Document:

Exhibit 10.56

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

February 13, 2004

VIA HAND DELIVERY

Carter Lee

VaxGen, Inc.

1000 Marina Blvd., Suite 200

Brisbane, CA 94014

Dear Carter:

This letter sets forth
the terms of the transition and separation agreement (the “Agreement”) that
VaxGen, Inc. (the “Company” or
“VaxGen”) is offering to you to aid in your employment transition.

          1.          Period
of Continued Employment.  The Company will continue your
employment in your current position, through March 31, 2004, unless you resign
voluntarily before that date or your employment is terminated due to a material
breach of existing Company policies or of a written agreement with the Company
(such termination to occur after notice and a reasonable opportunity to cure
such breach, if curable).  As you
requested, you will be on vacation, utilizing accrued Paid Time Off, during the
last two weeks of your employment.  The
last date of your employment is referred to herein as the “Separation Date,”
which you agree is also the termination date of the Employment Agreement between
you and the Company signed as of April 1, 1999, attached as Exhibit A (the
“Employment Agreement”), notwithstanding any term of employment or termination
notice requirement under the Employment Agreement.  Between now and your Separation Date, you will continue to report
to me and you will be paid your current base salary.

          2.          Departure Announcement.  You and the Company agree to make good faith
efforts to develop a mutually agreeable additional announcement, if any,
concerning your departure from the Company, consistent with the press release
previously issued by the Company on January 20, 2004.

          3.          Accrued
Salary and PTO Pay. 
On the Separation Date, the Company will pay you all accrued salary, and
all accrued and unused Paid Time Off, earned through the Separation Date (if
any), less standard payroll deductions and withholdings.  You are entitled to these payments by law.

          4.          Bonus Payment.  If you enter into this Agreement, the
Company will pay you a bonus in the amount of $75,000, less required payroll
deductions and withholdings, in lieu of any other bonus or incentive
compensation from the Company, including but not limited to bonuses for 2004,
2003 or any previous years of employment with the Company.  The bonus will be paid
within thirty (30) days
following the Effective Date of this Agreement (as defined in Paragraph
18).  You understand and agree that you
will not earn, and will not receive, any bonus or other incentive compensation
for 2004. 

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          5.          Severance
Benefits.  The
termination of your employment shall be treated as a termination without
“Cause” for the purposes of the Employment Agreement.  If you enter into this Agreement, satisfactorily perform your job
duties as required by Paragraph 1 above through March 31, 2004, and, within
forty-five (45) days after March 31, 2004, you sign, date and return to the
Company (and not revoke) the Separation Date Release attached hereto as Exhibit
B, the Company will provide you with the following severance benefits (the
“Severance Benefits”) as your sole severance benefits in lieu of the less
advantageous severance benefits under the Employment Agreement:

                        (a)          Severance Payments.  The Company will provide you severance
payments during calendar year 2004 that will total, in the aggregate, twelve
(12) months of your base salary in effect as of the Separation Date, less
required payroll deductions and withholdings (the “Severance Payments”).  The Severance Payments will be made on the
Company’s standard payroll dates, beginning with the first payroll date
following the Effective Date of the Separation Date Release (as defined
therein).  All Severance Payments, with
the exception of the Severance Payment provided as of December 31, 2004, shall
be in an amount equal to your regular paycheck amount as of the Separation
Date.  The Severance Payment provided as
of December 31, 2004 shall be calculated as an amount equal to the difference
between the following:  (i) twelve (12)
months of your base salary in effect as of the Separation Date; and (ii) the
total amount of Severance Payments paid prior to December 31, 2004.        

                        (b)          
Health Premium Payments.  To the extent provided
by the federal and state COBRA law or, if applicable, state insurance laws, and
by the Company’s current group health insurance policies, you will be eligible
to continue your group health insurance benefits at your own expense after the
Separation Date for a period of up to thirty-six (36) months, regardless of
whether you enter into this Agreement. 
Later, you may be able to convert to an individual policy through the
provider of the Company’s health insurance, if you wish.  The Company will provide you a separate
notice that describes your rights and obligations under COBRA on or after the
Separation Date.  If you timely elect
continued coverage under COBRA, enter into this Agreement, and timely sign,
date and return the Separation Date Release to the Company, the Company, as an
additional severance benefit, will pay your COBRA premiums sufficient to
continue your and your dependents’ (if any) health insurance coverage at the
level in effect as of the date of this Agreement through the earlier of the
following:  (i) the date that you and
your dependents become eligible for group health insurance benefits through a
new employer; or (ii) March 31, 2005. 
You agree to promptly notify the Company in writing if you become
eligible for group health insurance coverage through a new employer prior to
March 31, 2005.

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                        (c)          Stock
Option Grants. 
All of your stock option grants (the “Options”) and any other equity
interests you may have with the Company will cease vesting effective as of the
Separation Date.  As an additional
severance benefit, the Company agrees to accelerate the vesting of all Options
so that the Options are fully vested and immediately exercisable effective as
of the Separation Date.  In addition,
the Options are hereby amended to provide that you will
be able to exercise the
vested and unexercised shares subject to the Options within the earlier of the following:  (i) at any time within three (3) years
following the Separation Date; or (ii) the date that the Option term
expires.  The Options may cease being
incentive stock options under Section 422 of the Internal Revenue Code three
(3) months after the Separation Date, and you are hereby advised to seek
independent advice concerning the tax implications of the Options.  Your
rights to exercise any vested shares subject to the Options are set forth in
the Company’s stock option plan and your individual Options agreements, except
as modified herein.  Attached, as
Exhibit C, is a spreadsheet providing detail regarding your Options, their
respective exercise prices, and expiration dates.

                        (d)          Rent-Free
Office Space.  The Company agrees to make available
rent-free furnished office space for up to six (6) months after the Separation
Date, which you may be required to share with Donald Francis, Phillip Berman
and VaxGen employees or designees.  If
you inform the Company that you intend to utilize such office space, the
provided office space shall be large enough to include separate, individual
offices for you, Donald Francis, and Phillip Berman (to the extent that each
has requested the office space), such offices to be similar in size to the
office that you occupied while employed by the Company, and shall include
shared use of a common area.  VaxGen
will also allow you to use its conference rooms which are in the same general
area as the provided office space on an advance reservation basis, on such
dates and at such times as these rooms are not already reserved for VaxGen
use.  You must inform the Company in
writing, within thirty (30) days after the Separation Date, if you intend to
utilize such office space.  The Company
shall select the office space, which will be located in VaxGen’s corporate
headquarters or within a ten (10) mile radius of its corporate
headquarters.  The Company will pay for
the lease of this office space, will pay the electrical bills, and will provide
office telephone service in this office space (up to a total maximum monthly
amount of $600 for telephone service). 
Other than as stated herein, VaxGen will provide no other equipment or
materials.  If you wish to vacate this
office space before the expiration of six (6) months after you begin using the
office space, you may do so by providing thirty (30) days written notice to the
Company.

          6.          Consulting
Agreement.  Following
the Separation Date, the Company agrees to engage you, and you agree to make
yourself available to perform services, as a consultant under the terms
specified below.

                        (a)          Consulting
Period.  The
consulting relationship (“Consultancy”) shall commence on April 2, 2004, and
continue until October 2, 2004, unless terminated earlier pursuant to section
6(h) of this Agreement (the “Consulting Period”).  The Consulting Period can be extended by mutual written agreement
of the parties.

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                        (b)          Consulting
Services.  During
the Consulting Period, you will be available to consult with the Company in any
areas within your expertise at the specific written request of the Company’s
Chief Executive Officer or his Designee (as defined herein).  As referenced in this Agreement, the
“Designee” shall mean an individual provided written authorization by the Chief
Executive Officer to act as his designee for the purposes of this
Agreement.  You agree to exercise the
highest degree of professionalism and to utilize your expertise and creative
talent in performing these services. 
During the Consulting Period, you shall make yourself available to
perform consulting services for a total of up to two (2) days per month,
although the Company is not obligated to
authorize any specific amount of consulting services during the Consulting
Period.  The Company expects that the
consulting services will be performed outside of the Company’s premises except
when the Chief Executive Officer or his Designee informs you such services may
be provided on the Company’s premises. 
The Company shall not require such services in such a manner as to
unreasonably interfere with your other professional or non-profit
activities.  You agree that, during the
Consulting Period, you will not represent or purport to represent the Company
in any manner whatsoever to any third party, bind the Company in any agreement,
or direct the activities of Company employees, unless authorized by the Company
in writing to do so.  After the Separation Date, you will not be
considered a Company employee and you will not be entitled to any of the
benefits that the Company may make available to its employees, such as group
insurance, workers’ compensation insurance coverage, profit sharing or
retirement benefits, except as specifically provided in this Agreement.    

                        (c)          Consulting Fees.  During the Consulting Period, the Company will provide consulting
fees for authorized consulting services at the rate of $1,000 per day, or
pro-rata amount thereof (the “Consulting Fees”) as your sole compensation for
the consulting services.  You must
provide monthly invoices to the Company for your consulting services.  Due to your status as an independent
contractor, the Consulting Fees will be paid without deductions and
withholdings of any kind.  The Company
will issue you an IRS 1099 Form with respect to your Consulting Fees.  You acknowledge that you will be entirely
responsible for the payment of all taxes due and owing as a result of your
Consulting Fees.  You hereby indemnify
the Company and hold it harmless from any liability for any taxes,
contributions, penalties, and interest that may be assessed by any taxing or
governmental authority against the Company with respect to the Consulting Fees.

