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                                                                   EXHIBIT 10.12

                                                              Customer No.  1080

                          LOAN AND SECURITY AGREEMENT

          THIS LOAN AND SECURITY AGREEMENT dated as of July 30, 1999, is made by
Dendreon Corporation (the "Borrower"), a Delaware corporation having its
principal place of business and chief executive office at 3005 First Avenue,
Seattle, Washington, 98121, in favor of Transamerica Business Credit
Corporation, a Delaware corporation (the "Lender"), having its principal office
at 9399 West Higgins Road, Suite 600, Rosemont, Illinois 60018 and having an
office at 76 Batterson Park Road, Farmington, Connecticut 06032.

          WHEREAS, the Borrower has requested that the Lender make a Loan to the
Borrower; and

          WHEREAS, the Lender has agreed to make such Loan on the terms and
conditions of this Agreement.

          NOW, THEREFORE, in consideration of the premises and to induce the
Lender to extend credit, the Borrower hereby agrees with the Lender as follows:

          SECTION 1.  DEFINITIONS.
                      -----------

          As used herein, the following terms shall have the following meanings,
and shall be equally applicable to both the singular and plural forms of the
terms defined:

          Agreement shall mean this Loan and Security Agreement together with
          ---------
all schedules and exhibits hereto, as amended, supplemented, or otherwise
modified from time to time.

          Applicable Law shall mean the laws of the State of Illinois (or any
          --------------
other jurisdiction whose laws are mandatorily applicable notwithstanding the
parties' choice of Illinois law) or the laws of the United States of America,
whichever laws allow the greater interest, as such laws now exist or may be
changed or amended or come into effect in the future.

          Business Day shall mean any day other than a Saturday, Sunday, or
          ------------
public holiday or the equivalent for banks in New York City.

          Cash Equivalents means (i) securities issued, guaranteed or insured by
          ----------------
the United States or any of its agencies with maturities of not more than one
year from the date acquired; (ii) certificates of deposit with maturities of not
more than one year from the date acquired, issued by any U.S. federal or state
chartered commercial bank of recognized standing which has capital and
unimpaired surplus in excess of $100,000,000; (iii) investments in money market
funds registered under the Investment Company Act of 1940; (iv) mutual funds, at
least 90% of the assets of which constitute Cash Equivalents of the kinds
described in clauses (i) - (iii) of this definition; and (v) other instruments,
commercial paper or investments acceptable to the Lender in its sole discretion.

          Closing Date means the date first set forth above.
          ------------

          Code shall have the meaning specified in Section 8(d).
          ----

                                       1.
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          Collateral shall have the meaning specified in Section 2.
          ----------

          Collateral Access Agreement shall mean any landlord waiver, mortgagee
          ---------------------------
waiver, bailee letter, or similar acknowledgement of any warehouseman or
processor in possession of any Collateral.

          Contingent Obligation means any direct, indirect, contingent or non-
          ---------------------
contingent guaranty or obligation for the indebtedness of another Person, except
endorsements in the ordinary course of business.

          Effective Date shall mean the date on which all of the conditions
          --------------
specified in Section 3.3 shall have been satisfied.

          Event of Default shall mean any event specified in Section 7.
          ----------------

          Financial Statements shall have the meaning specified in Section 6.1.
          --------------------

          GAAP shall mean generally accepted accounting principles in the United
          ----
States of America, as in effect from time to time.

          Loans shall mean the loans and financial accommodations made by the
          -----
Lender to the Borrower in accordance with the terms of this Agreement and any
Note delivered hereunder.

          Loan Documents shall mean, collectively, this Agreement, the Notes,
          --------------
and all other present and future documents, agreements, certificates,
instruments, and opinions delivered by the Borrower under, in connection with or
relating to this Agreement, or any other present or future instrument or
agreement between Lender and Borrower, as each of the same may be amended,
modified, extended, restated or supplemented from time to time.

          Material Adverse Change shall mean, with respect to any Person, a
          -----------------------
material adverse change in the business, operations, results of operations,
assets, liabilities, or financial condition of such Person taken as a whole.

          Material Adverse Effect shall mean, with respect to any Person, a
          -----------------------
material adverse effect on the business, operations, results of operations,
assets, liabilities, or financial condition of such Person taken as a whole.

          Note shall mean each Promissory Note, in substantially the form
          ----
attached hereto, made by the Borrower in favor of the Lender, as amended,
supplemented, or otherwise modified from time to time.

          Obligations shall mean and include all loans (including the Loans),
          -----------
advances, debts, liabilities, obligations, covenants and duties owing by
Borrower to Lender of any kind or nature, present or future, whether or not
evidenced by the Note or any note, guaranty or other instrument, whether or not
arising under or in connection with, this Agreement, any other Loan Document or
any other present or future instrument or agreement, whether or not for the
payment of money, whether arising by reason of an extension of credit, opening,
guaranteeing or confirming of a letter of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment, purchase, discount or otherwise), whether absolute
or contingent, due or to become due, now due or hereafter arising and however
acquired (including without limitation all loans previously made by Lender to
Borrower).  The term includes, without limitation, all interest (including
interest accruing on or after an bankruptcy, whether or not an allowed claim),
charges, expenses, commitment, facility, closing and collateral management fees,
letter of credit fees, reasonable attorneys' fees, taxes and any other sum

                                       2.
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properly chargeable to Borrower under this Agreement, the other Loan Documents
or any other present or future agreement between Lender and Borrower.

          Permitted Liens shall mean such of the following as to which no
          ---------------
enforcement, collection, execution, levy, or foreclosure proceeding shall have
been commenced: (a) liens for taxes, assessments, and other governmental charges
or levies or the claims or demands of landlords, carriers, warehousemen,
mechanics, laborers, materialmen, and other like Persons arising by operation of
law in the ordinary course of business for sums which are not yet due and
payable, or liens which are being contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves are
maintained to the extent required by GAAP; (b) deposits or pledges to secure the
payment of worker's compensation, unemployment insurance, or other social
security benefits or obligations, public or statutory obligations, surety or
appeal bonds, bid or performance bonds, or other obligations of a like nature
incurred in the ordinary course of business; (c) licenses, restrictions, or
covenants for or on the use of the Collateral which do not materially impair
either the use of the Collateral in the operation of the business of the
Borrower or the value of the Collateral; (d) attachment or judgment liens that
do not constitute an Event of Default; and (e) a lien on any item of equipment
created substantially simultaneously with the acquisition of such equipment for
the purpose of financing such acquisition, provided that such lien shall attach
only to the equipment acquired.

          Person shall mean any individual, sole proprietorship, partnership,
          ------
limited liability partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution,
entity, party, or government (including any division, agency, or department
thereof), and the successors, heirs, and assigns of each.

          Receivable shall have the meaning set forth in Section 8(e).
          ----------

          Schedule shall mean Schedule A hereto containing certain information
          --------
pertaining to the Borrower.

          Solvent means, with respect to any Person, that as of the date as to
          -------
which such Person's solvency is measured:

          (a) the fair saleable value of its assets is in excess of the total
amount of its liabilities (including contingent liabilities as valued in
accordance with GAAP) as they become absolute and matured;

          (b) it has sufficient capital to conduct its business; and

          (c) it is able generally to meet its debts as they mature.

          Taxes shall have the meaning specified in Section 5.5.
          -----

SECTION 2.    CREATION OF SECURITY INTEREST; COLLATERAL. The Borrower hereby
              -----------------------------------------
assigns and grants to the Lender a continuing general, lien on, and security
interest in, all the Borrower's right, title, and interest in and to the
collateral described in the next sentence (the "Collateral") to secure the
payment and performance of all the Obligations, subject only to Permitted Liens.
Collateral means Receivables, Investment Property, Inventory, Equipment, and
Other Property and all additions and accessions thereto and substitutions and
replacements therefor and improvements thereon, and all proceeds (whether cash
or other property) and products thereof, including, without limitation, all
proceeds of insurance coveting the same and all tort claims in connection
therewith, and all records, files, computer

                                       3.
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programs and files, data and writings relating to the foregoing, and all
equipment containing the foregoing.

