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                                                                     EXHIBIT 4.0

                                 EDO CORPORATION
                      2004 NON-EMPLOYEE DIRECTOR STOCK PLAN

1.   PURPOSE

     The Purpose of the EDO Corporation 2004 Non-Employee Director Stock Plan is
to increase director share ownership to further align director interests with
those of the Company's shareholders.

2.   DEFINITIONS

     "Annual Grant" shall mean the Award made to an Eligible Director as
provided in Section 5(b), with the type and amount of Award determined by the
Committee, subject to the approval by the Board, prior to the grant date.

     "Award" shall mean the grant to an Eligible Director of Stock Options,
Restricted Shares or Restricted Share Units under Section 5 of the Plan.

     "Award Agreement" shall mean the written agreement reflecting the terms and
conditions applicable to an Award, in the form approved by the Committee.

     "Board" shall mean the Board of Directors of the Company.

     "Cause" shall mean (i) the willful failure by an Eligible Director to
perform Board or committee duties in any material respect (other than due to
physical or mental illness), (ii) the Eligible Director engaging in serious
misconduct that is injurious to the Company, including without limitation a
willful material violation of the Company's Code of Conduct or breach of the
director's fiduciary duty, or (iii) the Eligible Director having been convicted
of, or entered a plea of nolo contender with respect to, a crime that
constitutes a felony, in each case, as determined by the Committee.

     "Change in Control" shall mean the occurrence of any of the following
events:

     (i) A majority of the members of the Board at any time cease for any reason
other than due to death, Retirement or disability to be persons who were members
of the Board twenty-four months prior to such time (the "Incumbent Directors");
provided that any director whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
members of the Board then still in office who are Incumbent Directors shall be
treated as an Incumbent Director; or

     (ii) Any "person" including a "group" (as such terms are used in Sections
13(d) and 14 (d)(2) of the Exchange Act, but excluding the Company, any employee
benefit plan of the Company, any employee of the Company or any group of which
any of the foregoing is a member) is or becomes the "beneficial owner" (as
defined in Rule 13(d)(3) of the Exchange Act), directly or indirectly, including
without limitation, by means of a tender or exchange offer, of securities of the
Company representing 30% or more of the combined voting power of the Company's
then outstanding securities; or

     (iii) The shareholders of the Company shall approve a definitive agreement
for the merger or other business combination of the Company with or into another
corporation immediately following which merger or combination (A) the stock of
the surviving entity is not readily tradable on an established securities
market, (B) a majority of the directors of the surviving entity are persons who
(1) were not directors of the Company immediately prior to the merger and (2)
are not nominees or representatives of the Company, or (C) any "person"
including a "group" (as such terms are used in Section 13(d) and

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14(d)(2) of the Exchange Act, but excluding the Company, any employee benefit
plan of the Company, any employee of the Company or any group of which any of
the foregoing is a member) is or becomes the "beneficial owner" (as defined in
Rule 13(d)(3) of the Exchange Act), directly or indirectly of 30% or more of the
securities of the surviving entity or (y) for the direct or indirect sale or
other disposition of all or substantially all of the assets of the Company,
unless the transaction described in this clause (iii) is terminated or otherwise
fails to be consummated; or

     (iv) any other event or transaction that is declared by resolutions of the
Board to constitute a Change in Control for purposes of the Plan.

Notwithstanding the foregoing, a "Change in Control" shall not be deemed to
occur in the event (a) the Company files for bankruptcy, liquidation or
reorganization under the United States Bankruptcy Code or in the case of (ii)
above, upon a vote of a majority of the Incumbent Directors.

     "Change in Control Price" shall mean the highest price per share paid or
offered in any bona fide transaction related to a Change in Control, as
determined by the Committee.

     "Code" shall mean the Internal Revenue Code of 1986, as amended, and the
regulations there under.

     "Committee" shall mean the Compensation Committee of the Board, or such
other committee as may be designed by the Board to administer the Plan comprised
of not less than three directors each of whom is a Qualifying Director.

     "Common Share" shall mean a common share, par value $1.00 per share, of the
Company.

     "Company" shall mean EDO Corporation, including any Subsidiary, and any
successor thereto.

