Document:

SECURITY AGREEMENT

                  General Security Agreement dated August 20, 2004 made by
Corridor Communications Corp., a Delaware corporation ("Debtor"), in favor of
Bristol Investment Fund, Ltd. (the "Secured Party").

                  Debtor hereby agrees in favor of Secured Party as follows:

                  I. In consideration for loans made or to be made to Debtor by
Secured Party evidenced by the Promissory Note dated the date hereof of Debtor
in the principal amount of $300,000, payable to the order of Secured Party (such
note, as amended, modified, supplemented, replaced or substituted from time to
time, being herein referred to as the "Note"), Debtor hereby grants to Secured
Party a continuing security interest in, lien upon and a right of setoff
against, and Debtor hereby assigns to Secured Party, all of Debtor's right,
title and interest in and to the Collateral described in Section 2, to secure
the full and prompt payment, performance and observance of all present and
future indebtedness, obligations, liabilities and agreements of any kind of
Debtor to Secured Party, now existing or hereafter arising under or in
connection with the Note or this Security Agreement (all of the foregoing being
herein referred to as the "Obligations").

                  2. The Collateral is described on Schedule A annexed hereto as
part hereof and on any separate schedule(s) at any time or from time to time
furnished by Debtor to Secured Party (all of which are hereby deemed part of
this Security Agreement) and includes claims of Debtor against third parties for
loss or damage to or destruction of any Collateral.

                  3. Debtor hereby warrants, represents, covenants and agrees
(as of the date hereof and so long as any Obligation remains outstanding) that:
(a) the chief executive office and other places of business of Debtor, the books
and records relating to the Collateral (except for such records as are in the
possession or control of Secured Party) and the Collateral are located at the
address set forth below and Debtor will not change any of the same, or merge or
consolidate with any person or change its name or conduct its business under any
trade, assumed or fictitious name, without prior written notice to and consent
of Secured Party; (b) the Collateral is and will be used in the business of
Debtor and not for personal, family, household or farming use; (c)Debtor will
not abandon or assign, or lease, other than in the ordinary course of Debtor's
business, nor will Debtor suffer or permit any of the same to occur with respect
to, any Collateral, without prior written notice to and consent of Secured
Party; (d) Debtor will make payment or will provide for the payment, when due,
of all taxes, assessments or contributions or other public or private charges
which have been or may be levied or assessed against Debtor, whether with
respect to the Collateral, to any wages or salaries paid by Debtor, or
otherwise, will deliver to Secured Party, on demand, certificates or other
evidence satisfactory to Secured Party attesting thereto and shall cause
Debtor's subsidiaries to take any such action as described under this section
3(d); (e) Debtor will use the Collateral for lawful purposes only, with all
reasonable care and caution and in conformity in all material respects with all
applicable laws, ordinances and regulations; (f) Debtor will, at Debtor's sole
cost and expense, keep the Collateral in good order, repair, running condition
and in substantially the same condition as on the date hereof, reasonable wear
and tear excepted, and Debtor will not, without the prior written consent of
Secured Party, alter or remove any identifying symbol or number upon any of the
Collateral; (g) Secured Party shall at all times have free access to and right
of inspection of any Collateral and any papers, instruments and records
pertaining thereto (and the right to make extracts from and to receive from
Debtor originals or true copies of such records, papers and instruments upon
request therefor) and Debtor hereby grants to Secured Party a security interest
in all such records, papers and instruments to secure the payment, performance
and observance of the Obligations; (h) the Collateral is now and shall remain
personal property, and Debtor will not permit any

