PROTEIN POLYMER TECHNOLOGIES, INC.
10% CONVERTIBLE SECURED NOTE
DUE ____________, 200_

$ __________
________, 200_

THIS NOTE IS ISSUED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF
THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND QUALIFICATION PROVISIONS
OF APPLICABLE STATE SECURITIES LAWS.  NEITHER IT NOR THE SHARES OF COMMON STOCK
INTO WHICH IT CAN BE CONVERTED CAN BE SOLD, HYPOTHECATED OR OTHERWISE
TRANSFERRED UNLESS REGISTERED PURSUANT TO THE SECURITIES ACT AND QUALIFIED UNDER
APPLICABLE STATE LAW OR, IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
MAKER, AN EXEMPTION THEREFROM IS AVAILABLE.

FOR VALUE RECEIVED, the undersigned, Protein Polymer Technologies, Inc., with an
address at 11494 Sorrento Valley Road, San Diego, California 92121, ("Maker"),
promises to pay to Hunter & Co., with an address at P.O. Box 5756, Boston,
Massachusetts 02206, as agent ("Payee"), on ___________, 200_, or sooner as
otherwise provided herein (the "Maturity Date"), the principal amount of
_______________ ($_________) Dollars in lawful money of the United States of
America (the "Principal”).  This Note bears interest (the "Interest"), payable
on the earlier of the Maturity Date or the date on which this Note is converted
into Maker's common stock as provided herein, at the annual rate of ten percent
(10%), except as otherwise provided herein, until the Principal and all accrued
Interest thereon (collectively the “Obligations”) shall be paid in full.  This
Note is convertible into Maker's common stock, par value $0.01 per share (the
"Common Stock"), as set forth below.

1.      Interest.  Maker shall pay the Interest, in arrears, on the Maturity
Date.  Interest on the Note will accrue from the most recent date to which
Interest has been paid or, if no Interest has been paid, from the date of
delivery of the Note.  Interest will be computed on the basis of a 360-day year
of twelve 30-day months.

2.      Method of Payment. Maker will pay Principal and Interest in money of the
United States that at the time of payment is legal tender for the payment of
public and private debts.  All payments shall be sent to Payee at its address
first set forth above or such other address as Payee shall notify Maker pursuant
to the provisions of Paragraph 13 (g) below.  Anything to the contrary
notwithstanding, Maker, at its option, may pay Interest in shares of its Common
Stock at the rate of ______ ($______) _____ per share.

 

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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

3.      Security.  This Note shall be secured (the “Lien”) by an interest the
“Collateral,” as defined in the security agreement (the “Security Agreement”)
between Maker and TAG Virgin Islands, Inc., as agent (“TAG”) dated as of the
date hereof, subject to the Permitted Encumbrances as defined and set forth in
the Security Agreement, and is entitled to the benefits of and security provided
under the Security Agreement a patent security agreement (the “Patent Security
Agreement”) between Maker and TAG dated as of the date hereof and the related
documents. The Collateral also secures (the “Szulik Lien”) a note issued by
Maker to Matthew J. Szulik in the principal amount of $6,414,837.00 dated as of
January 9, 2008 and subsequently amended (the “Szulik Note”).  The Lien is
subordinate to the Szulik Lien.  This Note, the Security Agreement, the Patent
Security Agreement and the related documents are sometimes collectively referred
to herein as the "Credit Documents."

4.        Conversion.

 (a)      Payee's right to Convert. Except as provided in Paragraph 4(d)(iii) of
this Section 4 below, Payee shall have the right, at any time commencing on the
date hereof until the close of business on the day the Obligations are paid in
full, to cause the conversion of all or any portion (if such portion is Five
Thousand [$5,000] Dollars or a whole multiple of Five Thousand [$5,000] Dollars)
of the Principal (the "Convertible Obligations") into shares of Common Stock
(the "Underlying Shares").  The price for conversion, subject to adjustment as
provided in Section 5 below, shall be Four ($0.04) Cents per share (the
“Conversion Price”).  Maker will not issue a fractional share of Common Stock
upon conversion but will round any fractional share to the nearest share so that
if the fraction is less than 0.5 no share shall be issued and if the fraction is
0.5 or higher the Company shall issue one full share

