Exhibit 10.1

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER THE SECURITIES LAWS OF
CERTAIN STATES.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
1933 ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. 
THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.

CONVERTIBLE
PROMISSORY NOTE

Vacaville, California

$600,000.00

March 3, 2005

          1.          Obligation.  The undersigned, Large Scale Biology
Corporation, a Delaware corporation (“Borrower”) hereby promises to pay to the
order of Kevin J. Ryan, (“Lender” or “Holder”) on July 1, 2005 (“Maturity
Date”), at Lender’s principal place of business at 3333 Vaca Valley Parkway,
Vacaville, CA 95688, or at such other place as Holder may direct, the principal
sum of Six Hundred Thousand Dollars ($600,000.00) together with all simple
interest accrued on unpaid principal, at a rate equal to eight percent (8%) per
annum, computed on the basis of a year of 365 days from the date of this Note
until the unpaid principal and all interest accrued thereon are paid or
converted, as provided in Section 5 hereof.  As used herein, the term “Holder”
shall initially mean Lender, and shall subsequently mean each person or entity
to whom this Note is duly assigned.

          2.          Prepayment.  Prepayment of unpaid principal and/or
interest due under this Note may be made at any time without penalty.  Unless
otherwise agreed in writing by Holder, all payments will be made in lawful
tender of the United States and will be applied (a) first, to the payment of
accrued interest, and (b) second, (to the extent that the amount of such
prepayment exceeds the amount of all such accrued interest), to the payment of
principal. 

          3.          Default; Acceleration of Obligation.  Borrower will be
deemed to be in default under this Note and the outstanding unpaid principal
balance of this Note, together with all interest accrued thereon, will
immediately become due and payable in full, without the need for any further
action on the part of Holder, upon the occurrence of any of the following events
(each an “Event of Default”):  (a) upon Borrower’s failure to make any payment
when due under this Note;  (b) upon the filing by or against Borrower of any
voluntary or involuntary petition in bankruptcy or any petition for relief under
the federal bankruptcy code or any other state or federal law for the relief of
debtors; provided, however, with respect to an involuntary petition in
bankruptcy, such petition has not been dismissed within sixty (60) days after
the filing of such petition; or (c) upon the execution by Borrower of an
assignment for the benefit of creditors or the appointment of a receiver,
custodian, trustee or similar party to take possession of Borrower’s assets or
property.

          4.          Remedies On Default; Acceleration.  Upon any Event of
Default, Holder will have, in addition to its rights and remedies under this
Note, full recourse against any real, personal, tangible or intangible assets of
Borrower, and may pursue any legal or equitable remedies that are available to
Holder, and may declare the entire unpaid principal amount of this Note and all
unpaid accrued interest under this Note to be immediately due and payable in
full.

          5.          Conversion. 

                       5.1          Option to Convert.  At any time after thirty
calendar (30) days from the date of this Note and on or before the Maturity
Date, Holder may, at Holder’s sole option and discretion, convert the entire
outstanding unpaid principal balance of the Note and all accrued and unpaid
interest thereon (or such lesser outstanding amount as Holder in Holder’s sole
discretion may choose to convert), into that number of fully paid and
nonassessable shares of Borrower’s Common Stock that is equal to the dollar
amount of the indebtedness being converted into stock by Holder, divided by the
greater of: (i) the closing price of the Borrower’s Common Stock on the NASDAQ
stock market on the date of this Note, or (ii) ninety percent (90%) of the
average of the closing prices of Borrower’s Common Stock on the NASDAQ stock
market on the twenty-two (22) trading days ending the day before the conversion
of this Note (the “Conversion Price”); provided, however, that the Conversion
Price will automatically, equitably and proportionally be adjusted to reflect
any subdivision (stock split), combination (reverse stock split), stock dividend
or other recapitalization affecting the Borrower’s Common Stock.

                       5.2          Conversion Mechanics.  Holder will exercise
this Note by delivering to the Borrower a written notice of conversion: (a)
specifying the amount of principal and interest to be converted and the number
of shares of Borrower’s Common Stock to be acquired upon such conversion; and
(b) affirming the representations and warranties set forth in Section 9 below. 
The amount of principal and interest so converted will be deemed fully paid, and
the indebtedness under this Note will be reduced by such amount.

                       5.3          Issuance of Certificate.  Upon Holder’s
election to convert outstanding indebtedness hereunder pursuant to this Section,
Borrower, at its expense, will as soon as practicable cause to be issued in the
name of and delivered to Holder, a certificate or certificates for the number of
fully paid and nonassessable shares of Borrower’s Common Stock to which Holder
is entitled upon such conversion.  Such certificate(s) shall include legends
required under federal and applicable state securities laws.  No fractional
shares will be issued upon any conversion of this Note or any part hereof.  If,
upon any conversion of this Note, a fraction of a share would otherwise result,
then Borrower will pay Holder an amount of cash equal to the fair market value
of one share of Borrower’s Common Stock (determined in accordance with the
Conversion Price applicable at the time of such conversion), multiplied by the
fraction of a share of stock to which Holder would otherwise be entitled.

