<PAGE>
                                                                    EXHIBIT 10.6

                                                               EXECUTION VERSION

                         NORTHWEST BIOTHERAPEUTICS, INC.
                     LOAN AGREEMENT, SECURITY AGREEMENT AND
                    10% CONVERTIBLE, SECURED PROMISSORY NOTE

$50,000.00                                                        APRIL 26, 2004

SECTION 1. GENERAL.

For value received, NORTHWEST BIOTHERAPEUTICS, INC., a Delaware corporation (the
"Maker" or the "Company"), hereby promises to pay to the order of Toucan Capital
Fund II, L.P. or its assigns (collectively, the "Holder"), the principal amount
of Fifty Thousand Dollars ($50,000) upon written demand by Holder made at any
time on or after the first anniversary of execution of this Loan Agreement,
Security Agreement and 10% Convertible, Secured Promissory Note (this "Note" or
this "Agreement"), or such earlier date as may be applicable under Sections 3
and 4 hereof (the "Maturity Date"). Maker shall pay interest on the unpaid
principal amount of this Note, accruing from and after February 2, 2004 at the
rate of ten percent (10%) per annum, compounding annually (computed on the basis
of a 365-day year and the actual number of days elapsed) (the "Interest Rate").
Accrued interest shall be payable upon the payment of the principal of this
Note. The principal of, and interest on, this Note shall be payable in lawful
currency of the United States of America by wire transfer in immediately
available funds to the account of Holder, as provided in writing to Maker by
Holder. All payments shall be applied first to fees, costs and charges relating
to this Note (including, without limitation, any costs of collection), then to
accrued and unpaid interest, and thereafter to principal. This loan is made by
Holder to Maker in anticipation of an equity financing. Capitalized terms used
but not defined herein shall have the meanings ascribed to them in the
Recapitalization Agreement

SECTION 2. PRE-PAYMENT.

This Note may be pre-paid in whole or in part prior to the Maturity Date;
provided Maker provides Holder with 30 days prior written notice thereof, and
provided further that Holder shall have the option to convert this note in
accordance with Section 12 hereof by notifying Maker of Holder's election on or
before the expiration of such thirty (30) day notice period. In the event of
prepayment, Maker shall pay a penalty in the amount of 1% of the principal and
accrued interest then outstanding under this Note, unless a greater or lesser
penalty is established or approved by the U.S. Small Business Administration
("SBA"). Conversion of this Note shall not be deemed a prepayment.

SECTION 3. DEFAULT INTEREST.

Upon the occurrence of an Event of Default (as hereinafter defined), the unpaid
principal amount and accrued and unpaid interest shall bear interest payable on
demand at the lesser of (i) fourteen percent (14%) per annum, (ii) the maximum
rate permitted under applicable rules and regulations of the SBA, or (iii) the
maximum rate allowed by law (the "Default Interest"). Such interest shall
accrue, commencing upon the occurrence of an Event of Default and continuing
until such Event of Default is cured or waived.



<PAGE>

                                                               EXECUTION VERSION

SECTION 4. DEFAULTS.

         4.1 Definitions. Each occurrence of any of the following events shall
constitute an "Event of Default":

                  (a) if a default occurs in the payment of any principal of,
interest on, or other obligation with respect to, this Note, whether at the due
date thereof or upon acceleration thereof, and such default remains uncured for
five (5) business days after written notice thereof from Holder;

                  (b) if any representation or warranty of Maker made herein
shall have been false or misleading in any material respect, or shall have
contained any material omission, as of the date hereof;

                  (c) if a default occurs in the due observance or performance
of any covenant or agreement on the part of Maker to be observed or performed
pursuant to the terms of this Note and such default remains uncured for five (5)
business days after written notice thereof from Holder;

                  (d) if a default occurs in Maker's performance of any of the
terms and conditions of that certain Recapitalization Agreement, dated as of
April 26, 2004 (the "Recapitalization Agreement") or any Related
Recapitalization Document;

                  (e) if Maker shall (i) discontinue its business, (ii) apply
for or consent to the appointment of a receiver, trustee, custodian or
liquidator of Maker or any of its property, (iii) make a general assignment for
the benefit of creditors, or (iv) file a voluntary petition in bankruptcy, or a
petition or an answer seeking reorganization or an arrangement with creditors,
or take advantage of any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution or liquidation laws or statutes, or file an answer admitting
the material allegations of a petition filed against it in any proceeding under
any such law, provided, however, that insolvency of Maker shall not constitute a
default, or the basis for a default, during the Bridge Period;

                  (f) if there shall be filed against Maker an involuntary
petition seeking reorganization of Maker or the appointment of a receiver,
trustee, custodian or liquidator of Maker or a substantial part of its assets,
or an involuntary petition under any bankruptcy, reorganization or insolvency
law of any jurisdiction, whether now or hereafter in effect (any of the
foregoing petitions being hereinafter referred to as an "Involuntary Petition")
and such Involuntary Petition shall not have been dismissed within ninety (90)
days after it was filed, provided, however, that insolvency of Maker shall not
constitute a default, or the basis for a default, during the Bridge Period;

                  (g) if final judgment(s) for the payment of money in excess of
an aggregate of $25,000 (excluding any portion thereof that an insurance company
of nationally recognized standing and creditworthiness has agreed to pay) shall
be rendered against Maker and the same shall remain undischarged for a period of
thirty (30) days; or



                                       2
<PAGE>
                                                               EXECUTION VERSION

                  (h) if there occurs any event that may have a material adverse
effect on the business, affairs, prospects, operations, properties, assets,
liabilities, structure or condition, financial or otherwise, of the Company (as
such business is presently currently conducted and/or as it is proposed to be
conducted), or on any material assets or any Intellectual Property or other
Collateral developed, owned, controlled, licensed, possessed, or used by Maker,
or to which Maker has any right, option, entitlement or claim, provided,
however, that ongoing weakening of Maker's financial condition due to ongoing
expenditures and Maker's failure to obtain equity financing shall not constitute
a default, or the basis for a default, during the Bridge Period.

         4.2 Cross-Default: Maker acknowledges that the financing contemplated
by this Note is part of an integrated Recapitalization Plan, as set forth in the
Recapitalization Agreement and the Related Recapitalization Documents. Maker
further acknowledges and agrees that this Note is subject to all terms and
conditions set forth in the Recapitalization Agreement and the Related
Recapitalization Documents, and that the Recapitalization Agreement and the
Related Recapitalization Documents are subject to all of the terms and
conditions of this Note. Maker agrees that any default by Maker under any
provision of this Note, the Recapitalization Agreement or any of the Related
Recapitalization Documents will constitute a default under each other Related
Recapitalization Document and the Recapitalization Agreement.

         4.3 Remedies on Default.

                  (a) Upon each and every such Event of Default and at any time
thereafter during the continuance of such Event of Default: (i) any and all
indebtedness of Maker to Holder under this Note or otherwise shall immediately
become due and payable, both as to principal and interest (including any
deferred interest and any accrued and unpaid interest and any Default Interest);
and (ii) Holder may exercise all the rights of a creditor under applicable state
and/or federal law.

         (b) In case any one or more Events of Default shall occur and be
continuing, and acceleration of this Note or any other indebtedness of Maker to
Holder shall have occurred, Holder may, inter alia, proceed to protect and
enforce its rights by an action at law, suit in equity and/or other appropriate
proceeding, whether for the specific performance of any agreement contained in
this Note, or for an injunction against a violation of any of the terms hereof
or thereof or in furtherance of the exercise of any power granted hereby or
thereby or by law. No right conferred upon Holder by this Note shall be
exclusive of any other right referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise.


SECTION 5. DEFENSES.

         5.1 No Offsets. The obligations of Maker under this Note shall not be
subject to reduction, limitation, impairment, termination, defense, set-off,
counterclaim or recoupment for any reason.



                                       3
<PAGE>
                                                               EXECUTION VERSION

         5.2 Usury Limitations. It is the intention of the parties hereto to
comply with all applicable usury laws; accordingly, it is agreed that
notwithstanding any provisions to the contrary in this Note or any other
agreements or instruments between them, in no event shall such agreements or
instruments require the payment or permit the collection of interest (which
term, for purposes hereof, shall include any amount which, under applicable law,
is deemed to be interest, whether or not such amount is characterized by the
parties as interest) in excess of the maximum amount permitted by such laws. If
any excess of interest is unintentionally contracted for, charged or received
under the Note or under the terms of any other agreement or instrument between
the parties, the effective rate of interest shall be automatically reduced to
the maximum lawful rate of interest allowed under the applicable usury laws as
now or hereafter construed by the courts having jurisdiction thereof.