(b)      Manner of Conversion.  Payee may exercise its conversion right by
giving notice thereof to Maker setting forth the amount of the Convertible
Obligations to be converted.  Within fifteen (15) days after the giving of such
notice Maker shall issue the number of Underlying Shares into which the
Convertible Obligations are to be converted in accordance with the Conversion
Price and deliver to Payee a certificate or certificates therefor, registered in
its name or in accordance with its instructions, representing such Shares
against delivery to Maker of this Note marked paid in full.  If only a portion
of the Convertible Obligations then outstanding is converted, Maker shall
deliver to Payee, together with the aforesaid certificate(s), a new note, in
form and substance identical to this Note, except that the principal amount
thereof shall equal that portion of the Obligations then outstanding that has
not been converted.  If required by applicable federal or state securities laws
or regulations, Payee shall represent in writing to Maker prior to the receipt
of the Underlying Shares that such Shares will be acquired by him for investment
only and not for resale or with a view to the distribution thereof, and shall
agree that any certificates representing the Shares may bear a legend,
conspicuously noting such restriction, as Maker shall deem reasonably necessary
or desirable to enable it to comply with such federal or state securities laws
or regulations.

(c)      Taxes on Shares Issued.  The issue of stock certificates on conversion
of this Note shall be made without charge to Payee for any issue or transfer tax
in respect of such issue.  Maker shall not, however, be required to pay any tax
that may be payable in respect of any transfer involved in the issue and
delivery of Common Stock in any name other than that of Payee, and Maker shall
not be required to issue or deliver any certificates representing such Common
Stock unless and until the person or persons requesting the issue thereof shall
have paid to Maker the amount of such tax or shall have established to the
satisfaction of Maker that such tax has been paid.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

(d)          Covenants of Maker Relating to Conversion.  Maker covenants and
agrees that from and after the date hereof and until the date of repayment in
full of the Obligations, or full conversion of the Convertible Obligations:

(i)       It shall provide, free from preemptive rights, out of its authorized
but unissued shares, or out of shares held in its treasury, sufficient shares to
provide for the conversion of this Note from time to time as the Note is
presented for conversion;

(ii)      All Underlying Shares that may be issued upon conversion of the
Convertible Obligations will upon issue be validly issued, fully paid and
non-assessable, free from all taxes, liens and charges with respect to the issue
thereof, and will not be subject to the preemptive rights of any stockholder of
Maker;

(iii)      If any Underlying Shares to be provided for the purpose of conversion
of the Convertible Obligations require registration with or approval of any
governmental authority under any federal or state law before such shares may be
validly issued upon conversion, Maker will in good faith and as expeditiously as
possible endeavor to secure such registration or approval, as the case may be,
and Maker's obligation to deliver shares of the Common Stock upon conversion of
the Convertible Obligations shall be abated until such registration or approval
is obtained; provided, however, that this Note and the Obligations shall remain
outstanding unless paid in full until Maker delivers the Underlying Shares and
any then accrued but unpaid Interest to Payee and in no event shall this Note be
converted until Maker effects such delivery; and

(iv)      If, and thereafter so long as the Common Stock shall be listed on any
securities exchange, market or other quotation system, Maker will, if permitted
by the rules of such exchange, market or other quotation system, list and keep
listed and for sale so long as the Common Stock shall be so listed on such
exchange, market or other quotation system, upon official notice of issuance,
all Underlying Shares issuable upon conversion of the Convertible Obligations.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

5.      Adjustment in Conversion Price.

(a)      Adjustments for Change in Capital Stock.  Except as provided in
Paragraph 5(n) below, if Maker shall (i) declare a dividend on all its
outstanding Common Stock in shares of its capital stock, (ii) subdivide all its
outstanding Common Stock, (iii) combine all its outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock by
reclassification of its Common Stock (including any such reclassification in
connection with a consolidation or merger in which Maker is the continuing
corporation), then in each such case the conversion privilege and the Conversion
Price in effect immediately prior to such action shall be adjusted so that if
the Note is thereafter converted, Payee may receive the number and kind of
shares that it would have owned immediately following such action if it had
converted the Note immediately prior to such action.  Such adjustment shall be
made successively whenever such an event shall occur.  The adjustment shall
become effective immediately after the record date in the case of a dividend or
distribution and immediately after the effective date in the case of a
subdivision, combination or reclassification.  If after an adjustment Payee upon
conversion of this Note may receive shares of two or more classes of capital
stock of Maker, Maker's Board of Directors, in good faith, shall determine the
allocation of the adjusted Conversion Price between the classes of capital
stock.  After such allocation, the conversion privilege and Conversion Price of
each class of capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section 5.