                        (d)          Expenses.  The Company will
reimburse you for reasonable, documented business expenses incurred by you
during the Consulting Period pursuant to its regular business practice,
provided that these expenses have been pre-approved by the Company in writing.

                        (e)          Protection
of Information.  You
agree that, during the Consulting Period and thereafter, you will not use or
disclose any Confidential Proprietary Information (as defined below) or
materials of the Company that you obtain or develop in the course of performing
consulting services for the Company, except with the advance written permission
of the Company’s Chief Executive Officer or his Designee.  For purposes of this Agreement,
“Confidential Proprietary Information” shall include all information that is
not already in the public domain by virtue of such information having been
disclosed outside of the Company, in the form of authorized publication in
journals, publicly-disseminated reports, and by WebCast, or disclosed in
written form made publicly available in connection with professional
conferences or seminars that are open to the public, or in written form made
publicly available in connection with any other authorized public
disclosure.  In the event of a dispute
under this Paragraph 6(e) concerning information that you used or disclosed,
you will be required to demonstrate, including by providing tangible proof,
that such information was in the public domain as of the date of your
disclosure or use.  In all situations,
it shall not be considered a breach of this Agreement or the Employee’s
Proprietary Information and Inventions Agreement (attached hereto as Exhibit D)
if you provide any form of information when required by legal process.  Any and all work product you create in
connection with the consulting services will be the sole and exclusive property
of the Company.  You hereby assign to
the Company all right, title, and interest in all
inventions, techniques, processes, materials, and other intellectual property
developed in the course of performing consulting services for the Company.

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                        (f)          Other
Work Activities.  Unless
you obtain advance written authorization from the Company’s Chief Executive
Officer or his Designee, during the Consulting Period, you will not carry on
any business or activity (whether directly or indirectly, as a partner,
stockholder, principal, agent, director, affiliate, employee or consultant)
that (i) relates to the Company’s projects concerning AIDSVAX or other vaccines
targeting HIV surface protein, or relates to the Company’s projects concerning
development of vaccines against anthrax, smallpox, plague or Severe Acute
Respiratory Syndrome; or (ii) directly relates to or that materially
interferes with any services you are providing to the Company at any time
during the Consulting Period. 
Notwithstanding the restriction in the preceding sentence, you shall not
be prohibited from being a passive shareholder of up to one percent (1%) of the
public stock of a competitive entity. 
During the Consulting Period, you may engage in any form of employment,
consulting, or business activity not prohibited by this paragraph, provided
that it shall not materially interfere with your ability to perform the
consulting services for the Company.  

                        (g)          Access
to HIV Information.  The
Company agrees to provide you with access, during the Consulting Period, to its
information and materials (including but not limited to emails, electronic
files, and documents) concerning HIV for the sole purpose of your consulting
services to the Company or for any other purpose authorized in writing by the
Company’s Chief Executive Officer or his Designee.  For the avoidance of doubt, you understand and agree that you
will not be authorized to use or disclose such Company information and materials
other than as specified herein.

                        (h)          Termination.  The Company shall have the right to
terminate the Consultancy for any reason upon fifteen (15) days advance written
notice to you.  In addition, the Company
may terminate the Consultancy immediately in the event of your material breach
of this Agreement or of your Employee’s Proprietary Information and Inventions
Agreement (attached hereto as Exhibit D).

          7.          No
Other Compensation or Benefits.  You acknowledge that, except as expressly provided in this
Agreement, you have not earned and will not receive from the Company any
additional compensation relating to or arising from employment with the Company
(including base salary, bonus or incentive compensation), severance, or
benefits before or after the Separation Date, with the exception of any vested
right you may have under the express terms of a written ERISA-qualified benefit
plan (e.g., 401(k) account).       

          8.          Expense
Reimbursements.  You
agree that, within sixty (60) days after the Separation Date, you will submit
your final documented expense reimbursement statement reflecting all business
expenses you incurred through the Separation Date, if any, for which you seek
reimbursement.  The Company will
reimburse you for these expenses pursuant to its regular business
practices.    

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          9.          Return
of Company Property. 
You agree that, on the Separation Date or earlier if requested by the
Company, you will return to the Company all Company documents (and all copies
thereof) and other Company property in your possession or control, including,
but not limited to, any Company
equipment, files, correspondence, memoranda, reports, lists, proposals,
agreements, drafts, notes, minutes, drawings, records, plans, forecasts,
purchase orders, research and development information, customer information and
contact lists, sales and marketing information, personnel information, vendor
information, promotional literature and instructions, financial and operational
information, technical information, specifications, computer-recorded
information, electronic information (including email and correspondence), other
tangible property, credit cards, entry cards, identification badges and keys;
and, any materials of any kind that contain or embody any proprietary or
confidential information of the Company (and all reproductions thereof in whole
or in part).  You agree to make a
diligent search to locate any such documents, property and information on or
before the Separation Date.  In
addition, if you have used any personal computer, server, or e-mail system to
receive, store, review, prepare or transmit any Company confidential or
proprietary data, materials or information, you agree to provide the Company
with a computer-useable copy of such information and then permanently delete
and expunge such Company confidential or proprietary information from those
systems; and you agree to provide the Company access to your system as
requested to verify that the necessary copying and/or deletion is done.  VaxGen has contractual obligations to third
parties, including Genentech, the National Institute of Health, and the Walter
Reed Institute, that could require VaxGen to provide certain information, documents
or other materials to such third parties in the future.  Therefore, your obligations set forth in
this paragraph include information, documents and other materials that VaxGen
may be required to provide to such third parties, including information related
to technology provided to VaxGen by Genentech pursuant to their license
agreements.  Your timely return of all Company property is a precondition of your
receipt of the Severance Benefits.   Notwithstanding the above, you will be
allowed to retain any specific Company property for which you have obtained
written authorization from the Company’s Chief Executive Officer or his
Designee, and the Company’s Chief Executive Officer and his Designee agree to
use their best efforts to respond, in writing, to your written requests to
retain specific Company property within thirty (30) days of the receipt of your
written request.

          10.         Proprietary
Information Obligations. 
You acknowledge your continuing obligations under the Employee’s
Proprietary Information and Inventions Agreement between you and the Company
signed as of December 9, 1998 (the “Proprietary Information Agreement”).  A copy of the Proprietary Information
Agreement is attached hereto as Exhibit D. 
The Company has been informed that you desire to form a non-profit
entity to develop vaccines against HIV for distribution in third world
countries which potentially could include licenses and/or sublicenses from
VaxGen in compliance with VaxGen’s license agreements with Genentech, and contingent
upon separate written agreements and completion of any required parallel
agreements with Genentech and any other necessary third parties.   VaxGen agrees that nothing in the
Proprietary Information Agreement will prohibit you from using or disclosing
information that is in the public domain as of the date of your use or
disclosure, provided that such
information is not in the public domain as a result of your breach of any
written agreement with the Company.    

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          11.         Confidentiality.  The provisions of this Agreement will be
held in strictest confidence by you and the Company and will not be publicized
or disclosed in any manner whatsoever; provided, however, that:  (a) you may disclose this Agreement in
confidence to your immediate family; (b) the
parties may disclose this Agreement in confidence to their respective
attorneys, accountants, auditors, tax preparers, and financial advisors; (c)
the Company may disclose this Agreement as necessary to fulfill standard or
legally required corporate reporting or disclosure requirements; and (d) the
parties may disclose this Agreement insofar as such disclosure may be necessary
to enforce its terms or as otherwise required by law.  In particular, and without limitation, you agree not to disclose
the terms of this Agreement to any current or former employee of the Company.

          12.         Nondisparagement.  Both you and the Company
(through its officers and directors) agree not to disparage the other party,
and the other party’s officers, directors, employees, shareholders and agents,
in any manner likely to be materially harmful to them or their business,
business reputation or personal reputation; provided that both you and the
Company may at any time respond to any question, inquiry or request for
information when required by legal process. 
In the event that you are concerned about proposed statements you wish
to make regarding scientific or other matters, you may provide the proposed statement,
in writing, to VaxGen’s Chief Executive Officer or his Designee in order to
obtain VaxGen’s written authorization for the proposed statement, and VaxGen
agrees that such authorization will not be unreasonably withheld, and provided
within ten (10) business days. 
Likewise, in the event that the Company is concerned about proposed
statements it wishes to make about you regarding scientific or other matters,
the Company may provide the proposed statement, in writing, to you in order to
obtain your written authorization for the proposed statement, and you agree
that such authorization will not be unreasonably withheld, and provided within
ten (10) business days.  Both you and
VaxGen may submit to the other up to two (2) such proposed statements each week.  