SECTION 6. REPLACEMENT OF NOTE.

         Upon receipt by Maker of reasonable evidence of the loss, theft,
destruction, or mutilation of this Note, Maker will deliver a new Note
containing the same terms and conditions in lieu of this Note. Any Note
delivered in accordance with the provisions of this Section 6 shall be dated as
of the date of this Note.

SECTION 7. EXTENSION OF MATURITY.

         Should the principal of or interest on this Note become due and payable
on other than a business day, the due date thereof shall be extended to the next
succeeding business day, and, in the case of principal, interest shall be
payable thereon at the rate per annum herein specified during such extension.
For the purposes of the preceding sentence, a business day shall be any day that
is not a Saturday, Sunday, or legal holiday in the State of Delaware.

SECTION 8. ATTORNEYS' FEES AND COLLECTION FEES.

         Should the indebtedness evidenced by this Note or any part hereof be
collected at law or in equity or in bankruptcy, receivership or other court
proceedings, arbitration or mediation, or any settlement of any of the
foregoing, Maker agrees to pay, in addition to principal and interest due and
payable hereon, all costs of collection, including, without limitation,
reasonable attorneys' fees and expenses, incurred by Holder in collecting or
enforcing this Note.

SECTION 9. WAIVERS; CONSENT TO JURISDICTION.

         9.1 Waivers by Maker. Maker hereby waives presentment, demand for
payment, notice of dishonor, notice of protest and all other notices or demands
in connection with the delivery, acceptance, performance or default of this
Note.

         9.2 Actions of Holder not a Waiver. No delay by Holder in exercising
any power or right hereunder shall operate as a waiver of any power or right,
nor shall any single or partial exercise of any power or right preclude other or
further exercise thereof, or the exercise of any other power or right hereunder
or otherwise; and no waiver or modification of the terms hereof shall be valid
unless set forth in writing by Holder and then only to the extent set forth
therein.



                                       4
<PAGE>
                                                               EXECUTION VERSION

         9.3 Consent to Jurisdiction. Maker hereby irrevocably submits to the
jurisdiction of any state or federal court sitting in the State of Delaware over
any suit, action, or proceeding arising out of or relating to this Note or any
other agreements or instruments with respect to Holder. Maker hereby irrevocably
waives, to the fullest extent permitted by law, any objection that Maker may now
or hereafter have to the laying of venue of any such suit, action, or proceeding
brought in any such court and any claim that any such suit, action, or
proceeding brought in any such court has been brought in an inconvenient forum.
Final judgment in any such suit, action, or proceeding brought in any such court
shall be conclusive and binding upon Maker and may be enforced in any court in
which Maker is subject to jurisdiction by a suit upon such judgment, provided
that service of process is effected upon Maker as provided in this Note or as
otherwise permitted by applicable law.

         9.4 Waiver of Jury Trial. MAKER WAIVES ITS RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN
MAKER AND HOLDER RELATING TO THE SUBJECT MATTER OF THIS NOTE. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS NOTE,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY
OTHER DOCUMENT OR AGREEMENT RELATING TO THE LOAN.

         9.5 Service of Process. Maker hereby consents to process being served
in any suit, action, or proceeding instituted in connection with this Note by
delivery of a copy thereof by certified mail, postage prepaid, return receipt
requested, to Maker, and/or by delivery of a copy thereof to a registered agent
of Maker. Refusal to accept delivery, and/or avoidance of delivery, shall be
deemed to constitute delivery. Maker irrevocably agrees that service in
accordance with this Section 9.5 shall be deemed in every respect effective
service of process upon Maker in any such suit, action or proceeding, and shall,
to the fullest extent permitted by law, be taken and held to be valid personal
service upon Maker. Nothing in this Section 9.5 shall affect the right of Holder
to serve process in any manner otherwise permitted by law or limit the right of
Holder otherwise to bring proceedings against Maker in the courts of any
jurisdiction or jurisdictions.


SECTION 10.  COVENANTS.

         10.1 Affirmative Covenants. So long as this Note shall remain
outstanding:

                  (a) Office. Maker shall maintain its principal office, and the
majority of its employees, assets and operations, in the United States.



                                       5
<PAGE>
                                                               EXECUTION VERSION

                  (b) Use of Proceeds. Maker will use the proceeds from this
Note only for the following purposes:

         (i) General operating expenses, expenses for the development and
         protection of its intellectual property, and other usual and customary
         commercial and business expenses incurred in pursuing its business plan
         and strategy, on and after the effective date hereof;

         (ii) Audit expenses and regular and special SEC filing expenses, for
         audits and filings occurring on or after the effective date hereof,
         including, without limitation, SEC filings relating to solicitation of
         any shareholder consents to the recapitalization of Maker; and

         (iii) Expenses of accountants, attorneys, consultants and other
         professionals (including, without limitation, the expenses of Investor
         described in Section 4.11 of the Recapitalization Agreement) relating
         to the recapitalization of Maker.

Maker will not use the proceeds from this Note for any other purpose. Without
limiting the generality of the foregoing, none of the proceeds will be used,
without prior written agreement by the Holder, (i) to purchase or carry (or
refinance any borrowing, the proceeds of which were used to purchase or carry)
any "security" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), (ii) to repay any indebtedness or discharge any obligation to
an person or entity, other than trade payables incurred in the ordinary course
of business on or after the effective date hereof, and consistent with Maker's
operating plans and budgets fully disclosed to the Holder prior to the Closing,
or (iii) to engage in business activities which would cause a violation of 13
CFR 107.720. This latter limitation prohibits, without limitation, the use of
proceeds: (i) directly or indirectly, for providing funds to others; (ii) for
the purchase or discounting of debt obligations; (iii) for factoring or
long-term leasing of equipment with no provision for maintenance or repair; (iv)
for engaging in real estate transactions such that Maker could reasonably be
classified under Major Group 65 (Real Estate) of the SIC Manual; (v) for
business activities wherein the assets of the business of Maker (the "Business")
will be reduced or consumed, generally without replacement, as the life of the
Business progresses, and the nature of the Business does not require that a
stream of cash payments be made to the financing sources of the Business, on a
basis associated with the continuing sale of assets (examples of such businesses
would include real estate development projects, the financing and production of
motion pictures, and oil and gas well exploration, development and production);
(vi) for a foreign operation; (vii) to provide capital to a corporation licensed
or sub-licensed under the Small Business Investment Act, (viii) to acquire farm
land, (ix) to fund production of a single item or defined limited number of
items generally over a defined production period, such production to constitute
the majority, of the activities of Maker (examples include electric generating
plants), or (x) for any purpose contrary to the public interest (including, but
not limited to, activities which are in violation of law) or inconsistent with
free competitive enterprise, in each case, within the meaning of Section 107.720
of Title 13 of the Code of Federal Regulations.

                  (c) Seniority. Except as otherwise expressly provided, and
except for security interests and liens described in items 2, 3 and 4 of
Schedule 14.11 of the Disclosure Schedule attached hereto as Exhibit B (the
"Disclosure Schedule"), the indebtedness evidenced by this Note: (i) shall be
senior in all respects to all other indebtedness or obligations of Maker of any
kind, direct or indirect, contingent or otherwise, other than obligations of
Maker owed directly to


                                       6
<PAGE>
                                                               EXECUTION VERSION

the state or federal government, and other than any other indebtedness or
obligations of Maker to Holder; (ii) shall not be made subordinate or subject in
right of payment to the prior payment of any other indebtedness or obligation of
any kind, direct or indirect, contingent or otherwise, other than obligations of
Maker owed directly to the state or federal government, and other than any other
indebtedness or obligations of Maker to Holder.

                  (d) No Conflicting Agreements. Maker shall not enter into any
agreement that would materially impair, interfere or conflict with Maker's
obligations hereunder. Without Holder's prior written consent, Maker shall not
permit the inclusion in any material contract to which it becomes a party of any
provisions that could or might in any way result in the creation of a security
interest in any assets of Maker, including without limitation any Collateral (as
defined in Exhibit A hereto).

                  (e) Disclosure of Material Adverse Events. Within three (3)
business days of Maker obtaining knowledge thereof, Maker will notify Holder in
writing of any event that may have a material adverse effect on the business,
affairs, prospects, operations, properties, assets, liabilities, structure or
condition, financial or otherwise, of the Company (as such business is presently
conducted and/or as it is proposed to be conducted), or on any material assets
or any Intellectual Property or other Collateral developed, owned, controlled,
licensed, possessed, or used by Maker, or to which Maker has any right, option,
entitlement or claim. Operating expenditures in the ordinary course of business
and in accordance with operating budgets approved by Maker's Board of Directors
and fully disclosed to Holder prior to the effective date hereof shall not be
deemed to be material adverse events solely because they weaken Maker's
financial condition in the absence of new equity financing of Maker.