 (b)      Subscription Offerings.  In case Maker shall issue to all of its
existing stockholders or otherwise grant rights, options, or warrants entitling
the holders thereof to subscribe for or purchase Common Stock (or securities
convertible into or exchangeable for Common Stock) at a price per share (or
having a conversion price per share, in the case of a security convertible into
or exchangeable for Common Stock) less than the Current Market Price per share
(as defined in Paragraph 5(d) below) on the record date for the determination of
stockholders entitled to receive such rights or granting date, as the case may
be, then in each such case the Conversion Price in effect immediately prior to
such action (the “Existing Conversion Price”) shall be adjusted by multiplying
the Existing Conversion Price in effect immediately prior to such record or
granting date by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding on such record or granting date plus the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so to be offered (or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Market Price and of which the denominator shall be the number of
shares of Common Stock outstanding on such record or granting date plus the
number of additional shares of Common Stock to be offered for subscription or
purchase (or into which the convertible or exchangeable securities so to be
offered are initially convertible or exchangeable).  Such adjustment shall
become effective at the close of business on such record or granting date;
provided, however, that, to the extent the shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock) are not delivered,
the Conversion Price shall be readjusted after the expiration of such rights,
options, or warrants (but only to the extent that this Note is not converted
after such expiration), to the Conversion Price which would then be in effect
had the adjustments made upon the issuance of such rights or warrants been made
upon the basis of delivery of only the number of shares of Common Stock (or
securities convertible into or exchangeable for shares of Common Stock) actually
issued.  In case any subscription price may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such consideration
shall be as determined by Maker's Board of Directors, in good faith.  Shares of
Common Stock owned by or held for the account of Maker or any majority-owned
subsidiary shall not be deemed outstanding for the purpose of any such
computation.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

(c)      Other Rights to Acquire Common Stock.  In case Maker shall distribute
to all holders of its Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions paid from retained earnings of Maker)
or rights or warrants to subscribe for or purchase Common Stock (excluding those
referred to in Paragraph 5(b) above), then in each such case the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the Current Market
Price per share (as defined in Paragraph 5(d) below) of the Common Stock on the
record date mentioned below less the then fair market value (as determined in
good faith by the Board of Directors of Maker) of the portion of the assets or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock, and the denominator shall be the
Current Market Price per share of the Common Stock.  Such adjustment shall
become effective immediately after the record date for the determination of
shareholders entitled to receive such distribution.

(d)      Current Market Price.  For the purpose of any computation under
Paragraphs 5(b) and (c) above, the "Current Market Price" per share of Common
Stock on any date shall be deemed to be the average of the daily “Closing Price”
for the thirty (30) consecutive trading days commencing forty five (45) trading
days before such date.  The "Closing Price" for each day shall mean the last
reported sales price regular way or, in case no such reported sale takes place
on such day, the closing bid price regular way, in either case on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the highest reported bid price as furnished by the
Financial Industry Regulatory Authority through NASDAQ or similar organization
if NASDAQ is no longer reporting such information, or by the Pink Sheets, LLC or
similar organization if the Common Stock is not then quoted on an inter-dealer
quotation system.  If on any such date the Common Stock is not quoted by any
such organization, the fair value of the Common Stock on such date, as
determined in good faith by Maker's Board of Directors, shall be used.

 (e)      Action to Permit Valid Issuance of Common Stock.  Before taking any
action which would cause an adjustment reducing the Conversion Price below the
then par value, if any, of the shares of Common Stock issuable upon conversion
of this Note, Maker will take all corporate action which may, in the opinion of
its counsel, be necessary in order that Maker may validly and legally issue
shares of such Common Stock at such adjusted Conversion Price.