          6.          Piggy-Back Registrations. If at any time following
conversion, if any, of this Note, the Borrower shall determine to prepare and
file with the Securities and Exchange Commission a registration statement
relating to an offering for its own account or the account of others under the
1933 Act of any of its equity securities, other than on Form S-4 or Form S-8
(each as promulgated under the 1933 Act) or their then equivalents relating to
equity securities to be issued solely in connection with any acquisition of any
entity or business or equity securities issuable in connection with the stock
option or other employee benefit plans, then the Borrower shall send to Holder a
written notice of such determination and, if within fifteen days after the date
of such notice, Holder shall so request in writing, the Borrower shall include
in such registration statement all or any part of the Common Stock issued to
Holder upon conversion of this Note that Holder requests to be registered,
subject to customary underwriter cutbacks applicable to all holders of
registration rights and the other terms and conditions of such offering,
including without limitation the execution by the participating holders of an
underwriting agreement in the form to be used in connection with such offering.

          7.          Waiver and Amendment.  Any provision of this Note may be
amended or modified only by a writing signed by both Borrower and Holder. 
Except as provided below with respect to waivers by Borrower, no waiver or
consent with respect to this Note will be binding or effective unless it is set
forth in writing and signed by the party against whom such waiver is asserted. 
No course of dealing between Borrower and Holder will operate as a waiver or
modification of any party’s rights or obligations under this Note.  No delay or
failure on the part of either party in exercising any right or remedy under this
Note will operate as a waiver of such right or any other right.  A waiver given
on one occasion will not be construed as a bar to, or as a waiver of, any right
or remedy on any future occasion.

          8.          Waivers of Borrower.  Borrower hereby waives presentment,
notice of non-payment, notice of dishonor, protest, demand and diligence.  This
Note may be amended only by a writing executed by Borrower and Holder. 

          9.          Representations and Warranty of Holder.  Holder hereby
represents and warrants to, and agrees with, the Company, that:

                       9.1          Authorization.  This Note constitutes
Holder’s valid and legally binding obligation, enforceable in accordance with
its terms except as may be limited by  (i) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors’ rights generally and (ii) the effect of rules of law
governing the availability of equitable remedies.  Holder represents that Holder
has full power and authority to enter into this Note.

                       9.2          Purchase for Own Account.  This Note and the
shares of the Borrower’s Common Stock issuable upon the conversion of this Note,
(collectively, the “Securities”) will be acquired for investment for Holder’s
own account, not as a nominee or agent, and not with a view to the public resale
or distribution thereof within the meaning of the 1933 Act, and Holder has no
present intention of selling, granting any participation in, or otherwise
distributing the same.

                       9.3          Disclosure of Information.  Holder has
received or has had full access to all the information he considers necessary or
appropriate to make an informed investment decision with respect to the
Securities.  Holder further has had an opportunity to ask questions and receive
answers from the Borrower regarding the terms and conditions of the offering of
the Securities and to obtain additional information (to the extent the Borrower
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify any information furnished to Holder or to which
Holder had access. 

                       9.4          Investment Experience.  Holder understands
that the purchase of the Securities involves substantial risk.  Holder (i) has
experience as an investor in securities of companies and acknowledges that
Holder is able to fend for itself, can bear the economic risk of Holder’s
investment in the Securities and has such knowledge and experience in financial
or business matters that Holder is capable of evaluating the merits and risks of
this investment in the Securities and protecting his own interests in connection
with this investment and/or (ii) has a preexisting personal or business
relationship with the Borrower and certain of its officers, directors or
controlling persons of a nature and duration that enables Holder to be aware of
the character, business acumen and financial circumstances of such persons.

                       9.5          Accredited Investor Status.  Holder is an
“accredited investor” within the meaning of Regulation D promulgated under the
1933 Act.

                       9.6          Restricted Securities.  Holder understands
that the Securities are characterized as “restricted securities” under the 1933
Act and Rule 144 promulgated thereunder inasmuch as they are being acquired from
the Borrower in a transaction not involving a public offering, and that under
the 1933 Act and applicable regulations thereunder such securities may be resold
without registration under the 1933 Act only in certain limited circumstances. 
In this connection, Holder is familiar with Rule 144, as presently in effect,
and understands the resale limitations imposed thereby and by the 1933 Act. 
Holder understands that the Borrower is under no obligation to register any of
the securities sold hereunder.  Holder understands that no public market now
exists for any of the Securities and that it is uncertain whether a public
market will ever exist for the Securities.