          Equipment means all machinery, equipment, furniture, fixtures,
          ---------
conveyors, tools, materials, storage and handling equipment, hydraulic presses,
cutting equipment, computer equipment and hardware, including central processing
units, terminals, drives, memory units, printers, keyboards, screens,
peripherals and input or output devices, molds, dies, stamps, vehicles, and
other equipment of every kind and nature and wherever situated now or hereafter
owned by Borrower or in which Borrower may have any interest as lessee or
otherwise (to the extent of such interest), together with all additions and
accessions thereto, all replacements and all accessories and parts therefor, all
manuals, blueprints, know-how, warranties and records in connection therewith,
all rights against suppliers, warrantors, manufacturers, sellers or others in
connection therewith, and together with all substitutes for any of the
foregoing; and

          Inventory means all present and future goods intended for sale, lease
          ---------
or other disposition by Borrower including, without limitation, all raw
materials, work in process, finished goods and other retail inventory, goods in
the possession of outside processors or other third parties, goods consigned to
Borrower to the extent of its interest therein as consignee, materials and
supplies of any kind, nature or description which are or might be used in
connection with the manufacture, packing, shipping, advertising, selling or
finishing of any such goods, and all documents of title or documents
representing the same; and

          Investment Property means any and all investment property of Borrower,
          -------------------
including all securities, whether certificated or uncertificated, security
entitlements, securities accounts, commodity contracts and commodity accounts,
and all financial assets held in any securities account or otherwise, wherever
located, and whether now existing or hereafter acquired or arising; and

          Other Property means all present and future instruments, documents,
          --------------
documents of title, securities, bonds, notes, promissory notes, drafts,
acceptances, letters of credit and rights to receive proceeds of letters of
credit, deposit accounts, chattel paper, certificates, insurance policies,
insurance proceeds, leases, computer tapes, causes of action, judgments, claims
against third parties, leasehold rights in any personal property, books,
ledgers, files and records, general intangibles (including without limitation,
all contract rights, tax refunds, rights to receive tax refunds, patents, patent
applications, copyrights (registered and unregistered), royalties, licenses,
permits, franchise rights, authorizations, customer lists, rights of
indemnification, contribution and subrogation, computer programs, discs and
software, trade secrets, computer service contracts, trademarks, trade names,
service marks and names, logos, goodwill, deposits, choses in action, designs,
blueprints, plans, know-how, telephone numbers and rights thereto, credits,
reserves, and all forms of obligations whatsoever now or hereafter owing to
Borrower), all property at any time in the possession or under the control of
Lender, and all security given by Borrower to Lender pursuant to any other loan
document or agreement; and

          Receivables means all present and future accounts and accounts
          -----------
receivable, together with all security therefor and guaranties thereof and all
rights and remedies relating thereto, including any right of stoppage in
transit.

SECTION 3.  THE CREDIT FACILITY.
            -------------------

            SECTION 3.1.  Borrowings.  The Lender, subject to the terms and
conditions of this Agreement, agrees to make a Loan to Borrower in a single
drawdown, at Borrower's request, in a principal amount not to exceed $3,000,000.
Notwithstanding anything herein to the contrary, the Lender shall be obligated
to make such Loan only after the Lender, in its sole discretion, determines that
the

                                       4.
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applicable conditions for borrowing contained in Sections 3.3 and 3.4 are
satisfied. The timing and financial scope of Lender's obligation to make Loans
hereunder are limited as set forth in a commitment letter executed by Lender and
Borrower, dated as of July 9, 1999 and attached hereto as Exhibit A (the
"Commitment Letter").

          SECTION 3.2.  Application of Proceeds.  The Borrower shall use the
proceeds of the Loans for its general working capital purposes.

          SECTION 3.3.  Conditions to Loan.

     (a)  The obligation of the Lender to make the Loan is subject to the
Lender's receipt of the following, on or before the Closing Date, each dated the
date of the Loan or as of an earlier date acceptable to the Lender, in form and
substance satisfactory to the Lender and its counsel:

          (i)    completed requests for information (Form UCC-11) listing all
effective Uniform Commercial Code financing statements naming the Borrower as
debtor and all tax lien, judgment, and litigation searches for the Borrower as
the Lender shall deem necessary or desirable;

          (ii)   acknowledgment copies of Uniform Commercial Code financing
statements (naming the Lender as secured party and the Borrower as debtor), duly
fried in all jurisdictions that the Lender deems necessary or desirable to
perfect and protect the security interests created hereunder, and evidence that
all other filings, registrations and recordings have been made in the
appropriate governmental offices, and all other action has been taken, which
shall be necessary to create, in favor of the Lender, a perfected first priority
Lien on the Collateral;

          (iii)  a Note duly executed by the Borrower evidencing the amount of
such Loan;

          (iv)   an Intellectual Property Security Agreement, in form and
substance satisfactory to the Lender and its counsel, duly executed by the
Borrower, specifically identifying and granting to the Lender a security
interest in all of the Borrower's intellectual property;

          (v)    if requested by the Lender, a Collateral Access Agreement duly
executed by the lessor or mortgagee, as the case may be, of each premises where
the equipment Collateral is located;

          (vi)   a Notice of Security Interest, in form and substance
satisfactory to the Lender and its counsel, to each financial institution at
which any deposit accounts of Borrower are maintained;

          (vii)  the warrants described in the Commitment Letter, if any;

          (viii) certificates of insurance required under Section 5.4 of this
Agreement together with loss payee endorsements for all such policies naming the
Lender as lender loss payee and as an additional insured;

          (ix)   a certificate of the Secretary or an Assistant Secretary of the
Borrower ("Secretary's Certificate") certifying (A) that attached to the
Secretary's Certificate is a true, complete, and accurate copy of the
resolutions of the Board of Directors of the Borrower (or a unanimous consent of
directors in lieu thereof) authorizing the execution, delivery, and performance
of this Agreement, the other Loan Documents, and the transactions contemplated
hereby and thereby, and that such resolutions have not been amended or modified
since the date of such certification and are in full force and effect; (B) the
incumbency, names, and true signatures of the officers of the Borrower
authorized to sign the

                                       5.
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Loan Documents to which it is a party; (C) that attached to the Secretary's
Certificate is a true and correct copy of the Articles or Certificate of
Incorporation of the Company, as amended, which Articles or Certificate of
Incorporation have not been further modified, repealed or rescinded and are in
full force and effect; (D) that attached to the Secretary's Certificate of the
Borrower is a true and correct copy of the Bylaws, as amended, which Bylaws of
the Company have not been further modified, repealed or rescinded and are in
full force and effect; and (E) that attached to the Secretary's Certificate is a
valid Certificate of Good Standing issued by the Secretary of the State of the
Borrower's state of incorporation;

          (xi)   the opinion of counsel for the Borrower covering such matters
incident to the transactions contemplated by this Agreement as the Lender may
reasonably require;

          (xii)  evidence of the consent or authorization of, filing with or
other act by or in respect of any governmental agency or authority or any other
Person required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, or the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby; and

          (xiii) such other documents, agreements and instruments as the Lender
deems necessary in its sole and absolute discretion in connection with the
transactions contemplated hereby.

     (b)  The security interests in the Collateral granted in favor of the
Lender under this Agreement shall have been duly perfected and shall constitute
first priority liens, except for Permitted Liens.