                  (f) Financial Information. So long as any principal and/or
interest under this Note shall remain outstanding:

                           (i) Promptly after the end of each fiscal year (but
         in any event prior to February 28 of each year) and at such other times
         as Holder may reasonably request, Maker shall deliver to Holder a
         written assessment, in form and substance satisfactory to Holder, of
         the economic impact of such Holder's financing hereunder, specifying
         the full-time equivalent jobs created or retained in connection with
         such investment, and the impact of the financing on Maker's business in
         terms of revenues and profits and on taxes paid by Maker and its
         employees.

                           (ii) Maker shall provide on a timely basis to Holder
         all financial information requested from time to time by Holder,
         including without limitation its quarterly and annual balance sheet and
         income statement. Such financial information shall be certified by a
         member of Maker's senior management. Financial information required
         shall also include such information as is necessary for Holder to file
         form 468 with the SBA.

                           (iii) In addition to the information specified in
         Section 10.1(f)(i) and (ii) above, upon request, Maker agrees promptly
         to provide Holder with sufficient additional information to permit
         Holder to comply with (i) its obligations under the Small


                                       7
<PAGE>
                                                               EXECUTION VERSION

         Business Investment Act of 1958, as amended, and the regulations
         promulgated thereunder and related thereto and (ii) provide any other
         information reasonably requested or required by any governmental agency
         asserting jurisdiction over Holder.

                  (g) Access. So long as any principal and/or interest under
this Note shall remain outstanding, Maker shall permit Holder and its agents or
representatives to visit and inspect Maker's properties, to examine its books of
account and records and to discuss Maker's affairs, finances and accounts with
its officers, all at such times during normal business hours as reasonably may
be requested by Holder. Maker shall allow SBA Examiners access to its books and
records, as reasonably required by such Examiners in connection with their
annual audits of Holder or for any other legitimate purposes.

                  (h) SBA Compliance. Maker acknowledges that Holder is a
licensed Small Business Investment Corporation and thereby a participant in the
SBIC program of the U. S. Small Business Administration ("SBA"), and as such is
subject to the rules, regulations, guidance and direction of the SBA on matters
affecting its business and investment practices, and that such rules and
regulations affect the business activities and practices of the companies in
which Holder makes investments. Maker shall promptly and fully cooperate with
Holder to facilitate both Maker's and Holder's compliance with all such SBA
rules, regulations, guidance and direction.

                  (i) Business Activity. As long as this Note shall remain
outstanding, Maker shall make no change in its business activity that would make
it or any of its business activities non-compliant with SBA regulations and
guidelines.

         10.2 Negative Covenants. So long as this Note shall remain outstanding:

                  (a) Indebtedness. Maker shall not incur additional
indebtedness, beyond the indebtedness already existing as of the date hereof,
for borrowed money in excess of $10,000, in aggregate.

                  (b) Liens. Maker shall not grant to any person or entity a
security interest, lien, license, or other encumbrance of any kind, direct or
indirect, contingent or otherwise, in, to or upon any assets of Maker,
including, without limitation, any intellectual property of any kind, as defined
in Exhibit A hereto (respectively, the "Intellectual Property" and the
"Collateral").

                  (c) Sale or License of Assets. Maker shall not sell, lease,
transfer, assign or otherwise dispose of or encumber (including, without
limitation through licensing or partnering arrangements) or abandon, conceal,
injure or destroy any material assets (whether tangible or intangible) of Maker
(including, without limitation, any Collateral (as defined in Section 11), other
than with the prior written approval of Holder and in the ordinary course of
business.

                  (d) Issuance of Capital Stock. Except for (a) any transaction
pursuant to an Unsolicited Proposal that Maker accepts in accordance with the
fiduciary exception provided in Section 3.2 of the Recapitalization Agreement or
(b) shares of capital stock issuable upon exercise or conversion of warrants or
convertible securities outstanding prior to February 1,


                                       8
<PAGE>
                                                               EXECUTION VERSION

2004, Maker shall not without Holder's prior written approval: (i) issue any
shares of capital stock or other securities, or any instruments exercisable for
or convertible into capital stock or other securities, or (ii) make any
promises, commitments, undertakings, agreements or letters of intent for any of
the issuances described in (i) hereof.

                  (e) Distributions and Redemptions. Maker shall not declare or
pay any dividends or make any distributions of cash, property or securities of
Maker with respect to any shares of its common stock, preferred stock or any
other class or series of its stock, or, directly or indirectly (except for
repurchases of common stock by Maker in accordance with the terms of employee
benefit plans or written agreement between Maker and any of its employees
approved by the Board of Directors of Maker prior to February 1, 2004), redeem,
purchase, or otherwise acquire for any consideration any shares of its common
stock or any other class of its stock.

                  (f) Hiring. Maker shall not hire, or agree to hire, any
employee or engage, or agree to engage, any consultant, independent contractor
or any other non-employee personnel, except in accordance with Maker's budget
that has been approved by Maker's board of directors and the Investor;

                  (g) Severance. Maker shall not enter into, increase, expand,
extend, or renew any severance, separation, retention, change of control or
similar agreement with any employee, consultant, independent contractor or any
other non-employee personnel, or agree, promise or commit to do so, without the
prior written approval of Investor;

                  (h) Facilities. Maker shall not purchase, lease, hire, rent or
otherwise acquire directly or indirectly any rights in or to any asset or
facility outside of the ordinary course of business in an amount in excess of
$10,000, in aggregate, or agree, promise or commit to do so, except in
accordance with the Maker's budget that has been approved by the Maker's board
of directors and the Investor.

                  (i) Other Limitations.

                    (i) Maker shall not change the nature of its business
activity in a manner that would cause a violation of 13 C.F.R. Section 107.720
and/or Section 107.760(b) (including, without limitation, by undertaking real
estate, film production or oil and gas exploration activities). In the event
that Maker changes the nature of its business activity such that such change
would render Maker ineligible for financing pursuant to applicable SBA rules and
regulations, Maker agrees to use its best efforts to facilitate a transfer or
redemption of any securities then held by Holder.

                    (ii) Maker will at all times comply with the
non-discrimination requirements of 13 C.F.R. Parts 112, 113 and 117.

                    (iii) For a period of at least one year after the date of
this Note, Maker will locate no more than 49 percent of the employees or
tangible assets of Maker outside the United States.


                                       9
<PAGE>
                                                               EXECUTION VERSION

         10.3 Additional Covenant. Immediately after the effective date of this
Note, Maker shall recall all units of Maker's Tangential Flow Filtration ("TFF")
devices, and all specifications, diagrams, description or other information
relating to such TFF devices, or any similar device, from all third parties who
may currently have any of the foregoing. Maker will take all necessary steps to
ensure that such recall is effective as quickly as possible, and in no event
later than fifteen (15) days after the effective date hereof. Until the later of
the expiration of the Standstill Period (as defined in Section 13 below) or the
date on which this Note has been discharged in full, Maker shall not sell,
license, loan or otherwise in any way transfer or distribute Maker's Tangential
Flow Filtration ("TFF") devices or any similar device, or any specifications,
diagrams, description or other information about the TFF devices, to any third
party, or commit or promise or enter into any understanding of any kind, direct
or indirect, contingent or otherwise, to do any of the foregoing in regard to
Maker's TFF devices or any similar device, without the prior written consent of
Holder in each case.


SECTION 11. SECURITY INTEREST.

         11.1 First Priority in All Collateral. To secure its obligations under
this Note whether at stated maturity, by acceleration or otherwise, Maker hereby
grants and pledges to Holder a first priority senior security interest in all of
Maker's right, title and interest in, to and under all of Maker's tangible and
intangible property, whether now owned, licensed or held or hereafter acquired,
licensed, developed, held or arising, as described in Exhibit A hereto (the
"Collateral"), and all proceeds of any kind from any disposition of any such
Collateral. Such security interest shall be senior to any security interest in
the Collateral granted the holders of the Management Notes pursuant to any
subordination agreement between Holder, the holders of the Management Notes and
Maker, and shall be senior to any other security interest of any kind, direct or
indirect, contingent or otherwise, in the Collateral except for the security
interests and liens described in items 2, 3 and 4 of Schedule 14.11 of the
Disclosure Schedule (only to the amounts set forth on such schedule) and any
other indebtedness or obligations of Maker to Holder. If certificates of title
are now, or hereafter become, issued or outstanding with respect to any of the
Collateral, Maker promptly shall cause the senior security interest of Holder to
be properly noted thereon. Maker agrees that the security interest herein
granted has attached and shall continue until Maker's obligations under this
Note have been paid, performed and indefeasibly discharged in full.

