Document:

Exhibit 10.41

                              EMPLOYMENT AGREEMENT

      This Employment Agreement ("Agreement") by and between Piers Whitehead
("Whitehead") and VaxGen, Inc. ("VaxGen"), is effective July 1, 2002 (the
"Effective Date"). In consideration of the mutual promises made herein, VaxGen
and Whitehead agree as follows:

EMPLOYMENT. VaxGen hereby employs Whitehead, and Whitehead hereby accepts
employment with VaxGen, upon all of the terms and conditions described in this
Agreement. This Agreement supersedes, replaces and restates any and all prior
agreements between the parties hereto relating to the terms of Whitehead's
employment with VaxGen, including any prior agreements concerning
confidentiality, non-disclosure and inventions.

WORK RESPONSIBILITIES. Subject to the terms of this Agreement, Whitehead is
hereby employed in the position of Vice President, Corporate & Business
Development and shall perform the functions and responsibilities of that
position. Whitehead shall devote substantially all of his professional time,
attention and energies to the performance of his work responsibilities.
Whitehead's position, job description, duties and responsibilities may be
modified from time to time in the sole discretion of VaxGen.

COMPENSATION. As consideration for the services and covenants described in this
Agreement, VaxGen agrees to compensate Whitehead during the term of this
Agreement in the following manner:

Salary/Wages. VaxGen agrees to pay Whitehead an annual base salary of $225,000
per year, paid in accordance with Company policy. Whitehead's salary, less
required and authorized deductions, shall be paid in equal, periodic
installments no less frequently than semi-monthly in accordance with VaxGen's
then current payroll practices. The Compensation Committee of the VaxGen Board
of Directors (the "Board") will consider Whitehead's salary annually for
potential increase.

Initial Option Grant and Subsequent Option Grants. On the Effective Date,
Whitehead shall be granted an option to purchase 100,000 shares of common stock
of VaxGen at a per share exercise price equal to the fair market value of the
common stock of VaxGen on the Effective Date in accordance with the form of
grant used by VaxGen for grants made to its senior executive officers (the
"Initial Option"). The Initial Option shall be Incentive Stock Options to the
maximum extent permitted by VaxGen's stock option plan. The Initial Option shall
vest and become exercisable in accordance with the following schedule:
twenty-five percent (25%) of the Initial Option shall vest on the first (1st)
anniversary of the Effective Date and an additional 1/48th of the Initial Option
shall vest on the last day of each of the next 36 months following such
anniversary; provided that, in each case, Whitehead has been continuously
employed with VaxGen from the Effective Date through the applicable vesting
date, except as otherwise provided herein or under the terms of VaxGen's stock
option plan. Except as otherwise provided herein, the Initial Option shall be
subject to such terms and conditions, including provisions regarding
post-termination exercisability, as generally apply to stock options granted to
other senior executive officers who participate in VaxGen's equity incentive
plans as such terms and

<PAGE>

conditions are in effect on the Effective Date. Whitehead will be eligible to
receive an annual award of stock options, which will be issued, if at all, in
accordance with the terms and conditions of this Agreement and VaxGen's stock
option plan as in effect at the time of the award, in an amount to be determined
in the sole discretion of the Board. In the event that Whitehead's employment is
terminated by the Company without Cause pursuant to paragraph 16(a)(iv) below or
by Whitehead with Good Reason pursuant to paragraph 16(a)(v) below or following
a Change in Control pursuant to paragraph 16(d) below, then Whitehead shall have
one (1) year from the date of termination to exercise all options which are then
vested or which vest as a result of this Agreement, provided however that in no
event will Whitehead be entitled to exercise such stock options after the
expiration of 10 years from the date of grant of such stock options.

Performance Bonus. Whitehead is eligible to receive an annual performance bonus
of up to thirty percent (30%) of his annual base salary in cash, VaxGen
securities or a combination thereof, provided that no more than 50% of the
performance bonus shall be paid in securities. The Chief Executive Officer
("CEO") and Whitehead will mutually cooperate to establish annual performance
objectives for Whitehead. Such performance bonus shall be awarded, if at all, in
the sole discretion of the Compensation Committee of the Board. The Compensation
Committee of the Board will consider Whitehead's bonus annually for potential
increase.

Benefits. Whitehead shall be entitled to employment benefits in accordance with
policies established by or at the direction of the Board with respect to senior
officers of VaxGen, including holidays, leaves of absence, health insurance,
dental insurance, vacation and other benefits, if any, in accordance with any
eligibility requirements, policies, procedures, or benefit plans adopted by
VaxGen from time to time during the existence of this Agreement. Whitehead's
rights, or those of Whitehead's dependents under any such benefits policies or
plans, shall be governed solely by the terms of such policies or plans. VaxGen's
employment benefits, and policies related thereto, are subject to termination,
modification or limitation at VaxGen's sole discretion.

Total Compensation. Whitehead agrees that the compensation stated above
constitutes the full and exclusive monetary consideration and compensation for
all services rendered under this Agreement and for all promises and obligations
under this Agreement.

Business Expenses. VaxGen shall pay Whitehead's reasonable business expenses,
including expenses incurred for travel on VaxGen business, in accordance with
the policies and procedures of VaxGen, as may be adopted or amended from time to
time at VaxGen's sole discretion. If Whitehead incurs business expenses under
this Agreement, he shall submit monthly to VaxGen a request for reimbursement
together with supporting documentation satisfactory to VaxGen.

VAXGEN POLICIES. Whitehead agrees to abide by VaxGen's written policies, and
procedures that have been communicated or made available to him, as they may
from time to time be adopted or modified by VaxGen in its sole discretion.
VaxGen's written policies and procedures, including the Employee Handbook, shall
be binding on Whitehead unless superseded by, or in conflict with, this
Agreement. Copies of written policies and procedures are available to Whitehead
in the offices of VaxGen, and Whitehead shall be responsible at all times to
review, and make himself familiar with, these policies and procedures.

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WARRANTIES. Whitehead hereby represents and warrants that he has not unlawfully
misappropriated any confidential, proprietary or trade secret information from
Whitehead's prior employer or employers and, except to the extent such
information has become publicly available, will not knowingly disclose such
information to VaxGen or improperly use any such information on behalf of
VaxGen. Whitehead acknowledges that VaxGen has specifically requested that, if
Whitehead has any such confidential, proprietary or trade secret knowledge or
information, Whitehead not use such information while employed by VaxGen for the
benefit of VaxGen. Whitehead further warrants that by entering into this
Agreement with VaxGen he is not violating any of the terms, agreements or
covenants of any previous employment or association.

PRIOR INVENTIONS. Whitehead acknowledges that, except for the inventions
disclosed on Appendix A, Whitehead does not have any right or claim to any
invention, idea, process, formula, discovery, copyright, patent or other such
item or matter. No rights are hereby conveyed by Whitehead to VaxGen with
respect to inventions, if any, made by Whitehead prior to employment by VaxGen,
which inventions are listed in Schedule A, attached hereto.

SUBSEQUENT INVENTION DISCLOSURE. Whitehead hereby agrees to promptly disclose to
VaxGen any and all inventions that he develops during the term of his
employment. Whitehead will also disclose to the CEO all inventions made,
conceived, reduced to practice, or developed by Whitehead within six months of
the termination of his employment with VaxGen that resulted from his prior work
with VaxGen. Such disclosures shall be received by VaxGen in confidence and do
not extend the assignment of inventions disclosed beyond that required by law.

ASSIGNMENT OF INVENTIONS. Whitehead hereby assigns and agrees to assign to
VaxGen or its designee, Whitehead's entire right, title and interest in and to
all inventions, works of authorship, developments, concepts, discoveries, ideas,
trademarks and trade secrets, whether or not patentable or registrable under
copyright or other intellectual property laws ("Inventions") which Whitehead may
solely or jointly develop, conceive or reduce to practice, during the period of
employment, except as provided in paragraph 10 below. Whitehead agrees that all
such Inventions are the sole property of VaxGen. Whitehead further agrees that
all such Inventions, including works of authorship, are "works for hire" for
purposes of VaxGen's rights under copyright laws. Whitehead agrees to keep and
maintain adequate and current written records of all Inventions made by him
(solely or jointly with others) during the term of his employment with VaxGen.
The records will be in the form of notes, sketches, drawings, and any other
format that may be specified by VaxGen. The records will be available to and
remain the sole property of VaxGen at all times. Whitehead understands and
agrees that the decision whether or not to commercialize or market any Invention
developed by him solely or jointly with others is within VaxGen's sole
discretion and for VaxGen's sole benefit and that no royalty will be due to him
as a result of VaxGen's efforts to commercialize or market any such Invention.
Whitehead further agrees to perform, during and after employment with VaxGen,
all acts deemed necessary or desirable by VaxGen to permit and assist VaxGen, at
VaxGen's expense, in obtaining and enforcing the full benefits, enjoyment,
rights and title, throughout the world, of and to the Inventions hereby assigned
by Whitehead to VaxGen as set forth above.

