Sample Business Contracts

Promissory Note - VaxGen Inc. and Robert C. Nowinski

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                                 PROMISSORY NOTE

$892,703                                                       December 20, 2000
                                                             Seattle, Washington

For value received,  the undersigned  Borrower hereby promises to pay to VaxGen,
Inc., a Delaware  corporation,  (the "Company") the principal sum of Six Hundred
Fifty One Thousand Two Hundred and Fifty Five Dollars ($651,255),  together with
interest on that amount,  upon the covenants,  terms and conditions  provided in
this  promissory  note (the "Note").  Capitalized  terms not  otherwise  defined
herein shall have the same meanings set forth in the Loan Agreement.

1. Interest.  The obligations under this Note shall bear interest at the rate of
six percent (6%) per annum, compounded  semi-annually.  Provided,  however, that
following and during the continuance of any default,  the obligations shall bear
an  interest  at  a  rate  of  twelve   percent  (12%)  per  annum,   compounded

2. Due Date.  The  entire  principal  balance of this  Note,  together  with all
accrued and unpaid  interest and other  amounts  which may become due  hereunder
shall be due and  payable on June 19,  2001  ("Due  Date"),  provided,  however,
Company  has the  option to extend  the Due Date for a period of six (6)  months
(the "Option Period").  Interest on the Note during the Option Period will be at
same interest as stated herein.

3. Place of  Payment.  Payment  shall be made to Company at 1000  Marina  Blvd.,
Suite 200,  Brisbane,  CA 94005,  or such other  place as Company may specify in

4. Prepayment.  Borrower may prepay all or any amount owing on this Note without
penalty or  discount  at any time.  All  prepayments  shall be applied  first to
accrual and unpaid  interest  and then to the  principal  balance  owing on this

5. Default.

     5.1 Default.  The term "Default" means any of the following events,  unless
Company has agreed in writing to a deferral or waiver of the obligation:

          c.   Borrower,  at any time, fails to pay when due any sum due on this
               Note as herein agreed;

          d.   Borrower  breaches or fails to perform any other obligation under
               this Note, the Loan Agreement, or Control Agreement.


6. Remedy. If Borrower Defaults, Company may accelerate all amounts owing on the
Note and the Note shall become immediately due and payable.

7.  Control  Agreement.  This Note is entitled to the  benefits of the  attached
Control Agreement.

8. Attorneys' Fees. Borrower promises to pay all costs,  expenses and attorneys'
fees  (including  costs  of  discovery  and all fees and  expenses  of  experts)
incurred  by the Company  hereof if this Note is  referred  to an  attorney  for
collection,  whether suit is commenced thereon or not, in any proceeding for the
collection of the debt,  or in any  litigation  or  controversy  arising from or
connected with this Note in which the Company hereof  prevails.  If judgement is
obtained  thereon,  such  attorneys'  fees,  costs and expenses shall be in such
amount as the court, arbitrator, or mediator shall deem reasonable.

9. Waiver.  Borrower  hereby  waives  presentment,  protest,  demand of payment,
dishonor,  notice of dishonor,  of nonpayment,  of acceleration  and any and all
lack of diligence or delay in collection.

                                                       Robert C. Nowinski