         11.2 Rights Cumulative. The rights and remedies of Holder with respect
to the senior security interest granted hereby are in addition to those which
are now or may hereafter be available to Holder as a matter of law or equity.
Each right, power and remedy of Holder provided for herein, or now or hereafter
existing at law or in equity, shall be cumulative and concurrent and shall be in
addition to every right, power and remedy provided for herein, and the exercise
by Holder of any one or more of the rights, powers and/or remedies provided for
in this Note, or now or hereafter existing at law or in equity, shall not
preclude the simultaneous or later exercise by any person, including a grantee,
of any or all other rights, powers and/or remedies.



                                       10
<PAGE>
                                                               EXECUTION VERSION

         11.3 Documentation of Security Interest. Maker shall execute, deliver,
file, amend, and re-file any financing statements, instruments (including
without limitation stock certificates), continuation statements, assignments, or
other security agreements that Holder may require from time to time to confirm
the liens arising out of this Note with respect to the Collateral. Maker agrees
to pay all reasonable costs associated with filing and/or re-filing of any
financing statements, continuation statements or other security agreements
required to perfect and to continue perfection of Holder's security interest in
the Collateral and all reasonable costs required to evidence the first priority
of the security interest, including, without limitation, reasonable attorneys'
fees. Maker authorizes Holder to file financing statements under the UCC with
respect to the security interest granted hereby and agrees, upon request of
Holder, to promptly and duly execute and deliver any and all such further
instruments and documents, and to take such further action, as Holder may
reasonably deem necessary or desirable to obtain the full benefits of this grant
of security interest.

         11.4 No Conflicting Agreements. Maker shall not enter into any
agreement on or after the effective date of this Note that would materially
impair or conflict with Maker's obligations hereunder without Holder's prior
written consent. Without Holder's prior written consent, Maker shall not permit
the inclusion in any material contract to which it becomes a party on or after
the effective date of this Note, of any provisions that could or might in any
way prevent the creation, perfection and maintenance of a first priority
security interest in Maker's rights and interest in any property included within
the definition of the Collateral acquired under such contracts. Maker represents
and warrants that, as of the effective date of this Note, there are no existing
agreements or undertakings that would materially impair or conflict with Maker's
obligations hereunder or that could or might in any way prevent the creation,
perfection and maintenance of a first priority security interest in Maker's
rights and interest in any property included within the definition of the
Collateral acquired under such contracts; except for existing equipment leases
described in item 2 of Schedule 14.11 and the statutory liens described in items
3 and 4 of the Disclosure Schedule.

         11.5 Notification Requirements. Within two (2) business days of any
officer, director or employee of Maker obtaining knowledge thereof, Maker will
promptly notify Holder in writing of any event that materially adversely affects
the value of any material Collateral, the ability of Maker to dispose of any
material Collateral, or the rights and remedies of Holder in relation thereto,
including the levy of any legal process against any of the Collateral.

         11.6 Foreclosure Remedy. Notwithstanding anything to the contrary
herein or in the Recapitalization Agreement or any other agreement or document,
in the event that Maker is unable to pay and discharge this Note in full on the
Maturity Date, subject to the compliance with the requirements of the Delaware
Uniform Commercial Code, nothing herein or in the Recapitalization Agreement or
any other agreement or document shall be deemed to preclude, limit or restrict
Holder from requiring the delivery of some or all of the Collateral in full or
partial satisfaction of Maker's obligation under the Note. Alternatively, Holder
may, in its sole discretion, elect to cause some or all of the Collateral to be
sold, and the sale proceeds to be used to pay and discharge the Note in full.


                                       11
<PAGE>
                                                               EXECUTION VERSION

SECTION 12. CONVERSION.

         12.1 Holder's Election. Notwithstanding any other provision of this
Note or any applicable agreement or document, until, and/or in the absence of,
purchases for cash of a minimum of $15 million of Convertible Preferred Stock,
by Other Investors (as defined in the Recapitalization Agreement), on the terms
and conditions set forth herein and in the Recapitalization Agreement, Holder
may, in its sole discretion, elect to convert any or all of the principal and/or
interest due under the Note into any Equity Security and/or Debt Security (each
as defined below) and/or any combination thereof, in each case that Holder shall
designate in Holder's sole discretion (the securities so elected being the
"Holder Designated Securities"). Holder may make such determinations from time
to time and at any time before this Note has been discharged in full, and, as
applicable, at any time on or before the expiration of the thirty (30) day
notice period required under this Note in the event the Maker wishes to prepay
this Note. For purposes hereof, (i) the term "Equity Security" means any class
or series of equity security, or any combination of classes and/or series of
equity securities, of the Maker that have been authorized under the Maker's
certificate of incorporation, as amended and/or restated, including by any
certificate of designation (the "Charter"), or any new class or series of equity
security, or any combination of new and/or existing classes and/or series of
equity securities, of the Maker for which the Maker has undertaken any
agreement, obligation, promise, commitment or letter of intent to obtain such
authorization and (ii) the term "Debt Security" means any evidence of
indebtedness of the Maker that the Maker has authorized, created or incurred, or
that the Maker has undertaken any agreement, obligation, promise, commitment or
letter of intent to authorize, create or incur.

         12.2 Automatic Conversion. The principal amount of, and accrued and
unpaid interest on, this Note shall automatically convert into Convertible
Preferred Stock, upon the terms and conditions set forth herein and in the
Recapitalization Agreement, only in the event, and upon the closing of, the
purchase in cash (and not by conversion of debt, exercise of warrants or
options, or conversion or exercise of other securities or instruments), on the
terms and conditions set forth in the Convertible Preferred Stock Term Sheet, by
Other Investors, as defined in the Convertible Preferred Stock Term Sheet, of a
minimum of $15 million of Convertible Preferred Stock.

         12.3 Information for Holder's Election. Maker shall provide to Holder,
within two (2) business days after notice of each request by Holder, all
information reasonably requested by Holder in connection with any Equity
Securities and/or Debt Securities, to enable Holder to make decisions regarding
one or more conversions. In the event that Maker seeks to prepay this Note,
Maker shall deliver to Holder, simultaneously and together with the notice
required under Section 2 of this Note of Maker's interest in prepaying the Note,
a summary of all material information, terms and conditions relating to all
Equity Securities and Debt Securities (including any "side" letters or
agreements or separate agreements).

         12.4 Conversion Price. The conversion price for any conversion pursuant
to Section 12.2 shall be the lowest nominal or effective price per share paid by
the Other Investors who purchase such Convertible Preferred Stock (with the
exception of shares issuable upon exercise of the Bridge Warrants). The
conversion price for any conversion into any equity or debt security pursuant to
Section 12.1 shall be the lowest of (i) the lowest nominal or effective price


                                       12
<PAGE>
                                                               EXECUTION VERSION

per share paid by any investor at any time on or after the date one year prior
to the Effective Date of the Recapitalization Agreement (with the exception of
(x) purchases of up to 35,000 shares of Common Stock pursuant to certain options
to purchase, at a purchase price of $0.0001, that were outstanding on the
Effective Date of the Recapitalization Agreement and held by members of the
Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization
Agreement, and (y) shares issuable upon the exercise of the Bridge Warrants,
each of which shall be excluded from consideration under this section), (ii) the
lowest nominal or effective price at which any investor is entitled to acquire
shares (including, without limitation, through purchase, exchange, conversion or
exercise) pursuant to any other security, instrument, or promise, undertaking,
commitment, agreement or letter of intent of the Maker outstanding on or after
the Effective Date of the Recapitalization Agreement or granted, issued,
extended or otherwise made available by the Maker at any time on or after the
date one year prior to the Effective Date of the Recapitalization Agreement
(regardless of whether currently exercisable or convertible) (with the exception
of (x) certain options to purchase up to 35,000 shares of Common Stock at a
purchase price of $0.0001 that were outstanding on the Effective Date of the
Recapitalization Agreement and held by members of the Board of Directors as set
forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Bridge
Warrants, each of which shall be excluded from consideration under this
section); and (iii) the lesser of $0.10 per share or 35% discount to the average
closing price per share of the Common Stock during any twenty consecutive
trading days (beginning with the twenty consecutive trading days prior to the
Effective Date of the Recapitalization Agreement); provided, however, that in no
event shall the price per share calculated pursuant to this clause (iii) be less
than $.04 per share. The calculation required by clause (ii) hereof shall
initially be based upon Schedule 2.7(d) to the Recapitalization Agreement. All
other rights, preferences, privileges, terms and conditions received by Holder
in connection with any conversion and/or any securities issued by the Maker to
Holder upon conversion, shall be no less favorable to Holder than the rights,
preferences, privileges, terms and conditions any other investor in the Maker
has received or is entitled to receive with respect to the security into which
Holder is converting pursuant to any other security, instrument, promise,
undertaking, commitment, agreement or letter of intent of the Maker, whether or
not such rights, preferences, privileges, terms and conditions for any other
investor are incorporated into the agreements or documents relating to any
conversion or any issuance of the security or other instrument to that investor
or are provided separately, at any time on or after one year prior to the
Effective Date of the Recapitalization Agreement. In regard to each conversion
hereunder, the Maker hereby agrees to take and/or arrange for all necessary
corporate and related action to enable the execution of each such conversion
elected by Holder.