PATENT AND COPYRIGHT REGISTRATIONS. Whitehead agrees to assist VaxGen, or its
designee, at VaxGen's expense, in every proper way to secure VaxGen's rights in
the Inventions

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and any copyrights, patents, trademarks, and trade secret rights or other
intellectual property rights in connection with any such Inventions in any and
all countries, including the disclosure to VaxGen of all pertinent information
and data with respect thereto, the execution of all applications,
specifications, oaths, assignments and all other instruments or papers which
VaxGen shall deem necessary in order to apply for and obtain such rights and in
order to assign and convey to VaxGen, its successors, assigns, and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, patents, trademark and other intellectual property rights relating
thereto. Whitehead further agrees that his obligation to execute or cause to be
executed, when it is in his power to do so, any such instrument or papers shall
continue after the termination of this Agreement. If VaxGen is unable, because
of Whitehead's mental or physical incapacity or for any other reason, to secure
his signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering Inventions or original works
of authorship assigned to VaxGen as above, then Whitehead hereby irrevocably
designates and appoints VaxGen and its duly authorized officers and agents as
his agent and attorney in fact to act for and in his behalf and stead to execute
and file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by
Whitehead.

INVENTIONS NOT ASSIGNED. The parties agree that the assignment of inventions
under this Agreement does not apply to an invention which qualifies fully for
protection under Section 2870 of the California Labor Code, which states that
"Any provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer's equipment,
supplies, facilities or trade secret information except for those inventions
that either: (1) Relate at the time of conception or reduction to practice of
the invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or (2) Result from any work performed
by the employee for the employer[.]"

CONFIDENTIAL, PROPRIETARY AND TRADE SECRET INFORMATION. During the course of his
employment, will come into possession of or acquire knowledge of confidential,
proprietary and trade secret information of VaxGen. Whitehead hereby covenants
and agrees that he will not, either during his employment or at any time
thereafter, disclose any such confidential, proprietary or trade secret
information to any person, firm, corporation, association, partnership or other
entity (other than those in VaxGen's organization qualified and authorized to
receive such information) for any purpose or reason whatsoever. Such
confidential and proprietary information shall be deemed to include, but not be
limited to, manuals, discs, tapes, and summaries or originals of any papers,
documents, plans, specifications, client lists, contracts, licenses or licensing
agreements, data bases, or portions thereof, related to the research and
development, products or operations of VaxGen, provided that such information is
confidential, proprietary or falls within the definition of a "trade secret"
under the Uniform Trade Secrets Act. Whitehead specifically agrees that he will
not make use of any such confidential or proprietary information for his own
purpose, or for the benefit of any person, firm, corporation or other entity
except VaxGen. Whitehead will abide by VaxGen's policies and procedures, as
established from time to time for the protection of its trade secrets and
confidential information.

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RETURN OF PROPERTY. All confidential, proprietary and trade secret information,
and all other documents, records, apparatus, equipment and other physical
property which is furnished to or obtained by Whitehead in the course of
employment with VaxGen, shall be and remain the sole property of VaxGen.
Whitehead agrees that upon request by VaxGen or the termination of Whitehead's
employment (whichever occurs first), Whitehead shall return all such property,
and agrees not to make or retain copies, reproductions or summaries of any such
property without the express written consent of VaxGen.

NON-SOLICITATION, ANTI-RAIDING. For a period of one (1) year immediately
following the termination of his employment, Whitehead agrees that he 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 during the term of
this Agreement; 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; (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 Whitehead's employment with VaxGen,
including, but not limited to, investments, licenses, joint ventures, and
agreements for development.

EQUITABLE RELIEF. Whitehead and VaxGen each agree that in the event of a breach
or threatened breach of paragraphs 7 through 13 of this Agreement each party
will not have an adequate remedy at law. Thus, in the event of such a breach or
threatened breach by one party, the other party will be entitled to such
equitable and injunctive relief in a court of law as may be available to prevent
and restrain a breach of the provisions of paragraphs 7 through 13. Said
availability to obtain injunctive relief will not prevent either party from
pursuing any other equitable or legal relief, including the recovery of damages
from such breach or threatened breach.

AT-WILL EMPLOYMENT. Whitehead understands and agrees that employment at VaxGen
is at-will. This means that, for any reason or no reason, Whitehead's employment
may be terminated, with or without cause, at any time by either Whitehead or by
VaxGen, subject to the severance and notice provisions contained in Section 16
below. Nothing in this or any other document or statement shall limit the right
of VaxGen to terminate Whitehead's employment at-will. Only the Board has the
authority to amend this Agreement on behalf of VaxGen, and then only in a
writing that is signed by both Whitehead and VaxGen pursuant to authority
expressly granted by the Board.

TERMINATION OF EMPLOYMENT.

Subject to the survivability provisions of Section 18 below, Whitehead's
employment under this Agreement and all compensation and benefits provided for
herein shall terminate upon the occurrence of any of the following events.

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Death: In the event of Whitehead's death, the termination shall be effective
upon the date thereof.

Disability: In the event that Whitehead should become "disabled," VaxGen may
terminate Whitehead's employment under this Agreement. For purposes of this
paragraph, "disabled" shall mean Whitehead's inability, despite reasonable
accommodation, to perform the essential duties of his position for a period of
five (5) consecutive months, and failure to resume the performance of such
duties on a full-time basis within thirty (30) days of notice from VaxGen of
intent to terminate this Agreement on such grounds. The termination shall be
effective upon the date specified in VaxGen's notice to Whitehead as provided
for herein. Any base salary payable to Whitehead by VaxGen may be offset by any
benefits paid to Whitehead under any applicable short-term or long-term
disability plan.

Cause: VaxGen may terminate Whitehead's employment under this Agreement upon the
occurrence of "cause" for termination as herein defined. "Cause" shall mean (A)
Whitehead's fraud, misappropriation, embezzlement or other willful commission of
a dishonest or unlawful act that has the effect of materially injuring VaxGen or
its reputation, (B) Whitehead's conviction of a crime involving moral turpitude
or a felony, (C) Whitehead's willful or reckless violation of VaxGen's written
policies or procedures that has the effect of materially injuring VaxGen, or
Whitehead's breach of the confidential information and invention assignment
provisions of this Agreement, and, if any such violation or breach under this
Section 16(a)(iii)(C) is curable, Whitehead's failure to cure such violation or
breach within 15 business days of receiving notice of such violation or breach
from the Board, or (D) Whitehead's habitual failure to perform his job duties,
as determined by the Board in its reasonable judgment, and after notice of such
failure has been given to Whitehead by the Board and Whitehead has had a 15
business-day period within which to cure such failure. The Parties acknowledge
that the reference to a "for Cause" termination herein does not alter the
employment at-will relationship, but merely sets forth circumstances under which
VaxGen has no obligation to pay severance to Whitehead. The termination shall be
effective upon the date specified in VaxGen's notice to Whitehead.

Without Cause: Either VaxGen or Whitehead may terminate Whitehead's employment
under this Agreement without Cause at any time upon thirty (30) days written
notice to the other party. The termination shall be effective upon the date
specified in the notice given pursuant hereto.

By Whitehead with Good Reason: Whitehead may terminate his employment under this
Agreement for Good Reason (A) in the event VaxGen breaches a material term
hereof and, after receiving written notice from Whitehead detailing the specific
provision allegedly breached, does not remedy said breach within thirty (30)
days of receiving notice, (B) there is a demotion of Whitehead from the position
of Senior Vice President, Manufacturing Operations or the assignment of job
duties or responsibilities materially inconsistent with such position, (C)
VaxGen moves Whitehead's principal place of

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business more than thirty-five (35) miles from VaxGen's current principal place
of business at 1000 Marina Blvd, Brisbane, California, (D) there is a reduction
in Whitehead's then-current base salary and/or performance bonus opportunity, or
(E) there is a material and substantial reduction in the aggregate of
Whitehead's employee benefits. The termination shall be effective on the date
specified in the notice given hereunder, which date shall not be earlier than
the date such notice is given, nor more than 30 days after the date such notice
is given.

In the event that Whitehead's employment under this Agreement is terminated by
VaxGen under paragraphs 16(a)(i), 16(a)(ii) or 16(a)(iii) above, or by Whitehead
under paragraph 16(a)(iv) above, no severance pay will be due to Whitehead;
however Whitehead shall be entitled to payment for any earned but unpaid base
salary through the date of termination as well as payment for any accrued but
unused vacation time and any accrued employee benefits, subject to the terms of
the applicable employee benefit plans.

In the event that Whitehead's employment under this Agreement is terminated by
VaxGen under paragraph 16(a)(iv) above or by Whitehead under paragraph 16(a)(v)
above, Whitehead shall be entitled to receive: (i) severance pay in the amount
of six (6) months of his then-existing annual base salary plus one additional
month of base salary for each full year of employment with VaxGen (such
severance being limited strictly to annual base salary and will not include any
amount paid or payable as a bonus or stock option grant) up to a maximum
severance payment of twelve (12) months annual base salary, less required and
authorized deductions, payable on VaxGen's ordinary payroll cycles until fully
paid out; and (ii) accelerated vesting of all his outstanding stock options to
fully vested status as of the date of termination.

Whitehead shall be entitled to the severance benefits provided for in 16(c)
above if, within twelve (12) months following a Change in Control (as defined
below), VaxGen or its successor in interest terminates Whitehead's employment
for any reason other than for Cause (as defined above) or Whitehead terminates
his employment on account of any of the following: (i) in the event VaxGen
breaches a material term hereof and, after receiving written notice from
Whitehead detailing the specific provision allegedly breached, does not remedy
said breach within thirty (30) days of receiving notice; or (ii) there is a
material reduction in Whitehead's job duties or responsibilities, including,
without limitation, demotion from the position of Vice President; or (iii)
VaxGen or its successor in interest moves Whitehead's principal place of
business more than thirty-five (35) miles from VaxGen's current principal place
of business at 1000 Marina Blvd, Brisbane, California; or (iv) there is a
reduction in Whitehead's then-current base salary and/or performance bonus
opportunity; or (v) there is a material and substantial reduction in the
aggregate of Whitehead's employee benefits.