          SECTION 3.4.  Additional Conditions Precedent. The obligation of the
Lender to make the Loan is subject to the satisfaction of the following
additional conditions precedent:

     (a)  There shall be no pending or, to the knowledge of the Borrower after
due inquiry, threatened litigation, proceeding, inquiry, or other action (i)
seeking an injunction or other restraining order, damages, or other relief with
respect to the transactions contemplated by this Agreement or the other Loan
Documents or thereby or (ii) which affects or could affect the business,
prospects, operations, assets, liabilities, or condition (financial or
otherwise) of the Borrower, except, in the case of clause (ii), where such
litigation, proceeding, inquiry, or other action could not be expected to have a
Material Adverse Effect in the judgment of the Lender;

     (b)  all representations and warranties contained in this Agreement and the
other Loan Documents shall be true and correct on and as of the date of such
Loan as if then made, other than representations and warranties that expressly
relate solely to an earlier date, in which case they shall have been true and
correct as of such earlier date;

     (c)  no Event of Default or event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default shall have
occurred and be continuing or would result from the making of the requested Loan
as of the date of such request; and

     (d)  the Borrower shall be deemed to have hereby reaffirmed and ratified
all security interests, liens, and other encumbrances heretofore granted by the
Borrower to the Lender.

          SECTION 3.5.  Interest Rate; Repayment. The interest rate applicable
to the Loan made by the Lender hereunder, and the repayment date for such Loan,
are as set forth in the Note evidencing such Loan.

                                       6.
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               SECTION 4.  REPRESENTATIONS AND WARRANTIES.
                           ------------------------------

               SECTION 4.1.  Good Standing; Qualified to do Business.  The
Borrower (a) is duly organized, validly existing, and in good standing under the
laws of the State of its organization, (b) has the power and authority to own
its properties and assets and to transact the businesses in which it is
presently, or proposes to be, engaged, and (c) is duly qualified and authorized
to do business and is in good standing in every jurisdiction in which the
failure to be so qualified could have a Material Adverse Effect on (i) the
Borrower, (ii) the Borrower's ability to perform its obligations under the Loan
Documents, or (iii) the rights of the Lender hereunder.

               SECTION 4.2.  Due Execution, etc.  The execution, delivery, and
performance by the Borrower of each of the Loan Documents to which it is a party
are within the powers of the Borrower, do not contravene the organizational
documents, if any, of the Borrower, and do not (a) violate any law or
regulation, or any order or decree of any court or governmental authority, (b)
conflict with or result in a breach of, or constitute a default under, any
material indenture, mortgage, or deed of trust or any material lease, agreement,
or other instrument binding on the Borrower or any of its properties, or (c)
require the consent, authorization by, or approval of or notice to or filing or
registration with any governmental authority or other Person, except as may be
set forth in the Schedule.  This Agreement is, and each of the other Loan
Documents to which the Borrower is or will be a party, when delivered hereunder
or thereunder, will be, the legal, valid, and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally and by general principles of equity.

               SECTION 4.3.  Solvency; No Liens.  The Borrower is Solvent and
will be Solvent upon the completion of all transactions contemplated to occur
hereunder (including, without limitation, the Loan to be made on the Effective
Date); the security interests granted herein constitute and shall at all times
constitute the first and only liens on the Collateral other than Permitted
Liens; and the Borrower is, or will be at the time additional Collateral is
acquired by it, the absolute owner of the Collateral with full right to pledge,
sell, consign, transfer, and create a security interest therein, free and clear
of any and all claims or liens in favor of any other Person other than Permitted
Liens.

               SECTION 4.4.  No Judgments, Litigation. No judgments are
outstanding against the Borrower nor is there now pending or, to the best of the
Borrower's knowledge, threatened any litigation, contested claim, or
governmental proceeding by or against the Borrower except judgments and pending
or threatened litigation, contested claims, and governmental proceedings which
would not, in the aggregate, have a Material Adverse Effect on the Borrower.

               SECTION 4.5.  No Defaults. The Borrower is not in default or has
not received a notice of default under any material contract, lease, or
commitment to which it is a party or by which it is bound. The Borrower knows of
no dispute regarding any contract, lease, or commitment which could have a
Material Adverse Effect on the Borrower.

               SECTION 4.6.  Collateral Locations. The address of the principal
place of business and chief executive office of Borrower is, and the books and
records of Borrower and all of its chattel paper and records relating to
Collateral are maintained exclusively in the possession of Borrower at, the
address of Borrower specified in the heading of this Agreement. Borrower has
places of business, and Collateral is located, only at such address and at the
addresses set forth in the Schedule and at any additional locations reported to
the Lender as provided in Section 5.7 as to which the Lender has taken all
necessary action to perfect and protect its security interests in the Collateral
at any such locations.

                                       7.
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               SECTION 4.7.  Corporate and Trade Names; Federal Tax ID. During
the past five years, Borrower has not been known by or used any other corporate,
trade or fictitious name except for its name as set forth on the signature page
of this Agreement and the other names specified in the Schedule.  The Borrower's
Federal Tax ID number is as set forth in the Schedule.

               SECTION 4.8.  No Events of Default. No Event of Default has
occurred and is continuing nor has any event occurred which, with the giving of
notice or the passage of time, or both, would constitute an Event of Default.

               SECTION 4.9.  No Limitation on Lender's Rights. Except as
permitted herein, none of the Collateral is subject to contractual obligations
that may restrict or inhibit the Lender's rights or abilities to sell or dispose
of the Collateral or any part thereof after the occurrence of an Event of
Default.

               SECTION 4.10. Perfection and Priority of Security Interest. This
Agreement creates a valid and, upon completion of all required filings of
financing statements, perfected, and first priority and exclusive, security
interest in the Collateral, except for any Permitted Liens, securing the payment
of all the Obligations.

               SECTION 4.11. Intellectual Property.  Set forth in the Schedule
is a complete and accurate list of all patents, trademarks, trade names, service
marks and copyrights (registered and unregistered), and all applications
therefor and licenses thereof, of Borrower.  Borrower owns or licenses all
material patents, trademarks, service-marks, logos, tradenames, trade secrets,
know-how, copyrights, or licenses and other rights with respect to any of the
foregoing, which are necessary or advisable for the operation of its business as
presently conducted or proposed to be conducted.  To the best of its knowledge
after due inquiry, Borrower has not infringed any patent, trademark, service-
mark, tradename, copyright, license or other right owned by any other Person by
the sale or use of any product, process, method, substance, part or other
material presently contemplated to be sold or used, where such sale or use would
reasonably be expected to have a Material Adverse Effect and no claim or
litigation is pending, or to the best of Borrower's knowledge, threatened
against or affecting Borrower that contests its right to sell or use any such
product, process, method, substance, part or other material.

               SECTION 4.12. Consents and Filings.  No consent, authorization
or approval of, or filing with or other act by, any shareholders of Borrower or
any governmental authority or other Person is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
or any other Loan Document, the consummation of the transactions contemplated
hereby or thereby or the continuing operations of Borrower following such
consummation, except (i) those that have been obtained or made, (ii) the filing
of financing statements under the Code and (iii) any necessary filings with U.S.
Copyright Office and the U.S. Patent and Trademark Office.

               SECTION 4.13. Year 2000 Compliance. The Borrower has (i)
initiated a review and assessment of all areas within its business and
operations (including those affected by suppliers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower (or its suppliers and vendors) may be unable
to recognize and perform properly date-sensitive functions involving certain
dates prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to
date, implemented that plan in accordance with that timetable. The Borrower
reasonably believes that all computer applications (including those of its
suppliers and vendors) that are material to its business and operations will on
a timely basis be able to perform properly date-sensitive functions for all
dates before and after January 1, 2000 (that is, be "Year 2000 compliant"),
except to the extent that a failure to do so could not reasonably be expected to
have Material Adverse Effect.

                                       8.
<PAGE>

               SECTION 4.14. Taxes.  Borrower has properly completed and timely
filed all income tax returns it is required to file, and all Taxes, assessments,
fees and other governmental charges for periods beginning prior to the date of
this Agreement have been timely paid (or, if not yet due or being disputed in
good faith, adequate reserves therefor have been established in accordance with
GAAP) and Borrower has no liability for Taxes in excess of the amounts so paid
or reserves so established.  No deficiencies for Taxes have been claimed,
proposed or assessed by any taxing or other governmental agency or authority
against Borrower and no notice of any tax lien has been filed.  There are no
pending or (to the best knowledge of Borrower) threatened audits, investigations
or claims for or relating to any liability for Taxes and there are no matters
under discussion with any governmental agency or authority which could result in
an additional material liability for Taxes.