         12.5 No Impairment. Maker shall not, by amendment of its Charter or
through a reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action,
omission or agreement, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed by Maker under and/or in connection
with this Note, but shall at all times in good faith use best efforts to assist
in carrying out of all the provisions of and/or relating to this Note and in
taking all such action as may be necessary or appropriate to protect Holder's
rights, preferences and privileges under and/or in connection with the Note
against impairment. Holder's rights, preferences and privileges granted under
and/or in connection with any Holder Designated Securities may not be amended,


                                       13
<PAGE>
                                                               EXECUTION VERSION

modified or waived without the Holder's prior written consent, and the
documentation providing for such rights, preferences and privileges will
specifically provide as such.

SECTION 13. STANDSTILL, EXCLUSIVITY AND CONFIDENTIALITY.

During the Bridge Period and the Equity Financing Period, as defined in the
Recapitalization Agreement and in the Convertible Preferred Stock Term Sheet,
but excluding the periods from February 18, 2004 through February 29, 2004 and
from March 16, 2004 through the Effective Date of the Recapitalization
Agreement, (collectively the "STANDSTILL PERIOD") the parties shall have worked
together, and shall continue to work together, in good faith with best efforts
to implement the terms of the Recapitalization Agreement, upon which the parties
shall have reached binding agreement and which the parties shall have executed
as a condition precedent to the execution and funding of this Note. Except as
provided in the fiduciary exception set forth in Section 3.2 of the
Recapitalization Agreement, during the Standstill Period, the Maker and its
officers, directors, employees, agents, advisers, consultants, partners and
collaborators shall work only with Holder and its agents, advisers and
consultants, and shall have had, and shall continue to have, no discussions,
negotiations and/or communications of any kind with any other parties,
regardless of which party initiates or attempts to initiate any such contact or
communication, in regard to any potential equity or debt financing of the Maker
by parties other than Holder, and/or any joint venture, license, co-development
or other business arrangement by or with parties other than Holder.
Notwithstanding the fiduciary exception set forth in Section 3.2 of the
Recapitalization Agreement, during the Standstill Period, the Maker and its
officers, directors, employees, agents, advisers, consultants, partners and
collaborators shall maintain confidentiality, and shall not have, and shall
continue not to provide copies, excerpts, summaries, descriptions, or
communicate in any way with any third parties, either directly or indirectly, as
to any aspects of the recapitalization of Maker and/or any financing by Holder,
including, without limitation, the identity of the parties involved, any terms
of the Recapitalization Agreement, this Note, the Related Recapitalization
Documents, the Convertible Preferred Stock or any other matter relating to the
recapitalization of Maker, or the progress or status of any activities or
processes relating to the recapitalization of Maker; provided, however, nothing
herein shall prohibit the Maker from filing this Note, the Recapitalization
Agreement and any Related Recapitalization Document with the Securities and
Exchange Commission (the "SEC"), if required by the regulations of the SEC
(subject to the covenant in Section 2.5(a) of the Recapitalization Agreement).
During the Standstill Period, the Maker shall not make any sales of equipment or
other assets of any kind, including, without limitation, any non-essential
laboratory equipment, and the Maker shall comply with Section 10.3 in regard to
the TFF devices.


SECTION 14. REPRESENTATIONS AND WARRANTIES.

Except as expressly set forth (with reference to a section in this Note) in the
Disclosure Schedule attached hereto as Exhibit B, and only to the extent such
exceptions are acceptable to Holder in its sole discretion as of the date of
this Note, and independently as of the date upon which each additional Note is
issued to Holder, and as of the date of each closing, if any, of the Anticipated
Equity Financing, Maker represents and warrants to the following:



                                       14
<PAGE>
                                                               EXECUTION VERSION

         14.1 Organization, Good Standing and Qualification. Maker is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business. Maker is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure so to qualify would have
a material adverse effect on its business, properties, operations, prospects or
condition (financial or otherwise).

         14.2 Authorization of Note, Etc. The execution, delivery and
performance by Maker of this Note has been duly authorized by all requisite
corporate action by Maker in accordance with Delaware law. This Note is a valid
and binding obligation of Maker, enforceable against Maker in accordance with
its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other laws of general application effecting
enforcements of creditors' rights or general principles of equity.

         14.3 No Conflicts. The execution, delivery, performance, issuance, sale
and delivery of this Note and the Related Recapitalization Documents, and
compliance with the provisions hereof by Maker, will not (a) to the knowledge of
Maker, violate any provision of any law, statute, rule or regulation applicable
to Maker or any ruling, writ, injunction, order, judgment or decree of any
court, arbitrator, administrative agency or other governmental body applicable
to Maker or any of its properties or assets or (b) conflict with or result in
any material breach of any of the terms, conditions or provisions of, or
constitute (with notice or lapse of time or both) a material default (or give
rise to any right of termination, cancellation or acceleration) under, or result
in the creation of, any encumbrance upon any of the material assets of Maker
under, the Charter or Bylaws of Maker (as they may be amended to date) or any
agreement or instrument to which Maker is a party. As used herein, "encumbrance"
shall mean any liens, charges, encumbrances, equities, claims, options, proxies,
pledges, security interests, licenses or other similar rights of any nature.

         14.4 Compliance with Other Instruments. Maker is not in violation of
any term of Maker's Charter, as amended, including any certificate of
designation filed therewith, and/or Maker's Bylaws. Maker is not, in any
material respect, in violation of any term of any mortgage, indenture, contract,
agreement, instrument, judgment, decree, order, statute, rule or regulation to
which Maker or any of such Collateral is subject. To the best of Maker's
knowledge, no event has occurred which, with the passage of time or the giving
of notice, or both, would constitute a breach or violation, in any material
respect, under any applicable judgments, orders, writs, decrees, federal, state
and/or local laws, rules or regulations which would have a material adverse
affect on the condition, financial or otherwise, or operations of Maker (as it
is currently conducted and as it is proposed to be conducted) or on any material
assets or any Intellectual Property or other Collateral owned, controlled,
licensed, possessed, and/or used by Maker. To the best of its knowledge, Maker
has avoided every condition, and has not performed any act, the occurrence of
which would result in Maker's loss of any right granted under any license,
distribution agreement or other agreement or Maker's loss of any rights in or to
any Collateral.

         14.5 Approvals. Maker has obtained all necessary permits,
authorizations, waivers, consents and approvals of or by, and made all necessary
notifications of and/or filings with, all applicable persons (governmental and
private), in connection with the execution, delivery,


                                       15
<PAGE>
                                                               EXECUTION VERSION

performance, issuance, sale and/or delivery of this Note, the Recapitalization
Agreement and the Related Recapitalization Documents, and consummation by Maker
of the transactions contemplated hereby and thereby, except as listed in
Schedule 14.5

         14.6 Capitalization. The authorized capital stock of Maker consists of
125,000,000 shares of Common Stock, par value $0.001 per share and 15,000,000
shares of Preferred Stock, par value of $0.001 per share. As of the date hereof,
19,028,779 shares of Common Stock are issued and outstanding and no shares of
preferred stock of any kind are issued and outstanding. No other shares of any
class or series of Maker's capital stock are authorized and/or issued and
outstanding. All issued and outstanding shares of capital stock of Maker have
been duly authorized and validly issued, and are fully paid and non-assessable,
and have been offered, sold and delivered by Maker in compliance with all
applicable federal and state securities laws. Except as set forth in Schedule
14.6, no subscription, warrant, option, convertible security, or other right
(direct or indirect, contingent or otherwise) to purchase or otherwise acquire
any equity securities of Maker is authorized or outstanding, and there is no
agreement, promise, commitment, undertaking or letter of intent of any kind
(direct or indirect, contingent or otherwise) by Maker to issue any shares,
subscriptions, warrants, options, convertible securities, or other such rights,
or to distribute to holders of any of its equity securities any evidence of
indebtedness or asset. Except as set forth in Schedule 14.6, Maker has no
obligation of any kind (direct or indirect, contingent or otherwise) to
purchase, redeem or otherwise acquire any of its equity securities or any
interest therein or to pay any dividend or make any other distribution in
respect thereof. Schedule 14.6 includes a true, accurate and complete statement
describing the total number of shares of Maker outstanding as of the date of
this Note (on a fully diluted basis, including, without limitation, all warrants
and options outstanding (whether or not currently exercisable), all convertible
instruments of any kind (whether or not currently convertible), shares of all
classes of stock, and any agreements, promises, commitments, undertakings or
letters of intent to issue any of the foregoing.