          13.         No
Voluntary Adverse Action. 
You agree that you will not voluntarily assist any person in bringing or
pursuing any litigation, arbitration, administrative claim or other formal
proceeding, or any proposed litigation, arbitration, administrative claim, or
other formal proceeding, against the Company, its parents, subsidiaries,
affiliates, distributors, officers, directors, employees or agents, unless
pursuant to legal process.  The
restrictions set forth in this Paragraph 13 do not apply to any actions you may
bring to enforce this Agreement or to any actions you may bring based on claims
arising after the date that you sign the Separation Date Release.

          14.         Cooperation.  Before and after the Separation Date, you
agree to cooperate fully with the Company in connection with its actual or
contemplated defense, prosecution, or investigation of any claims, demands, or
other matters arising from events, acts, or failures to act that occurred
during the time period in which you were employed by the Company.  Such cooperation includes, without
limitation, making yourself available upon reasonable notice, without subpoena,
for interviews, depositions, and trial testimony and you shall be allowed to
provide truthful and accurate information or testimony in any proceeding
subject to this Paragraph 14 of this Agreement.  The Company will reimburse you for reasonable out-of-pocket
expenses you incur in connection with any such cooperation (excluding forgone
wages, salary, or other compensation), and will make reasonable efforts to
accommodate your scheduling needs.  For
the avoidance of doubt, the Company will not pay Consulting Fees or any other
compensation for your cooperation under this Paragraph 14.  To the extent required by law or any
pre-existing agreements between the parties, you will have the right to retain
counsel of your own selection and the
Company will pay your reasonable attorneys’ fees within thirty (30) days after
VaxGen’s receipt of satisfactory documentation of your attorneys’ fees; however,
such documentation shall not require you to waive the attorney-client
privilege.  

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          15.         Nonsolicitation.  For a period of one (1) year following the
Separation Date, you agree that you will not, either directly or indirectly,
(a) attempt to recruit, solicit or take away any of the employees of VaxGen who
worked for VaxGen at any time while you were employed by VaxGen, or make known
to any person, firm or corporation the names or addresses of, or any
information pertaining to, any current or former employees of VaxGen; or (b)
use any confidential or proprietary information to attempt to call on, solicit
or take away any clients of VaxGen or any other persons, entities, or
corporations with which VaxGen has had or contemplated any business transaction
or relationship during your employment with VaxGen, including, but not limited
to, investments, licenses, joint ventures, and agreements for development.  

          16.         No
Admissions.  Nothing
contained in this Agreement shall be construed as an admission by you or the
Company of any liability, obligation, wrongdoing or violation of law.

          17.         Release
of Claims.  Except as
otherwise set forth in this Agreement, in exchange for the consideration under
this Agreement to which you would not otherwise be entitled, you hereby
generally and completely release the Company and its parents, subsidiaries,
successors, predecessors and affiliates, and its and their directors, officers,
employees, shareholders, agents, attorneys, insurers, affiliates and assigns,
from any and all claims, liabilities and obligations, both known and unknown,
that arise out of or are in any way related to events, acts, conduct, or
omissions occurring at any time prior to and including the date you sign this
Agreement.  This general release
includes, but is not limited to: (a) all claims arising out of or in any way
related to your employment with the Company or the termination of that
employment; (b) all claims related to your compensation or benefits, including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership or equity
interests in the Company; (c) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing
(including but not limited to claims arising under or based on the Employment
Agreement); (d) all tort claims, including claims for fraud, defamation,
emotional distress, and discharge in violation of public policy; and (e) all
federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990 (as amended), the federal Age
Discrimination in Employment Act (as amended) (“ADEA”), and the California Fair
Employment and Housing Act (as amended). 
Notwithstanding the above, you do not release the Company from any obligation
to indemnify you pursuant to contract, the Company’s articles or by-laws, or
applicable law.  You represent that you
have no lawsuits, claims or actions pending in your name, or on behalf of any
other person or entity, against the Company or any other person or entity
subject to the release granted in this paragraph.

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          18.         ADEA
Waiver.  You acknowledge that you are knowingly and
voluntarily waiving and releasing any rights you may have under the ADEA, and
that the consideration given for the waiver and release in the preceding
paragraph hereof is in addition to anything of value to which you are already
entitled.  You further acknowledge that
you have been advised, as required by the ADEA,
that:  (a) your waiver and release
do not apply to any rights or claims that may arise after the date that you
sign this Agreement; (b) you have the right to consult with an attorney prior
to signing this Agreement (although you may choose voluntarily not to do so);
(c) you have forty-five (45) days to consider this Agreement (although you
may choose voluntarily to sign it earlier); (d) you have seven (7) days
following the date you sign this Agreement to revoke the Agreement by providing
written notice of your revocation to the Company’s Chief Executive Officer; and
(e) this Agreement will not be effective until the date upon which the
revocation period has expired, which will be the eighth day after the date that
this Agreement is signed by you (the “Effective Date”).  You hereby acknowledge that with this
Agreement, the Company has provided you with an ADEA Disclosure Notice Under
Title 29 U.S. Code Section 626(f)(1)(H) which is attached hereto as Exhibit
E.  Additionally, since you asked for, and
received, material changes in this Agreement in your favor, you agree to waive
the additional time for considering this offer to which you would otherwise be
entitled.  Thus, you agree that the
required forty-five (45) day consideration period for this Agreement will be
deemed to have started on January 29, 2004.

          19.         Section
1542 Waiver.  In
giving the releases set forth in this Agreement, which includes claims which
may be unknown to you at present, you acknowledge that you have read and
understand Section 1542 of the California Civil Code which reads as
follows:  “A general release does not extend to
claims which the creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have materially
affected his settlement with the debtor.”  You hereby expressly waive and relinquish all rights and benefits
under that section and any law or legal principle of similar effect in any
jurisdiction with respect to your release of claims herein, including but not
limited to the release of unknown and unsuspected claims.     

          20.         Dispute
Resolution.  To ensure
rapid and economical resolution of any disputes which may arise under this
Agreement, you and the Company agree that any and all claims, disputes or
controversies of any nature whatsoever arising from or regarding the
interpretation, performance, negotiation, execution, enforcement or breach of
this Agreement shall be resolved by confidential, final and binding arbitration
conducted before a single arbitrator with Judicial Arbitration and Mediation
Services, Inc. (“JAMS”) in San Francisco, California, under the then-applicable
JAMS rules.  The parties acknowledge
that by agreeing to this arbitration procedure, they waive the right to resolve
any such dispute through a trial by jury, judge or administrative proceeding.  The Company shall bear JAMS’ arbitration
fees and administrative costs.  The
arbitrator shall:  (a) have the
authority to compel adequate discovery for the resolution of the dispute and to
award such relief as would otherwise be permitted by law; and (b) issue a
written arbitration decision including the arbitrator’s essential findings and
conclusions and a statement of the award. 
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.  Nothing in this Agreement
is intended to prevent either you or the Company from obtaining injunctive
relief in court to prevent irreparable harm pending the conclusion of any such
arbitration.

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          21.         Miscellaneous.  This Agreement, including all exhibits,
constitutes the complete, final and exclusive embodiment of the entire
agreement between you and the Company with regard to its subject matter.  It is entered into without reliance on any
promise or representation, written or oral, other
than those expressly contained herein, and it supersedes any other such
promises, warranties or representations. 
This Agreement may not be modified or amended except in a writing signed
by both you and a duly authorized officer of the Company.  This Agreement will bind the heirs, personal
representatives, successors and assigns of both you and the Company, and inure
to the benefit of both you and the Company, their heirs, successors and
assigns.  If any provision of this
Agreement is determined to be invalid or unenforceable, in whole or in part,
this determination will not affect any other provision of this Agreement and
the provision in question shall be modified so as to be rendered enforceable in
a manner consistent with the intent of the parties insofar as possible under
the applicable law.  This Agreement will
be deemed to have been entered into and will be construed and enforced in
accordance with the laws of the State of California as applied to contracts
made and to be performed entirely within California without regard to conflicts
of law principles.  Any ambiguity in
this Agreement shall not be construed against either party as the drafter.  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.  This Agreement may be executed
in counterparts which shall be deemed to be part of one original, and facsimile
signatures shall be equivalent to original signatures.

          22.         Forfeiture
Actions.  You
understand and agree that your entitlement to receive the Severance Benefits,
and the Company’s obligation to provide Severance Payments, payment of COBRA
premiums, and rent-free office space hereunder, will cease immediately in the
event that you materially breach your Proprietary Information Agreement, or
materially breach Paragraphs 11, 12, 13, 14 or 15 of this Agreement, provided that, the Company first provides
you with written notice and an opportunity to cure such breach (which must be
cured as soon as practicable but in no event longer than thirty (30) days after
the breach), if the breach is susceptible to cure.

          23.         Continuing
Indemnification Rights and Insurance Coverage. 
You and VaxGen agree that that certain Indemnity
Agreement between you and the Company, a copy of which is attached hereto as
Exhibit F, will continue in effect in accordance with its terms.  

          24.         Reimbursement
of Attorney’s Fees. 
Within thirty (30) days following the Effective Date of this Agreement,
the Company agrees to reimburse you for the costs of your reasonable attorneys’
fees and costs for the review and negotiation of this Agreement, up to a
maximum reimbursement of $2,000.  You
must provide satisfactory documentation of your attorneys’ fees and costs in
order to receive reimbursement; however, such documentation shall not require
you to waive the attorney-client privilege. 