               SECTION 4.15. Financial Statements.  Borrower has provided to
the Lender complete and accurate Financial Statements, which have been prepared
in accordance with GAAP (except for the absence of footnotes and subject to
normal year-end adjustments with respect to unaudited financial statements)
consistently applied throughout the periods involved and fairly present the
financial position and results of operations of Borrower for each of the periods
covered, subject, in the case of any quarterly financial statements, to normal
year-end adjustments and the absence of notes.  Borrower has no Contingent
Obligation or liability for Taxes, unrealized losses, unusual forward or long-
term commitments or long-term leases, which is not reflected in such Financial
Statements or the footnotes thereto.  Since the last date covered by such
Financial Statements, there has been no sale, transfer or other disposition by
Borrower of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of
any other Person) material in relation to the financial condition of Borrower at
said date.  Since said date, (i) there has been no change, occurrence,
development or event which has had or could reasonably be expected to have a
Material Adverse Effect and (ii) none of the capital stock of Borrower has been
redeemed, retired, purchased or otherwise acquired for value by Borrower.

               SECTION 4.16. Accuracy and Completeness of Information.  All
data, reports, and information heretofore, contemporaneously, or hereafter
furnished by or on behalf of the Borrower in writing to the Lender or for
purposes of or in connection with this Agreement or any other Loan Document, or
any transaction contemplated hereby or thereby, are or will be true and accurate
in all material respects on the date as of which such data, reports, and
information are dated or certified and not incomplete by omitting to state any
material fact necessary to make such data, reports, and information not
misleading at such time.  There are no facts now known to the Borrower which
individually or in the aggregate would reasonably be expected to have a Material
Adverse Effect and which have not been specified herein, in the Financial
Statements, or in any certificate, opinion, or other written statement
previously furnished by the Borrower to the Lender.

    SECTION 5. COVENANTS OF THE BORROWER.

               SECTION 5.1.  Existence, etc.  The Borrower shall: (a) retain
its existence and its current yearly accounting cycle, (b) maintain in full
force and effect all licenses, bonds, franchises, leases, trademarks, patents,
contracts, and other rights necessary or desirable to the profitable conduct of
its business unless the failure to do so could not reasonably be expected to
have a Material Adverse Effect on the Borrower, (c) continue in, and limit its
operations to, the same general lines of business as those presently conducted
by it, and (d) comply with all applicable laws and regulations of any federal,
state, or local governmental authority, except for such laws and regulations the
violations of which would not, in the aggregate, have a Material Adverse Effect
on the Borrower.

                                       9.
<PAGE>

               SECTION 5.2.   Notice to the Lender. As soon as possible, and in
any event within five days after the Borrower learns of the following, the
Borrower will give written notice to the Lender of the following:

               (a)  any proceeding instituted or threatened to be instituted by
or against the Borrower in any federal, state, local, or foreign court or before
any commission or other regulatory body (federal, state, local, or foreign)
involving a sum, together with the sum involved in all other similar
proceedings, in excess of $50,000 in the aggregate,

               (b)  any contract that is terminated or amended and which has had
or could reasonably be expected to have a Material Adverse Effect on the
Borrower,

               (c)  the occurrence of any Material Adverse Change with respect
to the Borrower;

               (d)  the occurrence of any Event of Default or event or condition
which, with notice or lapse of time or both, would constitute an Event of
Default, together with a statement of the action which the Borrower has taken or
proposes to take with respect thereto;

               (e)  of any discovery or determination by Borrower that any
computer application (including those of its suppliers and vendors) that is
material to its business and operations will not be Year 2000 compliant on a
timely basis, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect;

               (f)  of any material damage to, the destruction of or any other
material loss to any Collateral owned or used by Borrower other than any such
Collateral with a net book value (individually or in the aggregate) less than
$10,000 or any condemnation, confiscation or other taking, in whole or in part,
or any event that otherwise diminishes so as to render impracticable or
unreasonable the use of such Collateral owned or used by Borrower together with
the amount of the damage, destruction, loss or diminution in value;

               (g)  of any copyright registration made by it, any rights
Borrower may obtain to any copyrightable works, new trademarks or any new
patentable inventions, and of any renewal or extension of any trademark
registration, or if it shall otherwise become entitled to the benefit of any
patent or patent application or trademark or trademark application; and

               (h)  of the opening of any new bank account or other deposit
account, and any new securities account.

               SECTION 5.3.   Maintenance of Books and Records. Borrower shall
(i) maintain books and records (including computer records) pertaining to the
Collateral in such detail, form and scope as is customary for companies in
similar businesses in similar situations and (ii) provide the Lender and its
agents access to the premises of Borrower at any time and from time to time,
during normal business hours and upon reasonable notice under the circumstances,
and at any time on and after the occurrence and during the existence of an Event
of Default, or event or condition which, with notice or lapse of time or both,
would constitute an Event of Default, for the purposes of (A) inspecting and
verifying the Collateral, (B) inspecting and copying (at Borrower's expense) any
and all records pertaining thereto, and (C) discussing the affairs, finances and
business of Borrower with any officer, employee or director of Borrower or with
Borrower's accountants. Borrower shall reimburse the Lender for the reasonable
travel and related expenses of the Lender's employees or, at the Lender's
option, of such outside accountants or examiners as may be retained by the
Lender to verify or inspect Collateral,

                                      10.
<PAGE>

records or documents of Borrower on a regular basis or for a special inspection
if the Lender deems the same appropriate. If the Lender's own employees are
used, Borrower shall also pay therefor $600 per person per day (or such other
amount as shall represent the Lender's then current standard charge for the
same), or, if outside examiners or accountants are used, Borrower shall also pay
the Lender such reasonable sum as the Lender may be obligated to pay as fees
therefor.

               SECTION 5.4.   Insurance. Borrower shall maintain public
liability insurance, business interruption insurance, third party property
damage insurance and replacement value insurance on its assets (including the
Collateral) under such policies of insurance, with such insurance companies, in
such amounts and covering such risks as are at all times reasonably satisfactory
to the Lender in its commercially reasonable judgment, all of which policies
coveting the Collateral shall name the Lender as an additional insured and
lender loss payee in case of loss, and contain other provisions as the Lender
may reasonably require to protect fully the Lender's interest in the Collateral
and any payments to be made under such policies.

               SECTION 5.5.   Taxes. The Borrower will pay, when due, all taxes,
assessments, claims, and other charges ("Taxes") lawfully levied or assessed
against the Borrower or the Collateral other than taxes that are being
diligently contested in good faith by the Borrower by appropriate proceedings
promptly instituted and for which an adequate reserve is being maintained by the
Borrower in accordance with GAAP. If any Taxes remain unpaid after the date
fixed for the payment thereof, or if any lien shall be claimed therefor, then,
without notice to the Borrower, but on the Borrower's behalf, the Lender may pay
such Taxes, and the amount thereof shall be included in the Obligations.

               SECTION 5.6.   Borrower to Defend Collateral Against Claims; Fees
on Collateral. The Borrower will defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest therein.
The Borrower will not permit any notice creating or otherwise relating to liens
on the Collateral or any portion thereof to exist or be on file in any public
office other than Permitted Liens. The Borrower shall promptly pay, when
payable, all transportation, storage, and warehousing charges and license fees,
registration fees, assessments, charges, permit fees, and taxes (municipal,
state, and federal) which may now or hereafter be imposed upon the ownership,
leasing, renting, possession, sale, or use of the Collateral, other than taxes
on or measured by the Lender's income and fees, assessments, charges, and taxes
which are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are maintained to the
extent required by GAAP.