(f)      Minimum Adjustment.  No adjustment in the Conversion Price shall be
required if such adjustment is less than 1% of the then Existing Conversion
Price; provided, however, that any adjustments which by reason of this Paragraph
5(f) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment.  All calculations under this Section 5 shall be
made to the nearest cent or to the nearest one-hundredth of a share, as the case
may be.  Anything to the contrary notwithstanding, Maker shall be entitled to
make such reductions in the Conversion Price, in addition to those required by
this Paragraph 5(f), as it in its discretion shall determine to be advisable in
order that any stock dividends, subdivision of shares, distribution of rights to
purchase stock or securities, or distribution of securities convertible into or
exchangeable for stock hereafter made by Maker to its stockholders shall not be
taxable.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

(g)      Referral of Adjustment.  In any case in which this Section 5 shall
require that an adjustment in the Conversion Price be made effective as of a
record date for a specified event, if the Note shall have been converted after
such record date Maker may elect to defer until the occurrence of such event
issuing to Payee the shares, if any, issuable upon such conversion event over
and above the shares, if any, issuable upon such conversion on the basis of the
Conversion Price in effect prior to such adjustment; provided, however, that
Maker shall deliver to Payee a due bill or other appropriate instrument
evidencing Payee's right to receive such additional shares upon the occurrence
of the event requiring such adjustment.

(h)      Number of Shares.  Upon each adjustment of the Conversion Price as a
result of the calculations made in Paragraphs 5(a) through (c) above, this Note
shall thereafter evidence the right to purchase, at the adjusted Conversion
Price, that number of shares (calculated to the nearest one-hundredth) obtained
by dividing (i) the product obtained by multiplying the number of shares
issuable upon conversion of this Note prior to adjustment of the number of
shares by the Conversion Price in effect prior to adjustment of the Conversion
Price by (ii) the Conversion Price in effect after such adjustment of the
Conversion Price.

(i)      When No Adjustment Required.  No adjustment need be made for a
transaction referred to in Paragraphs 5(a) through (c) above if Payee is
permitted to participate in the transaction on a basis no less favorable than
any other party and at a level which would preserve Payee's percentage equity
participation in the Common Stock upon conversion of the Note.  No adjustment
need be made for sales of Common Stock pursuant to any Maker plan for
reinvestment of dividends or interest, the granting of options and/or the
exercise of options outstanding under any of Maker's stock option plans, the
exercise of any other of Maker's currently outstanding options, or any currently
authorized warrants, whether or not outstanding.  No adjustment need be made for
a change in the par value of the Common Stock, or from par value to no par
value.  If the Note becomes convertible solely into cash, no adjustment need be
made thereafter.  Interest will not accrue on the cash.

(j)      Notice of Adjustment.  Whenever the Conversion Price is adjusted, Maker
shall promptly mail to Payee a notice of the adjustment together with a
certificate from Maker's Chief Financial Officer briefly stating (i) the facts
requiring the adjustment, (ii) the adjusted Conversion Price and the manner of
computing it, and the date on which such adjustment becomes effective.  The
certificate shall be evidence that the adjustment is correct, absent manifest
error.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

(k)      Voluntary Reduction.  Maker from time to time may reduce the Conversion
Price by any amount for any period of time if the period is at least twenty (20)
days and if the reduction is irrevocable during the period.  Whenever the
Conversion Price is reduced, Maker shall mail to Payee a notice of the
reduction.  Maker shall mail the notice at least fifteen (15) days before the
date the reduced Conversion Price takes effect.  The notice shall state the
reduced Conversion Price and the period it will be in effect.  A reduction of
the Conversion Price does not change or adjust the Conversion Price otherwise in
effect for purposes of Paragraphs 5(a) through (c) above.  Anything to the
contrary notwithstanding, this Paragraph 5(k) shall be void and of no effect if
it violates the rules and/or regulations of any exchange on which the Common
Stock is then listed for trading.

(l)      Prohibition against Certain Reductions of Exercise Price.  Anything to
the contrary notwithstanding, in no event shall the Conversion Price be reduced
below the par value of the Common Stock.

(m)    Notice of Certain Transactions.  If (i) Maker takes any action that would
require an adjustment in the Conversion Price pursuant to this Section 5; or
(ii) there is a liquidation or dissolution of Maker, Maker shall mail to Payee a
notice stating the proposed record date for a distribution or effective date of
a reclassification, consolidation, merger, transfer, lease, liquidation or
dissolution.  Maker shall mail the notice at least fifteen (15) days before such
date.  Failure to mail the notice or any defect in it shall not affect the
validity of the transaction.