If this Agreement is
acceptable to you, please sign below
and return the original to me.

- 10 -

I wish you the best in
your future endeavors.

Sincerely,

VAXGEN, INC.  

	
  By:  /s/
  Lance Gordon

	
   
	
  

  	
   

	
   
	
  Lance Gordon

	
   
	
  Chief Executive Officer

				

	
  Exhibit A – Employment Agreement

	
  Exhibit B – Separation Date Release

	
  Exhibit C – Stock Option Grant Spreadsheet

	
  Exhibit D -- Proprietary Information Agreement

	
  Exhibit E -- ADEA
  Disclosure Notice Under Title 29 U.S. Code Section
  626(f)(1)(H)

	
  Exhibit F – Indemnity Agreement

UNDERSTOOD AND AGREED:

	
  /s/ Carter A. Lee

  
	
  

  	
   

	
  Carter Lee

	
   

	
  Date:    February
  17, 2004

- 11 -

EXHIBIT A

EMPLOYMENT
AGREEMENT

Previously
filed as Exhibit 10.10 on Form S-1 filed May 7, 1999

- 12 -

EXHIBIT B

SEPARATION
DATE RELEASE

(to be signed on
the Separation Date)

          In
consideration for the Severance Benefits, and other consideration provided to
me by VaxGen, Inc. (the
“Company”), and as required by the Agreement between the Company and me dated
January 15, 2004, I hereby give the following Separation Date Release (the
“Release”). 

          I
hereby generally and completely release the Company and its directors,
officers, employees, shareholders, partners, agents, attorneys, predecessors,
successors, parent and subsidiary entities, insurers, affiliates, and assigns
from any and all claims, liabilities and obligations, both known and unknown,
that arise out of or are in any way related to events, acts, conduct, or
omissions occurring at any time prior to and including the date I sign this
Release.  This general release includes,
but is not limited to: (1) all claims arising out of or in any way related to
my employment with the Company or the termination of that employment; (2) all
claims related to my compensation or benefits from the Company, including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay,
fringe benefits, stock, stock options, or any other ownership or equity
interests in the Company; (3) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing
(including but not limited to claims arising under or based on the Employment
Agreement); (4) all tort claims, including claims for fraud, defamation,
emotional distress, and discharge in violation of public policy; and (5) all
federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act (as amended) (“ADEA”), and the California Fair Employment and
Housing Act (as amended). 
Notwithstanding the above, I do not release the Company from any
obligation to indemnify me pursuant to contract, the Company’s articles or
by-laws, or applicable law.  I represent
that I have no lawsuits, claims or actions pending in my name, or on behalf of
any other person or entity, against the Company or any other person or entity
subject to the release granted in this paragraph.  

          I
acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, and that the consideration given for the
waiver and release in the preceding paragraph is in addition to anything of
value to which I am already entitled.  I
further acknowledge that I have been advised by this writing that:  (a) my waiver and
release do not apply to any rights or claims that may arise after the date I
sign this Release; (b) I should consult with an
attorney prior to signing this Release (although I may choose voluntarily not
to do so); (c) I have forty-five (45) days to
consider this Release (although I may choose voluntarily to sign it earlier); (d) I have seven (7) days following the date I sign this
Release to revoke it by providing written notice of revocation to the Company’s
Chief Executive Officer; and (e) this Release
will not be effective until the date upon which the revocation period has
expired, which will be the eighth calendar day after the date I sign it (the
“Effective Date”).  

- 13 -

          
I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.  I acknowledge that I have read
and understand Section 1542 of the California
Civil Code which reads as follows:  “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.”  I hereby expressly waive and relinquish all
rights and benefits under that section and any law or legal principle of
similar effect in any jurisdiction with respect to my release of claims herein,
including but not limited to the release of unknown and unsuspected
claims.     

	
   
	
  By:  
	
  /s/ Carter A. Lee

	
   
	
   
	
  

  
	
   
	
   
	
   
	
  Carter Lee

	
   
	
   

	
   
	
  Date:
	
  February 17, 2004

- 14 -

EXHIBIT C

STOCK
OPTION GRANT SPREADSHEET

Carter A. Lee

Termination Date – 3/31/2004

Exercisable Options

	
  Number

  	
   
	
  Grant

  Date

  	
   
	
   
	
  Plan/

  Type

  	
   
	
  Price

  	
   
	
  Shares

  Granted

  	
   
	
  Shares

  Exercised

  	
   
	
  Shares

  Exercisable

  	
   
	
  Vesting

  Stop Date

  	
   
	
  Total

  Price

  	
   
	
  Last Date

  To Exercise

  	
   

	
  

  	
   
	
  

  	
   
	
   
	
  

  	
   
	
  

  	
   
	
  

  	
   
	
  

  	
   
	
  

  	
   
	
  

  	
   
	
  

  	
   
	
  

  	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
  000069

  	
   
	
   
	
   
	
  4/22/99
	
   
	
   
	
   
	
  96SO/NQ
	
   
	
   
	
   
	
  $  
	
  9.500000
	
   
	
   
	
   
	
  50,000
	
   
	
   
	
   
	
  0
	
   
	
   
	
   
	
  50,000
	
   
	
   
	
   
	
  3/31/04
	
   
	
   
	
   
	
  $
	
  475,000.00
	
   
	
   
	
   
	
  3/31/07
	
   
	
   

	
   
	
  000070
	
   
	
   
	
   
	
  4/22/99
	
   
	
   
	
   
	
  96SO/NQ
	
   
	
   
	
   
	
  $
	
  9.500000
	
   
	
   
	
   
	
  2,500
	
   
	
   
	
   
	
  0
	
   
	
   
	
   
	
  2,500
	
   
	
   
	
   
	
  3/31/04
	
   
	
   
	
   
	
  $
	
  23,750.00
	
   
	
   
	
   
	
  3/31/07
	
   
	
   

	
   
	
  000156
	
   
	
   
	
   
	
  5/31/00
	
   
	
   
	
   
	
  96SO/NQ
	
   
	
   
	
   
	
  $
	
  13.500000
	
   
	
   
	
   
	
  9,000
	
   
	
   
	
   
	
  0
	
   
	
   
	
   
	
  9,000
	
   
	
   
	
   
	
  3/31/04
	
   
	
   
	
   
	
  $
	
  121,500.00
	
   
	
   
	
   
	
  3/31/07
	
   
	
   

	
   
	
  000268
	
   
	
   
	
   
	
  4/6/01
	
   
	
   
	
   
	
  96SO/NQ
	
   
	
   
	
   
	
  $
	
  19.440000
	
   
	
   
	
   
	
  5,000
	
   
	
   
	
   
	
  0
	
   
	
   
	
   
	
  5,000
	
   
	
   
	
   
	
  3/31/04
	
   
	
   
	
   
	
  $
	
  97,200.00
	
   
	
   
	
   
	
  3/31/07
	
   
	
   

	
   
	
  000474
	
   
	
   
	
   
	
  7/22/02
	
   
	
   
	
   
	
  96SO/NQ
	
   
	
   
	
   
	
  $
	
  5.740000
	
   
	
   
	
   
	
  24,000
	
   
	
   
	
   
	
  0
	
   
	
   
	
   
	
  24,000
	
   
	
   
	
   
	
  3/31/04
	
   
	
   
	
   
	
  $
	
  137,760.00
	
   
	
   
	
   
	
  3/31/07
	
   
	
   

	
   
	
  000046
	
   
	
   
	
   
	
  12/1/98
	
   
	
   
	
   
	
  96SO/NQ
	
   
	
   
	
   
	
  $
	
  9.500000
	
   
	
   
	
   
	
  75,000
	
   
	
   
	
   
	
  0
	
   
	
   
	
   
	
  75,000
	
   
	
   
	
   
	
  3/31/04
	
   
	
   
	
   
	
  $
	
  712,500.00
	
   
	
   
	
   
	
  3/31/07
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
  TOTALS
	
   
	
   
	
   
	
  165,500
	
   
	
   
	
   
	
  0
	
   
	
   
	
   
	
  165,500
	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
  $  
	
  1,567,710.00
	
   
	
   
	
   
	
   
	
   
	
   

- 15 -

EXHIBIT D

EMPLOYEE’S PROPRIETARY INFORMATION

AND INVENTIONS AGREEMENT

I recognize that VaxGen,
Inc., a Delaware corporation, together with its subsidiaries (hereinafter
collectively called the “Company”) is engaged in a continuous program of
research, development, and production respecting its business, present and
future, including fields generally related to its business.  I understand that:

	
   
	
  A.
	
  As part of my employment by the Company I am
  expected to make new contributions and inventions of value to the Company;

	
   
	
   
	
   

	
   
	
  B.
	
  My employment creates a relationship of confidence
  and trust between me and the Company with respect to any information:

	
   
	
   
	
   

	
   
	
   
	
  i.
	
  Applicable to the business of the Company; or

	
   
	
   
	
   
	
   

	
   
	
   
	
  ii.
	
  Applicable to the business of any client or customer
  of the Company, which may be made known to me by the Company or by any client
  or customer of Company, or learned by me during the period of my employment.