               SECTION 5.7.   Change of Location, Structure, or Identity. The
Borrower will give Lender at least 30 days prior written notice of any change of
Borrower's chief executive office or of the opening of any additional place of
business. The Borrower will not move or permit the movement of any item of
Collateral from the locations specified in the Schedule, except that the
Borrower keep Collateral at other locations within the United States provided
that the Borrower has delivered to the Lender (i) prior written notice thereof
and (ii) duly executed financing statements and other agreements and instruments
(all in form and substance satisfactory to the Lender) necessary or, in the
opinion of the Lender, desirable to perfect and maintain in favor of the Lender
a first priority security interest in the Collateral. Notwithstanding anything
to the contrary in the immediately preceding sentence, the Borrower may keep any
Collateral consisting of motor vehicles or rolling stock at any location in the
United States provided that the Lender's security interest in any such
Collateral is conspicuously marked on the certificate of title thereof and the
Borrower has complied with the provisions of Section 5.9.

               SECTION 5.8.   Use of Collateral; Licenses; Repair. The
Collateral shall be operated by competent, qualified personnel in connection
with the Borrower's business purposes,

                                      11.
<PAGE>

for the purpose for which the Collateral was designed and in accordance with
applicable operating instructions, laws, and government regulations, and the
Borrower shall use every reasonable precaution to prevent loss or damage to the
Collateral from fire and other hazards. The Borrower shall procure and maintain
in effect all orders, licenses, certificates, permits, approvals, and consents
required by federal, state, or local laws or by any governmental body, agency,
or authority in connection with the delivery, installation, use, and operation
of the Collateral.

               SECTION 5.9.   Further Assurances. The Borrower will, promptly
upon request by the Lender, execute and deliver or use its best efforts to
obtain any document required by the Lender (including, without limitation,
warehouseman or processor disclaimers, mortgagee waivers, landlord disclaimers,
or subordination agreements with respect to the Obligations and the Collateral),
give any notices, execute and file any financing statements, mortgages, or other
documents (all in form and substance satisfactory to the Lender), mark any
chattel paper, deliver any chattel paper or instruments to the Lender, and take
any other actions that are necessary or, in the opinion of the Lender, desirable
to perfect or continue the perfection and the first priority of the Lender's
security interest in the Collateral, to protect the Collateral against the
rights, claims, or interests of any Persons, or to effect the purposes of this
Agreement. The Borrower hereby authorizes the Lender to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of the Borrower where permitted
by law. A carbon, photographic, or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. To the extent
required under this Agreement, the Borrower will pay all costs incurred in
connection with any of the foregoing.

               SECTION 5.10.  No Disposition of Collateral. The Borrower will
not in any way hypothecate or create or permit to exist any lien, security
interest, charge, or encumbrance on or other interest in any of the Collateral,
except for the lien and security interest granted hereby and Permitted Liens. In
the event the Collateral, or any part thereof, is sold, transferred, assigned,
exchanged, or otherwise disposed of in violation of this Agreement, the security
interest of the Lender shall continue in such Collateral or part thereof
notwithstanding such sale, transfer, assignment, exchange, or other disposition,
and the Borrower will hold the proceeds thereof in a separate account for the
benefit of the Lender. Following such a sale, the Borrower will transfer such
proceeds to the Lender in kind.

               SECTION 5.11.  No Limitation on Lender's Rights. The Borrower
will not enter into any contractual obligations which may restrict or inhibit
the Lender's rights or ability to sell or otherwise dispose of the Collateral or
any part thereof.

               SECTION 5.12.  Protection of Collateral. Upon notice to the
Borrower (provided that if an Event of Default has occurred and is continuing
the Lender need not give any notice), the Lender shall have the right at any
time to make any payments and do any other acts the Lender may deem necessary to
protect its security interests in the Collateral, including, without limitation,
the rights to satisfy, purchase, contest, or compromise any encumbrance, charge,
or lien which, in the reasonable judgment of the Lender, appears to be prior to
or superior to the security interests granted hereunder, and appear in, and
defend any action or proceeding purporting to affect its security interests in,
or the value of, any of the Collateral. The Borrower hereby agrees to reimburse
the Lender for all payments made and expenses incurred under this Agreement
including fees, expenses, and disbursements of attorneys and paralegals
(including the allocated costs of in-house counsel) acting for the Lender,
including any of the foregoing payments under, or acts taken to protect its
security interests in, any of the Collateral, which amounts shall be secured
under this Agreement, and agrees it shall be bound by any payment made or act
taken by the Lender hereunder absent the Lender's gross negligence or willful
misconduct. The Lender shall have no obligation to make any of the foregoing
payments or perform any of the foregoing acts.

                                      12.
<PAGE>

               SECTION 5.13.  Delivery of Items. The Borrower will (a) promptly
(but in no event later than one Business Day) after its receipt thereof, deliver
to the Lender any documents or certificates of title issued with respect to any
property included in the Collateral, and any promissory notes, letters of credit
or instruments related to or otherwise in connection with any property included
in the Collateral, which in any such case come into the possession of the
Borrower, or shall cause the issuer thereof to deliver any of the same directly
to the Lender, in each case with any necessary endorsements in favor of the
Lender and (b) deliver to the Lender as soon as available copies of any and all
press releases and other similar communications issued by the Borrower.

               SECTION 5.14.  Solvency.  The Borrower shall be and remain
Solvent at all times.

               SECTION 5.15.  Intellectual Property. Borrower shall do and cause
to be done all things necessary to preserve, maintain and keep in full force and
effect all of its registrations of trademarks, service marks and other marks,
trade names and other trade rights, patents, copyrights and other intellectual
property in accordance with prudent business practices, except to the extent
that the failure to preserve or maintain any of the foregoing would not
reasonably be expected to have a Material Adverse Effect. Without limiting the
generality of the foregoing, Borrower agrees Promptly, and in any event not
later than 30 days after the date hereof, to have any of its currently
unregistered copyrightable software, computer programs and other materials
registered with the U.S. Copyright Office in Washington, D.C. (the "Copyright
Office") and to promptly provide TBCC with evidence of such registration.
Borrower will, on an ongoing basis, promptly register any future unregistered
copyrightable software, computer programs and other materials with the Copyright
Office.

               SECTION 5.16.  Fundamental Changes. The Borrower shall not (a)
amend or modify its name, unless the Borrower delivers to the Lender thirty days
prior to any such proposed amendment or modification written notice of such
amendment or modification and within ten days before such amendment or
modification delivers executed Uniform Commercial Code financing statements (in
form and substance satisfactory to the Lender) or (b) merge or consolidate with
any other entity or make any material change in its capital structure, in each
case without the Lender's prior written consent which shall not be unreasonably
withheld.

               SECTION 5.17.  Contingent Obligations. Borrower will not,
directly or indirectly, incur, assume, or suffer to exist any Contingent
Obligation, excluding indemnities given in connection with this Agreement or the
other Loan Documents in favor of the Lender or in connection with the sale of
inventory or other asset dispositions permitted hereunder, except Contingent
Obligations and other similar third party credit support relating to obligations
of vendors and suppliers of Borrower in respect of transactions entered into in
the normal course of business, provided that the aggregate amount of any such
guarantees and other similar third party credit support shall not exceed
$100,000 at any time outstanding, and provided further that no Default or Event
of Default shall exist either immediately prior to or after giving effect to the
making of the foregoing guarantees or the entering into any third party credit
support transactions.

               SECTION 5.18.  Change in Nature of Business. Borrower will not at
any time make any material change in the lines of its business as carried on at
the date of this Agreement or enter into any new line of business; provided that
Borrower may enter businesses reasonably related or incidental to its current
lines of business.

               SECTION 5.19.  Sales of Assets. Borrower will not, directly or
indirectly, in any fiscal year, sell, transfer or otherwise dispose of any
assets, or grant any option or other right to purchase or otherwise acquire any
assets other than (i) equipment with an aggregate value of less

                                      13.
<PAGE>

than $25,000 the proceeds of which shall be paid to the Lender and applied to
the Obligations, (ii) sales of inventory in the ordinary course of business and
(iii) licenses or sublicenses on a non-exclusive basis of intellectual property
in the ordinary course of Borrower's business.