(n)      Reorganization of Company.  If Maker and/or the holders of Common Stock
are parties to a merger, consolidation or a transaction in which (i) Maker
transfers or leases substantially all of its assets; (ii) Maker reclassifies or
changes its outstanding Common Stock; or (iii) the Common Stock is exchanged for
securities, cash or other assets; the person who is the transferee or lessee of
such assets or is obligated to deliver such securities, cash or other assets
shall assume the obligations under this Note.  If the issuer of securities
deliverable upon conversion of the Note is an affiliate of the surviving,
transferee or lessee corporation, that issuer shall join in such
assumption.  The assumption agreement shall provide that the Payee may convert
the Obligations into the kind and amount of securities, cash or other assets
that it would have owned immediately after the consolidation, merger, transfer,
lease or exchange if it had converted the Note immediately before the effective
date of the transaction.  The assumption agreement shall provide for adjustments
that shall be as nearly equivalent as may be practical to the adjustments
provided for in this Section 5.  The successor company shall mail to Payee a
notice briefly describing the assumption agreement.  If this Paragraph applies,
Paragraph 4(a) above does not apply.

6.          Covenants.  Maker covenants and agrees that from and after the date
hereof and until the date of repayment in full of the Obligations it shall
comply with the following conditions:

(i)      Maintenance of Existence and Conduct of Business.  Maker shall, and
shall cause each of its subsidiaries, if any, to (A) do or cause to be done all
things necessary to preserve and keep in full force and effect its legal
existence and rights and maintain its property; and (B) continue to conduct its
business so that the business carried on in connection therewith may be properly
and advantageously conducted at all times.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

(ii)      Books and Records.  Maker shall, and shall cause each of its
subsidiaries, if any, to keep adequate books and records of account with respect
to its business activities.

(iii)      Insurance.  Maker shall, and shall cause each of its subsidiaries, if
any, to maintain insurance policies insuring such risks as are customarily
insured against by companies engaged in businesses and/or with property similar
to those operated and/or owned or leased by Maker or any such subsidiaries, as
the case may be, including but not limited to, insurance policies covering real
property acceptable to Payee on which Payee is named as an additional
insured.  All such policies are to be carried with reputable insurance carriers
and shall be in such amounts as are customarily insured against by companies
with similar assets and properties engaged in a similar business.

(iv)      Compliance with Law.  Maker shall, and shall cause each of its
subsidiaries, if any, to comply in all material respects with all federal,
state, local and other laws and regulations applicable to it or any such
subsidiaries, as the case may be, which, if breached, would have a material
adverse effect on Maker's or any such subsidiaries', as the case may be,
business or financial condition.

(v)      Compliance with Material Agreements, Licenses, Patents and Financial
Obligations.  All of the terms of Maker’s material agreements, licenses, Patents
as defined in the Security Agreement and financial obligations shall be complied
with, and each of them shall be kept in full force and effect in accordance with
their respective terms.

(vi)      Maintenance of Collateral.  Maker will keep the Collateral free and
clear of all liens and encumbrances except for those created by or referred to
in the Credit Documents.

7.          Reorganization of Maker.  If Maker is party to a merger,
consolidation or a transaction in which it is not the surviving or continuing
entity or transfers or leases all or substantially all of its assets, the person
who is the surviving or continuing entity or is the transferee or lessee of such
assets shall assume the terms of this Note and the Obligations.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