     "Disability" shall occur if the Committee determines, based on medical
evidence, that the Eligible Director is disabled, mentally or physically, and,
as a result of such disability, is unable to perform his or her duties as a
director of the Company.

     "Eligible Director" shall mean a person who is serving as a member of the
Board and who is not an employee of the Company.

     "Exchange" shall mean the principal stock exchange or market on which the
Company's Common Shares are listed or traded, which, as of the date of the
adoption of the Plan, is the New York Stock Exchange.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules promulgated thereunder, as they may be in force from time to time.

     "Fair Market Value" shall mean, on any date, the closing sales price of a
Common Share, as reported for such day on the Exchange.

     "Initial Grant" shall mean a one-time Award to a newly elected Eligible
Director, as provided in Section 5(a).

     "Plan" shall mean this EDO Corporation 2004 Non-Employee Director Stock
Plan, as it may be amended from time to time.

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     "Qualifying Director" means a director who is both a "non-employee,
director," as defined in Rule 16(b)-3 of the Exchange Act, and an independent
director as defined in the rules of the Exchange.

     "Restriction Period" shall mean the period during which a grant of
Restricted Shares or Restricted Share Units is subject to forfeiture as provided
in Sections 7 and Section 8, respectively.

     "Restricted Share" shall mean a Common Share granted as an Initial Grant or
an Annual Grant which becomes vested and non-forfeitable in the case of an
Annual Award at the end of the Restriction Period, as provided in Section 7 or
Section 8, as applicable.

     "Restricted Share Unit" shall mean the right to receive a Common Share (or
a cash payment equal to the Fair Market Value of a Common Share) at a future
date, as determined by the Committee and set forth in the applicable Award
Agreement, pursuant to the provisions of Section 8 of the Plan.

     "Retirement" shall mean an Eligible Director's retirement from service from
the Board, other than (i) for Cause or (ii) as a result of the failure of the
Board of Directors or nominating committee to include an Eligible Director as
one of the Board's nominees for director or the refusal of the Eligible Director
to stand for re-election, in either case as a result of conduct described under
the definition of Cause.

     "Stock Option" shall mean an option to acquire Common Shares pursuant to
Section 6 of the Plan.

     "Subsidiary" shall mean any corporation or other entity, regardless of
form, of which the Company owns directly or indirectly either fifty percent
(50%) or more of the total combined voting power of such entity or fifty percent
(50%) of the value of the combined equity interests in such entity.

3.   ADMINISTRATION

     (a) The Plan shall be administered by the Committee. The Committee shall
have the responsibility for construing and interpreting the Plan and for
establishing and amending such rules and regulations as it deems necessary or
desirable for the proper administration of the Plan. Any decision or action
taken or to be taken by the Committee arising out of or in connection with the
construction, administration, interpretation and effect of the Plan and of its
rules and regulations shall be within its absolute discretion of the Committee
to the maximum extent permitted by applicable law and shall be conclusive and
binding upon the Company and upon all directors participating in the Plan and
their successors in interest. Prior to the time of grant, the Committee shall
determine, whether any Initial Grant, Annual Grant or Periodic Grant shall be in
the form of a Stock Option, Restricted Shares or Restricted Share Units and the
terms and conditions applicable thereto and to be reflected in an Award
Agreement; provided, that absent a timely determination by the Committee, the
Initial Grant and Annual Grant shall be in the form of a Stock Option; and
provided, further, that, the same determination shall be made with respect to
all Eligible Directors receiving Initial Grants or Annual Grants on the same
date.

     (b) Awards shall only be made to an Eligible Director in respect of service
as a director. The Committee may in its discretion at any time impose a holding
period before Common Shares received in connection with any Award can be sold.
The prospective recipient of an Award shall not have any rights with respect to
such Award unless and until such recipient has executed an Award Agreement
evidencing the Award and has delivered a fully executed copy thereof to the
Company, and has otherwise complied with the applicable terms and conditions of
such Award. Awards may be granted alone, in addition to or in tandem with other
Awards under the Plan and/or cash award made outside the Plan.