               SECTION 5.20.  Loans to Other Persons. Borrower will not at any
time make loans or advance any credit (except to trade debtors in the ordinary
course of business) to any Person in excess of $25,000 in the aggregate at any
time for all such loans, except that Borrower may make cashless advances of
credit to senior members of Borrower's management team to purchase restricted
stock of Borrower.

               SECTION 5.21.  Dividends, Stock Redemptions. Borrower will not,
directly or indirectly, pay any dividends or distributions on, purchase, redeem
or retire any shares of any class of its capital stock or any warrants, options
or rights to purchase any such capital stock, whether now or hereafter
outstanding ("Stock"), or make any payment on account of or set apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of its Stock, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of Borrower, except for dividends paid solely in stock of the
Borrower and repurchases of stock owned by employees, directors and consultants
of Borrower pursuant to terms of employment, consulting or other stock
restrictions agreements at such time as any such employee, director or
consultant terminates his or her affiliations with the Borrower, provided that
no Default or Event of Default shall exist either immediately prior to or after
giving effect to such repurchase, and provided further that the total amount
paid in connection therewith by Borrower shall not exceed $50,000 in any
consecutive 12-month period.

               SECTION 5.22.  Investments in Other Persons. Borrower will not,
directly or indirectly, at any time make or hold any Investment in any Person
(whether in cash, securities or other property of any kind) other than
investments in Cash Equivalents.

               SECTION 5.23.  Acquisition of Stock or Assets. Borrower will not
acquire or commit or agree to acquire all or any stock, securities or assets of
any other Person other than inventory and equipment acquired in the ordinary
course of business.

               SECTION 5.24.  Partnerships; Subsidiaries; Joint Ventures;
Management Contracts. Borrower will not at any time create any direct or
indirect Subsidiary, enter into any joint venture or similar arrangement (other
than joint ventures or strategic partnerships consisting of non-exclusive
licensing of technology or the providing of technical support) or become a
partner in any general or limited partnership or enter into any management
contract (other than an employment contract for the employment of an officer or
employee entered into in the regular course of Borrower's business) permitting
third party management rights with respect to Borrower's business.

               SECTION 5.25.  Right of First Refusal. In connection with any
proposed line of credit hereafter to be obtained by Borrower, Borrower agrees
that the Lender shall have a right of first refusal to provide such financing to
Borrower. Accordingly, the Lender shall have the right (but not the obligation)
to make a financing proposal for a line of credit for Borrower upon receiving
notice from Borrower of Borrower's intent to obtain such financing. Borrower
shall provide the Lender with advance notice of its intent to obtain such
financing. Thereafter, Borrower shall afford the Lender the opportunity to make
a financing proposal to Borrower, which Borrower agrees to evaluate in Good
Faith. If the Lender and Borrower shall not mutually agree upon the terms and
conditions of such financing within 45 days following Borrower's receipt of
notice, Borrower may obtain such financing from alternative sources.

                                      14.
<PAGE>

               SECTION 5.26.  Limitation on Additional Debt. The Borrower shall
not incur additional indebtedness without the consent of the Lender.
Notwithstanding the foregoing, Borrower may incur indebtedness so long as such
indebtedness is only secured by specific items of equipment financed.
Notwithstanding the foregoing, Borrower may incur up to $2,000,000 in unsecured
indebtedness with Kirin Brewery so long as repayment does not occur during the
term of Lenders loan.

               SECTION 5.27.  Additional Requirements. The Borrower shall take
all such further actions and execute all such further documents and instruments
as the Lender may reasonably request.

               SECTION 6.     FINANCIAL STATEMENTS. Until the payment and
                              --------------------
satisfaction in full of all Obligations, the Borrower shall deliver to the
Lender the following financial information:

               SECTION 6.1.   Annual Financial Statements. As soon as available,
but not later than 90 days after the end of each fiscal year of the Borrower and
its consolidated subsidiaries, the consolidated balance sheet, income statement,
and statements of cash flows and shareholders equity for the Borrower and its
consolidated subsidiaries (the "Financial Statements") for such year, reported
on by independent certified public accountants without an adverse qualification;
and

               SECTION 6.2.   Quarterly Financial Statements. As soon as
available, but not later than 30 days after the end of each of the first three
fiscal quarters in any fiscal year of the Borrower and its consolidated
subsidiaries, the Financial Statements for such fiscal quarter, together with a
certification duly executed by a responsible officer of the Borrower that such
Financial Statements have been prepared in accordance with GAAP and are fairly
stated in all material respects (subject to normal year-end audit adjustments).

               SECTION 7.     EVENTS OF DEFAULT. The occurrence of any of the
                              -----------------
following events shall constitute an Event of Default hereunder:

                    (a) the Borrower shall fail to pay when due any principal,
interest, fee or other amount required to be paid by the Borrower under or in
connection with any Note and this Agreement;

                    (b) any representation or warranty made or deemed made by
the Borrower under or in connection with any Loan Document or any Financial
Statement shall prove to have been false or incorrect in any material respect
when made or deemed made;

                    (c) the Borrower shall fail to perform or observe (i) any of
the terms, covenants or agreements contained in Sections 5.4, 5.7, 5.10, 5.14 or
5.16 through 5.25 hereof or (ii) any other term, covenant, or agreement
contained in any Loan Document (other than the other Events of Default specified
in this Section 7) and such failure remains unremedied for the earlier of ten
days from (A) the date on which the Lender has given the Borrower written notice
of such failure and (B) the date on which the Borrower knew or should have known
of such failure;

                    (d) any defined "Event of Default" shall occur under any
other Loan Document; or Borrower or any Person shall deny or disaffirm its
obligations under any of the Loan Documents or any Liens granted in connection
therewith or shall otherwise challenge any of its obligations under any of the
Loan Documents; or any Liens granted in any of the Collateral shall be
determined to be void, voidable or invalid, are subordinated or are not given
the priority contemplated by this Agreement; or any Loan Document shall for any
reason cease to create a valid and perfected Lien on the Collateral purported to
be covered thereby, of first priority (except for Permitted Liens);

                                      15.
<PAGE>

                    (e) dissolution, liquidation, winding up, or cessation of
the Borrower's business, failure of the Borrower generally to pay its debts as
they mature, admission in writing by the Borrower of its inability generally to
pay its debts as they mature, or calling of a meeting of the Borrower's
creditors for purposes of compromising any of the Borrower's debts;

                    (f) the commencement by or against the Borrower of any
bankruptcy, insolvency, arrangement, reorganization, receivership, or similar
proceedings under any federal or state law and, in the case of any such
involuntary proceeding, such proceeding remains undismissed or unstayed for
thirty days following the commencement thereof, or any action by the Borrower is
taken authorizing any such proceedings;

                    (g) an assignment for the benefit of creditors is made by
the Borrower, whether voluntary or involuntary, the appointment of a trustee,
custodian, receiver, or similar official for the Borrower or for any substantial
property of the Borrower, or any action by the Borrower authorizing any such
proceeding;

                    (h) the Borrower shall default in (i) the payment of
principal or interest on any indebtedness in excess of $100,000 (other than the
Obligations) beyond the period of grace, if any, provided in the instrument or
agreement under which such indebtedness was created, and such payment default
has not been cured within any applicable grace period unless such default has
been waived by such Person; or (ii) the observance or performance of any other
agreement or condition relating to any such indebtedness or contained in any
instrument or agreement relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such indebtedness to cause, with
the giving of notice if required, such indebtedness to become due prior to its
stated maturity, and such default has not been cured within any applicable grace
period unless such default has been waived by such Person; or (iii) any loan or
other agreement under which the Borrower has received financing from
Transamerica Corporation or any of its affiliates;

                    (i) the Borrower suffers or sustains a Material Adverse
Change;

                    (j) any tax lien, other than a Permitted Lien, is filed of
record against the Borrower and is not bonded or discharged within five Business
Days;

                    (k) any judgment or order for the payment of money in excess
of $50,000 and not otherwise covered by applicable insurance shall be rendered
against the Borrower and such judgment or order shall not be stayed, vacated,
bonded, or discharged within thirty days;

                    (1) any material covenant, agreement, or obligation, as
determined in the sole discretion of the Lender, made by the Borrower and
contained in or evidenced by any of the Loan Documents shall cease to be
enforceable, or shall be determined to be unenforceable, in accordance with its
terms; the Borrower shall deny or disaffirm the Obligations under any of the
Loan Documents or any liens granted in connection therewith; or any liens
granted on any of the Collateral in favor of the Lender shall be determined to
be void, voidable, or invalid, or shall not be given the priority contemplated
by this Agreement; or

                    (n) there is a change in more than 35% of the ownership of
any equity interests of the Borrower on the date hereof or more than 35% of such
interests become subject to any contractual, judicial, or statutory lien,
charge, security interest, or encumbrance.