8.      Representations and Warranties of Maker.  Maker represents and warrants
that:  (i) it, and each of its subsidiaries, if any, is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite power to carry on its
business as now conducted and to own its properties and assets it now owns; (ii)
it, and each of its subsidiaries, if any, is duly qualified or licensed to do
business as a foreign corporation in good standing in the jurisdictions in which
ownership of property or the conduct of its business requires such qualification
except jurisdictions in which the failure to qualify to do business will have no
material adverse effect on its business, prospects, operations, properties,
assets or condition (financial or otherwise); (iii) it, and each of its
subsidiaries, if any, and/or affiliates thereof, holds all material licenses and
patents and otherwise complies with all material laws, rules and regulations
required to permit it to own its property and conduct its business in the
jurisdictions in which it owns its property and conducts its business; (iv) it
owns the Collateral, free and clear of all liens and encumbrances except for
those held by Payee in accordance with the terms of this Note and the Security
Agreement, the Patent Security Agreement, the Szulik Lien and any encumbrances
that may exist pursuant to the Permitted Encumbrances, as that term is defined
in the Security Agreement; (v) the Patents are in full force and effect and
Maker is entitled to all rights relating thereto;  (vi) it has full power and
authority to execute and deliver this Note, and that the execution and delivery
of this Note will not result in the breach of or default under, with or without
the giving of notice and/or the passage of time, any other agreement, financial
instrument, arrangement or indenture to which it is a party or by which it may
be bound, or the violation of any law, statute, rule, decree, judgment or
regulation binding upon it; (vii) it has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the Securities
and Exchange Commission (the “Commission”) pursuant to the Securities Act of
1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the
“Exchange Act”) (the “SEC Documents”); (viii) the SEC Documents have complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the
Commission promulgated thereunder applicable to the SEC Documents, and none of
the SEC Documents, at the time they were filed with the Commission, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; (ix) as of their respective dates, Maker’s financial statements
included in the SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the Commission with respect thereto, such financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States as in effect from time to time, consistently applied, during the
periods involved (except (a) as may be otherwise indicated in such financial
statements or the notes thereto, or (b) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
condition of Maker as of the respective dates thereof and the results of its
operations and cash flows for the respective periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments); (x) except
as may be set forth in the SEC Documents, Maker has not received notification
from the Commission and/or any federal or state securities bureaus that any
investigation (informal or formal), inquiry or claim is pending, threatened or
in process against Maker and/or relating to any of Maker’s securities; (xi)
except as may be set forth in the SEC Documents, there is no action, suit,
proceeding, or investigation pending or currently threatened against Maker, and
(xii) it has taken and will take all acts required, including but not limited to
authorizing the signatory hereof on its behalf to execute this Note, so that
upon the execution and delivery of this Note, it shall constitute the valid and
legally binding obligation of Maker enforceable in accordance with the terms
thereof.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

9.           Defaults and Remedies.

(a)          Events of Default.  The occurrence or existence of any one or more
of the following events or conditions (regardless of the reasons therefor) shall
constitute an "Event of Default" hereunder:

(i)      Maker shall fail to make any payment of Principal or Interest when due
and payable or declared due and payable pursuant to the terms hereof or the
Szulik Note;

(ii)     Maker shall fail to perform any other obligation and/or covenant as
required by this Note, any of the other Credit Documents or the Szulik Note in
accordance with the respective terms thereof and such failure to perform shall
not have been cured within five (5) business days after Maker’s receipt of
notice of such failure to perform;

(iii)    Any representation or warranty made in this Note, any of the other
Credit Documents or the Szulik Note by Maker shall be untrue or incorrect in any
material respect as of the date when made or deemed made;

(iv)    Any money judgment, writ or warrant of attachment, or similar process
not covered by insurance in excess of Twenty Five Thousand ($25,000) Dollars in
the aggregate shall be entered or filed against Maker or any of its properties,
including, but not limited to, the Collateral, or other assets and shall remain
unpaid, unvacated, unbonded or unstayed for a period of ten (10) days;

(v)     Maker shall make an assignment for the benefit of creditors or shall be
unable to pay its debts as they become due;

(vi)    Maker shall have received a written notice of default related to any
material agreement to which it is a party and such act of default shall remain
uncured after any applicable cure period;

(vii)   A case or proceeding shall have been commenced against Maker, or any of
its subsidiaries, if any, (each a “Proceeding Company”) in a court having
competent jurisdiction seeking a decree or order in respect of a Proceeding
Company, (A) under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal, state or foreign bankruptcy
or other similar law; (B) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) of a Proceeding Company,
or any of its properties, including but not limited to the Collateral; or (C)
ordering the winding-up or liquidation of the affairs of a Proceeding Company,
and such case or proceeding shall remain unstayed or undismissed for a period of
ten (10) consecutive days or such court shall enter a decree or order granting
the relief sought in such case or proceeding; or

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

(viii)      A Proceeding Company shall (A) file a petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other applicable federal, state or foreign bankruptcy or other similar law;
or (B) consent to the institution of proceedings thereunder or to the filing of
any such petition or to the appointment of or the taking of possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of such Proceeding Company, or any of its properties, including but
not limited to the Collateral.