<PAGE>

Collateral to become a fixture without prior written notice to and consent of
Secured Party and without first making all arrangements, and delivering, or
causing to be delivered, to Secured Party all instruments and documents,
including, without limitation, waivers and subordination agreements by any
landlords or mortgagees, requested by and satisfactory to Secured Party to
preserve and protect the primary security interest granted herein against all
persons; (i) Debtor, at its sole cost and expense, will insure the Collateral in
the name of and with loss or damage payable solely to Secured Party (or as
co-insured), as its interest may appear, against such risks, with such companies
and in such amounts, as may be reasonably required by Secured Party from time to
time and are consistent with policies maintained by companies similarly situated
to the Company (all such policies providing 30 days' minimum written notice of
cancellation or substantial modification to Secured Party) and Debtor will
deliver to Secured Party at its request any original or certified duplicate
policies, with endorsements, or certificates or other evidence satisfactory to
Secured Party attesting thereto, and Debtor will promptly notify Secured Party
of any loss or damage to any Collateral or arising from its use; (j) at its
option Secured Party may apply any insurance monies received at any time to the
cost of repairs to or replacements for the Collateral and/or to payment of the
Obligations, whether or not due, in any order Secured Party may determine, any
surplus (after payment of all costs, reasonable attorneys' fees and
disbursements) to be remitted to Debtor who shall remain liable for any
deficiency; (k) Debtor will, at its sole cost and expense, perform all acts and
execute all documents requested by Secured Party from time to time to evidence,
perfect, maintain or enforce Secured Party's security interest granted herein or
otherwise in furtherance of the provisions of this Security Agreement; (l) at
any time and from time to time, Debtor shall, at its sole cost and expense,
execute and deliver to Secured Party such financing statements pursuant to the
Uniform Commercial Code ("UCC"), applications for certificate of title and other
papers, documents or instruments as may be requested by Secured Party in
connection with this Security Agreement, and to the extent permitted by
applicable law, Debtor hereby authorizes Secured Party to execute and file at
any time and from time to time one or more financing statements or copies
thereof or of this Security Agreement with respect to the Collateral signed only
by Secured Party, and Debtor agrees to pay any recording tax or similar tax
arising in connection with the filing of any such financing statement and
further agrees to pay any additional recording or similar tax which is incurred
in connection therewith; (m) Debtor assumes all responsibility and liability
arising from the Collateral; (n) in its discretion, Secured Party may, at any
time and from time to time, upon the occurrence and during the continuance of a
Default (as hereinafter defined), in its name or Debtor's or otherwise, notify
any account debtor or obligor of any account, contract, document, instrument,
chattel paper or general intangible included in the Collateral to make payment
to Secured Party; (o) in its discretion, Secured Party may, at any time and from
time to time, upon the occurrence and during the continuance of a Default,
demand, sue for, collect or receive any money or property at any time payable or
receivable on account of or in exchange for, or make any compromise or
settlement deemed desirable by Secured Party with respect to, any Collateral,
and/or extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, or release, any of the Obligations and/or the
Collateral, or any obligor, maker, endorser, acceptor, surety or guarantor of,
or any party to, any of the Obligations or the Collateral, all without notice to
or consent by Debtor and without otherwise discharging or affecting the
Obligations, the Collateral or the security interest granted herein; (q) in its
discretion, Secured Party may, at any time and from time to time, for the
account of Debtor, pay any amount or do any act required of Debtor hereunder and
which Debtor fails to do or pay, and any such payment shall be deemed an advance
by Secured Party to Debtor payable on demand together with interest at the
highest rate then payable on any of the Obligations; (r) Debtor will promptly
pay Secured Party for any and all sums, costs, and expenses which Secured Party
may pay or incur pursuant to the provisions of this Security Agreement or in
perfecting, defending, protecting or enforcing this Security Agreement or the
security interest granted herein or in enforcing payment of the Obligations or
otherwise

                                      -2-
<PAGE>

in connection with the provisions hereof, including but not limited to
all search, filing and recording fees, taxes, fees and expenses for the service
and filing of papers, premium on bonds and undertakings, fees of marshals,
sheriffs, custodians, auctioneers, court costs, collection charges, travel
expenses, and reasonable attorneys' fees, all of which together with interest at
the highest rate then payable on any of the Obligations, shall be part of the
Obligations and be payable on demand; (s) upon the occurrence and during the
continuance of a Default, any proceeds of the Collateral received by Debtor
shall not be commingled with other property of Debtor, but shall be segregated,
held by Debtor in trust for Secured Party, and immediately delivered to Secured
Party in the form received, duly endorsed in blank where appropriate to
effectuate the provisions hereof, the same to be held by Secured Party as
additional Collateral hereunder or, at Secured Party's option, to be applied to
payment of the Obligations, whether or not due and in any order; (t) in its sole
discretion, Secured Party may, at any time and from time to time, assign,
transfer or deliver to any transferee of any Obligations, any Collateral,
whereupon Secured Party shall be fully discharged from all responsibility and
the transferee shall be vested with all powers and rights of Secured Party
hereunder with respect thereto, but Secured Party shall retain all rights and
powers with respect to any Collateral not assigned, transferred or delivered;
(u) Debtor has not during the five-year period prior to the date hereof been
known by or used any trade name, fictitious name or any corporate name other
than Debtor's name as set forth next to its signature below; and (v) upon
request of Secured Party, at any time and from time to time, Debtor shall, at
its cost and expense, execute and deliver to Secured Party reports as to the
Collateral listing all items thereof, describing the condition of same and
setting forth the value thereof (lower of cost or market) all in form and
substance reasonably satisfactory to Secured Party.

