Sample Business Contracts


Promissory Note - Maxygen Inc., Joseph Affholter and Roxanne Affholter

Promissory Notes


$150,000.00                                   Redwood City, CA
April 22, 1999

FOR VALUE RECEIVED, the undersigned Joseph Affholter ("EMPLOYEE") and Roxanne
Affholter, husband and wife, (BORROWER) hereby promise to pay to Maxygen, Inc.,
("LENDER") at 515 Galveston Drive, Redwood City, CA  94063 (or at such other
address as the holder of this NOTE may designate by notice to BORROWER), or
order, in lawful money of the United States of America, the sum of One Hundred
Fifty Thousand Dollars ($150,000.00), as set forth below.

1.   Definitions.

     a.   "CODE" shall mean the Internal Revenue Code of 1986, as amended.

     b.   "APPLICABLE FEDERAL RATE" shall mean the monthly long-term applicable
Federal rate (as defined in the CODE) as the date of the occurrence of the
predecessors of this restated NOTE.

     c.   "PRINCIPAL RESIDENCE" shall mean the personal residence purchased and
used by BORROWER as a residence within the meaning of Section 217 of the CODE
and the Regulation thereunder, which PRINCIPAL RESIDENCE is described in the
Deed of Trust attached hereto as Exhibit A.

     d.   "DUE DATE" shall mean the earliest of any of the following:

          (i)   the sale, conveyance, alienation, or other transfer by BORROWER
          of the PRINCIPAL RESIDENCE, whether voluntary or involuntary, by act
          of law or otherwise, except to a living trust of which BORROWER is the
          trustee;

          (ii)  the refinancing of any loan secured by a deed of trust on the
          PRINCIPAL RESIDENCE senior to the Deed of Trust securing BORROWER's
          obligation pursuant to this NOTE;

          (iii) one year after the TERMINATION OF EMPLOYMENT of BORROWER;

          (iv)  any change that removes BORROWER as a holder of record of title
          to the PRINCIPAL RESIDENCE, except as otherwise provided herein;

          (v)   April 1, 2003, with respect to $72,500 of the principal, and
          March 30, 2004 with respect to $77,500 of the principal, provided that
          if BORROWER is unable to repay this NOTE at such times, LENDER in its
          discretion shall consider extending the DUE DATE; or

          (vi)  such earlier date as may be required by LENDER upon acceleration
          of the DUE DATE in accordance with Section 5 of this NOTE.
<PAGE>
Affholter Promissory Note
April 22, 1999


     e.   "TERMINATION OF EMPLOYMENT" shall mean the voluntary or involuntary
termination of BORROWER's employment relationship with LENDER for any reason or
no reason, with or without cause, including the death of BORROWER.

2.   Payments.

     a.   Interest on the unpaid principal balance of this NOTE shall accrue at
5.70% with respect to $72,500 of the principal, which is the APPLICABLE FEDERAL
RATE thereon, compounded annually, commencing May 1, 1998, and at 4.83% with
respect to $77,500 of the principal, which is the APPLICABLE FEDERAL RATE
thereon, compounded annually, commencing March 31, 1999.

     b.   Subject to Section 11 of this NOTE, no payment of principal or
interest shall be due and payable until the DUE DATE, at which time all accrued
interest on the principal balance of this NOTE shall be due and payable.

     c.   All payments shall be applied first against accrued interest, and
secondly against principal.

3.   Prepayment.

     BORROWER may prepay all or any portion of this NOTE and the accrued
interest without penalty or acceleration of the DUE DATE of this NOTE.

4.   Security/Insurance.

     This NOTE shall be secured by a Deed of Trust on the BORROWER's PRINCIPAL
RESIDENCE which is identified in said Deed of Trust and which is attached hereto
as EXHIBIT A. BORROWER shall maintain reasonable and customary insurance on the
PRINCIPAL RESIDENCE, in an amount sufficient to cover any senior debt and all
amounts payable on this NOTE. BORROWER shall provide proof of insurance to
LENDER upon request and shall name LENDER as an additional insured on the
foregoing insurance.