	
   
	
   
	
   
	
   

	
   
	
  C.
	
  As used in this Agreement, the period of my
  employment by the Company includes any time during which I may be retained by
  the Company as a consultant or independent contractor.

	
   
	
   
	
   
	
   

	
   
	
  D.
	
  The Company possesses and will continue to possess
  information that has been created, discovered, developed, or otherwise become
  known to the Company (including, without limitation, information created,
  discovered, developed, or made known by me during the period of or arising
  out of my employment by the Company) and/or in which property rights have
  been assigned or otherwise conveyed to the Company, which information has
  commercial value in the business in which the Company is engaged.  All of the aforementioned information is
  hereinafter called “VaxGen Proprietary Information.”  By way of illustration, but not
  limitation, VaxGen Proprietary Information includes trade secrets, processes,
  formulas, data and know-how, improvements, inventions, techniques, marketing
  plans, strategies, forecasts, and customer lists.

	
   
	
   
	
   
	
   

	
   
	
   
	
  By virtue of a License Agreement between the Company
  and Genentech, Inc. (“Genentech”), a Services Agreement between the Company
  and Genentech, and other agreement(s) that may be entered into between the
  Company and Genentech (collectively, the “Genentech Agreements”), the Company
  and its employees have been and will continue to be afforded substantial
  access to proprietary technology and information of Genentech (collectively,
  “Genentech Proprietary Information”). 
  By way of illustration, but not limitation, Genentech Proprietary
  Information includes trade secrets, processes, formulas, data and know-how
  (including computer databases, improvements, inventions, techniques,
  marketing plans, strategies, forecasts, and customer
  lists.  VaxGen Proprietary Information
  and Genentech Proprietary Information are referred to collectively herein as
  the “Proprietary Information”.

- 16 -

In consideration of my employment or continued employment, as the case
may be, and the compensation received by me from the Company from time to time,
I hereby agree as follows:

	
   
	
  1.
	
  Subject to Paragraph 5 hereof, all VaxGen
  Proprietary Information shall be the sole property of the Company and its
  assigns, and the Company and its assigns shall be the sole owner of all
  patents and other rights in connection therewith, subject to the terms of the
  Genentech Agreements.  I hereby assign
  to the Company any rights I may have or acquire in such VaxGen Proprietary
  Information.  At all times, both
  during my employment by the Company and after termination of such employment,
  I will keep in confidence and trust all VaxGen Proprietary Information, and I
  will not use or disclose any VaxGen Proprietary Information or anything
  relating to it without the written consent of the Company, except as may be
  necessary in the ordinary course of performing my duties as an employee of
  the Company.

	
   
	
   
	
   
	
   

	
   
	
   
	
  All Genentech Proprietary Information shall be the
  sole property of Genentech and its assigns, and Genentech and its assigns
  shall be the sole owner of all patents and other rights in connection
  therewith, subject to the terms of the Genentech Agreements.  I do not have and shall not acquire any
  rights in such Genentech Proprietary Information.  At all times, both during my employment by the Company and
  after termination of such employment, I will keep in confidence and trust all
  Genentech Proprietary Information, and I will not use or disclose any
  Genentech Proprietary Information or anything relating to it without the
  written consent of the Company (to the extent authorized under the Genentech
  Agreements) or Genentech, except as may be necessary in the ordinary course
  of performing my duties as an employee of the Company.  I understand and acknowledge, and the
  Company understands and acknowledges, that Genentech is affording the Company
  and its employees substantial access to Genentech Proprietary Information in
  connection with the Genentech Agreements in reliance on the provisions set
  forth herein, and that breach of such provisions could result in immediate
  material, irreparable harm to Genentech. 
  Genentech is a third party beneficiary of this Agreement.

	
   
	
   
	
   
	
   

	
            
	
  2.
	
  I agree that during the period of my employment by
  the Company, I will not, without the Company’s express written consent,
  engage in any employment or activity other than for the Company in any
  business in which the Company is now or may hereafter become engaged.  In the event of the termination of my
  employment by me or by the Company for any reason, I will deliver to the
  Company all documents and data of any nature pertaining to my work with the
  Company and I will not take with me any documents or data of any description,
  or any reproduction thereof, containing or pertaining to any Proprietary
  Information.

- 17 -

	
   
	
  3.
	
  I will promptly disclose to the Company, or any
  persons designated by it, all improvements, inventions, formulas, processes,
  techniques, know-how, and data, whether or not patentable, made or conceived
  or reduced to practice or learned by me, either alone or jointly with others,
  during the period of my employment which are related to or useful in the
  business of the Company, or result from tasks assigned me by the Company or
  result from use of premises owned, leased, or contracted for by the Company
  (all said improvements, inventions, formulas, process, techniques, know-how,
  and data shall be collectively hereinafter called “Inventions”).

	
   
	
   
	
   

	
   
	
  4.
	
  Subject to Paragraph 5 hereof, I agree that all
  Inventions shall be the sole property of the Company and its assigns, and the
  Company and its assigns shall be the sole owner of all patents and other
  rights in connection herewith, subject to the terms of the Genentech
  Agreements.  I hereby assign to the
  Company any rights I may have or acquire in such Inventions.  I further agree as to all Inventions to
  assist the Company and Genentech in every proper way (but at the Company’s
  expense) to obtain and from time to time enforce patents on said Inventions
  in any and all countries, and to that end I will execute all documents for
  use in applying for and for obtaining such patents thereon and enforcing
  same, as the Company or Genentech may desire, together with any assignments
  thereof to the Company or Genentech, as the case may be.  My obligations to assist in obtaining and
  enforcing patents for such Inventions in any and all countries shall continue
  beyond the termination of my employment, but the Company shall compensate me
  at a reasonable rate after such termination for time actually spent by me at
  the Company’s or Genentech’s request on such assistance.

	
   
	
   
	
   
	
   

	
   
	
  5.
	
  I understand that the Company’s right with regard to
  certain things invented or co-invented by me are subject to Sections
  2870-2872 of the California Labor Code, under which I have no obligation to
  assign rights in an invention for which no equipment, supplies, facilities or
  trade secret information of the Company was used and which was developed
  entirely on my own time, and (a) which does not relate (1) to the business of
  the Company or (2) to the Company’s actual or demonstrably anticipated research
  of development, or (b) which does not result from any work performed by me
  for the Company.

	
   
	
   
	
   
	
   

	
   
	
  6.
	
  As a matter of record I attach hereto a complete
  list of all inventions or improvements relevant to the subject matter of my
  employment by the Company which have been made, conceived or reduced to
  practice by me alone or jointly with others prior to my employment by the
  Company, which I desire to remove from the operation of this Agreement; and I
  covenant that such list is complete. 
  If no such list is attached to this Agreement, I represent that I have
  no such inventions or improvements at the time of signing this Agreement.

	
   
	
   
	
   
	
   

	
   
	
  7.
	
  I represent that my performance of all the terms of
  this Agreement and as an employee of the Company does not and will not breach
  any agreement to keep in confidence proprietary information acquired by me in
  confidence or in trust prior to my employment by the Company and I have not
  entered into, nor will I enter into, any agreement (written or oral) in
  conflict herewith.

	
   
	
   
	
   
	
   

	
   
	
  8.
	
  I understand that, as part of the consideration of
  the offer of employment extended to me by the Company and of my employment by
  the Company, I will not bring with me to the Company or use in the
  performance of my responsibilities at the Company materials or
  documents of any former employer, unless I have obtained written
  authorization from the former employer for their possession and use.  I certify that:

- 18 -

	
   
	
   
	
  1.
	
  I have brought no proprietary or confidential
  materials or documents to the Company; or

	
   
	
   
	
   
	
   

	
   
	
   
	
  2.
	
  I have brought proprietary or confidential materials
  or documents to the Company and I have attached to this Agreement a list of
  such materials or documents, together with an authorization for their
  possession and use as shown in the attached letter; or

	
   
	
   
	
   
	
   

	
   
	
   
	
  3.
	
  I have brought proprietary or confidential materials
  or documents to the Company but I have not yet attached a list or obtained a
  written authorization for their possession and use.  I understand that a representative from Human Resources will
  contact me within the first week of my employment and request such list and
  authorization.  I further understand
  that in the event I am unable to obtain such authorization, I will NOT USE
  any proprietary or confidential materials or documents during the course of
  my employment with the Company AND I will return any such materials or
  documents to the former employer.

I also understand that,
in my employment with the Company, I am not to breach any obligation of
confidentiality that I have to any former employer, and I agree that I shall
fulfill all such obligations during my employment with the Company.

	
   
	
  9.
	
  This Agreement shall be effective as of the first
  day of my employment by the Company, which is

	
   
	
   
	
   
	
   

	
   
	
  10.
	
  This Agreement shall be binding upon me, my heirs,
  executors, assigns, and administrators and shall inure to the benefit of the
  Company, its successors and assigns.

	
   
	
  DATED:  December 02, 1998
	
  BY:
	
  /s/
  Carter A. Lee

	
   
	
   
	
   
	
  

  
	
   
	
   
	
   
	
   

	
   
	
  ACCEPTED
  AND AGREED TO:
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   

	
   
	
  VAXGEN,
  INC.
	
