.

9.Accountants' Certificate as to Adjustments.  In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable upon the exercise of the Warrants, the Company at its expense will promptly cause the Company's regularly retained auditor to compute such adjustment or readjustment in accordance with the terms of the Warrants and review a letter from the Company to the Holders setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, and the number of shares of Common Stock outstanding or deemed to be outstanding, in accordance with procedures agreed upon by the Company and the Holders as provided for under AICPA Professional Standards Section AT-20.  The Company will forthwith mail a copy of each such letter to each Holder.

10.Notices of Record Date, etc.  In the event of

(a)any taking by the Company of a record of its stockholders for the purpose of determining the stockholders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or for the purpose of determining stockholders who are entitled to vote in connection with any proposed capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or consolidation or merger of the Company with or into any other person, or

(b)any voluntary or involuntary dissolution, liquidation or winding-up of the Company.

then and in each such event the Company will mail or cause to be mailed to each Holder of a Warrant a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any, as of which the Holders of record of Underlying Securities shall be entitled to exchange their shares of Underlying Securities for securities or other property deliverable upon such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up.  Such notice shall be mailed at least 10 days prior to the date therein specified.

11.Reservation of Stock, etc., Issuable on Exercise of Warrants.  The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable upon the exercise of the Warrants.

12.Listing on Securities Exchanges; Registration; Issuance of Certain Securities. 

12.1.In furtherance and not in limitation of any other provision of this Warrant, if the Company at any time shall list any Common Stock on any national securities exchange or Nasdaq, the Company will, at its expense, simultaneously list on such exchange or Nasdaq, upon official notice of issuance upon the exercise of the Warrants, and maintain such listing of all shares of Common Stock from time to time issuable upon the exercise of the Warrants; and the Company will so list on any national securities exchange or Nasdaq, will so register and will maintain such listing of, any Other Securities if and at the time that any securities of like class or similar type shall be listed on such national securities exchange or Nasdaq by the Company. 

12.2.The Company shall not issue any (a) Convertible Securities or similar securities that contain a provision that provides for any change or determination of the applicable conversion price, conversion rate, or exercise price (or a similar provision which might have a similar effect) based on the Market Price or any other determination of the market price or value of the Company's securities or any other market based or contingent standard; provided that the Company shall not be barred from agreeing to customary weighted average anti-dilution provisions, or (b) any preferred stock, debt instruments or similar securities or investment instruments providing for (i) preferences or other payments substantially in excess of the original investment by purchasers thereof or (ii) dividends, interest or similar payments other than dividends, interest or similar payments computed on an annual basis and not in excess, directly or indirectly, of the lesser of a rate equal to (A) twice the interest rate on 10 year US Treasury Notes and (B) 20%. 

13.Exchange of Warrants.  Subject to the provisions of Section 2 hereof, upon surrender for exchange of any Warrant, properly endorsed, to the Company, as soon as practicable (and in any event within three business days) the Company at its own expense will issue and deliver to or upon the order of the Holder thereof a new Warrant or Warrants of like tenor, in the name of such Holder or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant or Warrants so surrendered.

14.Redemption.  

14.1.Commencing on the Initial Exercise Date, the Company may, on ten (10) business days' prior written notice, redeem all the Warrants at five cents ($.05) per Warrant, provided however, that before any such call for redemption of Warrants can take place the closing sale price of the Common Stock as quoted on Nasdaq or, if such shares are not quoted on Nasdaq, on the principal market on which such shares shall then be trading, shall have, for each of the ten (10) consecutive trading days ending on the third (3rd) day prior to the date on which the notice contemplated by (b) and (c) below is given, equaled or exceeded $6.45 per share (subject to adjustment in the event of any stock splits or other similar events as provided in Section 5 hereof); provided that the Company shall not have the right to give notice of redemption or to redeem the Warrants unless a Registration Statement under the Investor Rights Agreement covering all the Underlying Securities shall be effective at the time of the notice and the Redemption Date, as defined below.

14.2.The notice of redemption shall specify (i) the redemption price, (ii) the date fixed for redemption, which shall in no event be less than ten (10) business days after the date of mailing of such notice, (iii) the place where the Warrant shall be delivered and the redemption price shall be paid, and (iv) that the right to exercise the Warrant shall terminate at 5:00 p.m. (New York time) on the business day immediately preceding the date fixed for redemption. The date fixed for the redemption of the Warrants shall be the Redemption Date. No failure to mail such notice nor any defect therein or in the mailing thereof shall affect the validity of the proceedings for such redemption except as to a holder (a) to whom notice was not mailed or (b) whose notice was defective. An affidavit of the Warrant Agent or the Secretary or Assistant Secretary of the Company that notice of redemption has been mailed shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

14.3.Any right to exercise a Warrant shall terminate at 5:00 p.m. (New York time) on the business day immediately preceding the Redemption Date. The redemption price payable to the Holders shall be mailed to such persons at their addresses of record.