(b)          Remedies.  Upon the occurrence of an Event of Default specified in
Paragraph 9(a) above, all Obligations then remaining unpaid hereunder shall
immediately become due and payable in full, plus interest on the unpaid portion
of the Obligations at the highest rate permitted by applicable law, without
notice to Maker and without presentment, demand, protest or notice of protest,
all of which are hereby waived by Maker together with all reasonable costs and
expenses of the collection and enforcement of this Note, including reasonable
attorney's fees and expenses, all of which shall be added to the amount due
under this Note.  The rights, powers, privileges and remedies of Payee pursuant
to the terms hereof are cumulative and not exclusive of any other rights,
powers, privileges and remedies which Payee may have under this Note or any
other instrument or agreement.

10.      Acknowledgment of Payee's Investment Representations.  By accepting
this Note, Payee acknowledges that, except as provided in the Registration
Rights Agreement dated as of September 3, 2009 between Maker and TAG, neither
this Note nor the Underlying Shares have been or will be registered under the
Securities Act or qualified under any state securities laws and that the
transferability thereof is restricted by the registration provisions of the
Securities Act as well as such state laws.  Based upon the representations and
agreements being made by it herein, this Note is being and any Underlying Shares
will be issued to it pursuant to an exemption from such registration provided by
Section 4(2) of the Securities Act, and applicable state securities law
qualification exemptions.  Payee represents that it (i) is an “Accredited
Investor” as that term is defined in Rule 501 (a) of Regulation D promulgated
under the Securities Act, and (ii) is acquiring this Note and will acquire any
Underlying Shares for its own account, for investment purposes only and not with
a view to resale or other distribution thereof, nor with the intention of
selling, transferring or otherwise disposing of all or any part of these
securities for any particular event or circumstance, except selling,
transferring or disposing of them only upon full compliance with all applicable
provisions of the Securities Act, the Exchange Act, the Rules and Regulations
promulgated by the Commission thereunder, and any applicable state securities
laws.  In addition, Payee understands and acknowledges that any routine sales of
these securities made in reliance upon Rule 144 promulgated by the Commission
under the Securities Act can be effected only in the amounts set forth in and
pursuant to the other terms and conditions, including applicable holding
periods, of that Rule.  Payee further understands and agrees that no transfer of
this Note shall be valid unless made in compliance with the restrictions set
forth on the front of this Note, effected on Maker's books by the registered
holder hereof, in person or by an attorney duly authorized in writing, and
similarly noted hereon as provided in Paragraph 13(h) below.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

11.      Limitation of Interest Payments.  Nothing contained in this Note or in
any other agreement between Maker and Payee requires Maker to pay or Payee to
accept interest in an amount that would subject Payee to any penalty or
forfeiture under applicable law.  In no event shall the total of all charges
payable hereunder, whether of interest or of such other charges, which may or
might be characterized as interest, exceed the maximum rate permitted to be
charged under the laws of the States of California, New York or Delaware, the
United States Virgin Islands or any other state or domestic or other
jurisdiction in which either Maker or Payee may be located or may conduct
business or the Collateral my be located.  Should Payee receive any payment that
is or would be in excess of that permitted to be charged under such laws, such
payment shall have been and shall be deemed to have been made in error and shall
automatically be applied to reduce the Principal outstanding on this Note.

12.      Maker’s Right to Prepay the Note.  Maker may prepay this Note without
penalty at any time after thirty (30) day’s notice to Payee.

13.      Miscellaneous.

(a)      Effect of Forbearance.  No forbearance, indulgence, delay or failure to
exercise any right or remedy by Payee with respect to this Note shall operate as
a waiver or as an acquiescence in any default.

(b)      Effect of Single or Partial Exercise of Right.  No single or partial
exercise of any right or remedy by Payee shall preclude any other or further
exercise thereof or any exercise of any other right or remedy by Payee.