                       9.7          No Solicitation.  At no time was Holder
presented with or solicited by any publicly issued or circulated newspaper,
mail, radio, television or other form of general advertising or solicitation in
connection with the offer, sale and purchase of the Securities.

                       9.8          Further Limitations on Disposition.  Without
in any way limiting the representations set forth above, Holder further agrees
not to make any disposition of all or any portion of the Securities unless and
until:

                                      (a)          there is then in effect a
registration statement under the 1933 Act covering such proposed disposition and
such disposition is made in accordance with such registration statement; or

                                      (b)          Holder shall have notified
the Borrower of the proposed disposition, and shall have furnished the Borrower
with a statement of the circumstances surrounding the proposed disposition, and,
at the expense of Holder or its transferee, with an opinion of counsel,
reasonably satisfactory to the Borrower, that such disposition will not require
registration of such securities under the 1933 Act.

          Notwithstanding the provisions of paragraphs (a) and (b) above, no
such registration statement or opinion of counsel shall be required:  (i) for
any transfer of any Securities in compliance with Rule 144 or Rule 144A;
(ii) for any transfer of any Securities by a Holder that is a partnership or a
corporation to (A) a partner of such partnership or shareholder of such
corporation, (B) a controlled affiliate of such partnership or corporation,
(C) a retired partner of such partnership who retires after the date hereof,
(D) the estate of any such partner or shareholder; or (iii) for the transfer by
gift, will or in testate succession by any Holder to his or her spouse or lineal
descendants or ancestors or any trust for any of the foregoing; provided that in
each of the foregoing cases the transferee agrees in writing to be subject to
the terms of this Section 9 to the same extent as if the transferee were an
original Holder hereunder.

                       9.9          Legends.  Holder understands and agrees that
the certificates evidencing the Securities will bear legends substantially
similar to those set forth below in addition to any other legend that may be
required by applicable law, by the Borrower’s Certificate of Incorporation or
Bylaws, or by any agreement between the Borrower and Holder:

                                       (a)          THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES.  THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE
STATE SECURITIES

LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  INVESTORS SHOULD BE
AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT
FOR AN INDEFINITE PERIOD OF TIME.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.

                                       (b)          Any legend required by the
laws of the State of California, including any legend required by the California
Department of Corporations and Sections 417 and 418 of the California
Corporations Code or any other state securities laws.

          The legend set forth in (a) above shall be removed by the Borrower
from any certificate evidencing the Securities upon delivery to the Borrower of
an opinion of counsel, reasonably satisfactory to the Borrower, that a
registration statement under the 1933 Act is at that time in effect with respect
to the legended security or that such security can be freely transferred in a
public sale (other than pursuant to Rule 144 or Rule 145 under the 1933 Act)
without such a registration statement being in effect and that such transfer
will not jeopardize the exemption or exemptions from registration pursuant to
which the Borrower issued the Securities.

          10.        Governing Law. This Note will be governed by and construed
in accordance with the internal laws of the State of California as applied to
agreements between residents thereof to be performed entirely within such State,
without reference to that body of law relating to conflict of laws or choice of
law.

          11.        Severability; Headings.  The invalidity or unenforceability
of any term or provision of this Note will not affect the validity or
enforceability of any other term or provision hereof.  The headings in this Note
are for convenience of reference only and will not alter or otherwise affect the
meaning of this Note.

          12.        Jurisdiction; Venue.  Borrower, by its execution of this
Note, hereby irrevocably submits to the in personam jurisdiction of the state
courts of the State of California for the purpose of any suit, action or other
proceeding arising out of or based upon this Note.

          13.        Attorneys’ Fees.  If suit is brought for collection of this
Note, Borrower agrees to pay all reasonable expenses, including attorneys’ fees,
incurred by Holder in connection therewith whether or not such suit is
prosecuted to judgment.

          14.        Assignment.  This Note is freely transferable and
assignable by Holder, provided that such transfer is made in compliance with all
applicable state and federal securities laws.  Any reference to Holder herein
will be deemed to refer to any subsequent transferee of this Note at such time
as such transferee holds this Note.   This Note may not be assigned or delegated
by Borrower, whether by voluntary assignment or transfer, operation of law,
merger or otherwise. 

          IN WITNESS WHEREOF, Borrower has executed this Note as of the date and
year first above written.

 

 

 

 

BORROWER:

 

 

 

 

 

Agreed to and Acknowledged by:

 

LARGE SCALE BIOLOGY CORPORATION

 

 

a Delaware corporation

LENDER:

 

 

 

 

 

By:

 

/s/ KEVIN J. RYAN

 

By:

 

/s/ RONALD J. ARTALE

 

 

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Name:

 

Kevin J. Ryan

 

Name:

 

Ronald J. Artale

 

 

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Title:

 

President and Chief Executive Officer

 

Title:

 

Senior Vice President, Chief Operating Officer and
Chief Financial Officer

 

 

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