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                                 PROMISSORY NOTE

$2,000,000.00                                                    July 26, 1999

         BIGMAR, INC. ("Borrower") promises to pay to CITIZENS BANK ("Lender"),
or order, in lawful money of the United States of America, on demand, the
principal amount of Two Million & 00/100 Dollars ($2,000,000.00) or so much as
may be outstanding, together with interest on the unpaid outstanding principal
balance of each advance. Interest shall be calculated from the date of each
advance until repayment of each advance.

         PAYMENT: Borrower will pay this loan immediately upon Lender's demand.
In addition, Borrower will pay regular monthly payments of all accrued unpaid
interest due as of each payment date, beginning August 28, 1999, with all
subsequent interest payments to be due on the same day of each month after that.
The annual interest rate for this Note is computed on a 365/360 basis; that is,
by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will be
applied first to accrued unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs and late charges.

         VARIABLE INTEREST RATE: The Interest rate on this Note is subject to
change from time to time based on changes in an index which is Lender's Prime
Rate (the "Index"). This is the rate Lender charges, or would charge, on 90-day
unsecured loans to the most creditworthy corporate customers. This rate may or
may not be the lowest rate available from Lender at any given time. Lender will
tell Borrower the current index rate upon Borrower's request. Borrower
understands that Lender may make loans based o n other rates as well. The
interest rate change will not occur more often than each day. THE INDEX
CURRENTLY IS 8.250% PER ANNUM. THE INTEREST RATE TO BE APPLIED TO THE UNPAID
PRINCIPAL BALANCE OF THIS NOTE WILL BE AT A RATE EQUAL TO THE INDEX, RESULTING
IN AN INITIAL RATE OF 8.250% PER ANNUM. NOTICE: Under no circumstances will the
interest rate on this Note be more than the maximum rate allowed by applicable
law.

         PREPAYMENT: Borrower may pay without penalty all or a portion of the
amount owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue to make
payments of accrued unpaid interest. Rather, they will reduce the principal
balance due.

         LATE CHARGE: If a regularly scheduled interest payment is 10 DAYS OR
MORE LATE, Borrower will be charged 5.000% OF THE UNPAID PORTION OF THE
REGULARLY SCHEDULED PAYMENT OR $25.00, WHICHEVER IS GREATER. If Lender demands
payment of this loan, and Borrower does not pay the loan WITHIN 10 DAYS AFTER
LENDER'S DEMAND, BORROWER ALSO WILL BE CHARGED EITHER 5.000% OF THE UNPAID
PORTION OF THE SUM OF THE UNPAID PRINCIPAL PLUS ACCRUED UNPAID INTEREST OR
$25.00, WHICHEVER IS GREATER.

         DEFAULT: Borrower will be in default if any of the following happens:
(a) Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially


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affect any of Borrower's property or Borrower's ability to repay this Note or
perform Borrower's obligations under this Note or any of the Related
Documents. (d) Any representation or statement made or furnished to Lender by
Borrower or on Borrower's behalf is false or misleading in any material
respect either now or at the time made or furnished. (e) Borrower becomes
insolvent, a receiver is appointed for any part of Borrower's property,
Borrower makes an assignment for the benefit of creditors, or any proceeding
is commenced either by Borrower or against Borrower under any bankruptcy or
insolvency laws. (f) Any creditor tries to take any of Borrower's property on
or in which Lender has a lien or security interest. This includes a
garnishment of any of Borrower's accounts with Lender. (g) Any guarantor dies
or any of the other events described in this default section occurs with
respect to any guarantor of this Note. (h) A material adverse change occurs
in Borrower's financial condition, or Lender believes the prospect of payment
or performance of the indebtedness is impaired. (i) Lender in good faith
deems itself insecure.

         In any default, other than a default in payment, is curable and if
Borrower has not been given a notice of a breach of the same provision of this
Note within the preceding twelve (12) months, it may be cured (and no event of
default will have occurred) if Borrower, after receiving written notice from
Lender demanding cure of such default: (a) cures the default within ten (10)
days; or (b) if the cure requires more than ten (10) days, immediately initiates
steps which Lender deems in Lender's sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.