(c)      Governing Law; Waiver of Right to Jury Trial; Venue.  This Note shall
be construed and enforced in accordance with, and the rights of the parties
shall be governed by, the internal laws of the jurisdiction to be determined by
Payee applicable to contracts made and to be performed entirely within such
jurisdiction.  Maker hereby waives all right to trial by jury in any action,
suit or proceeding brought to enforce or defend any rights or remedies under
this Note, and agrees that any lawsuit brought to enforce or interpret the
provisions of this Note shall be instituted in state or federal courts, as
appropriate, in the jurisdiction to be determined by Payee, and Maker further
agrees to submit to the personal jurisdiction of such court and waives any
objection which it may have, based on improper venue, forum non conveniens or
sufficiency of contact with the forum state, to the conduct of any proceeding in
any such court and waives personal service of any and all process upon it, and
consents that all such service of process be made by mail or messenger directed
to it at the address set forth in Paragraph 12(g) below and that service so made
shall be deemed to be completed upon the earlier of actual receipt or three (3)
days after the same shall have been posted to its address.  Nothing contained in
this Paragraph 12(c) affects the right of Payee to serve legal process in any
other manner permitted by law or affects the right of Payee to bring any action
or proceeding against Maker or its property in the courts of any other
jurisdiction.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

(d)      Headings.  The headings and captions of the various sections herein are
for convenience of reference only and shall in no way modify any of the terms or
provisions of this Note.

(e)      Loss, Theft, Destruction or Mutilation of Note.  Upon receipt by Maker
of evidence reasonably satisfactory to it of loss, theft, destruction or
mutilation of this Note, Maker shall make and deliver or caused to be made and
delivered to Payee a new Note of like tenor in lieu of this Note.

(f)      Modification of Note or Waiver of Terms Thereof Relating to Payee.  No
modification or waiver of any of the provisions of this Note shall be effective
unless in writing and signed by Payee and then only to the extent set forth in
such writing, or shall any such modification or waiver be applicable except in
the specific instance for which it is given.  This Note may not be discharged
orally but only in writing duly executed by Payee.

(g)      Notice.  Any notice or other communication under the provisions of this
Note shall be in writing, and shall be given by postage prepaid, registered or
certified mail, return receipt requested, by hand delivery with receipt
acknowledged, or by a recognized overnight courier service, directed to the
parties at their respective addresses as set forth above, or to any new address
of which either party shall have informed the other party by the giving of
notice in the manner provided herein.  Copies of all notices sent to Hunter &
Co. shall be sent to TAG, at The Tunick Building, 1336 Beltjen Road, Suite 202,
St. Thomas, VI 00802.  All notices or communications shall be effective upon
receipt if hand delivered or sent by overnight courier service, or, if mailed,
four days after mailing or ten days after mailing if mailed to the United States
Virgin Islands.  Notice may also be given by facsimile or email transmission to
a party that provides its facsimile number or email address to the other party
and such notice shall be effective upon confirmation to the sender of receipt.

(h)      Transfer.  This Note shall be transferable only on the books of Maker
upon delivery thereof duly endorsed by Payee or by its duly authorized attorney
or representative, or accompanied by proper evidence of succession, assignment,
or authority to transfer.  In all cases of transfer by an attorney, executor,
administrator, guardian, or other legal representative, duly authenticated
evidence of his authority shall be produced.  Upon any registration of transfer,
Maker shall deliver a new Note or Notes to the person entitled
thereto.  Notwithstanding the foregoing, Maker shall have no obligation to cause
Notes to be transferred on its books to any person if, in the opinion of counsel
to Maker, such transfer does not comply with the provisions of the Securities
Act and the rules and regulations thereunder.

(i)      Successors and Assigns.  This Note shall be binding upon Maker, its
successors, assigns and transferees, and shall inure to the benefit of and be
enforceable by Payee and its successors and assigns.

 
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Convertible Secured Note
of Protein Polymer Technologies, Inc.
payable to Hunter & Co.
as agent dated ______, 2____

(j)      Severability.  If one or more of the provisions or portions of this
Note shall be deemed by any court or quasi-judicial authority to be invalid,
illegal or unenforceable in any respect, the invalidity, illegality or
unenforceability of the remaining provisions, or portions of provisions
contained herein shall not in any way be affected or impaired thereby.

(k)      Gender.  The use herein of the masculine pronouns or similar terms
shall be deemed to include the feminine and neuter genders as well and vice
versa and the use of the singular pronouns shall be deemed to include the plural
as well and vice versa.

IN WITNESS WHEREOF, Maker has caused this Note to be executed on its behalf by
an officer thereunto duly authorized as of the date set forth above.

Protein Polymer Technologies, Inc.,
a Delaware corporation

By:
   
Name:  James B. McCarthy,
 
Title:  Interim Chief Executive Officer

 
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