For purposes of this Agreement, a "Change in Control" shall be deemed to have
occurred if: (i) there is an acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (for the purposes of this Section,
a "Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the voting power of the
then outstanding voting securities of VaxGen entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection 16(e), any acquisition by any
employee benefit plan (or related trust) sponsored or

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maintained by VaxGen or any corporation controlled by VaxGen shall not
constitute a Change in Control; or (ii) individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual (other
than an individual whose initial assumption of office occurs as a result of an
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board) who becomes a director subsequent to the date
hereof whose election or nomination for election by VaxGen's shareholders was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board; or (iii) there is a consummation of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of VaxGen (a "Business Combination") unless, following such
Business Combination, (A) individuals and entities who were the beneficial
owners of the Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of
the voting power of the then Outstanding Company Voting Securities of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns VaxGen or
all or substantially all of VaxGen's assets either directly or through one or
more subsidiaries) and (B) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or (iv) approval by the shareholders of VaxGen of a complete
liquidation or dissolution of VaxGen.

INDEMNIFICATION. VaxGen shall maintain, for the benefit of Whitehead, director
and officer liability insurance in form at least as comprehensive as, and in an
amount that is at least equal to, that maintained by VaxGen as of the Effective
Date of this Agreement for its other officers and directors. In addition, VaxGen
shall indemnify Whitehead against liability as an officer and director of VaxGen
or any subsidiary or affiliate of VaxGen to the maximum extent permitted by
applicable law. Whitehead's rights under this Paragraph 17 shall continue so
long as he may be subject to such liability, whether or not his employment may
have terminated prior thereto.

SURVIVABILITY. The respective rights and obligations of the Parties hereunder,
including, without limitation, Sections 7, 8, 9, 10, 11, 12, 13, 14, 16(c), 17,
19 and 28 of this Agreement, shall, to the extent necessary, survive any
termination of Whitehead's employment or this Agreement.

GOVERNING LAW. This Agreement shall be construed in accordance with and governed
by the laws of the State of California without regard to its conflict of law
rules. This Agreement shall be interpreted in accordance with the plain meaning
of its terms and not strictly for or against either party.

ENTIRE AGREEMENT. This Agreement embodies the complete agreement and
understanding of the parties related to Whitehead's employment by VaxGen,
superseding any and all other prior or contemporaneous oral or written
agreements between the parties hereto with respect to the employment of
Whitehead by VaxGen, and contains all of the covenants and agreements of any
kind whatsoever between the parties with respect to such employment. Each party
acknowledges that no representations, inducements, promises or agreements,
whether oral

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or written, express or implied, have been made by either party or anyone acting
on behalf of a party, that are not incorporated herein and that no agreement or
promise not contained herein shall be valid or binding.

WAIVER. The failure of either party to insist, in any one or more instances,
upon performance of the terms or conditions of this Agreement shall not be
construed as a waiver or a relinquishment of any right granted under this
Agreement or of the future performance of any such term, covenant or condition.

INVALIDITY. Should any provision, portion or part of this Agreement be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions, portions or parts shall be unaffected and shall continue
in full force and effect, and said invalid, void or unenforceable provision(s),
portion(s) or part(s) shall be deemed not to be part of this Agreement.

NO THIRD PARTY BENEFICIARIES. This Agreement is not intended by either party to
create any third-party beneficiaries, and shall not be so construed in any
proceeding. The sole parties to this Agreement are Whitehead and VaxGen, and it
is their mutual intent that they alone shall have standing to enforce the
provisions of this Agreement, subject to the provisions of Section 26 below.

VOLUNTARY AGREEMENT. Whitehead and VaxGen represent and agree that each has
reviewed all aspects of this Agreement, has carefully read and fully understands
all provisions of this Agreement, and is voluntarily entering into this
Agreement. Each party represents and agrees that such party has had the
opportunity to review any and all aspects of this Agreement with the legal, tax
or other advisor or advisors of such party's choice before executing this
Agreement.

CAPTIONS. The captions of the various paragraphs of this Agreement are placed
herein for the convenience of the parties and the reader, do not constitute a
substantive term or terms of this Agreement, and shall not be considered in any
issue involving the interpretation or application of this Agreement.

SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of and shall be enforceable by and against Whitehead's heirs,
beneficiaries and legal representatives. It is agreed that the rights and
obligations of Whitehead may not be delegated or assigned except as specifically
set forth in this Agreement. In the event of a Change in Control (as defined
above), VaxGen may assign its rights and obligations under this Agreement to its
successor-in-interest, and in that event such successor-in-interest shall be
deemed to have acquired all rights and assumed all obligations of VaxGen under
this Agreement.

NOTICES. Notices given under the terms of this Agreement shall be in writing and
shall be deemed delivered when personally delivered to the person identified
below, or three (3) days after deposited, proper first class postage prepaid, in
the U. S. Mail and addressed as set forth below, or one day after properly
consigned to a recognized national next-day delivery service (e.g., Federal
Express) prepaid and addressed as set forth below, or faxed to the number
provided below and confirmed by a delivery report from the sending fax
transmitter. The officer,

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addresses and facsimile numbers below may be changed by written notice given
pursuant to this paragraph. Notices shall be given:

           If to VaxGen:                 Chief Executive Officer of VaxGen, Inc.
                                         1000 Marina Blvd., Suite 200
                                         Brisbane, California 94005
                                         Fax number:  650-624-1001

           If to Whitehead:              Piers Whitehead
                                         16 Toledo Court
                                         Lafayette, CA  94549

ALTERNATIVE DISPUTE RESOLUTION PROGRAM. Except as to efforts to seek injunctive
relief as specifically addressed in paragraphs 7 through 14, the parties
understand and agree that any dispute arising out of Whitehead's employment by
VaxGen, the termination of that employment, or arising out of or relating to
this Agreement shall be submitted to binding arbitration in accordance with the
terms of the Alternative Dispute Agreement set forth in Appendix B to this
Agreement and incorporated herein.

Dated:
        -----------------------                           ----------------------
                                                          Piers Whitehead

Dated:                                                   VaxGen, Inc.
        -----------------------

                                                         ----------------------
                                                         Lance Gordon, Ph.D.
                                                         Chief Executive Officer

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                                   APPENDIX A

Inventions. Except as set forth below, I hereby acknowledge that at this time I
have no right, title or other interest in any invention, patent, copyright or
other such material other than the following (if none, so state):

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Dated:
       --------------------------     ------------------------------
                                      Piers Whitehead
       --------------------------

<PAGE>

                                   APPENDIX B

ALTERNATIVE DISPUTE AGREEMENT

      AGREEMENT TO ARBITRATE

      In the event that any employment dispute arises between VaxGen, Inc.
("VaxGen") and Piers Whitehead ("Whitehead"), the parties involved will make all
efforts to resolve any such dispute through informal means. However, if within
thirty (30) days of the event giving rise to the dispute, these informal
attempts at resolution fail and if the dispute arises out of or is related to
Whitehead's Employment Agreement, Whitehead's employment, the termination of
Whitehead's employment or alleged unlawful discrimination, including but not
limited to sexual or other unlawful harassment (an "Arbitrable Dispute"), VaxGen
and Whitehead will submit the dispute to final and binding arbitration, except
as set forth in Paragraphs 7-14 of the Employment Agreement.

      The parties expressly understand and agree that arbitration is the
exclusive remedy for all such Arbitrable Disputes; with respect to such
disputes, no other action may be brought in court or any other forum (except
actions to compel arbitration or enforce an award issued hereunder). THIS
ALTERNATIVE DISPUTE RESOLUTION ("ADR") AGREEMENT IS A WAIVER OF THE PARTIES'
RIGHTS TO A CIVIL COURT ACTION FOR A DISPUTE RELATING TO BREACH OF THE PARTIES'
EMPLOYMENT AGREEMENT, TERMINATION OF THAT EMPLOYMENT OR ALLEGED UNLAWFUL
DISCRIMINATION, WHICH INCLUDES RETALIATION OR SEXUAL OR OTHER UNLAWFUL
HARASSMENT; ONLY AN ARBITRATOR, NOT A JUDGE OR JURY, WILL DECIDE THE DISPUTE.

      Arbitrable Disputes arising out of or related to employment, or the
termination of such employment or alleged unlawful discrimination, including
retaliation or sexual or other unlawful harassment, shall include, but not be
limited to, the following: alleged violations of federal, state and/or local
constitutions, statutes or regulations; claims based on any purported breach of
contractual obligation, including breach of the covenant of good faith and fair
dealing; and claims based on any purported breach of duty arising in tort,
including violations of public policy.

      The following types of employment disputes are not subject to this ADR
Agreement: (1) disputes related to workers' compensation and unemployment
insurance; (2) claims for benefits covered by a separate benefit plan that
provides for arbitration; and (3) claims subject to Sections 7 through 14 of the
Employment Agreement. Also, nothing in the Employment Agreement or in the ADR
Agreement shall be construed as precluding Whitehead from filing a charge with
the Equal Employment Opportunity Commission ("EEOC"), the National Labor
Relations Board ("NLRB") or other federal, state or local agencies, seeking
administrative assistance in resolving claims. However, any claim that cannot be
resolved administratively through such an agency shall be subject to the
Employment Agreement and the ADR Agreement.