5.   Acceleration of DUE DATE.

The entire unpaid principal balance of this NOTE and accrued interest thereon
shall, at the election of the LENDER, become immediately due and payable upon
the occurrence of any of the following, irrespective of the DUE DATE as
otherwise defined in this NOTE:

     a.   Any failure on the part of the BORROWER to make any payment when the
same is due;

     b.   Any failure on the part of the BORROWER (i) to perform or observe any
of its obligations under the deed of trust securing this NOTE, and (ii) to
commence and proceed diligently to cure such default within fifteen days after
written notice thereof is given by LENDER, and in any event to cure such default
within thirty days after the date on which such notice is given;


Maxygen, Inc.                                                 Confidential

<PAGE>


Affholter Promissory Note
April 22, 1999

     c.   The destruction or condemnation of the real property subject to the
Deed of Trust or any material portion thereof;

     d.   The real property subject to the Deed of Trust is no longer BORROWER's
PRINCIPAL RESIDENCE; or

     e.   If there is entered against BORROWER an order for relief under Title
11 of the United States Code (Bankruptcy).

6.   Collection Costs Borne by BORROWER.

In the event of any failure on the part of BORROWER to make any payment when the
same is due, LENDER shall be entitled to recover from BORROWER all costs of
effecting collection of the same, including reasonable attorneys' fees. Unpaid
principal and interest subject to collection shall bear interest at the maximum
rate allowed under California law for nonexempt lenders.

7.   Certification of BORROWER

BORROWER warrants that BORROWER shall immediately notify LENDER if any of the
following occurs:

     (i)   the sale, conveyance, alienation, or other transfer by BORROWER of
the PRINCIPAL RESIDENCE, whether voluntary or involuntary, by act of law or
otherwise, except to a living trust of which BORROWER is the trustee; or

     (ii)  the refinancing of any loan secured by a deed of trust on the
PRINCIPAL RESIDENCE senior to the Deed of Trust securing BORROWER's obligation
pursuant to this NOTE;

     (iii) any other change that removes BORROWER as a holder of record of
title to the PRINCIPAL, RESIDENCE; or

     (iv)  Any default under any deed of trust that is senior to the Deed of
Trust securing BORROWER's obligation to LENDER hereunder.

BORROWER also warrants that on the annual anniversary date of this NOTE and on
each subsequent anniversary date, BORROWER shall also deliver to LENDER a
written confirmation that none of the events listed immediately above has
occurred. BORROWER further certifies that BORROWER reasonably expects to itemize
deductions for each year during which this loan is outstanding.

8.   Termination.

The obligations of BORROWER hereunder shall terminate upon the earliest of (i)
foreclosure of the lien of the Deed of Trust or mortgage securing this NOTE, or
00 cancellation of this NOTE and reconveyance of the Deed of Trust securing
same.

9.   Governing Law.

Maxygen, Inc.                                                 Confidential

<PAGE>
Affholter Promissory Note
April 22, 1999

The NOTE shall be enforced in accordance with the laws of the State of
California and shall be construed in accordance therewith notwithstanding
California's, or any other jurisdiction's, choice of law principles.

10.  Successors.

This NOTE shall be binding upon and shall inure to the benefit of the parties
hereto and their respective representatives, heirs, administrators, successors
and assigns.

11.  Forgiveness of Accrued Interest.

So long as EMPLOYEE shall remain an employee in good standing of LENDER, as
determined in LENDER's sole discretion, interest on the unpaid balance of this
NOTE shall be forgiven on an annual basis. BORROWER will be responsible for
annual taxes on the forgiven interest.

Maxygen, Inc.                                                 Confidential

<PAGE>

Affholter Promissory Note
April 22, 1999

Effective as of the date set forth above.



/s/ Joseph A. Affholter
------------------------
Joseph Affholter

Date       4/26/99
     -------------------



/s/ Roxanne B. Affholter
------------------------
Roxanne Affholter

Date       4/26/99
     -------------------

Maxygen, Inc.                                                 Confidential


ClubJuris.Com