               SECTION 8.   REMEDIES. If any Event of Default shall have
occurred and be continuing:

                                      16.
<PAGE>

                    (a) The Lender may, without prejudice to any of its other
rights under any Loan Document or Applicable Law, declare all Obligations to be
immediately due and payable (except with respect to any Event of Default set
forth in Section 7(f) hereof, in which case all Obligations shall automatically
become immediately due and payable without necessity of any declaration) without
presentment, representation, demand of payment, or protest, which are hereby
expressly waived.

                    (b) The Lender may take possession of the Collateral and,
for that purpose may enter, with the aid and assistance of any person or
persons, any premises where the Collateral or any part hereof is, or may be
placed, and remove the same.

                    (c) The obligation of the Lender, if any, to make additional
Loans or financial accommodations of any kind to the Borrower shall immediately
terminate.

                    (d) The Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein (or in any Loan
Document) or otherwise available to it, all the rights and remedies of a secured
party under the applicable Uniform Commercial Code (the "Code") whether or not
the Code applies to the affected Collateral and also may (i) require the
Borrower to, and the Borrower hereby agrees that it will at its expense and upon
request of the Lender forthwith, assemble all or part of the Collateral as
directed by the Lender and make it available to the Lender at a place to be
designated by the Lender that is reasonably convenient to both parties and (ii)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the Lender's
offices or elsewhere, for cash, on credit, or for future delivery, and upon such
other terms as the Lender may deem commercially reasonable.

                    (e) The Lender may accelerate or extend the time of payment,
compromise, issue credits, or bring suit on all accounts receivable
("Receivables") and other Collateral (in the name of Borrower or the Lender) and
otherwise administer and collect the Receivables and other Collateral.

                    (f) The Lender may collect, receive, dispose of and realize
upon any investment property Collateral, including withdrawal of any and all
funds from any securities accounts.

                    (g) The Lender may (i) settle or adjust disputes or claims
directly with account debtors for amounts and upon terms which it considers
advisable, and (ii) notify account debtors on the Receivables and other
Collateral that the Receivables and Collateral have been assigned to the Lender,
and that payments in respect thereof shall be made directly to the Lender. If an
Event of Default has occurred and is continuing, Borrower hereby irrevocably
authorizes and appoints the Lender, or any Person the Lender may designate, as
its attorney-in-fact, at Borrower's sole cost and expense, to exercise, all of
the following powers, which are coupled with an interest and are irrevocable,
until all of the Obligations have been indefeasibly paid and satisfied in full
in cash: (A) to receive, take, endorse, sign, assign and deliver, all in the
name of the Lender or Borrower, any and all checks, notes, drafts, and other
documents or instruments relating to the Collateral; (B) to receive, open and
dispose of all mail addressed to Borrower and to notify postal authorities to
change the address for delivery thereof to such address as the Lender may
designate; and (C) to take or bring, in the name of the Lender or Borrower, all
steps, actions, suits or proceedings deemed by the Lender necessary or desirable
to enforce or effect collection of Receivables and other Collateral or file and
sign Borrower's name on a proof of claim in bankruptcy or similar document
against any obligor of Borrower.

                    (h) The Borrower agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Borrower of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Lender shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
The Lender may

                                      17.
<PAGE>

adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Borrower recognizes that the
Lender may be unable to make a public sale of any or all of any investment
property Collateral, by reason of prohibitions contained in applicable
securities laws or otherwise, and expressly agrees that a private sale to a
restricted group of purchasers for investment and not with a view to any
distribution thereof shall be considered a commercially reasonable sale.

                    (i) Unless expressly prohibited by any licensor thereof, the
Lender is hereby granted a license to use all computer software programs, data
bases, processes, trademarks, tradenames and materials used by Borrower in
connection with its businesses or in connection with the Collateral.

                    (j) All cash proceeds received by the Lender in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Lender, be held by the Lender as
collateral for, or then or at any time thereafter applied in whole or in part by
the Lender against, all or any part of the Obligations in such order as the
Lender shall elect. Any surplus of such cash or cash proceeds held by the Lender
and remaining after the full and final payment of all the Obligations shall be
paid over to the Borrower or to such other Person to which the Lender may be
required under applicable law, or directed by a court of competent jurisdiction,
to make payment of such surplus.

                     SECTION 9.  MISCELLANEOUS PROVISIONS.

               SECTION 9.1.   Notices. Except as otherwise provided herein, all
notices, approvals, consents, correspondence, or other communications required
or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery, or certified or registered mail,
postage prepaid, if to the Lender, then to at 76 Batterson Park Road,
Farmington, Connecticut 06032, with a copy to the Lender at Riverway II, West
Office Tower, 9399 West Higgins Road, Rosemont, Illinois 60018, and if to the
Borrower, then to 3005 First Avenue, Seattle, Washington, 98121, or such other
address as shall be designated by the Borrower or the Lender to the other party
in accordance herewith. All such notices and correspondence shall be effective
when received.

               SECTION 9.2.   Headings. The headings in this Agreement are for
purposes of reference only and shall not affect the meaning or construction of
any provision of this Agreement.

               SECTION 9.3.   Assignments and Participations. The Borrower shall
not have the right to assign any Note or this Agreement or any interest therein
unless the Lender shall have given the Borrower prior written consent and the
Borrower and its assignee shall have delivered assignment documentation in form
and substance satisfactory to the Lender in its sole discretion. The Lender may
assign (without the consent of Borrower) to one or more Persons all or a portion
of its rights and obligations under this Agreement and the other Loan Documents
(provided that such Person shall not be a direct or indirect competitor of the
Borrower). The Lender may sell participations in or to all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of any Loans); provided, however, that the Lender's obligations
under this Agreement shall remain unchanged. The Lender may, in connection with
any permitted assignment or participation or proposed assignment or
participation pursuant to this Agreement, disclose to the assignee or
participant or proposed assignee or participant any information relating to
Borrower furnished to the Lender by or on behalf of Borrower.

               SECTION 9.4.   Amendments, Waivers, and Consents. Any amendment
or waiver of any provision of this Agreement and any consent to any departure by
the

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Borrower from any provision of this Agreement shall be effective only by a
writing signed by the Lender and shall bind and benefit the Borrower and the
Lender and their respective successors and assigns, subject, in the case of the
Borrower, to the first sentence of Section 9.3.

               SECTION 9.5.   Interpretation of Agreement. Time is of the
essence in each provision of this Agreement of which time is an element. All
terms not defined herein or in a Note shall have the meaning set forth in the
applicable Code, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with any Note, or any term or
provision thereof, and is not dealt with herein with more specificity, this
Agreement shall control with respect to the subject matter of such term or
provision. Acceptance of or acquiescence in a course of performance rendered
under this Agreement shall not be relevant in determining the meaning of this
Agreement even though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.