<PAGE>

REQUEST FOR ARBITRATION

Attempt At Informal Resolution Of Disputes

      Prior to the submission of any Arbitrable Dispute to arbitration,
Whitehead and VaxGen shall attempt to resolve the dispute informally as set
forth below.

      Whitehead and VaxGen will select a mediator from a list provided by the
Federal Mediation and Conciliation Service or other similar agency who will
assist the parties in attempting to reach a settlement of the dispute. The
mediator may make settlement suggestions to the Parties but shall not have the
power to impose a settlement upon them. If the dispute is resolved in mediation,
the matter shall be deemed closed. If the dispute is not resolved in mediation
and goes to the next step (binding arbitration), any proposals or compromises
suggested by either of the parties or the mediator shall not be referred to in
or have any bearing on the arbitration procedure. The mediator cannot also serve
as the arbitrator in the subsequent proceeding unless all parties expressly
agree in writing.

Arbitration Procedures

      The party desiring arbitration, whether Whitehead or VaxGen, must submit a
"Request For Arbitration" in writing to the other party within the time period
required by the law that applies to the claim under the applicable statute of
limitations. If the "Request for Arbitration" is not submitted in accordance
with the aforementioned time limitations, the party failing to do so will not be
able to bring his claims to this or any other forum. The requesting party may
use a "Request for Arbitration" form supplied by VaxGen (Appendix C).
Alternatively, the requesting party may create a "Request For Arbitration" form
that, unless otherwise required by law, clearly states "Request For Arbitration"
at the beginning of the first page and includes the following information:

      1. A factual description of the dispute in sufficient detail to advise the
other party of the nature of the dispute;

      2. The date when the dispute first arose;

      3. The names, work locations and telephone numbers of any individuals,
including employees or supervisors, with knowledge of the dispute; and

      4. The relief requested by requesting party.

      The responding party may submit counterclaim(s) in accordance with
applicable law. Any dispute as to the sufficiency of the foregoing notice shall
be submitted to the Arbitrator for resolution and shall not be a basis for
avoiding arbitration.

Selection Of The Arbitrator

      All disputes will be resolved by a single Arbitrator, the Arbitrator will
be mutually selected by VaxGen and Whitehead. If the parties cannot agree on an
Arbitrator, then a list of seven (7) arbitrators, experienced in employment
matters, shall be provided by the Judicial

                                      -ii-
<PAGE>

Arbitration Mediation Services ("JAMS/Endispute"). The Arbitrator will be
selected by the parties who will alternately strike names from the list. The
last name remaining on the list will be the Arbitrator selected to resolve the
dispute. Upon selection, the Arbitrator shall set an appropriate time, date and
place for the arbitration, after conferring with the parties to the dispute.

The Arbitrator's Authority

      The Arbitrator shall have the powers enumerated below:

      1. Ruling on motions regarding discovery, and ruling on procedural and
evidentiary issues arising during the arbitration.

      2. Ruling on motions to dismiss and/or motions for summary judgment
applying the standards governing such motions under the Federal Rules of Civil
Procedure.

      3. Issuing protective orders on the motion of any party or third party
witness. Such protective orders may include, but are not limited to, sealing the
record of the arbitration, in whole or in part (including discovery proceedings
and motions, transcripts, and the decision and award), to protect the privacy or
other constitutional or statutory rights of parties and/or witnesses.

      4. Determining only the issue(s) submitted to him/her. The issue(s) must
be identifiable in the "Request For Arbitration" or counterclaim(s). Except as
required by law, any issue(s) not identifiable in those documents is outside the
scope of the Arbitrator's jurisdiction and any award involving such issue(s),
upon motion by a party, shall be vacated.

Discovery

      The discovery process shall proceed and be governed by the standards of
the California Code of Civil Procedure and the Federal Arbitration Act. Each
party may obtain discovery necessary to adequately explore and arbitrate their
respective claims. The Arbitrator shall have the power to enforce the
aforementioned discovery rights and obligations by the imposition of the same
terms, conditions, consequences, liabilities, sanctions and penalties as can or
may be imposed in like circumstances in a civil action under the California Code
of Civil Procedure, except the power to order the arrest or imprisonment of a
person.

Hearing Procedure

      The hearing shall be held at a location mutually agreed upon by the
parties, or as determined by the Arbitrator in the absence of an agreement, and
shall proceed according to the current version of the American Arbitration
Association's "National Rules for the Resolution of Employment Disputes" (the
"Rules") with the following amendments:

      1. The Arbitrator shall rule at the outset of the arbitration on
procedural issues that bear on whether the arbitration is allowed to proceed.

                                      -iii-
<PAGE>

      2. Each party has the burden of proving each element of its claims or
counterclaims, and each party has the burden of proving any of its affirmative
defenses.

      3. In addition to, or in lieu of closing argument, either party shall have
the right to present a post-hearing brief, and the due date for exchanging any
post-hearing briefs shall be mutually agreed on by the parties and the
Arbitrator, or determined by the Arbitrator in the absence of agreement.

      4. The Rules shall otherwise be modified to the extent necessary to be
consistent with applicable law.

Substantive Law

      1. The parties agree that they will be afforded the identical legal,
equitable, and statutory remedies as would be afforded them were they to bring
an action in a court of competent jurisdiction.

      2. The applicable substantive law shall be the law of the State of
California and/or federal law. Choice of substantive law in no way affects the
procedural aspects of the arbitration, which are exclusively governed by the
provisions of this ADR Agreement.

Opinion And Award

      The Arbitrator shall issue a written opinion and award, in conformance
with the following requirements:

      1. The opinion and award must be signed and dated by the Arbitrator.

      2. The Arbitrator's opinion and award shall decide all issues submitted.

      3. The Arbitrator's opinion and award shall set forth the findings of fact
and conclusions of law supporting each part of the opinion.

      4. The Arbitrator shall have the same authority to award remedies, damages
and costs as provided to a judge and/or jury under parallel circumstances.

Enforcement Of Arbitrator's Award

      Following the issuance of the Arbitrator's decision, any party may
petition a court to confirm, enforce, correct or vacate the Arbitrator's opinion
and award under the Federal Arbitration Act, and/or applicable State law.

Fees And Costs

      Unless otherwise required by law, fees and costs shall be allocated in the
following manner:

      1. Each party shall be responsible for its own attorneys' fees, except as
otherwise provided by law for the particular claim(s) at issue.

                                      -iv-
<PAGE>

      2. VaxGen shall pay the entire cost of the arbitrator's services, the
facility in which the arbitration is to be held, and any similar costs that
Whitehead would not have otherwise incurred if the dispute were adjudicated in a
court of law rather than through arbitration.

      3. VaxGen shall pay the entire cost of a court reporter to transcribe the
arbitration proceedings. Each party shall advance the cost for said party's
transcript of the proceedings. Each party shall advance its own costs for
witness fees, service and subpoena charges, copying, or other incidental costs
that each party would bear during the course of a civil lawsuit.

      4. Each party shall be responsible for its costs associated with
discovery, except as required by law or court order.

Severability

      Each term, clause and provision of this ADR Agreement is separate and
independent, and should any term, clause or provision of this ADR Agreement be
found to be invalid or unenforceable, the validity of the remaining terms,
clauses, and provisions shall not be affected. As to those terms, clauses and
provisions found to be invalid or unenforceable, they shall be replaced with
valid and enforceable terms, clauses or provisions or shall be modified, in
order to achieve, to the fullest extent possible, the economic, business and
other purposes of the invalid or unenforceable terms, clauses or provisions.

Dated:
        -------------                                     ----------------------
                                                          Piers Whitehead

Dated:                                                  VaxGen, Inc.
        -------------

                                                        ----------------------
                                                        Lance Gordon, Ph.D.
                                                        Chief Executive Officer

                                      -v-
<PAGE>

                                   APPENDIX C

REQUEST FOR ARBITRATION FORM

ALTERNATIVE DISPUTE RESOLUTION AGREEMENT

--------------------------------------------------------------------------------

Submission        This form (or, alternatively, a form that includes the
Requirement       information below) must be submitted by the individual
                  claimant to the CEO within the time period required by the law
                  that applies to the claim. If VaxGen requests arbitration, the
                  form must also be served on the individual within the
                  appropriate time period.

--------------------------------------------------------------------------------

State the nature of the claim in detail:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

(Continue on reverse and add pages if necessary)

Enter the date of termination or date(s) of alleged incident(s) (e.g., date of
last instance of unlawful discrimination, sexual or other unlawful harassment):

_______/________/_______
Month    Day      Year

Provide the names and work locations of any individuals, including employees or
supervisors, with knowledge of the dispute:

Name                        Job Title                             Work Location

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

                                      -6-
<PAGE>

Describe the relief requested (i.e., what you want done):

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

(Please attach any documents relevant to the dispute.)