   
	
   
	
   

	
   
	
   

	
   
	
  BY:
	
  /s/
  Don Francis
	
  DATED:  December 02, 1998

	
   
	
   
	
  

  	
   

	
   
	
   
	
  Don Francis

	
   
	
   
	
  President

								

- 19 -

	
  

  	
   

	
   
	
  Date

			

VaxGen, Inc.

1000 Marina Boulevard

Suite 200

Brisbane, CA 94005

I,
____________________________, propose to bring to my VaxGen employment the following
tangible materials and previously unpublished documents, which materials and
documents may be used in my VaxGen employment:

_________ Additional
sheets attached

The signature below by a
representative of my current or former employer confirms that my continued
possession and use of these materials is authorized.

	
  AUTHORIZATION:
	
   
	
   

	
   
	
  

  	
   

	
   
	
  SIGNATURE
	
   

	
   
	
   
	
   

	
   
	
  

  	
   

	
   
	
             TITLE
	
   

	
   
	
   
	
   

	
   
	
  

  	
   

	
   
	
             EMPLOYER
	
   

Very truly yours,

	
  

  	
   

	
   
	
  Signature

			

- 20 -

EXHIBIT E

ADEA DISCLOSURE NOTICE

UNDER TITLE 29 US CODE
SECTION 626(f)(1)(H)

	
  Confidentiality
  Provision:

  	
  The information contained in

this document
  is private and confidential.  You may
  not disclose this information to anyone except your professional advisors.

  

	
  1.

  	
  VaxGen, Inc.
  employees in the positions of Vice President and above have been considered
  for the severance package program.

	
   
	
   

	
  2.
	
  Employees in
  the positions of Vice President and above whose employment will terminate on
  or about January 30, 2004 and March 31, 2004 are eligible to participate in
  the severance package program.

	
   
	
   

	
  3.
	
  You and all
  others receiving this disclosure will have up to forty-five (45) days to
  review the terms and conditions of the severance package and to decide
  whether to accept the package.

	
  EMPLOYEES ELIGIBLE FOR THE SEVERANCE
  PACKAGE PROGRAM

  
	
   

  
	
  JOB TITLE

  	
   
	
  AGE

  
	
  

  	
   
	
  

  
	
  President

  	
   
	
  61

	
  Sr. Vice
  President, Research and 

  Development
	
   
	
  55

	
  Sr. Vice
  President, Finance and

  Administration
	
   
	
  51

	
  Vice
  President, International Clinical 

  Research
	
   
	
  53

- 21 -

	
  EMPLOYEES NOT ELIGIBLE FOR THE SEVERANCE
  PACKAGE PROGRAM

	
   

	
  (RETAINED VICE PRESIDENTS AND ABOVE)

	
   

	
  JOB TITLE
	
   
	
  AGE

	
  

  	
   
	
  

  
	
  Chief
  Executive Officer
	
   
	
  56

	
  Sr. Vice
  President, Regulatory and Quality Systems
	
   
	
  48

	
  Sr. Vice
  President, Medical Affairs
	
   
	
  64

	
  Sr. Vice
  President, Manufacturing
	
   
	
  50

	
  Vice
  President, Corporate Communications
	
   
	
  47

	
  Vice
  President, Corporate Development
	
   
	
  41

- 22 -

EXHIBIT F

INDEMNITY AGREEMENT

THIS AGREEMENT is
made and entered into this 2nd day of December, 2002 by and between VaxGen,
Inc.,  a Delaware corporation (the
“Corporation”), and Carter A. Lee (“Agent”).

Recitals

WHEREAS, Agent
performs a valuable service to the Corporation in his capacity as a director
and/or executive officer of the Corporation;

WHEREAS, the
stockholders of the Corporation have adopted bylaws (the “Bylaws”) providing
for the indemnification of the directors, officers, employees and other agents
of the Corporation, including persons serving at the request of the Corporation
in such capacities with other corporations or enterprises, as authorized by the
Delaware General Corporation Law, as amended (the “Code”);

WHEREAS, the Bylaws
and the Code, by their non-exclusive nature, permit contracts between the
Corporation and its agents, officers, employees and other agents with respect
to indemnification of such persons; and

WHEREAS, in order to
induce Agent to continue to serve as a director and/or executive officer of the
Corporation, the Corporation has determined and agreed to enter into this
Agreement with Agent;

NOW, THEREFORE, in
consideration of Agent’s continued service as a director and/or executive
officer after the date hereof, the parties hereto agree as follows:

Agreement

          1.

          Services
to the Corporation.  Agent will
serve, at the will of the Corporation or under separate contract, if any such
contract exists, as a director and/or executive officer of the Corporation or
as a director, officer or other fiduciary of an affiliate of the Corporation
(including any employee benefit plan of the Corporation) faithfully and to the
best of his ability so long as he is duly elected and qualified in accordance
with the provisions of the Bylaws or other applicable charter documents of the
Corporation or such affiliate; provided, however, that Agent may at any
time and for any reason resign from such position (subject to any contractual
obligation that Agent may have assumed apart from this Agreement) and that the
Corporation or any affiliate shall have no obligation under this Agreement to
continue Agent in any such position.

          2.

          Indemnity
of Agent.  The
Corporation hereby agrees to hold harmless and indemnify Agent to the fullest
extent authorized or permitted by the provisions of the Bylaws and the Code, as
the same may be amended from time to time (but, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than the Bylaws or the Code permitted prior to adoption of such amendment).

- 23 -

          3.

          Additional
Indemnity.  In
addition to and not in limitation of the indemnification otherwise provided for
herein, and subject only to the exclusions set forth in Section 4 hereof,
the Corporation hereby further agrees to hold harmless and indemnify Agent:

	
   
	
  (a)
	
  against any
  and all expenses (including attorneys’ fees), witness fees, damages,
  judgments, fines and amounts paid in settlement and any other amounts that
  Agent becomes legally obligated to pay because of any claim or claims made
  against or by him in connection with any threatened, pending or completed
  action, suit or proceeding, whether civil, criminal, arbitrational,
  administrative or investigative (including an action by or in the right of
  the Corporation) to which Agent is, was or at any time becomes a party, or is
  threatened to be made a party, by reason of the fact that Agent is, was or at
  any time becomes a director, officer, employee or other agent of Corporation,
  or is or was serving or at any time serves at the request of the Corporation
  as a director, officer, employee or other agent of another corporation,
  partnership, joint venture, trust, employee benefit plan or other enterprise;
  and

	
   
	
   
	
   

	
   
	
  (b)
	
  otherwise to
  the fullest extent as may be provided to Agent by the Corporation under the
  non-exclusivity provisions of the Code and Article 9 of the Bylaws.

          4.

          Limitations
on Additional Indemnity.  No indemnity pursuant to Section 3 hereof shall be
paid by
the Corporation:

	
   
	
  (a)
	
  on account
  of any claim against Agent solely for an accounting of profits made from the
  purchase or sale by Agent of securities of the Corporation pursuant to the
  provisions of Section 16(b) of the Securities Exchange Act of 1934 and
  amendments thereto or similar provisions of any federal, state or local statutory
  law;

	
   
	
   
	
   

	
   
	
  (b)
	
  on account
  of Agent’s conduct that is established by a final judgment as knowingly
  fraudulent or deliberately dishonest or that constituted willful misconduct;

	
   
	
   
	
   

	
   
	
  (c)
	
  on account
  of Agent’s conduct that is established by a final judgment as constituting a
  breach of Agent’s duty of loyalty to the Corporation or resulting in any
  personal profit or advantage to which Agent was not legally entitled;

	
   
	
   
	
   

	
   
	
  (d)
	
  for which
  payment is actually made to Agent under a valid and collectible insurance
  policy or under a valid and enforceable indemnity clause, bylaw or agreement,
  except in respect of any excess beyond payment under such insurance, clause,
  bylaw or agreement;

	
   
	
   
	
   

	
   
	
  (e)
	
  if
  indemnification is not lawful (and, in this respect, both the Corporation and
  Agent have been advised that the Securities and Exchange Commission believes
  that indemnification for liabilities arising under the federal securities
  laws is against public policy and is, therefore, unenforceable and that
  claims for indemnification should be submitted to appropriate courts for
  adjudication); or

- 24 -

	
   
	
  (f)
	
  in
  connection with any proceeding (or part thereof) initiated by Agent, or any
  proceeding by Agent against the Corporation or its directors, officers,
  employees or other agents, unless (i) such indemnification is expressly
  required to be made by law, (ii) the proceeding was authorized by the
  Board of Directors of the Corporation, (iii) such indemnification is
  provided by the Corporation, in its sole discretion, pursuant to the powers
  vested in the Corporation under the Code, or (iv) the proceeding is
  initiated pursuant to Section 9 hereof.

          5.

          Continuation
of Indemnity. 
All agreements and obligations of the Corporation contained herein shall
continue during the period Agent is a director, officer, employee or other
agent of the Corporation (or is or was serving at the request of the
Corporation as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) and shall continue thereafter so long as Agent shall be subject to
any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal, arbitrational, administrative or investigative,
by reason of the fact that Agent was serving in the capacity referred to
herein.