               SECTION 9.6.   Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until the indefeasible payment in full of the Obligations,
(ii) be binding upon the Borrower and its successors and assigns and (iii)
inure, together with the rights and remedies of the Lender hereunder, to the
benefit of the Lender and its successors, transferees, and assigns.

               SECTION 9.7.   Reinstatement. To the extent permitted by law,
this Agreement and the rights and powers granted to the Lender hereunder and
under the Loan Documents shall continue to be effective or be reinstated if at
any time any amount received by the Lender in respect of the Obligations is
rescinded or must otherwise be restored or returned by the Lender upon the
insolvency, bankruptcy, dissolution, liquidation, or reorganization of the
Borrower or upon the appointment of any receiver, intervenor, conservator,
trustee, or similar official for the Borrower or any substantial part of its
assets, or otherwise, all as though such payments had not been made.

               SECTION 9.8.   Survival of Provisions. All representations,
warranties, and covenants of the Borrower contained herein shall survive the
execution and delivery of this Agreement, and shall terminate only upon the full
and final payment and performance by the Borrower of the Obligations secured
hereby.

               SECTION 9.9.   Indemnification. The Borrower agrees to indemnify
and hold harmless the Lender and its directors, officers, agents, employees, and
counsel from and against any and all costs, expenses, claims, or liability
incurred by the Lender or such Person hereunder and under any other Loan
Document or in connection herewith or therewith, unless such claim or liability
shall be due to willful misconduct or gross negligence on the part of the Lender
or such Person. In addition and without limiting the generality of the
foregoing, Borrower shall, upon demand, pay to the Lender all reasonable costs
and expenses incurred by the Lender (including the reasonable fees and
disbursements of counsel and other professionals) in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents, and pay to the Lender all reasonable costs and expenses
(including the reasonable fees and disbursements of counsel and other
professionals) paid or incurred by the Lender in order to enforce or defend any
of its rights under or in respect of this Agreement, any other Loan Document or
any other document or instrument now or hereafter executed and delivered in
connection herewith, collect the Obligations or otherwise administer this
Agreement, foreclose or otherwise realize upon the Collateral or any part
thereof, prosecute actions against, or defend actions by, account debtors;
commence, intervene in, or defend any action or proceeding; initiate any
complaint to be relieved of the automatic stay in bankruptcy; file or prosecute
any probate claim, bankruptcy claim, third-party claim, or other claim; examine,
audit, copy, and inspect any of the Collateral or any of Borrower's books and
records; protect, obtain possession of, lease, dispose of, or

                                      19.
<PAGE>

otherwise enforce the Lender's security interest in, the Collateral; and
otherwise represent the Lender in any litigation relating to Borrower.

               SECTION 9.10.  Counterparts; Signatures by Facsimile. This
Agreement may be executed in counterparts, each of which when so executed and
delivered shall be an original, but both of which shall together constitute one
and the same instrument. This Agreement and each of the other Loan Documents and
any notices given in connection herewith or therewith may be executed and
delivered by facsimile transmission all with the Same force and effect as if the
same was a fully executed and delivered original manual counterpart.

               SECTION 9.11.  Severability. In case any provision in or
obligation under this Agreement or any Note or any other Loan Document shall be
invalid, illegal, or unenforceable in any jurisdiction, the validity, legality,
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

               SECTION 9.12.  Delays; Partial Exercise of Remedies. No delay or
omission of the Lender to exercise any right or remedy hereunder, whether before
or after the happening of any Event of Default, shall impair any such right or
shall operate as a waiver thereof or as a waiver of any such Event of Default.
No single or partial exercise by the Lender of any right or remedy shall
preclude any other or further exercise thereof, or preclude any other right or
remedy.

               SECTION 9.13.  Entire Agreement. The Borrower and the Lender
agree that this Agreement, the Schedule hereto, and the Commitment Letter are
the complete and exclusive statement and agreement between the parties with
respect to the subject matter hereof, superseding all proposals and prior
agreements, oral or written, and all other communications between the parties
with respect to the subject matter hereof. Should there exist any inconsistency
between the terms of the Commitment Letter and this Agreement, the terms of this
Agreement shall prevail.

               SECTION 9.14.  Setoff. In addition to and not in limitation of
all rights of offset that the Lender may have under Applicable Law, and whether
or not the Lender has made any demand or the Obligations of the Borrower have
matured, the Lender shall have the right to appropriate and apply to the payment
of the Obligations of the Borrower all deposits and other obligations then or
thereafter owing by the Lender to or for the credit or the account of the
Borrower.

               SECTION 9.15.  Joint and Several Liability. If Borrower consists
of more than one Person, their liability shall be joint and several, and the
compromise of any claim with, or the release of, any Borrower shall not
constitute a compromise with, or a release of, any other Borrower.

               SECTION 9.16.  Maximum Rate. Notwithstanding anything to the
contrary contained elsewhere in this Agreement or in any other Loan Document,
the parties hereto hereby agree that all agreements between them under this
Agreement and the other Loan Documents, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to
the Lender for the use, forbearance, or detention of the money loaned to
Borrower and evidenced hereby or thereby or for the performance or payment of
any covenant or obligation contained herein or therein, exceed the maximum non-
usurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Obligations, under
the laws of the State of Illinois (or the laws of any other jurisdiction whose
laws may be mandatorily applicable notwithstanding other provisions of this
Agreement and the other Loan Documents), or under applicable federal laws which
may presently or hereafter be in effect and which allow a higher maximum non-
usurious interest rate than under the laws of

                                      20.
<PAGE>

the State of Illinois (or such other jurisdiction), in any case after taking
into account, to the extent permitted by applicable law, any and all relevant
payments or charges under this Agreement and the other Loan Documents executed
in connection herewith, and any available exemptions, exceptions and exclusions
(the "Highest Lawful Rate"). If due to any circumstance whatsoever, fulfillment
of any provisions of this Agreement or any of the other Loan Documents at the
time performance of such provision shall be due shall exceed the Highest Lawful
Rate, then, automatically, the obligation to be fulfilled shall be modified or
reduced to the extent necessary to limit such interest to the Highest Lawful
Rate, and if from any such circumstance the Lender should ever receive anything
of value deemed interest by applicable law which would exceed the Highest Lawful
Rate, such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to Borrower. All
sums paid or agreed to be paid to the Lender for the use, forbearance, or
detention of the Obligations and other indebtedness of Borrower to the Lender
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such indebtedness, until
payment in full thereof, so that the actual rate of interest on account of all
such indebtedness does not exceed the Highest Lawful Rate throughout the entire
term of such indebtedness. The terms and provisions of this Section shall
control every other provision of this Agreement, the other Loan Documents and
all other agreements between the parties hereto.

               SECTION 9.17.  WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

               SECTION 9.18.  GOVERNING LAW. THE VALIDITY, INTERPRETATION, AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF.

               SECTION 9.19.  Venue; Service of Process. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS SITUATED IN COOK COUNTY, OR OF
THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY WAIVES, IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING, (a) ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (b) THE RIGHT TO
INTERPOSE ANY NONCOMPULSORY SETOFF, COUNTERCLAIM, OR CROSS-CLAIM. THE BORROWER
IRREVOCABLY' CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS
FOR IT SPECIFIED IN SECTION 9.1 HEREOF. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE

                                      21.
<PAGE>

PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION, SUBJECT IN EACH INSTANCE
TO THE PROVISIONS HEREOF WITH RESPECT TO RIGHTS AND REMEDIES.

                    IN WITNESS WHEREOF, the undersigned Borrower has caused this
Agreement to be duly executed and delivered by its proper and duly authorized
officer as of the date first set forth above.


                                   DENDREON CORPORATION

                                   By: /s/  Martin A. Simonetti
                                       -----------------------------
                                   Name:   Martin A. Simonetti
                                   Title:  CFO

Accepted as of the
____ day of July, 1999

TRANSAMERICA BUSINESS CREDIT CORPORATION

By: /s/ Gary P. Moro
    -------------------------------------
Name:   Gary P. Moro
Title:  Senior Vice President

                                      22.