Signature of Party Requesting Arbitration:

Dated:
        -----------------------                          ----------------------
                                                         Piers P. Whitehead

Dated:                                                   VaxGen, Inc.
        -----------------------

                                                         ----------------------
                                                         Lance Gordon, Ph.D.
                                                         Chief Executive Officer

                                      -7-Exhibit 10.42

                             JOINT VENTURE AGREEMENT

This Joint Venture Agreement (this "Agreement" or the "JVA") is made on June 7,
2002, by and between:

VAXGEN, INC. a company duly organized and existing under the laws of the State
of Delaware, USA and having its registered office at 1000 Marina Boulevard,
Brisbane, California, 94005-1841, U.S.A. ("VaxGen"); and

CELLTRION, INC., a company duly organized and existing under the laws of the
Republic of Korea and having its registered office at Hanseung Building, 818,
Dongchun-dong, Yonsu-gu, Incheon, Korea ("Celltrion").

(VaxGen and Celltrion shall individually be referred to as a "Party" and
collectively as the "Parties".)

                                    WHEREAS:

(A)   Celltrion is obligated to invest in the construction of the Pilot Plant
      (as defined in Section 1.4 herein) pursuant to that certain Joint Venture
      Agreement dated February 25, 2002 by and among VaxGen, Nexol Biotech Co.,
      Ltd., Nexol Co., Ltd., Korea Tobacco & Ginseng Corporation and J. Stephen
      & Company Ventures Ltd. (the "Celltrion Joint Venture Agreement").

(B)   VaxGen has certain obligations with respect to the Pilot Plant pursuant to
      the Celltrion Joint Venture Agreement.

(C)   The Parties wish to establish the JVC (as defined in Section 1.3 herein)
      to fulfill their respective obligations under the Celltrion Joint Venture
      Agreement.

(D)   The Parties enter into this Agreement to set out the terms governing their
      investment and relationship as shareholders in the JVC and the management
      and operations of the JVC.

Now, therefore, it is agreed as follows:

                                    ARTICLE 1
                                   DEFINITIONS

In this Agreement, unless otherwise clearly indicated by the context, the
following expressions shall have the following meanings:

1.1   An "Affiliate" of a Party shall mean any corporation, association, or
      other entity which, directly or indirectly, controls the Party or is
      controlled by the Party or is under common control with the Party, where
      "control" means the possession, directly or indirectly, of the power to
      direct or cause the direction of the affairs or management of an entity
      through the ownership of voting securities or otherwise, including,
      without limitation, having the power to elect a majority of the board of
      directors or other governing body of such entity.

1.2   "Effective Date" shall mean the date first set forth above.

1.3   "JVC" shall mean the corporation formed as a joint venture between the
      Parties pursuant to Article 2.1 of this

                                       28
<PAGE>

      Agreement.

1.4   "Pilot Plant" shall mean the pilot manufacturing facility (at a scale
      between 500 and 1000 liters) to be constructed by the JVC in South San
      Francisco, California, U.S.A. that will use cell culture technology
      licensed from VaxGen for the manufacture of a number of pharmaceutical
      products including, without limitation, AIDSVAX, an HIV vaccine using
      certain technology licensed to VaxGen from Genentech, Inc. ("Genentech").

1.5   "Shares" shall mean the shares of common stock issued by the JVC to
      Celltrion and VaxGen pursuant to Article 5 of this Agreement.

1.6   "Transaction Documents" shall mean such documents and agreements as are
      reasonably necessary in order to give effect to the purpose of this
      Agreement, including, but not limited to, the documents and agreements
      referred to in Articles 2.2 and 3 of this Agreement.

1.7   "Technology" shall mean the Licensed Know-How and Licensed Patent Rights
      as defined in both the License Agreement and the Sub-License Agreement
      defined in Article 3 of this Agreement.

                                   ARTICLE 2
                           COMPANY TO BE INCORPORATED

2.1   The Parties shall incorporate the JVC under the laws of the State of
      California, on or before the Effective Date, a corporation named "VaxGen -
      Celltrion, Inc."

2.2   The Parties shall adopt the Articles of Incorporation for the JVC attached
      hereto as Exhibit 1 and the Bylaws attached hereto as Exhibit 2, each as
      may be amended by the Parties from time to time, and shall approve
      internal regulations as necessary in conformity with the terms and
      conditions of this Agreement. If any discrepancy is found between this
      Agreement and the JVC's Articles of Incorporation, Bylaws and/or internal
      regulations, the Parties shall amend the Articles of Incorporation, Bylaws
      and/or internal regulations, as applicable, to be consistent with this
      Agreement. This Agreement shall control and prevail prior to the time that
      the relevant amendment to the Articles of Incorporation, Bylaws and/or
      internal regulations is effective.

2.3   The duration of the JVC shall be perpetual subject to the provisions of
      this Agreement.

2.4   The purpose of the JVC will be to construct, license and operate the Pilot
      Plant, which shall engage in the activities set forth in Article 4 herein.

                                    ARTICLE 3
                              TRANSACTION DOCUMENTS

As soon as practically possible, but no later than within thirty (30) days after
the execution of this Agreement unless otherwise extended by the mutual
agreement among the Parties, the JVC shall enter certain agreements with VaxGen,
including, but not limited to:

      (a)   license agreement with VaxGen, specifying the terms and conditions
            of the license of certain technology by VaxGen to the JVC,
            substantially similar in form and substance to the draft attached
            hereto as Exhibit 3 ("License Agreement");

      (b)   sub-license agreement with VaxGen, specifying the terms and
            conditions of the sub-license to the JVC by VaxGen of certain
            technology licensed to VaxGen by Genentech, Inc. relating to the
            manufacture of AIDSVAX and Vaccine (as defined therein),
            substantially similar in form and substance to the draft

                                       29
<PAGE>

            attached hereto as Exhibit 4 ("Sub-License Agreement"); and

      (c)   consulting services agreement with VaxGen, specifying the terms and
            conditions of the services to be provided by VaxGen to the JVC, upon
            the JVC's request, for the management of the design, construction,
            licensure and operation of the Pilot Plant and the provision of all
            personnel requirements of the JVC, substantially similar in form and
            substance to the draft attached hereto as Exhibit 5 ("Consulting
            Services Agreement").

                                    ARTICLE 4
                           UTILIZATION OF PILOT PLANT

4.1   The JVC shall utilize the Pilot Plant to engage in the following
      activities (listed in order of priority):

      (a)   support process development and process validation for the licensure
            of AIDSVAX;

      (b)   expedite commercial development and launch of AIDSVAX;

      (c)   facilitate the technology transfer of AIDSVAX or other mammalian
            cell culture manufacturing technology from VaxGen to Celltrion,
            including the provision of on-site training;

      (d)   to the extent that priorities (a) through (c) above have been
            satisfied and the Pilot Plant has idle capacity, further utilization
            of the Pilot Plant shall be discussed by the Parties and shall be
            prioritized between (i) support of product development and licensure
            related activities for a non-AIDSVAX product of VaxGen and (ii)
            support of other non-AIDSVAX Celltrion business activities,
            including, without limitation, process development, technology
            transfer and/or contract manufacturing; and

      (e)   any and all acts, things, business and activities which are related,
            incidental or conducive, directly or indirectly, to the attainment
            of the foregoing objectives.

4.2   Utilization of the Pilot Plant pursuant to Article 4.1 above shall be
      subject to the following rights and obligations of the Parties:

      (a)   use of the Pilot Plant and any other VaxGen facilities to support
            technology transfer and training, as contemplated in Articles 4.1(c)
            and (d) above, shall be coordinated by the Parties, provided,
            however, that VaxGen shall have authority over access to VaxGen and
            JVC facilities, and provided further, that, VaxGen shall not
            unreasonably deny Celltrion access to the JVC facilities in support
            of such activities;

      (b)   VaxGen shall be responsible for all operating costs and expenses,
            including, but not limited to, costs and expenses of validation and
            licensure, of the Pilot Plant associated with the commercial
            production of any VaxGen product;

      (c)   to the extent that the Pilot Plant is utilized for support of any
            non-AIDSVAX VaxGen product and process development activities,
            VaxGen shall have control over the use of the Pilot Plant, shall
            track and report such usage to the boards of directors of the JVC
            and Celltrion, and shall be responsible for all associated operating
            costs and expenses; provided, that, Celltrion may propose a use for
            any idle capacity of the Pilot Plant, which VaxGen shall reasonably
            consider;

      (d)   to the extent that the Pilot Plant is utilized for support of any
            non-AIDSVAX Celltrion business activities, use of VaxGen staff to
            operate the facility and perform such activities shall be discussed
            and agreed by the Parties, Celltrion shall be responsible for all
            associated operating costs and expenses, and any use of VaxGen's
            services shall be the subject of a specific production services
            agreement between VaxGen and the JVC; and

                                       30
<PAGE>

      (e)   to the extent that the full capacity of the Pilot Plant is not being
            utilized or is not required to support the licensure or
            commercialization of any VaxGen product or any non-AIDSVAX Celltrion
            business, the JVC's board of directors shall meet to discuss and
            determine the best use of such capacity.

4.3   Once the Pilot Plant has been utilized in support of any non-AIDSVAX
      Celltrion business activities pursuant to Article 4.2(d) above, such
      activities may only be suspended by the unanimous vote of the Board (as
      defined in Article 9.1 herein).

4.4   Notwithstanding anything to the contrary in this Agreement, VaxGen shall
      at all times have operational control of the Pilot Plant as long as it
      maintains an ownership position in the JVC.