          6.

          Partial
Indemnification. 
Agent shall be entitled under this Agreement to indemnification by the
Corporation for a portion of the expenses (including attorneys’ fees), witness
fees, damages, judgments, fines and amounts paid in settlement and any other
amounts that Agent becomes legally obligated to pay in connection with any
action, suit or proceeding referred to in Section 3 hereof even if not entitled
hereunder to indemnification for the total amount thereof, and the Corporation
shall indemnify Agent for the portion thereof to which Agent is entitled.

          7.

          Notification
and Defense of Claim. 
Not later than thirty (30) days after receipt by Agent of notice of the
commencement of any action, suit or proceeding, Agent will, if a claim in
respect thereof is to be made against the Corporation under this Agreement,
notify the Corporation of the commencement thereof; but the omission so to
notify the Corporation will not relieve it from any liability which it may have
to Agent otherwise than under this Agreement. 
With respect to any such action, suit or proceeding as to which Agent
notifies the Corporation of the commencement thereof:

	
   
	
  (a)

  	
  the
  Corporation will be entitled to participate therein at its own expense;

  
	
   
	
   
	
   

	
   
	
  (b)
	
  except as
  otherwise provided below, the Corporation may, at its option and jointly with
  any other indemnifying party similarly notified and electing to assume such
  defense, assume the defense thereof, with counsel reasonably satisfactory to
  Agent.  After notice from the
  Corporation to Agent of its election to assume the defense thereof, the
  Corporation will not be liable to Agent under this Agreement for any legal or
  other expenses subsequently incurred by Agent in connection with the defense
  thereof except for reasonable costs of investigation or otherwise as provided
  below.  Agent shall have the right to
  employ separate counsel in such action, suit or proceeding but the fees and
  expenses of such counsel incurred after notice from the Corporation of its
  assumption of the defense thereof shall be at the expense of Agent unless
  (i) the employment of counsel by Agent has been authorized by the
  Corporation, (ii) Agent shall have reasonably concluded, and so
  notified the Corporation, that there is an actual conflict of interest between the
  Corporation and Agent in the conduct of the defense of such action or
  (iii) the Corporation shall not in fact have employed counsel to assume
  the defense of such action, in each of which cases the fees and expenses of
  Agent’s separate counsel shall be at the expense of the Corporation.  The
  Corporation shall not be entitled to
  assume the defense of any action, suit or proceeding brought by or on behalf
  of the Corporation or as to which Agent shall have made the conclusion
  provided for in clause (ii) above; and

- 25 -

	
   
	
  (c)
	
  the
  Corporation shall not be liable to indemnify Agent under this Agreement for
  any amounts paid in settlement of any action or claim effected without its
  written consent, which shall not be unreasonably withheld.  The Corporation shall be

permitted to
  settle any action except that it shall not settle any action or claim in any
  manner which would impose any penalty or limitation on Agent without Agent’s
  written consent, which may be given or withheld in Agent’s sole discretion.

          8.

          Expenses.  The

Corporation shall advance, prior to the
final disposition of any proceeding, promptly following request therefor, all
expenses incurred by Agent in connection with such proceeding upon receipt of
an undertaking by or on behalf of Agent to repay said amounts if it shall be
determined ultimately that Agent is not entitled to be indemnified under the
provisions of this Agreement, the Bylaws, the Code or otherwise.

          9.

          Enforcement.  Any right

to indemnification or advances
granted by this Agreement to Agent shall be enforceable by or on behalf of
Agent in any court of competent jurisdiction if (i) the claim for
indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request
therefor.  Agent, in such enforcement
action, if successful in whole or in part, shall be entitled to be paid also
the expense of prosecuting his claim. 
It shall be a defense to any action for which a claim for
indemnification is made under Section 3 hereof (other than an action
brought to enforce a claim for expenses pursuant to Section 8 hereof, provided
that the required undertaking has been tendered to the Corporation)
that Agent is not entitled to indemnification because of the limitations set
forth in Section 4 hereof.  Neither
the failure of the Corporation (including its Board of Directors or its
stockholders) to have made a determination prior to the commencement of such
enforcement action that indemnification of Agent is proper in the
circumstances, nor an actual determination by the Corporation (including its
Board of Directors or its stockholders) that such indemnification is improper
shall be a defense to the action or create a presumption that Agent is not
entitled to indemnification under this Agreement or otherwise.

          10.

        Subrogation.  In the

event of payment under this Agreement,
the Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Agent, who shall execute all documents required and shall
do all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.

          11.

        Non-Exclusivity
of Rights.  The
rights conferred on Agent by this Agreement shall not be exclusive of any other
right which Agent may have or hereafter acquire under any statute, provision of
the Corporation’s Certificate of Incorporation or Bylaws, agreement, vote of
stockholders or directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding office.

- 26 -

          12.

        Survival
of Rights.

	
   
	
  (a)
	
  The rights
  conferred on Agent by this Agreement shall continue after Agent has ceased to
  be a director and executive officer, officer, employee or other agent of the
  Corporation or to serve at the request of the Corporation as a director,
  officer, employee or other agent of another corporation, partnership, joint
  venture, trust, employee benefit plan or other enterprise and shall inure to
  the benefit of Agent’s heirs, executors and administrators.

	
   
	
   
	
   

	
   
	
  (b)
	
  The
  Corporation shall require any successor (whether direct or indirect, by
  purchase, merger, consolidation or otherwise) to all or substantially all of
  the business or assets of the Corporation, expressly to assume and agree to
  perform this Agreement in the same manner and to the same extent that the
  Corporation would be required to perform if no such succession had taken
  place.

          13.

        Separability.  Each of

the provisions of this Agreement is
a separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof.  Furthermore, if this
Agreement shall be invalidated in its entirety on any ground, then the
Corporation shall nevertheless indemnify Agent to the fullest extent provided
by the Bylaws, the Code or any other applicable law.

          14.

        Governing
Law.  This
Agreement shall be interpreted and enforced in accordance with the laws of the
State of Delaware.

          15.

        Amendment
and Termination. 
No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto.

          16.

        Identical
Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original but all of which
together shall constitute but one and the same Agreement.  Only one such counterpart

need be produced
to evidence the existence of this Agreement.

          17.

        Headings.  The headings

of the sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.

          18.

        Notices.  All notices,

requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (i) upon delivery if delivered by hand to the party to whom
such communication was directed or (ii) upon the third business day after
the date on which such communication was mailed if mailed by certified or
registered mail with postage prepaid:

	
   
	
  (a)

  	
  If to Agent,
  at the address indicated on the signature page hereof.

  

- 27 -

	
   
	
  (b)
	
  If to the
  Corporation, to:

	
   
	
   
	
   

	
   
	
   
	
   
	
  VAXGEN , INC.

	
   
	
   
	
   
	
  1000 Marina
  Blvd., Suite 200

	
   
	
   
	
   
	
  Brisbane,
  California 94005

	
   
	
   
	
   
	
  Attn: Lance
  K. Gordon

or to such other address as may have

been furnished to Agent by the
Corporation.

- 28 -

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

	
   
	
  VAXGEN, INC.

	
   
	
   

	
   
	
   

	
   
	
  By:   /s/
  Lance Gordon

	
   
	
   
	
  

  
	
   
	
   

	
   
	
  Title:

	
   
	
   
	
  

  
	
   
	
   

	
   
	
  AGENT

	
   
	
   

	
   
	
  /s/ Carter
  A. Lee

	
   
	
  

  
	
   
	
   

	
   
	
  Name:   Carter
  A. Lee

	
   
	
   

	
   
	
  Address:

	
   
	
   

	
   
	
  [*]

	
   
	
   

	
   
	
   

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

- 29 -EXHIBIT 10.58

Amendment to Joint Venture Agreement

          This
Amendment to Joint Venture Agreement (this “Amendment”) is entered into as of July 14, 2004, by and among VAXGEN, INC.
(“VaxGen”), a Delaware corporation,
NEXOL BIOTECH CO., LTD. (“Nexol”),
a Korean corporation, NEXOL CO., LTD. (“Nexol Co”),
a Korean corporation, KT&G CORPORATION (“KT&G”),
a Korean corporation whose name was
changed from KOREA TOBACCO & GINSENG CORPORATION, and J. STEPHEN
& COMPANY VENTURES LTD. (“JS”),
a Korean corporation, with reference to the following facts:

	
 

	
 

	
 

	
 

	
A.

	
The parties
  have previously entered into a certain Joint Venture Agreement dated February
  25, 2002 (the “Agreement”
  or “JVA”).

	
 

	
 

	
 

	
 

	
B.

	
The parties
  now desire to amend certain provisions of the JVA in accordance with
  Section 23.3 thereof, to be effective as of the date hereof.

          NOW,
THEREFORE, in consideration of the mutual promises and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree to amend
the JVA as
follows:

	
 

	
 

	
1.