                  4. The term Default as used in this Security Agreement shall
mean any event of default, as such term is defined in the Note.

                  5. Upon the occurrence and during the continuance of any
Default, Secured Party may, without notice to (except as herein set forth) or
demand upon Debtor, declare any Obligations immediately due and payable and
Secured Party shall have the following rights and remedies (to the extent
permitted by applicable law) in addition to all rights and remedies of a Secured
party under the UCC or of Secured Party under the Obligations, all such rights
and remedies being cumulative, not exclusive and enforceable alternatively,
successively or concurrently:

                  (a) Secured Party may, at any time and from time to time, with
or without judicial process or the aid and assistance of others, (i) enter upon
any premises in which any Collateral may be located and, without resistance or
interference by Debtor, take possession of the Collateral, (ii) dispose of any
part or all of the Collateral on any such premises, (iii) require Debtor to
assemble and make available to Secured Party at the expense of Debtor any part
or all of the Collateral at any place and time designated by Secured Party which
is reasonably convenient to both parties, (iv) remove any part or all of the
Collateral from any such premises for the purpose of effecting sale or other
disposition thereof (and if any of the Collateral consists of motor vehicles,
Secured Party may use Debtor's license plates), and (v) sell, resell, lease,
assign and deliver, grant options for or otherwise dispose of any part or all of
the Collateral in its then condition or following any commercially reasonable
preparation or processing, at public or private sale or proceedings or
otherwise, by one or more contracts, in one or more parcels, at the same or
different times, with or without having the Collateral at the place of sale or
other disposition, for cash and/or credit, and upon any terms, at such place(s)
and time(s) and to such person(s) as Secured Party deems best, all without
demand, notice or advertisement whatsoever except that where an applicable
statute requires reasonable notice of sale or other disposition Debtor hereby
agrees that the

                                      -3-
<PAGE>

sending of ten days' notice by ordinary mail, postage prepaid, to any address of
Debtor set forth in this Security Agreement shall be deemed reasonable notice
thereof. If any Collateral is sold by Secured Party upon credit or for future
delivery, Secured Party shall not be liable for the failure of the purchaser to
pay for same and in such event Secured Party may resell or otherwise dispose of
such Collateral. Secured Party may buy any part or all of the Collateral at any
public sale and, if any part or all of the Collateral is of a type customarily
sold in a recognized market or is of the type which is the subject of widely
distributed standard price quotations, Secured Party may buy such Collateral at
private sale and in each case may make payment therefor by any means, whether by
credit against the Obligations or otherwise. Secured Party may apply the cash
proceeds actually received from any sale or other disposition to the reasonable
expenses of retaking, holding, preparing for sale, selling, leasing and the
like, to reasonable attorneys' fees and all legal, travel and other expenses
which may be incurred by Secured Party in attempting to collect the Obligations,
proceed against the Collateral or enforce this Security Agreement or the Pledge
Agreement or in the prosecution or defense of any action or proceeding related
to the Obligations, the Collateral or this Security Agreement or the Pledge
Agreement; and then to the Obligations in such order and as to principal or
interest as Secured Party may desire; and Debtor shall remain liable and will
pay Secured Party on demand any deficiency remaining, together with interest
thereon at the highest rate then payable on the Obligations and the balance of
any expenses unpaid, with any surplus to be paid to Debtor, subject to any duty
of Secured Party imposed by law to the holder of any subordinate security
interest in the Collateral known to Secured Party.

                  (b) Secured Party may, at any time and from time to time,
appropriate, set off and apply to the payment of the Obligations, any Collateral
in or coming into the possession of Secured Party or its agents, without notice
to Debtor and in such manner as Secured Party may in its discretion determine.