                                    ARTICLE 5
                      CAPITAL CONTRIBUTION; USE OF PROCEEDS

5.1   Celltrion shall purchase seven million (7,000,000) Shares, at the price of
      one dollar (US$1.00) per share for an aggregate capital contribution of
      seven million dollars (US$7,000,000), of which three million (3,000,000)
      Shares shall be purchased within thirty (30) days of the Effective Date,
      and the remainder of the Shares shall be purchased on or before December
      31, 2002 pursuant to a schedule to be agreed by the JVC and Celltrion.
      Celltrion's capital contribution shall be used by the JVC in accordance
      with Article 5.6 below.

5.2   VaxGen shall fund all non-capitalizable costs and expenses of the JVC
      pursuant to Article 5.7 below, as well as any capitalizable assets of the
      JVC in excess of the capital contribution provided by Celltrion pursuant
      to Article 5.1 above; provided, however, that VaxGen shall have the right
      to suspend or terminate its obligation to make such additional capital
      contributions in the event that the outcome of its pending Phase III
      clinical trials of AIDSVAX are unfavorable or in the event that regulatory
      approval of AIDSVAX is otherwise delayed or denied. In such event, VaxGen
      shall have the right to choose ongoing utilization of the Pilot Plant for
      the development of and licensure of one or more VaxGen products, at
      VaxGen's cost and expense, and such efforts may be used to provide the
      basis for licensure of the Pilot Plant and Celltrion technology transfer
      and training in lieu of AIDSVAX. Once VaxGen exercises its right for
      ongoing utilization of the Pilot Plant, VaxGen shall fund all
      non-capitalizable costs and expenses of the JVC pursuant to Article 5.7
      below, as well as any capitalizable assets of the JVC for such utilization
      in excess of the capital contribution provided by Celltrion pursuant to
      Article 5.1 above. In the event that VaxGen does not exercise its right
      for ongoing utilization of the Pilot Plant, Celltrion shall have the right
      to the utilization of the JVC, and shall fund any necessary capital and
      operating expenses required.

5.3   All amounts provided by VaxGen to the JVC pursuant to Article 5.2 above
      prior to commercial production of the first VaxGen product manufactured by
      the JVC shall be deemed capital contributions by VaxGen. At the end of
      each calendar quarter, VaxGen shall document and certify to the JVC the
      aggregate amount of its expenditures deemed capital contributions
      hereunder, and the JVC shall issue to VaxGen one (1) Share for each one
      dollar (US$1.00) so expended.

5.4   Notwithstanding, Article 5.2 above, any additional funds required by the
      JVC, if any, to enable greater utilization of the Pilot Plant in support
      of Celltrion non-AIDSVAX business and/or Celltrion non-AIDSVAX products,
      except technology transfer, shall be discussed and mutually agreed by the
      parties.

5.5   In addition to any legends required under federal and state securities
      laws in the U.S., including, without limitation, the Securities Act of
      1933, as amended, and state blue sky laws, during the term of the
      Agreement, each stock certificate issued hereunder will bear the following
      words:

      "Transfer of the shares of stock represented by this certificate is
      restricted subject to the Joint Venture Agreement dated June 1, 2002, by
      and between VaxGen, Inc. and Celltrion, Inc., a copy of which is on file
      at

                                       31
<PAGE>

      the principal office of the Company in South San Francisco, California,
      U.S."

5.6   The capital contribution provided by Celltrion pursuant to Article 5.1
      above shall be used by the JVC, to the extent practicable, to fund the
      capitalizable assets of the JVC, including, without limitation,
      architecture and engineering costs and construction costs of the Pilot
      Plant and the purchase of equipment to be utilized in the operation of the
      Pilot Plant.

5.7   The capital contributions provided by VaxGen pursuant to Article 5.2 above
      shall be used by the JVC, to the extent practicable, to fund operating
      expenses and other non-capitalizable expenses.

                                    ARTICLE 6
                           REVENUE AND PROFIT SHARING

6.1   Subject to the Pilot Plant utilization provisions set forth in Article 4
      above, VaxGen and Celltrion may use the facility and assets of the JVC
      free of charge, except for out-of-pocket expenses and direct costs, prior
      to the licensure of any VaxGen or Celltrion product or the initiation of
      any contract development and manufacturing activities on behalf of any
      third party.

6.2   In the event that the Pilot Plant is utilized to support any third party,
      fee for service development and manufacturing activities or any third
      party commercial manufacturing activities, the Parties shall share any
      related profits based on each Party's pro rata ownership of Shares.

6.3   The Parties shall enter into separate agreements describing the services
      to be provided in support of any third party arrangements under Article
      6.2 above.

                                    ARTICLE 7
              TRANSFER OF SHARES; PURCHASE OPTION; RIGHT OF REFUSAL

7.1   Except as permitted by this Article 7 or with the prior written consent of
      the other Party, no Party shall:

      (a)   transfer any Shares;

      (b)   grant, declare, create or dispose of any right or interest in any
            Shares; or

      (c)   create or permit to exist any pledge, lien, fixed or floating charge
            or other encumbrance over any Shares.

7.2   VaxGen shall have an exclusive option to purchase all of the Shares held
      by Celltrion, exercisable upon notice at any time during the five (5)-year
      period commencing on February 25, 2003 and ending on February 24, 2008;
      provided, that, VaxGen shall be required to purchase such Shares upon
      receiving U.S. Food and Drug Administration approval to market any VaxGen
      product manufactured at the Pilot Plant during such five (5)-year period.
      In such event, VaxGen shall be obligated to continue to facilitate the
      transfer of technology to Celltrion and the training of Celltrion
      employees through the utilization of the Pilot Plant.

7.3   Any purchase of Shares made by VaxGen pursuant to Article 7.2 above shall
      be at the price of one dollar (US$1.00) per share, plus simple interest at
      the U.S. prime rate on each Share accruing from the date the selling Party
      acquired the Shares until the exercise of the option by purchasing Party
      hereunder.

7.4   Either Party may sell or otherwise transfer its Shares to the other Party
      on terms mutually agreeable to the 7.5 Parties, subject to VaxGen's
      purchase option set forth in Article 7.2 above, at any time during the
      five (5)-year period commencing on February 25, 2003 and ending on
      February 24, 2008.

                                       32
<PAGE>

7.5   Each Party shall have the right to sell its Shares to a third party at
      then-current fair market value of the Shares at any time after February
      24, 2008 subject to the following right of refusal. In the event that
      either Party proposes to transfer its Shares to a proposed third party
      purchaser ("Third Party Purchaser"), the other Party shall have a right of
      refusal with respect to such Party's Shares. For this purpose, no transfer
      of the Shares shall be made unless the following provisions are complied
      with in respect of such transfer:

      (a)   the selling Party shall first give the other Party (the "Offeree
            Party") a notice ("Transfer Notice") of any proposed transfer
            together with details of the Third Party Purchaser, the purchase
            price and other material terms which the selling Party and the Third
            Party Purchaser have agreed.

      (b)   the Offeree Party shall have thirty (30) days from the date of its
            receipt of the Transfer Notice to notify the selling Party that it
            intends to purchase all or any part of the Shares proposed to be
            sold by the selling Party on the terms set forth in the Transfer
            Notice and shall enter into a binding agreement to consummate such
            purchase; and

      (c)   in the event that all of the Shares proposed to be sold by the
            selling Party is not purchased by the Offeree Party in accordance
            with (a) and (b) above within the thirty (30) period set forth above
            ("Option Period"), the selling Party may sell any such remaining
            Shares to the Third Party Purchaser on terms no less favorable to
            the selling Party than those set forth in the Transfer Notice within
            sixty (60) days of the expiration of the Option Period. If any such
            remaining Shares are not sold by the selling Party within sixty (60)
            days after the expiration of the Option Period, then the right of
            the selling Party to sell such Shares shall expire and the
            obligations of this Article 7.5 shall be reinstated.

7.6   Any amounts payable by a Party to the other Party for the purchase of any
      Shares under this Article 7 shall be due within sixty (60) days of the
      exercise of the option or right of refusal, as the case may be.

7.7   VaxGen's purchase option right set forth in Article 7.2 above shall be
      subject to forfeiture pursuant to Article 11.3 herein.

7.8   Since damages arising from breach of the obligations under this Article 7
      may be difficult to compute with precision, the Parties agree that any
      Party found to have sold or transferred any Shares in violation of the
      terms of this Article 7 shall pay to the non-breaching Party twice the
      value of the Shares transferred in violation of this Article 7 (as
      appraised by a licensed appraisal company) or twice the consideration
      received for said Shares, whichever shall be greater. The Parties agree
      that such computation of damages is fair and reasonable. Application of
      this provision shall not prevent either Party from enforcing its rights or
      augmenting its protection by such other remedies as may be available,
      including without limitation, injunctive relief.

                                    ARTICLE 8
                           CONTRIBUTION OF TECHNOLOGY

8.1   VaxGen and the JVC shall enter into the License Agreement and the
      Sub-License Agreement pursuant Article 3, granting the JVC the right to
      use the Technology and under the terms of which, VaxGen shall provide to
      the JVC the relevant documents, materials, designs, data and other
      information necessary for the use of the Technology by the JVC and shall
      use its best efforts to arrange for the operation of the facility as
      contemplated by the Parties.

8.2   VaxGen shall license, and shall make its best efforts to cause Genentech
      to license, to the JVC any new and developed technologies pertaining to
      the development and/or manufacture of AIDSVAX and other products, at no
      additional cost to the JVC.