15.Replacement of Warrants.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

16.Warrant Agent.  The Company may, by written notice to each Holder of a Warrant, appoint an agent having an office in New York, New York, for the purpose of issuing Common Stock (or Other Securities) upon the exercise of the Warrants pursuant to Section 3, exchanging Warrants pursuant to Section 13, redeeming warrants pursuant to Section 14, and replacing Warrants pursuant to Section 15, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

17.Remedies.  The Company stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.

18.Negotiability, etc.  Subject to Section 2 above, this Warrant is issued upon the following terms, to all of which each Holder or owner hereof by the taking hereof consents and agrees:

(a)subject to the provisions hereof, title to this Warrant may be transferred by endorsement (by the Holder hereof executing the form of assignment at the end hereof) and delivery in the same manner as in the case of a negotiable instrument transferable by endorsement and delivery;

(b)subject to the foregoing, any person in possession of this Warrant properly endorsed is authorized to represent himself as absolute owner hereof and is empowered to transfer absolute title hereto by endorsement and delivery hereof to a bona fide purchaser hereof for value; each prior taker or owner waives and renounces all of his equities or rights in this Warrant in favor of each such bona fide purchaser and each such bona fide purchaser shall acquire absolute title hereto and to all rights represented hereby; and

(c)until this Warrant is transferred on the books of the Company, the Company may treat the registered Holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

19.Notices, etc.  All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, or by overnight delivery service, at such address as may have been furnished to the Company in writing by such Holder, or, until an address is so furnished, to and at the address of the last Holder of this Warrant who has so furnished an address to the Company.

20.Miscellaneous.  This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.  This Warrant is being delivered in the State of Florida and shall be construed and enforced in accordance with and governed by the laws of such State.  The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.

21.Assignability.  Subject to Section 2 hereof, this Warrant is fully assignable at any time.

 

 

Dated: June 1, 2005

LIGHTPATH TECHNOLOGIES, INC. 

 

 

By:/s/ Robert Burrows

Robert Burrows

Chief Financial Officer

 

 

 

 

 

Attest: /s/ Kenneth Brizel

            

FORM OF SUBSCRIPTION

(To be signed only upon exercise of Warrant)

To: LIGHTPATH TECHNOLOGIES, INC.

The undersigned, the Holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, shares of Common Stock of LightPath Technologies, Inc. (the "Exercise Shares"), and herewith makes payment therefor: 

(i) of $      *    or 

(ii) by surrender of the number of Warrants included in the within Warrant required for full exercise pursuant to Section 3.3 of the Warrant, 

and requests that the certificates for the Exercise Shares be issued in the name of, and delivered to, ___________________, whose address is _______________________.  The undersigned is acquiring the Exercise Shares issuable upon the exercise of this Warrant for investment for Holder's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof such that the undersigned would constitute an "underwriter" under the Securities Act, other than pursuant to an effective registration statement under the Securities Act.  The undersigned acknowledges that the Exercise Shares may not be sold by the undersigned without registration under the Securities Act or an exemption therefrom.

Dated: _______________________

 ________________________________________
(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

_________________________________________

         (Address)

 

 

                        
*Insert here the required payment for number of shares called for on the face of the Warrant (or, in the case of a partial exercise, the portion thereof as to which the Warrant is being exercised), in either case without making any adjustment for additional Common Stock or any other stock or other securities or property or cash which, pursuant to the adjustment provisions of the Warrant, may be deliverable upon exercise.

FORM OF ASSIGNMENT

(To be signed only upon transfer of Warrant)

For value received, the undersigned hereby sells, assigns and transfers unto ________________________________ the right represented by the within Warrant to purchase ____________ of Common Stock of LightPath Technologies, Inc.  to which the within Warrant relates, and appoints ___________________________________ Attorney to transfer such right on the books of LightPath Technologies, Inc. with full power of substitution in the premises.  The Warrant being transferred hereby is the Warrant issued by LightPath Technologies, Inc. as of June 1, 2005 to purchase an aggregate of 133,320 shares of Common Stock.

Dated:_______________

(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

 

(Address)

 

Signature guaranteed by a Bank

or Trust Company having its

principal office in New York City

or by a Member Firm of the New

York or American Stock Exchange

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