	
Section 4.2 (f)
  shall be newly inserted in its entirety to read:

	
 

	
 

	
 

	
Notwithstanding
  Section 4.1, the Parties hereby authorize the JVC to issue (a) up to
  20,000,000,000 Won of Preferred Shares having a par value of 5,000 Won per
  share and an issue price of 5,000 Won per share (the “First Tranche”); provided
  that such Preferred Shares shall not be issued after December 31, 2004, and
  (b) up to an additional 10,000,000,000 Won of Preferred Shares having a par
  value of 5,000 Won per share and an issue price of 5,000 Won per share (the “Second Tranche”); provided,
  that such Preferred Shares shall not be issued prior to January 1, 2005, nor
  after December 31, 2005.

	
 

	
 

	
 

	
If there are Preferred Shares which the then-existing shareholders of
  the JVC do not subscribe for in the First Tranche (the “Unsubscribed Shares”), the Board of
  Directors (the “Board”) shall
  dispose of such Unsubscribed Shares as follows: (i) the shareholders of JS and/or
  the members of the investment association of JS shall be allowed to
  subscribe, with priority, for up to the number of Unsubscribed Shares that JS
  was authorized to subscribe for in the First Tranche; and (ii) the investors
  designated by Nexol and/or Nexol Co shall be allowed to subscribe for the
  remaining number of Unsubscribed Shares.

	
 

	
 

	
 

	
JS shall take all actions necessary to ensure that the offer and sale
  of any of the Preferred Shares to any shareholders of JS and/or members of
  the investment association of JS do not violate Korean or other applicable
  securities laws, and Nexol and Nexol Co shall take all actions to ensure that
  the offer and sale of any of the 

	
 

	
 

	
 

	
Preferred Shares to investors designated by Nexol and/or Nexol Co do
  not violate Korean or other applicable securities laws.

	
 

	
 

	
 

	
VaxGen, KT&G and JS (including the investment associations of JS)
  shall not subscribe for the Preferred Shares in the Second Tranche (the “Standstill
  Agreement”). Any unsubscribed shares in the Second Tranche shall
  be sold to Nexol,
  Nexol Co and/or investors who participate in the Second Tranche through the
  recommendation of Nexol or Nexol Co; provided, that the
  Standstill Agreement shall expire if the Second Tranche is not completed on
  or prior to December 31, 2005. The
  Standstill Agreement shall only come into force when Nexol and Nexol Co
  including investors designated by Nexol and/or Nexol Co fully and precisely
  complete the First Tranche by subscribing for the remaining number of
  unsubscribed shares as prescribed in the first and second paragraph of this
  section 4.2(f).

	
 

	
 

	
2.

	
Section 4.2 (g)
  shall be newly inserted in its entirety to read:

	
 

	
 

	
 

	
Since damages
  arising from a breach of the Standstill Agreement by VaxGen, KT&G, or JS
  (including the investment associations of JS) may be difficult to compute
  with precision, the Parties agree that any Party that violates the Standstill
  Agreement shall pay to Nexol or Nexol Co the greater of (i) the market price
  or (ii) the appraised value (as appraised by a licensed appraisal company) of
  the Preferred Shares that were subscribed for in violation of the Standstill
  Agreement. The Parties agree that such computation of damages is fair and
  reasonable. Application of this provision shall not prevent a Party hereto
  from enforcing its rights or augmenting its protection by such other remedies
  as may be available, including without limitation, injunctive relief.

	
 

	
 

	
3.

	
Section 6.6
  shall be newly inserted in its entirety to read:

	
 

	
 

	
 

	
Notwithstanding
  anything to the contrary contained in this Agreement, the new Preferred
  Shares to be issued in accordance with Section 4.2 (f) shall not be subject
  to the provisions of Article 6, including, but not limited to, the
  restrictions on transfer set forth therein.

	
 

	
 

	
4.

	
Section 9.1 (a)
  shall be amended and restated in its entirety to read:

	
 

	
 

	
 

	
Subject to the provisions
  of this Section 9.1 (a), the JVC shall be administered and managed by the
  Board which shall consist of six (6) directors, two of whom shall be
  nominated by VaxGen, two of whom shall be nominated by Nexol, and one of whom
  shall each be nominated by KT&G and JS (each, a “Nominating Party”). VaxGen shall be
  entitled to nominate two of the six directors for so long as it retains at
  least two-thirds of the shares of the JVC issued to it before the completion
  of the First Tranche (the “VaxGen Required
  Holding”), and Nexol shall be entitled to nominate two of the six
  directors for so long as Nexol and Nexol Co, including an indirect investor
  who has participated in the First Tranche through Nexol and Nexol Co and
  acquired the shares of the JVC from Nexol or Nexol Co, but excluding direct
  investors who participated in the First Tranche retain, in the aggregate, at
  least two-thirds of the 

	
 

	
 

	
 

	
shares of the JVC issued
  to them from the incorporation of the JVC through the completion of the First
  Tranche (the “Nexol Required Holding”);
  provided, that if either the Nexol Required Holding or VaxGen Required
  Holding is not maintained, then, automatically and without any further action
  of the Parties, (A) the number of directors comprising the Board shall be
  reduced to five (5), (B) the Board seat held by the most recently elected
  director for which Nexol (if it does not maintain the Nexol Required Holding)
  or VaxGen (if it does not maintain the VaxGen Required Holding), as
  applicable, was the Nominating Party shall be eliminated, and (C) thereafter,
  Nexol or VaxGen, as applicable, shall only be entitled to be the Nominating
  Party with respect to one (1) director of the Board. Each Party shall vote
  their shares to cause the director or directors nominated by each Nominating
  Party to be elected, removed or replaced as the Nominating Party may from
  time to time require; provided, however, that if such removal or replacement
  is without cause, the Party proposing the removal or replacement shall
  indemnify and hold the JVC and the other Parties harmless for any and all
  damages and other expenses that may arise from such action. In case the
  position of a director becomes vacant for any reason, the Parties shall cause
  their shares to be voted to elect a person nominated by the respective Party
  who was the Nominating Party with respect to the director whose position has
  become vacant, to fill such vacancy for the remainder of the term.

	
 

	
 

	
5.

	
Section 9.2
  shall be amended and restated in its entirety to read:

	
 

	
 

	
 

	
For so long
  as VaxGen maintains the VaxGen Required Holding and Nexol and Nexol Co
  maintain the Nexol Required Holding, VaxGen and Nexol shall jointly be
  entitled to appoint the Representative Director of the JVC, who shall be
  elected by the Board, represent the JVC, and shall be in charge of the
  administration of all the daily business affairs of the JVC in accordance
  with the polices established by the Board and the shareholders; provided,
  however, that the Board shall decide on and elect the Representative Director
  of the JVC from the Representative Director candidates nominated by each of
  VaxGen and Nexol, in the event VaxGen and Nexol fail to reach an agreement
  regarding the appointment of the Representative Director; provided further,
  that if (a) the Nexol Required Holding is not maintained, Nexol shall forfeit
  its right to jointly appoint the Representative Director pursuant to this
  Section 9.2, and (b) if the VaxGen Required Holding is not maintained, VaxGen
  shall forfeit its right to jointly appoint the Representative Director
  pursuant to this Section 9.2.

	
 

	
 

	
6.

	
This
  Amendment shall be governed by, and construed in accordance with, the
  substantive laws of the Republic of Korea.

	
 

	
 

	
7.

	
Each
  capitalized term used but not specifically defined in this Amendment shall
  have the meaning ascribed to it in the JVA.

	
 

	
 

	
8.

	
This
  Amendment shall be effective as of the date first written above. The JVA, as
  amended by this Amendment, shall remain in full force and effect.

[SIGNATURE PAGE FOLLOWS]

          IN
WITNESS WHEREOF, the parties have executed this
Amendment to Joint Venture Agreement as of the date first set forth above.

	
 

	
 

	
 

	
 

	
 

	
/s/ Lance
  Gordon

	
 

	
/s/ Jung-Jin Seo

	

	
 

	

	
By: VAXGEN,
  INC.

	
 

	
By: NEXOL
  BIOTECH CO., LTD.

	
 

	
 

	
 

	
 

	
 

	
Print Name:

	
Lance K.
  Gordon

	
 

	
Print Name:

	
Jung-Jin Seo

	
 

	

	
 

	
 

	

	
Title:

	
President
  and CEO

	
 

	
Title:

	
Representative Director

	
 

	

	
 

	
 

	

	
Date:

	
08 September
  2004

	
 

	
Date:

	
 

	
 

	

	
 

	
 

	

	
 

	
 

	
 

	
/s/ Jung-Jin Seo

	
 

	
/s/ Young-Kyoon Kwak

	

	
 

	

	
By: NEXOL
  CO., LTD.

	
 

	
By: KT&G CORPORATION

	
 

	
 

	
 

	
 

	
 

	
Print Name:

	
Jung-Jin Seo

	
 

	
Print Name:

	
Young-Kyoon Kwak

	
 

	

	
 

	
 

	

	
Title:

	
Representative
  Director

	
 

	
Title:

	
CEO

	
 

	

	
 

	
 

	

	
Date:

	
 

	
 

	
Date:

	
 

	
 

	

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
/s/ Sun-Dae Kang

	
 

	
 

	
 

	

	
 

	
 

	
 

	
By: J.
  STEPHEN & COMPANY VENTURES LTD.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Print Name:

	
Sun-Dae Kang

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Title:

	
CEO

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Date:

	
14 September
  2004

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