                  6. To the extent necessary to enforce its rights hereunder,
and after the occurrence and during the continuance of a Default, Debtor hereby
designates and appoints Secured Party and each of its designees or agents as
attorney-in-fact of Debtor, irrevocably and with power of substitution, with
authority to: receive, open and dispose of all mail addressed to Debtor and
notify the Post Office authorities to change the address for delivery of mail
addressed to Debtor to such address as Secured Party may designate; endorse the
name of Debtor on any notes, acceptances, checks, drafts, money orders,
instruments or other evidences of Collateral that may come into Secured Party's
possession; sign the name of Debtor on any invoices, documents, drafts against
and notices to account debtors or obligors of Debtor, assignments and requests
for verification of accounts; execute proofs of claim and loss; execute
endorsements, assignments or other instruments of conveyance or transfer; adjust
and compromise any claims under insurance policies or otherwise; execute
releases; and do all other acts and things necessary or advisable in the sole
discretion of Secured Party to carry out and enforce this Security Agreement or
the Obligations. All acts done under the foregoing authorization are hereby
ratified and approved and neither Secured Party nor any designee or agent
thereof shall be liable for any acts of commission or omission done in good
faith, for any error of judgment or for any mistake of fact or law. This power
of attorney being coupled with an interest is irrevocable while any Obligations
shall remain unpaid.

                  7. With respect to the enforcement of Secured Party's rights
under this Security Agreement, Debtor hereby releases Secured Party from any
claims, causes of action and demands at any time arising out of or with respect
to this Security Agreement, the Obligations, the Collateral and its use and/or
any actions taken or omitted to be taken by Secured Party in good faith with
respect thereto, and Debtor hereby agrees to hold Secured Party harmless from
and with respect to any and all such claims, causes of action and demands.

                                      -4-
<PAGE>

                  8. Secured Party's prior recourse to any Collateral shall not
constitute a condition of any demand, suit or proceeding for payment or
collection of the Obligations nor shall any demand, suit or proceeding for
payment or collection of the Obligations constitute a condition of any recourse
by Secured Party to the Collateral. Any suit or proceeding by Secured Party to
recover any of the Obligations shall not be deemed a waiver of, or bar against,
subsequent proceedings by Secured Party with respect to any other Obligations
and/or with respect to the Collateral. No act, omission or delay by Secured
Party shall constitute a waiver of its rights and remedies hereunder or
otherwise. No single or partial waiver by Secured Party of any covenant,
warranty, representation, Default or right or remedy which he may have shall
operate as a waiver of any other covenant, warranty, representation, Default,
right or remedy or of the same covenant, warranty, representation, Default,
right or remedy on a future occasion. Debtor hereby waives presentment, notice
of dishonor and protest of all instruments included in or evidencing any
Obligations or Collateral, and all other notices and demands whatsoever (except
as expressly provided herein).

                  9. Debtor hereby agrees to pay, on demand, all out-of-pocket
expenses incurred by Secured Party in connection with the enforcement of the
Note, this Security Agreement, the Pledge Agreement and the Obligations and in
connection with any amendment, including, without limitation, the fees and
disbursements of counsel to Secured Party.

                  10. In the event of any litigation with respect to any matter
connected with this Security Agreement, the Obligations, the Collateral or the
Note, Debtor hereby waives the right to a trial by jury and all rights of
setoff. Debtor hereby waives personal service of any process in connection with
any such action or proceeding and agrees that the service thereof may be made by
certified or registered mail directed to Debtor at any address of Debtor set
forth in this Security Agreement. Debtor so served shall appear or answer to
such process within thirty days after the mailing thereof. Should Debtor so
served fail to appear or answer within said thirty-day period, Debtor shall be
deemed in default and judgment may be entered by Secured Party against Debtor
for the amount or such other relief as may be demanded in any process so served.
In the alternative, Secured Party may in its discretion effect service upon
Debtor in any other form or manner permitted by law.

                  11. Debtor shall deliver to Secured Party on the date of
execution of this Security Agreement duly executed UCC-1 financing statements
with respect to the Collateral.

                  12. Secured Party may assign its rights and obligation
hereunder to any Affiliate of Secured Party provided that such Affiliate assumes
all of the liabilities or obligations of Secured Party hereunder. For purposes
of this section, "Affiliate" of any person means any other person or entity
which, directly or indirectly, controls or is controlled by that person, or is
under common control with that person or entity. "Control" (including, with
correlative meaning, the terms "controlled by" and "under common control with"),
as used with respect to any person or entity, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person or entity, whether through the ownership of voting
securities, by contract or otherwise.