         LENDER'S RIGHTS: Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately due,
without notice, and then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also, if
permitted under applicable law, increase the variable interest rate on this Note
to 4.000 percentage points over the index. The interest rate will not exceed the
maximum rate permitted by applicable law. Lender may hire or pay someone else to
help collect this Note if Borrower does not pay. Borrower also will pay Lender
that amount. This includes, subject to any limits under applicable law, Lender's
reasonable attorneys' fees and Lender's legal expenses whether or not there is a
lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services. If
not prohibited by applicable law, Borrower also will pay any court costs. In
addition to all other sums provided by law. THIS NOTE HAS BEEN DELIVERED TO
LENDER AND ACCEPTED BY LENDER IN THE STATE OF MICHIGAN. IF THERE IS A LAWSUIT,
BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF GENESEE COUNTY, THE STATE OF MICHIGAN. THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.

         RIGHT OF SETOFF: Borrower grants to lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.

         COLLATERAL: This Note is secured by SECURITY AGREEMENT COVERING
INVENTORY, CHATTEL PAPER, ACCOUNTS RECEIVABLE, GENERAL INTANGIBLES & EQUIPMENT;
CORPORATE GUARANTY OF BIGMAR PHARMACEUTICALS, S.A. SUPPORTED BY A SECURITY
AGREEMENT COVERING ACCOUNTS RECEIVABLE; 500,000 SHARES OF BIGMAR, INC. STOCK
PLEDGED BY JERICHO II, L.L.C.; PERSONAL LOAN GUARANTYS OF HAROLD C. BALDAUF,
JANET A BAULDAUF, FREDERICK H. MAY, JR., CYNTHIA R. MAY


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AND JOHN G. TRAMONTANA; BUSINESS LOAN AGREEMENT. References contained in this
collateral listing are intended for lenders internal use only and do not
limit the applicability of any security or support agreement given by any
person in connection with this loan, whether now or hereafter existing and
whether direct or indirect in nature.

         LINE OF CREDIT: This Note evidences a revolving line of credit.
Advances under this Note may be requested orally by Borrower or by an authorized
person. Lender may, but need not, require that all oral requests be confirmed in
writing. All communications, instructions, or directors by telephone or
otherwise to lender are to be directed to Lender's office shown above. The
following party or parties are authorized to request advances under the line of
credit until Lender receives from Borrower at Lender's address shown above
written notice of revocation of their authority: JOHN G. TRAMONTANA, CHAIRMAN.
Borrower agrees to be liable for all sums either: (a) advanced in accordance
with the instructions of an authorized person or (b) credited to any of
Borrower's accounts with Lender. The unpaid principal balance owing on this Note
at any time may be evidenced by endorsements on this Note or by Lender's
internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this note if: (a) Borrower or any guarantor is
in default under the terms of this Note or any agreement that borrower or any
guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (b) Borrower or any guarantor ceases doing business or is
insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any other loan with
Lender; (d) Borrower has applied funds provided pursuant to this note for
purposes other than those authorized by Lender; or (e) Lender in good faith
deems itself insecure under this Note or any other agreement between lender and
Borrower.

         REVOLVING CREDIT: All advances by Bank under this note shall be made
solely by depositing funds into Citizens Bank account #3300018617 maintained in
the name of borrower.

         GENERAL PROVISIONS: This Note is payable on demand. The inclusion of
specific default provisions or rights of Lender shall not preclude Lender's
right to declare payment of this Note on its demand. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waive presentment, demand for payment, protest and
notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender's security
interest in the collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree that
Lender may modify this loan without the consent of or notice to anyone other
than the party with whom the modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF
A COMPLETED COPY OF THE NOTE.

BORROWER:

Bigmar, Inc.

By:               /s/
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       John G. Tramontana, Chairman


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