         14.7 Authorization of the Shares. Maker has, or before the first
closing of the Anticipated Equity Financing hereunder will have, authorized the
issuance and sale of a sufficient number of shares of Convertible Preferred
Stock, par value $0.001 per share, and Common Stock of the Maker to fully
implement the Recapitalization Plan, while maintaining such additional
authorized but unissued shares as reasonably determined by Holder to be
appropriate. Of such authorized shares, a sufficient number of shares shall be
reserved for issuance upon any exercise of the Bridge Warrants and/or Preferred
Stock Warrants. If at any time the number of authorized but unissued shares of
Convertible Preferred Stock and/or of Common Stock is not sufficient to effect
the conversion of all then outstanding convertible Notes and other instruments,
and the exercise of all then outstanding warrants, options and similar
instruments, then, in addition to such other remedies as may be available to
Holder, Maker shall take such corporate action as may be necessary to increase
its authorized but unissued shares of Convertible Preferred Stock and/or Common
Stock to such number of shares as will be sufficient for such purposes. Such
corporate action shall include, without limitation, obtaining all requisite
regulatory approvals and any requisite shareholder approval of any necessary
amendment to Maker's Charter.



                                       16
<PAGE>
                                                               EXECUTION VERSION

         14.8 Litigation. There is no action, suit, proceeding or investigation
pending or, to the knowledge of Maker, currently threatened against Maker,
and/or its directors, officers, advisers, agents, properties, assets or
business, in each case relating to Maker and/or its business, assets, operations
or properties. Maker is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by Maker
currently pending or which Maker intends to initiate.

         14.9 No Liens. Except for liens for the benefit of Holder, created by
this Note, the Recapitalization Agreement and/or any of the Related
Recapitalization Documents, and except as set forth in Schedule 14.9 of the
Disclosure Schedule, none of the material assets of Maker, including the
Collateral, are subject to any existing lien, pledge, security interest or other
encumbrance of any kind, direct or indirect, contingent or otherwise.

         14.10 Full Disclosure. Notwithstanding any other provision of this
Note, neither this Note, nor any exhibit hereto, nor any written report,
certificate, instrument or other information furnished to Holder in connection
with the transactions contemplated under and/or in connection with Note contain
any material misstatement (including, without limitation, any material
omission), or is misleading in any material respect.

         14.11 No Other Security Interests or Other Encumbrances. Except as set
forth in Schedule 14.11 (and only to the amounts set forth on such schedule),
there are no existing security interests, pledges, liens or other encumbrances
of any kind, direct or indirect, contingent or otherwise (including without
limitation any licensing or partnering arrangements or agreements), in or
relating to any assets of Maker, including, without limitation, any Intellectual
Property (as defined herein) or other Collateral. All existing security
interests, pledges, liens or other encumbrances of any kind, other than those
set forth in Schedule 14.11 hereto (and only to the amounts set forth on such
schedule), are subordinate to the security interest established pursuant to
Section 11 hereof, all necessary consents, subordination agreements and waivers,
if any, have been obtained, and all amended filings and/or re-filings shall be
made immediately upon execution of this Note.

         14.12 "Small Business".

                  (a) Small Business Status. Maker together with its
"affiliates" (as that term is defined in Section 121.103 of Title 13 of Code of
Federal Regulations (the "FEDERAL REGULATIONS")) is a "small business concern"
within the meaning of the Small Business Investment Act of 1958, as amended (the
"SMALL BUSINESS ACT" or "SBIA"), and the regulations promulgated thereunder,
including Section 121.301(c) of Title 13, Code of Federal Regulations.

                  (b) Information for SBA Reports. Maker has delivered and/or
will deliver to Holder certain information, set forth by and regarding the Maker
and its affiliates in connection with this Note, on SBA Forms 480, 652 and Part
A and B of Form 1031. This information delivered was true, accurate, complete
and correct, and any information yet to be delivered will be true, accurate,
complete and correct, and in form and substance acceptable to Holder.



                                       17
<PAGE>
                                                               EXECUTION VERSION

                  (c) Eligibility. Maker is eligible for financing by any Holder
pursuant to Section 107.720 of Title 13 of the Federal Regulations and any other
SBA regulations.

         14.13 Intellectual Property.

                  (d) Definitions. "Intellectual Property" means all foreign and
domestic intangible property and rights, owned, licensed, sub-licensed or
otherwise obtained by Maker, including, without limitation, (i) inventions,
discoveries and ideas, whether patentable or not, and all patents, registrations
and applications therefor, including divisions, continuations,
continuations-in-part, requests for continued examination, and renewal
applications, and including renewals, extensions and reissues (collectively,
"Patents"); (ii) confidential and proprietary information, trade secrets and
know-how, including without limitation processes, schematics, formulae,
drawings, prototypes, models, designs and customer lists (collectively, "Trade
Secrets"); (iii) all data, slides, observations, and laboratory results,
produced by, for or on behalf of Maker, or which Maker has rights to obtain
(collectively, "Data"); (iv) all FDA applications, registrations, filings and
other rights (collectively, "FDA Rights") and all data and documentation
supporting or relating thereto; (iv) published and unpublished works of
authorship, whether copyrightable or not (including, without limitation,
databases and other compilations of information), copyrights therein and
thereto, and registrations and applications therefor, and all renewals,
extensions, restorations and reversions thereof (collectively, "Copyrights");
(v) trademarks, service marks, brand names, certification marks, collective
marks, d/b/a's, Internet domain names, logos, symbols, data, trade dress,
assumed names, fictitious names, trade names, and other indicia of origin, all
applications and registrations for the foregoing, and all goodwill associated
therewith and symbolized thereby, including all extensions, modifications and
renewals of same (collectively, "Trademarks"); (vi) all other intellectual
property or proprietary rights, including, without limitation, all claims or
causes of action arising out of or related to any infringement, misappropriation
or other violation of any of the foregoing, including rights to recover for
past, present and future violations thereof (collectively, "Other Proprietary
Rights").

         "Intellectual Property Contracts" means all agreements involving,
relating to or affecting the Intellectual Property, including, without
limitation, agreements granting rights to use the Licensed or Sub-Licensed
Intellectual Property, agreements granting rights to use Owned Intellectual
Property, confidentiality agreements, Trademark coexistence agreements,
Trademark consent agreements and non-assertion agreements.

         "Licensed or Sub-Licensed Intellectual Property" means the Intellectual
Property that Maker is licensed, sub-licensed or otherwise permitted by other
persons or entities to use.

         "Owned Intellectual Property" means the Intellectual Property owned by
Maker.

         "Registered" means issued, registered, renewed or the subject of a
pending application.


                  (e) Schedule 14.13 ("Intellectual Property") sets forth a true
and complete list and summary description of (A) all Registered or material
Owned Intellectual Property (each identified as a Patent, Trademark, Trade
Secret, Copyright or Other Proprietary Right, as the case


                                       18
<PAGE>
                                                               EXECUTION VERSION

may be); (B) all Licensed or Sub Licensed Intellectual Property and (C) all
Intellectual Property Contracts.

                  (f) All Intellectual Property is valid, subsisting and
enforceable. No Owned Intellectual Property has been canceled, suspended,
adjudicated invalid, not maintained, expired or lapsed, or is subject to any
outstanding order, judgment or decree restricting its use or adversely affecting
or reflecting Maker's rights thereto. No Licensed or Sub-Licensed Intellectual
Property has been canceled, suspended, not renewed or extended, adjudicated
invalid, not maintained, expired or lapsed, or is subject to any outstanding
order, judgment or decree restricting its use or adversely affecting or
reflecting Maker's rights thereto.

                  (g) The Owned Intellectual Property is owned exclusively by
Maker and has been used with all patent, trademark, copyright, confidential,
proprietary and other Intellectual Property notices and legends prescribed by
law or otherwise permitted.

                  (h) No suit, action, reissue, reexamination, public protest,
interference, opposition, cancellation or other proceeding (collectively,
"Suit") is pending or threatened concerning any claim or position:

                    (i) that Maker, or another person or entity, has violated
any Intellectual Property rights. To Maker's best knowledge, Maker is not
violating and has not violated any intellectual property rights of any other
party.