                  13. All terms herein shall have the meanings as defined in the
UCC, unless the context otherwise requires. No provision hereof shall be
modified, altered, waived, released, terminated or limited except by a written
instrument expressly referring to this Security Agreement and to such provision,
and executed by the party to be charged. The execution and delivery of this
Security Agreement has been authorized by the Board of Directors of Debtor and
by any necessary vote or consent of stockholders of Debtor. This Security
Agreement and all Obligations shall be binding upon the successors and assigns
of Debtor and shall, together with the rights and remedies of Secured Party
hereunder, inure to the benefit of Secured Party, its executors, administrators,
successors, endorsees and assigns. This Security Agreement and the Obligations
shall be governed in all respects by the laws of the State of New York
applicable to contracts executed and to be performed in such state. If any term
of this Security Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby. Secured Party is authorized to annex hereto any schedules
referred to herein. Debtor acknowledges receipt of a copy of this Security
Agreement.

                                      -5-
<PAGE>

                  IN WITNESS WHEREOF, the undersigned has executed or caused
this security agreement to be executed in the State of New York on the date
first above set forth.

                                       CORRIDOR COMMUNICATIONS CORP.

                                       By /s/ J. Michael Heil
                                          --------------------------------------
                                       Name:  J. Michael Heil
                                       Title: CEO

Location of books and records
relating to Collateral:

California

All locations of Collateral:

California
Oregon

                                      -6-
<PAGE>

                                   SCHEDULE A

                  The property covered by this Security Agreement consists of
(in each case, wherever located and whether now owned or hereafter made,
developed or acquired by Debtor): (a) all equipment, computer hardware,
machinery, furniture, fixtures, dies, tools, vehicles, trucks, cars, tractors,
trailers, fork lifts, cranes, hoists and tangible personal property of Debtor,
and all accessions and attachments to or relating to any of the foregoing; (b)
all books, records, computer software and other property relating to or
referring to any of the foregoing; (c) all patents, trade names, trade styles,
service marks, all rights associated with the foregoing, and goodwill; (d) all
present and future accounts, contract rights, general intangibles, chattel
paper, documents and instruments, as such terms are defined in the Uniform
Commercial Code, including, without limitation, all accounts receivable and
other receivables of any kind, and all obligations for the payment of money
arising out of the sale of goods, rendition of services or the lease by the
Debtor of its property; (e) all other property of the Debtor; (f) all guaranties
or other agreements securing or relating to any of the items referred to in
subparagraphs (a)-(e) above, or acquired for the purpose of securing and
enforcing any of such items; and (g) all proceeds of any of the foregoing in
whatever form, including, without limitation, any claims against third parties
for loss or damage to or destruction of any or all of the foregoing and cash,
negotiable instruments and other instruments for the payment of money, chattel
paper, security agreements or other documents.

                                      -7-Exhibit 10.58

                                                                 NON-PLAN OPTION

                             STOCK OPTION AGREEMENT

      THIS STOCK OPTION AGREEMENT (this "Agreement") is entered into, effective
as of October 21, 2004, by VAXGEN, INC., a Delaware corporation (the "Company"),
and Myron M. Levine (the "Holder").

                                    RECITALS

      A. The Holder has been designated to receive an option outside an equity
incentive plan maintained by the Company in connection with his initial election
to the Board.

      NOW, THEREFORE, the Company and the Holder agree as follows:

      1. GRANT OF THE OPTION. The Company hereby grants to the Holder a
non-qualified stock option (the "Option") to acquire from the Company thirty
thousand (30,000) shares of Common Stock (the "Shares") at the price of $12.27
per share (the "Purchase Price").

      2. TERM OF THE OPTION. The Option (or certain portions thereof) shall
terminate on the earliest to occur of the following: (i) ten (10) years from the
date of this Agreement; (ii) the earlier termination of one or more portions of
the Option in the event that such portions do not become exercisable for shares
on an applicable anniversary date of this Agreement pursuant to Section 3(b);
and (iii) the earlier termination of the Option pursuant to Section 8.