                                       33
<PAGE>

                                    ARTICLE 9
                         MANAGEMENT AND FINANCING OF JVC

The Parties undertake to secure that the administration of the JVC is effected
in accordance with the provisions of this Article 9 in addition to the relevant
provisions of the Articles of Incorporation and Bylaws of the JVC.

9.1   Board of Directors

      (a)   As long as VaxGen and Celltrion maintain an ownership position in
            the JVC, the JVC shall be administered and managed by the Board of
            Directors ("Board") which shall consist of three (3) directors,
            consisting of the Senior Vice President of Manufacturing Operations
            of VaxGen, the Senior Vice President of Manufacturing Operations of
            Celltrion and the VaxGen officer serving on the board of directors
            of Celltrion ("Directors"). Each Party shall secure that the
            Directors are elected, removed or replaced, as applicable, as may be
            required from time to time to reflect the composition of the Board
            as set forth above. The Senior Vice President of Manufacturing
            Operations of VaxGen shall serve as the Chairman of the Board and
            the President of the JVC.

      (b)   Meetings of the Board shall be called and notice shall be given as
            set forth in the Bylaws of the JVC. The Chairman of the Board shall
            serve as the presiding officer of all meetings of the Board of
            Directors.

      (c)   The Board shall hold four regular meetings annually, once a quarter
            and shall hold additional meetings as necessary.

      (d)   The quorum for transacting business at any regular meeting of the
            Board shall be a majority of Directors present in person or by
            teleconference or videoconference, provided that quorum for any
            special meeting of the Board shall require the Director nominated by
            Celltrion.

      (e)   Except as otherwise provided in this Agreement or unless otherwise
            provided by applicable laws, the resolution of the Board at any
            meeting of the Board shall be adopted by an affirmative vote of a
            majority of the Directors represented at such meeting; provided,
            however, that the following matters shall be adopted by the Board
            only with the unanimous votes of all the Directors:

            (i)    Decision to make an investment in excess of US $1,000,000;

            (ii)   Consenting to a director's transaction with the JVC;

            (iii)  Authorizing the issuance of debentures;

            (iv)   Acquisition or disposal of the JVC's assets in excess of US
                   $1,000,000, which amount shall be automatically increased as
                   of January the 1st of each year in proportion to any increase
                   in the Consumer Price Index as published by the US equivalent
                   for the previous calendar year;

            (v)    Any capital expenditure or commitment thereof involving an
                   amount in excess of US $1,000,000, which amount shall be
                   automatically increased as of January the 1st of each year in
                   proportion to any increase in the Consumer Price Index as
                   published by the US equivalent for the previous calendar
                   year;

            (vi)   Lending or borrowing money in excess of 5 percent of the
                   JVC's annual turnover;

            (vii)  Adoption of a new business, abolishment of any of its
                   businesses, merger or acquisition of all or a substantial
                   portion of shares, assets or business of another company; and

            (viii) Approval of the quarterly expenditure reports submitted by
                   VaxGen pursuant to Article 5.3 herein.

                                       34
<PAGE>

9.2   Officers.

      As long as VaxGen and Celltrion maintain an ownership position in the JVC,
      the Board shall have the right to appoint and approve the officers of the
      JVC, who shall initially be, in addition to the President as provided in
      Article 9.1(a), VaxGen's Vice President of Finance, who shall serve as the
      JVC's Chief Financial Officer, and VaxGen's corporate counsel, who shall
      serve as the JVC's Secretary. The officers of the JVC shall have the
      rights and responsibilities set forth in the Bylaws of the JVC and shall
      be in charge of the administration of all the daily business affairs of
      the JVC as set forth therein and in accordance with the polices
      established by the Board.

9.3   Meetings of Shareholders

      Meetings of the JVC's shareholders shall be called and notice shall be
      given as set forth in the Bylaws of the JVC. The Chairman of the Board
      shall serve as the presiding officer of all such shareholder meetings.

9.4   Management Planning and Accounting Systems

      (a)   VaxGen shall establish all management planning and financial and
            accounting controls and systems on behalf of the JVC, consistent
            with generally accepted accounting principles of the U.S. and as in
            use by VaxGen, pursuant to the Consulting Services Agreement.

      (b)   The Parties agree to cause the books and records of the JVC to be
            audited at the end of each accounting year during the term of this
            Agreement by an accounting firm which shall be appointed by the
            Board from among reputable accounting firms with international
            affiliates ("Independent Auditor").

      (c)   The JVC shall provide the Parties with annual financial statements,
            prepared in accordance with generally accepted accounting principles
            of the U.S.A. and audited by the Independent Auditor. Once approved
            by the Board, the audited financial statements shall be final and
            binding on the Parties as to the revenue, costs, fees, expenses,
            losses and profits of the JVC, in the absence of manifest error or
            fraud.

      (c)   The Parties agree that the accounting year of the JVC shall be
            according to the calendar year; provided, however, that the first
            accounting year shall begin on the date on which the JVC is
            incorporated and shall end on the last day of December immediately
            following.

      (d)   Each Party shall be entitled, at its own expense, to examine, or to
            appoint a firm of accountants to examine the books, records, and
            accounts to be kept by the JVC and to be supplied with all
            information in such form as the Board determines to keep it properly
            informed about the business and affairs of the JVC and generally to
            protect its interests as a shareholder.

      (e)   The JVC shall provide each Party with an unaudited quarterly report
            of the JVC.

                                   ARTICLE 10
                            DURATION AND TERMINATION

10.1  This Agreement shall continue in effect until terminated pursuant to the
      provisions of this Agreement or by mutual agreement of the Parties hereto.

10.2  This Agreement shall be terminable forthwith by a Party upon sending
      written notice upon the occurrence of one or more of the following events:

      (a)   if the other Party shall commit a material breach of any of its
            obligations under this Agreement, which, if remediable, is not
            remedied within sixty (60) days from the giving of written notice
            requiring said breach

                                       35
<PAGE>

            to be remedied;

      (b)   if any of the Transaction Documents is not duly executed within the
            time period set forth in Article 3 herein;

      (c)   if the other Party shall be or becomes incapable for a period of six
            (6) months of performing any of its said obligations under this
            Agreement because of force majeure as defined in Article 16; or

      (d)   if the other Party ("Embarrassed Party") or its creditors or any
            other eligible party shall file for said Embarrassed Party's
            liquidation, bankruptcy, reorganization, compulsory composition, or
            dissolution, or if the Embarrassed Party is unable to pay any debts
            as they become due, has explicitly or implicitly suspended payment
            of any debts as they became due (except debts contested in good
            faith), or if the creditors of the Embarrassed Party have taken over
            its management, or if the relevant financial institutions have
            suspended the Embarrassed Party's clearing house privileges, or if
            any material or significant part of the Embarrassed Party's
            undertaking, property, or assets shall be intervened in,
            expropriated, or confiscated by action of any government.

                                   ARTICLE 11
                           CONSEQUENCES OF TERMINATION

11.1  Termination of this Agreement shall be without prejudice to the accrued
      rights and liabilities of the Parties at the date of termination, unless
      waived in writing by mutual agreement of the Parties.

11.2  Upon termination, each Party shall take all steps necessary to ensure that
      the name of the JVC is immediately changed so that it no longer contains
      any reference to any company/corporation name, trade name, trademark or
      service mark then owned by the other Party or any of its Affiliates (other
      than the JVC), nor the Korean equivalent of any such name or mark.

11.3  In the event this Agreement is terminated by a Party ("Terminating Party")
      in consequence of breach of this Agreement by the other Party ("Breaching
      Party"), then

      (a)   the Breaching Party shall discontinue use, cancel and return the
            Terminating Party's confidential and/or proprietary information
            provided under this Agreement and the Transaction Documents,
            together with all reproductions and copies thereof and other written
            documents related thereto, retaining no reproductions or copies of
            or other written documents relating to said confidential and/or
            proprietary information; and

      (b)   the Terminating Party shall enjoy (without prejudice to any right it
            may have to receive damages in consequence of breach of this
            Agreement) the right to secure, at the JVC's expense, an appraisal
            of the net worth of the JVC's shares from an internationally
            recognized firm of accountants on a going-concern basis, and the
            Terminating Party shall have either of the following rights, at its
            option, and the Breaching Party shall have the corresponding
            obligations:

            (i)   to require the Breaching Party (and its Affiliates, if
                  applicable) to sell all of its shares of the JVC to the
                  Terminating Party at the value as thus appraised. In the event
                  that there is more than one (1) Terminating Party, then the
                  Terminating Parties shall purchase such shares in proportion
                  to their then current shareholding ratio; or

            (ii)  to require the Breaching Party to purchase all or any portion
                  of the shares of the Terminating Party at their value as thus
                  appraised.

      (c)   The Breaching Party shall forfeit its purchase option rights set
            forth in Articles 7.2 and 7.3, as applicable, and a contract for the
            sale and purchase of Shares shall be deemed to have been entered
            into upon the

                                       36
<PAGE>

            dispatch of written notice to the Breaching Party of the election of
            the Terminating Party to exercise the option given in Article
            11.3(b) above, and payment for the Shares shall be due within sixty
            (60) days of the completion of the appraisal of the shares.

11.4  If this Agreement is terminated for any reason other than breach of one of
      the Parties, then:

      (a)   The Terminating Party shall have the right, by written notice, to
            require the other Party to discontinue use, cancel, and return (and
            to cause the JVC to discontinue use, cancel, and return) the
            confidential and/or proprietary information, supplied by the
            Terminating Party, together with all reproductions and copies
            thereof and other written documents related thereto, retaining no
            reproductions or copies of or other written documents relating to
            said confidential and/or proprietary information.