                    (ii) that Maker, or another person or entity, has breached
any Intellectual Property Contract. There exists no event, condition or
occurrence which, with the giving of notice or lapse of time, or both, would
constitute a breach or default by Maker, or a breach or default by another
person or entity, under any Intellectual Property Contract. No party to any
Intellectual Property Contract has given Maker notice of its intention to
cancel, terminate or fail to renew any Intellectual Property Contract.

                    (iii) that the Intellectual Property has been violated or is
invalid, unenforceable, unpatentable, unregisterable, cancelable, not owned or
not owned exclusively by Maker. No such claim has been threatened or asserted.
To Maker's best knowledge, no valid basis for any such Suits or claims exists.

                  (i) To Maker's best knowledge, no other person or entity is
violating, infringing upon or claiming rights incompatible with Maker's rights
to any Intellectual Property. Maker has provided to Holder copies of all
information reasonably available to it relevant to intellectual property rights
claimed by third parties and possible infringement thereof including, without
limitation, any freedom to practice or freedom to operate opinions.


                  (j) Except as set forth on Schedule 14.13(j), Maker owns or
otherwise holds valid rights to use all Intellectual Property used in its
business.




                                       19
<PAGE>
                                                               EXECUTION VERSION

                  (k) Maker has timely made all filings and payments with the
appropriate foreign and domestic agencies and other parties required to maintain
in full force and effect all Intellectual Property. Except as set forth on
Schedule 14.13, no due dates for filings or payments concerning the Intellectual
Property (including, without limitation, office action responses, affidavits of
use, affidavits of continuing use, renewals, requests for extension of time,
maintenance fees, application fees and foreign convention priority filings) fall
due within ninety (90) days prior to or after the closing, whether or not such
due dates are extendable. Maker is in compliance with all applicable rules and
regulations of such agencies and other parties with respect to the Intellectual
Property. All documentation necessary to confirm and effect the Intellectual
Property, if acquired from other persons or entities, has been recorded in the
United States Patent and Trademark Office, the United States Copyright Office
and other official offices.

                  (l) Maker has undertaken and consistently implemented best
efforts to protect the secrecy, confidentiality and value of all non-public
Intellectual Property used in its business (including, without limitation,
entering into appropriate confidentiality agreements with all officers,
directors, employees and other persons or entities with access to such
non-public Intellectual Property). Maker management has not disclosed any such
non-public Intellectual Property to any persons or entities other than (i) Maker
employees or Maker contractors who had a need to know and use such non-public
Intellectual Property in the ordinary course of employment or contract
performance, or (ii) prospective customers, and in each case who executed
appropriate confidentiality agreements.

                  (m) Maker has taken all reasonable measures to confirm that no
current or former Maker employee is or was a party to any confidentiality
agreement or agreement not to compete that restricts or forbids, or restricted
or forbade at any time during such employee's employment by Maker, such
employee's performance of Maker's business, or any other activity that such
employee was hired to perform or otherwise performed on behalf of or in
connection with such employee's employment by Maker.

         14.14 SEC Filings; Financial Statements.

         (a) Maker has delivered or made available to Holder accurate and
complete copies of all registration statements, proxy statements and other
statements, reports, schedules, forms and other documents filed by the Maker
with the SEC since January 1, 2003, and all amendments thereto (the "Maker SEC
Documents"). Except as set forth on Schedule 14.14(a), all statements, reports,
schedules, forms and other documents required to have been filed by Maker with
the SEC have been so filed on a timely basis. As of the time it was filed with
the SEC (or, if amended or superseded by a filing prior to the date of this
Note, then on the date of such filing): (i) each of the Maker SEC Documents
complied in all material respects with the applicable requirements of the
Securities Act or the Exchange Act (as the case may be); and (ii) none of the
Maker SEC Documents 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 the light of the circumstances under which they
were made, not misleading.



                                       20
<PAGE>
                                                               EXECUTION VERSION

         (b) The financial statements (including any related notes) contained in
the Maker SEC Documents: (i) complied as to form in all material respects with
the published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered (except as may be indicated in
the notes to such financial statements or, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC, and except that the unaudited financial
statements may not contain footnotes and are subject to normal and recurring
year-end adjustments that will not, individually or in the aggregate, be
material in amount), and (iii) fairly present the consolidated financial
position of Maker and its consolidated subsidiaries as of the respective dates
thereof and the consolidated results of operations and cash flows of Maker and
its consolidated subsidiaries for the periods covered thereby.

         14.15 Liabilities. Maker has no accrued, contingent or other
liabilities of any nature, either matured or unmatured, except for: (a)
liabilities identified as such in Maker's audited balance sheet as of December
31, 2003, or the notes thereto; (b) liabilities that have been incurred by Maker
since December 31, 2003 in the ordinary course of business and consistent with
past practices, and that do not exceed a maximum potential amount of $330,000;
and (c) expenses that have been incurred by the Maker (but not including any
expenses of Holder that Maker is obligated to reimburse in connection therewith)
in the preparation and review of the Recapitalization Agreement and the Related
Recapitalization Documents, and that do not exceed $72,000.

         14.16 Compliance with All Standstill Provisions. Maker has complied in
all respects with all standstill, exclusivity and confidentiality provisions of
(a) this Note, the Recapitalization Agreement and the Related Recapitalization
Documents, (b) Section 13 of that certain 10% Convertible, Secured Promissory
Note by and between Maker and Holder dated as of February 2, 2004 and (c)
Section 13 of that certain 10% Convertible, Secured Promissory Note by and
between Maker and Holder dated as of March 1, 2004.

SECTION 15. INDEMNIFICATION

         15.1 Indemnification Agreement.

                  (a) In addition to all rights and remedies available to Holder
at law or in equity, Maker shall indemnify Holder and each subsequent holder of
this Note, and their respective affiliates, stockholders, limited partners,
general partners, officers, directors, managers, employees, agents,
representatives, successors and assigns (collectively, the "Indemnified
Persons") and save and hold each of them harmless against and pay on behalf of
or reimburse such party as and when incurred for any loss, liability, demand,
claim, action, cause of action, cost, damage, deficiency, tax, penalty, fine or
expense (other than any demand, claim, action or cause of action instituted by
Maker), including interest, penalties, reasonable attorneys' fees and expenses,
and all amounts paid in investigation, defense or settlement of any of the
foregoing (collectively, "Losses") which any such party may suffer, sustain or
become subject to, as a result of, in connection with, relating or incidental to
or by virtue of:



                                       21
<PAGE>
                                                               EXECUTION VERSION

                                    (i) any material misrepresentation in, or
                  material omission from, or breach of any of the
                  representations, warranties, statements, schedules and/or
                  exhibits hereto, certificates or other instruments or
                  documents furnished to Holder by Maker in connection with this
                  Note; or

                                    (ii) any material nonfulfillment or material
                  breach of any covenant or agreement on the part of Maker under
                  this Note.

                  (b) Notwithstanding the foregoing, Maker shall not be liable
for any portion of Losses resulting from the gross negligence or willful
misconduct of Holder or a subsequent holder of this Note.

                  (c) Within twenty (20) days after receipt of notice of
commencement of any action or the assertion of any claim by a third party,
Holder shall give Maker written notice thereof together with a copy of such
claim, process or other legal pleading of such claim. Maker shall have the right
to assist in the defense thereof by representation of its own choosing.

         15.2 Survival. All indemnification rights hereunder shall survive the
execution and delivery of this Note and the consummation of the transactions
contemplated hereby (i) for a period of two years with respect to
representations and warranties made by Maker, and (ii) until fully performed
with respect to covenants and agreements made by Maker, regardless of any
investigation, inquiry or examination made for or on behalf of, or any knowledge
of Holder and/or any of the Indemnified Persons, or the acceptance by Holder of
any certificate or opinion.

         15.3 Payment. Any indemnification of Holder or any other Indemnified
Person by Maker pursuant to this Section 15 shall be effected by wire transfer
of immediately available funds from Maker to an account designated by Holder or
such other Indemnified Person within fifteen (15) days after the determination
thereof.

SECTION 16. INTEGRATION WITH RECAPITALIZATION PLAN

Maker acknowledges and agrees that the funding provided by Holder pursuant to
this Note is only being provided as part of an integrated Recapitalization Plan,
as set forth in the Recapitalization Agreement. Maker further acknowledges and
agrees that this Note is subject to all terms and conditions set forth in the
Recapitalization Agreement.

SECTION 17. MISCELLANEOUS.