      3. EXERCISABILITY.

            (a) The Option shall vest and become exercisable with respect to
one-third (1/3) of the shares subject to the Option on each successive annual
anniversary of the date of this Agreement such that all of the shares subject to
the Option shall be vested and exercisable on the third anniversary of the date
of this Agreement.

            (b) Notwithstanding the preceding, the Option shall not become
exercisable for shares for which it is scheduled to become exercisable on each
applicable anniversary of this Agreement if (i) more than sixty (60) days prior
to the applicable anniversary date, the Holder ceases to serve as a director of
the Company for any reason other than his death; or (ii) during the annual
period measured initially from the date of this Agreement and subsequently from
each anniversary date (or such portion of that period during which the Holder is
serving as a director of the Company), the Holder does not attend at least
seventy-five percent (75%) of the combined number of meetings of the full Board
and any committee(s) of the Board of which the Holder is a member, or does not
attend at least fifty percent (50%) of such combined number of meetings in
person. For purposes of this Section 3(b), if the Board takes action by
unanimous written consent, such consent shall be deemed to be a meeting of the
Board that the Holder attended in person.

            (c) After a portion of the Option becomes exercisable, the Option
may be exercised for the shares covered thereby in whole or in part at any time
and from time to time prior to its termination pursuant to Section 2.

                                       1.
<PAGE>

      4. ADMINISTRATION.

            (a) The Option shall be administered by the Board or the
Compensation Committee of the Board (the "Administrator").

            (b) The Administrator shall have the sole authority, in its absolute
discretion, to (i) construe and interpret the terms of the Option; (ii) define
the terms used in this Agreement; (iii) prescribe, amend and rescind rules and
regulations relating to the Option; (iv) correct any defect, supply any omission
or reconcile any inconsistency in this Agreement; and (v) make all other
determinations necessary or advisable for the administration of the Option. All
decisions, determinations and interpretations made by the Administrator shall be
binding and conclusive on the Holder and on his legal representatives, heirs and
beneficiaries.

      5. LIMITED TRANSFERABILITY. The Option is not transferable, except (i) by
will or by the laws of descent and distribution; (ii) with the prior written
approval of the Company, by instrument to an inter vivos or testamentary trust,
in a form accepted by the Company, in which the option is to be passed to
beneficiaries upon the death of the trustor (settlor); and (iii) with the prior
written approval of the Company, by gift, in a form accepted by the Company, to
a permitted transferee under a Form S-8 registration statement promulgated by
the Securities and Exchange Commission.

      6. EXERCISE OF THE OPTION. In order to exercise the Option, the Holder
must do the following:

            (a) deliver to the Company a written notice, substantially in the
form of the attached Exhibit A, specifying the number of Shares for which the
Option is being exercised;

            (b) tender payment to the Company of the aggregate Purchase Price
for the Shares for which the Option is being exercised, which amount may be paid
(i) in cash or by certified or cashier's check; (ii) by delivery to the Company
of shares of Common Stock held by the Holder for the requisite period necessary
to avoid a charge to the Company's earnings for financial reporting purposes and
valued at Fair Market Value on the date of exercise; or (iii) pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
that, prior to the issuance of Common Stock, results in either the receipt of
cash (or check) by the Company or the receipt of irrevocable instructions to pay
the aggregate exercise price to the Company from the sales proceeds; and

            (c) pay, or make arrangements satisfactory to the Administrator for
payment to the Company of, all applicable federal and state income and
employment taxes required to be withheld by the Company in connection with the
exercise of the Option.

      7. CHANGES IN CAPITALIZATION.

            (a) If the outstanding shares of Common Stock are increased or
decreased, or changed into or exchanged for a different number or kind of shares
or securities of the Company through a reorganization, merger, recapitalization,
reclassification, share exchange or other material alteration in the capital
structure of the Company, the Administrator shall proportionately adjust the
number of shares of Common Stock subject to the Option, the exercise

                                       2.
<PAGE>

price per share, or both, so as to preserve the rights of the Holder
substantially proportionate to the rights of the Holder prior to such event.

            (b) For purposes of Section 7(a), neither (i) the issuance of
additional shares of Common Stock or other securities of the Company in exchange
for adequate consideration (including services), nor (ii) the conversion into
Common Stock of any securities of the Company now or hereafter outstanding,
shall be deemed material alterations in the capital structure of the Company.