      (b)   Upon written request from the Terminating Party, the Parties shall
            meet and negotiate in good faith in order to reach a mutually
            acceptable agreement concerning the ultimate disposition of their
            ownership rights in the JVC.

11.5  The rights of the Terminating Party provided in this Article 11 shall be
      cumulative to, and not exclusive of, other rights to which the Terminating
      Party is entitled at law and/or under this Agreement.

                                   ARTICLE 12
                      DISPUTE RESOLUTION AND GOVERNING LAW

12.1  Any controversy or claim arising out of or in relation to this Agreement,
      or breach hereof, shall be finally settled by arbitration in San
      Francisco, California, U.S.A.

      (a)   The arbitration shall be conducted before three arbitrators in
            accordance with the Rules of Arbitration and Conciliation of the
            International Chamber of Commerce then in effect.

      (b)   Each Party shall appoint one (1) arbitrator within thirty (30) days
            after receipt of a demand for arbitration. The arbitrators shall be
            freely selected, and the Parties shall not be limited to any
            prescribed list. The two arbitrators thus appointed shall, within
            thirty (30) days after both shall have been appointed, appoint a
            third arbitrator, who shall not be a national of Korea or the U.S.A.
            and who shall preside over the arbitration proceedings.

      (c)   If any appointment required herein shall not be made within the
            prescribed time, then such appointment may be made by the President
            of the International Chamber of Commerce in Paris.

      (d)   The proceedings shall be conducted in English, and all arbitrators
            shall be conversant in and have a thorough command of the English
            language.

      (e)   The award of the arbitrators shall be final and conclusive. The
            Parties shall be bound by the award rendered by the arbitrators and
            judgment thereon may be entered in any court of competent
            jurisdiction.

      (f)   Notwithstanding any other provision of this Agreement, each Party
            shall be entitled to seek preliminary injunctive relief from any
            court of competent jurisdiction pending the final decision or award
            of the arbitrators.

12.2  The validity, performance, construction and effect of this Agreement shall
      be governed by the laws of the

                                       37
<PAGE>

      State of California, U.S.A., without regard to conflict-of-law principles.

                                   ARTICLE 13
                                 CONFIDENTIALITY

13.1  Except as required by law, each Party agrees to maintain the
      confidentiality of all information and data relating to the other Party's
      business, including, without limitation, economic, financial and/or
      technical information, disclosed, directly or indirectly, or disclosed by
      visual inspection, and shall not disclose such information and data to a
      third party without the prior written consent of the other Party;
      provided, however, that the preceding obligation shall not apply to
      information which:

      (a)   was in the public domain at the time of disclosure; or

      (b)   enters the public domain after the time of disclosure through no act
            or omission of the receiving Party; or

      (c)   was in the receiving Party's possession at the time of disclosure as
            evidenced by such Party's prior written documents; or

      (d)   is required to be disclosed by law or order of the court, in which
            case, the receiving Party shall notify the other Party of such
            statutory requirement or court order as soon as practicable prior to
            the disclosure; or

      (e)   has been acquired from a third party which had not previously
            acquired it, directly or indirectly, from the disclosing Party,
            provided, that, such third party is not and was not bound by a duty
            of confidentiality when making such disclosure to the receiving
            Party.

13.2  Each Party shall procure that its employees, advisers, and agents are
      bound by the confidentiality obligations on terms set out above.

                                   ARTICLE 14
                          NON-WAIVER AND OTHER REMEDIES

14.1  Failure of any Party to insist upon the strict and punctual performance of
      any provision hereof shall not constitute waiver of nor estoppel against
      asserting the right to require such performance, nor shall a waiver or
      estoppel in one instance constitute a waiver or estoppel with respect to a
      later breach whether of similar nature or otherwise.

14.2  Nothing in this Agreement shall prevent a Party from enforcing its rights
      by such remedies as may be available in lieu of or in addition to
      termination.

                                   ARTICLE 15
                               UNENFORCEABLE TERMS

In the event that any provision of this Agreement becomes or is declared by a
court or other tribunal of competent jurisdiction to be illegal, invalid
unenforceable or void, such provision(s) shall be limited or eliminated to the
maximum extent necessary so that this Agreement shall otherwise remain in full
force and effect without said provision.

                                       38
<PAGE>

                                   ARTICLE 16
                                  FORCE MAJEURE

16.1  The failure or delay of either Party to perform any obligation under this
      Agreement solely by reason of acts of God, acts of government (except as
      otherwise enumerated herein), riots, wars, embargoes, strikes, lockouts,
      accidents in transportation, port congestion or other causes beyond its
      control ("force majeure") shall not be deemed to be a breach of this
      Agreement; provided, however, that the Party so prevented from complying
      herewith shall not have procured such force majeure, shall have used
      reasonable diligence to avoid such force majeure and ameliorate its
      effects, and shall continue to take all actions within its power to comply
      as fully as reasonably possible with the terms of this Agreement.

16.2  Except where the nature of the event shall prevent it from doing so, the
      Party suffering such force majeure shall notify the other Party in writing
      within fourteen (14) days after the occurrence of such force majeure and
      shall in every instance, to the extent reasonable and lawful under the
      circumstances, use its best efforts to remove or remedy such cause with
      all reasonable dispatch.

                                   ARTICLE 17
                              DISCLAIMER OF AGENCY

This Agreement shall not be deemed to constitute either Party as the agent of
the other Party hereto, nor shall it constitute the JVC an agent of either
Party.

                                   ARTICLE 18
                                  ASSIGNABILITY

Except as otherwise provided herein, this Agreement and each and every covenant,
term and condition hereof shall be binding upon and inure to the benefit of the
Parties and their respective heirs, devisees and successors, but neither this
Agreement nor any rights hereunder shall be assignable, directly or indirectly,
by any Party hereto without the prior written consent of the other Party, which
consent shall not be unreasonably withheld; provided, however, that this
Agreement shall be automatically assigned by any Party as a result of or
pursuant to any merger or consolidation.

                                   ARTICLE 19
                                     NOTICE

19.1  All written notices, requests, demands, and other communications under
      this Agreement or in connection herewith shall be given by letter
      (delivered by hand, by air courier, or by registered air mail) or by
      cable, telex, or facsimile transmission confirmed by such a letter, which
      shall be addressed to the respective Parties as follows:

         If to VaxGen:     VaxGen, Inc.
                           1000 Marina Boulevard
                           Brisbane, California 94005-1841
                           U.S.A.
                           Attention: Lance Gordon, CEO
                           Fax No.: (650) 624-1001

                                       39
<PAGE>

         If to Celltrion:  Celltrion, Inc.
                           Hanmi Bank Building,13th Floor
                           1127, Guwol-dong, Namdong-gu,
                           Incheon, 405-711, Korea
                           Attention: Jung-jin Seo, CEO
                           Fax No.: (32) 439-1197

19.2  Any notice so given shall be deemed to be received forty-eight (48) hours
      after dispatch in case of cable, telex or facsimile transmission, or in
      case of letter (i) upon receipt or fourteen (14) days after posting,
      whichever is earlier, for airmail or air courier sent between Korea and
      the U.S.A. or any other country, or (ii) upon receipt, or seven (7) days
      after posting, whichever is earlier, for mail sent within Korea, the
      U.S.A. or any other country.

19.3  To prove service of notice, it shall be sufficient to prove that a telex,
      cable, or facsimile transmission containing the notice was properly
      addressed and properly dispatched or to show that a letter was properly
      addressed and posted, provided, that a return receipt or registered mail
      receipt has been returned to the sender indicating delivery of said
      letter.

19.4  Either Party may change its address at any time by written notice to the
      other Party given pursuant to the terms of this Article 19.

                                   ARTICLE 20
                                    LANGUAGE

This Agreement is written in the English language and executed in two (2)
counterparts, each of which shall be deemed an original and both of which
together shall constitute one and the same instrument. The English language text
of the Agreement shall prevail over any translation thereof.

                                   ARTICLE 21
                                ENTIRE AGREEMENT

21.1  This Agreement supersedes all previous and contemporaneous
      representations, understandings, or agreements, oral or written, between
      the Parties with respect to the subject matter hereof, and the agreements
      and documents contemplated hereby contain the entire understanding of the
      Parties as to the terms and conditions of their relationship.

21.2  Terms included herein may not be contradicted by evidence of any prior
      oral or written agreement or of a contemporaneous oral or written
      agreement.

21.3  No changes, alterations, or modifications hereto shall be effective unless
      they are in writing and are signed by an authorized representative of each
      Party.

21.4  Headings of Articles in this Agreement are for convenience only and do not
      substantively affect the terms of this Agreement.

                            [Signature Page Follows]

                                       40
<PAGE>

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their respective representative thereunto duly authorized as of the Effective
Date.

VAXGEN, INC.                               CELLTRION, INC.

By:                                        By:
   ---------------------------                --------------------------
   Lance Gordon,                              Jung-jin Seo,
   CEO                                        CEO

                                       41
<PAGE>

                                LIST OF EXHIBITS

1. Articles of Incorporation

2. Bylaws

3. Technology License Agreement

4. Sub-License Agreement

5. Consulting Services Agreement

                                       42

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