         17.1 Notices. All notices, demands and requests of any kind to be
delivered to any party in connection with this Note shall be in writing and
shall be deemed to be effective upon delivery if (i) personally delivered, (ii)
sent by confirmed facsimile with a copy sent by nationally recognized overnight
courier, (iii) sent by nationally recognized overnight courier, or (iv) sent by
registered or certified mail, return receipt requested and postage prepaid,
addressed as follows:

                                       22
<PAGE>
                                                               EXECUTION VERSION

         if to Maker:      Northwest Biotherapeutics, Inc.
                           22322 20th Ave SE, Suite 150
                           Bothell, WA  98021
                           Fax: (425) 608 3146
                           Attn: Alton Boynton

         if to Holder:     Toucan Capital Fund II, LP
                           7600 Wisconsin Avenue
                           Suite 700
                           Bethesda, MD 20814
                           Fax: (240) 497-4060
                           Attention: Linda F. Powers

or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance with the
provisions of this Section.

         17.2 Parties In Interest. This Note shall bind and inure to the benefit
of Holder, Maker and their respective successors and permitted assigns. Maker
shall not transfer or assign this Note without the prior written consent of
Holder. Holder may transfer and assign this note without the prior consent of
Maker.

         17.3 Entire Agreement. This Note together with the Disclosure Schedule
and the Recapitalization Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings among the parties with respect thereto.

         17.4 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Delaware (without giving effect to
principles of conflicts of laws of the State of Delaware or any other state).

         17.5 Headings. The section and paragraph headings contained in this
Note are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Note.

         17.6 Amendments. No provision of this Note may be amended or waived
without the express written consent of both Maker and Holder, provided, however,
that Holder may waive any provision hereof that inures to the benefit of Holder
without the prior written consent of Maker. Also notwithstanding anything to the
contrary, this Note shall be amended as and to the extent necessary to comply
with the Small Business Investment Act and all regulations, advice, direction
and guidance applicable to SBIC's.

         17.7 Nature of Obligation. This Note is being made for business and
investment purposes, and not for household or other purposes.

         17.8 Expenses. Maker shall pay, reimburse or otherwise satisfy, upon
demand of Holder, all fees, costs and expenses incurred and/or


                                       23
<PAGE>
                                                               EXECUTION VERSION

undertaken, and to be incurred and/or undertaken, by Holder relating to the
preparation for, development of and implementation of the Recapitalization Plan
set forth in the Recapitalization Agreement, including, without limitation, all
due diligence expenses and all expenses relating to the Bridge Funding, the
Anticipated Equity Financing and the transactions contemplated thereby and the
documentation of the foregoing (including, without limitation all legal fees and
expenses and costs incurred and to be incurred in connection with any SBA
filings), which shall be satisfied by Maker upon Holder's demand, including but
without limitation upon each closing of the Bridge Funding or Anticipated Equity
Financing. This obligation shall apply regardless of whether or not all of the
transactions contemplated in the Recapitalization Agreement close. At each
closing of Bridge Funding or Anticipated Equity Financing, at Holder's sole
discretion, and with respect to any or all of such fees, costs and expenses
accrued through such closing, Maker shall (a) pay Holder in cash concurrently
with such closing (or at Holder's sole discretion, Investor may withhold such
amount from the wire of investment proceeds), (b) issue a Note in the form
hereof in principal amount equal to such fees, costs and expenses (which at
Holder's option may instead be evidenced as an increase in the principal amount
of any Note issued in connection with such closing); or (c) treat such fees,
costs and expenses as an unsecured payable. At any time following such closing,
Holder may require any amounts that it elected to have Maker treat as unsecured
amounts payable to be paid in cash or satisfied by issuance of a Note in the
principal amount of some or all of such unsecured obligation.







                                       24
<PAGE>
                                                               EXECUTION VERSION


         IN WITNESS WHEREOF, Maker has caused this Note to be duly executed by
its duly authorized person(s) as of the date first written above.

                                          NORTHWEST BIOTHERAPEUTICS, INC.


                                          By /s/ Alton Boynton
                                          --------------------------------------
                                          Name: Alton Boynton
                                          Title: President





                              CONSENT AND AGREEMENT

         Toucan Capital Fund II, L.P. consents to the loan and security interest
granted by Maker in the foregoing Note.


                                          TOUCAN CAPITAL FUND II, L.P.


                                          By: /s/ Linda Powers
                                          --------------------------------------
                                          Name: Linda Powers
                                          Title: Managing Director




                                       25
<PAGE>
                                                               EXECUTION VERSION




                                    EXHIBIT A

                            DESCRIPTION OF COLLATERAL

         The "Collateral" consists of all of Maker's right, title and interest
(in each case, whether now owned or hereafter acquired) in and to the following:

         (a) All intellectual property of any kind, whether owned, licensed or
otherwise permitted to be used, and whether now held or hereafter acquired or
developed (the "Intellectual Property"). Such Intellectual Property shall
include, without limitation, all foreign and domestic intangible property and
rights, owned, licensed or otherwise obtained by Maker, including, without
limitation, (i) trademarks, service marks, brand names, certification marks,
collective marks, d/b/a's, Internet domain names, logos, symbols, trade dress,
assumed names, fictitious names, trade names, and other indicia of origin, all
applications and registration for the foregoing, and all goodwill associated
therewith and symbolized thereby, including all extensions, modifications and
renewals of same, including without limitation those items reference on Appendix
1 hereto (collectively, "Trademarks"); (ii) inventions, discoveries and ideas,
whether patentable or not, and all patents, registrations and applications
therefor, including divisions, continuations, continuations-in-part, requests
for continued examination, and renewal applications, and including renewals,
extensions and reissues, including without limitation those items reference on
Appendix 2 hereto (collectively, "Patents"); (iii) confidential and proprietary
information, trade secrets and know-how, including, without limitation,
processes, schematics, formulae, drawings, prototypes, models, designs and
customer lists (collectively, "Trade Secrets"); (iv) published and unpublished
works of authorship, whether copyrightable or not (including, without
limitation, databases and other compilations of information), copyrights therein
and thereto, and registrations and applications therefor, and all renewals,
extensions, restorations and reversions thereof (collectively, "Copyrights");
(v) all FDA applications, registrations, filings and other rights (collectively,
"FDA Rights and Materials"); (vi) all results, information and data arising
from, or obtained in connection with, research, development, pre-clinical work
and/or clinical trials (collectively, "Data"); and (vii) all other intellectual
property or proprietary rights and claims or causes of action arising out of or
related to any infringement, misappropriation or other violation of any of the
foregoing, including rights to recover for past, present and future violations
thereof (collectively, "Other Proprietary Rights").

         (b) All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located.

         (c) All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Maker's custody or possession or in transit
and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing an any documents of title representing any of the above.



                                       26
<PAGE>
                                                               EXECUTION VERSION

         (d) All contract rights, general intangibles and intellectual property,
now owned or hereafter acquired, including, without limitation, goodwill,
trademarks, service marks, trade styles, trade names, patents, patent
applications, leases, license agreements, franchise agreements, blueprints,
drawings, purchase orders, customer lists, route lists, infringements, claims,
computer programs, computer discs, computer tapes, computer code, copyrights,
literature, reports, catalogs, design rights, income tax refunds, payments of
insurance and rights to payment of any kind.

         (e) All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Maker
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Maker, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefore, as well as
all merchandise returned to or reclaimed by Maker.

         (f) All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets,
letters of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired and Maker's books relating to the foregoing.

         (g) Each item of equipment, or personal property whether now owned or
hereafter acquired, together with all substitutions, renewals or replacements of
and additions, improvements, and accessions to any and all of the foregoing, and
all proceeds from sales, renewals, releases or other dispositions thereof.

         (h) All Maker's books relating to the foregoing and any and all claims,
rights and interests in any of the above, whether now owned or hereafter
acquired, and all substitutions for, additions and accessions to and proceeds
thereof.

Notwithstanding the foregoing, to the extent any of Maker's licensed
Intellectual Property prohibits the transfer or encumbrance of such licensed
Intellectual Property (the "Restricted Intellectual Property") without prior
consent of the owner or licensor thereof, such Restricted Intellectual Property
is hereby conditionally included within the definition of Collateral, subject to
receipt, by or on behalf of Maker, of any required consents. If requested by
Holder, Maker shall use its best efforts to obtain the required consents under
any Restricted Intellectual Property within thirty (30) days of such request.



                                       27
<PAGE>
                                                               EXECUTION VERSION


                                   APPENDIX 1
                                   TRADEMARKS



                                       28
<PAGE>
                                                               EXECUTION VERSION


                                   APPENDIX 2
                                     PATENTS

                                       29
<PAGE>
                                                               EXECUTION VERSION


                                    EXHIBIT B

                               DISCLOSURE SCHEDULE


                                       30