            (c) If the Administrator determines that the nature of a material
alteration in the capital structure of the Company is such that it is not
feasible or advisable to make adjustments to the Option, such event shall be
subject to Section 8.

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

      8. OTHER SIGNIFICANT EVENTS. In the event of (i) the acquisition by any
person, partnership, corporation or other entity of more than fifty percent
(50%) of the outstanding shares of Common Stock, (ii) a sale of substantially
all of the assets of the Company, (iii) the dissolution or liquidation of the
Company, or (iv) a material change in the capital structure of the Company that
is subject to this Section 8 in accordance with Section 7(c), the Administrator
shall have the power to determine what effect, if any, such event shall have
upon the Option, including but not limited to the power to cause the Option to
be surrendered and canceled and payments to be made to the Holder in exchange
therefor and to cause adjustments to be made in the number and/or kind of shares
or securities with respect to which the Option may be exercised and/or in the
purchase prices and other terms and conditions thereof. Upon such event, the
Option shall terminate, except to the extent the Administrator, pursuant to its
authority under this Section 8, has made provision for the continuation of the
Option or the substitution for the Option of new options or awards covering the
stock or securities of a successor entity, in which event the Option shall be
subject to the terms so provided.

      9. NO SERVICE CONTRACT. The grant of the Option shall not confer upon the
Holder any right to continue in service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Company or of
Holder, which rights are hereby expressly reserved by each, to terminate the
Holder's service at any time for any reason, with or without cause.

      10. ENTIRE AGREEMENT; AMENDMENTS; BINDING EFFECT. This Agreement
constitutes the entire agreement and understanding between the Company and the
Holder regarding the subject matter hereof. No amendment of the Option or this
Agreement, or waiver of any provision of this Agreement, shall be valid unless
in writing and duly executed by the Company and the Holder. The failure of any
party to enforce any of that party's rights against the other party for breach
of any of the terms of this Agreement shall not be construed as a waiver of such
rights as to any continued or subsequent breach. This Agreement shall be binding
upon the Holder and his heirs, successors and assigns.

                                       3.
<PAGE>

      11. DEFINITIONS.

            (a) "Board" shall mean the board of directors of the Company.

            (b) "Common Stock" shall mean the common stock of the Company.

            (c) "Fair Market Value" per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:

                  (i) If the Common Stock (or other security) is publicly
traded, the last sales price (or, if no last sales price is reported, the
average of the high bid and low asked prices) for a share of Common Stock (or
unit of the other security) on that day (or, if that day is not a trading day,
on the next preceding trading day), as reported by the principal exchange on
which the Common Stock (or other security) is listed, or, if the Common Stock
(or other security) is publicly traded but not listed on an exchange, as
reported by The Nasdaq Stock Market, or, if such prices or quotations are not
reported by The Nasdaq Stock Market, as reported by any other available source
of prices or quotations selected by the Administrator;

                  (ii) If the Common Stock (or other security) is not publicly
traded, or if the Fair Market Value is not determinable by any of the foregoing
means, the Fair Market Value on any day shall be determined in good faith by the
Administrator on the basis of such considerations as the Administrator deems
appropriate.

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

COMPANY                                VAXGEN, INC.
                                       a Delaware corporation

                                       By__________________________________

HOLDER                                 ------------------------------------
                                       Myron Levine, M.D.

                                       4.
<PAGE>

                                    EXHIBIT A
                           FORM OF EXERCISE OF OPTION

To:   VaxGen, Inc.
      1000 Marina Blvd., Ste. 200
      Brisbane, CA 94005

      The undersigned holds Option Number ____ (the "Option"), represented by a
Stock Option Agreement dated effective as of October 21, 2004 (the "Agreement").

      The undersigned hereby exercises the Option and elects to purchase
________________ shares (the "Shares") of Common Stock of VaxGen, Inc. (the
"Company") pursuant to the Option.

      This notice is accompanied by full payment of the Purchase Price for the
Shares in cash or by check or in another manner permitted by Section 6(b) of the
Agreement. The undersigned has also paid, or made arrangements satisfactory to
the Administrator for payment of, all taxes, if any, required to be withheld by
the Company in connection with the exercise of the Option.

      Date: __________________, ____

                                               --------------------------------
                                               Myron Levine, M.D.

                                       5.

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