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4.   MAXIMUM AMOUNT OF SHARES AVAILABLE FOR AWARDS

     (a)  Shares Available for Issuance

          The maximum number of Common Shares in respect of which Awards may be
made under the Plan shall be 250,000 Common Shares. Common Shares may be made
available from the authorized but unissued shares of the Company or from shares
held in the Company's treasury and not reserved for some other purpose. Common
Shares subject to any Award, which are cancelled or forfeited for any reason,
shall again be available for award under this Plan. If any Award may be paid in
Common Shares or in cash, and such Award is settled in cash, the Common Shares
with respect to which the cash was paid shall, for purposes of determining the
number of Common Shares available under the Plan, be available for Awards under
the Plan.

     (b)  Adjustment for Corporate Transactions

          (i) In the event that the Committee shall determine that any
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Common Shares, or other similar event affects the
Common Shares such that an adjustment is required to preserve, or to prevent
enlargement of, the benefits or potential benefits made available under this
Plan, then the Committee may, in such manner as the Committee deems equitable,
(A) adjust any or all of (i) the number and kind of Common Shares subject to
outstanding Stock Options and Restricted Stock Units, and (ii) the exercise
price with respect to any outstanding Stock Options, or (B) with respect to a
person who has an outstanding Stock Option, make provisions for a cash payment
of any extraordinary cash dividend or an alternative means (in whole or in part)
of affecting an adjustment deemed appropriate by the Committee to preserve, or
to prevent enlargement of, the benefits or potential benefits made available
under this Plan with respect to such Stock Option. However, in connection with
any adjustment made hereunder, the number of shares subject to any Stock Option
shall always be rounded to the nearest whole number.

     (c)  Adjustment for Stock Dividends

          Subsequent to the making of any Award, if the Company shall (i) pay a
dividend or make a distribution on its Common Shares in Common Shares, (ii)
subdivide or reclassify its outstanding Common Shares into a greater number of
shares, or (iii) combine or reclassify its outstanding Common Shares into a
smaller number of shares or otherwise effect a reverse split, then (x) the
exercise price of any Stock Option in effect on the record date for such
dividend or distribution or the effective date of such subdivision, and (y) the
number of Common Shares issuable upon exercise of any such Stock Option or
pursuant to Restricted Stock Unit, shall be proportionately adjusted to reflect
such transaction. Whenever an adjustment is made in the exercise price pursuant
to the preceding sentence, the number of Common Shares purchasable upon exercise
of a Stock Option shall simultaneously be adjusted by multiplying the number of
Common Shares issuable upon such exercise in effect on the date thereof by the
exercise price in effect on the date thereof and dividing the product so
obtained by the adjusted exercise price. In no event shall the exercise price
per share be less than the par value per share, and, if any adjustment made
pursuant to this subsection (b) shall result in an exercise price of less than
the par value per share, then, in such event, the exercise price per share shall
be the par value per share. Such adjustment shall be made successively whenever
any event listed in this Section 4 shall occur. Except as provided above, a
Stock Option shall not be repriced without approval of a majority of the
Company's shareholders.

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5.   INITIAL GRANTS AND ANNUAL GRANTS

     (a) Initial Grant

          An Initial Grant shall be made to each Eligible Director who is first
elected to the Board after the Effective Date of the Plan on the date of such
first election (but not upon any subsequent elections of such Eligible
Director). If the Initial Grant is in the form a Stock Option, the exercise
price per share shall be the Fair Market Value on the date of the grant.

     (b) Annual Grant

          An Annual Grant shall be made to each Eligible Director serving on the
Board during the term of the Plan on the first business day of January of each
year following the year in which such Eligible Director received an Initial
Grant. If the Annual Grant is in the form a Stock Option, the exercise price per
share shall be the Fair Market Value on the date of grant. I

     (c) Vesting of Awards

          Subject to the timely execution of the applicable Award Agreement,

          (i) each Stock Option granted pursuant to Section 5(a) and 5(b) shall
be exercisable immediately in full upon grant and shall remain exercisable until
the earlier to occur (i) the tenth anniversary date of grant or (ii) a time
provided in Section 6(b) after the date the Eligible Director ceases to be a
member of the Board;

          (ii) any Restricted Shares granted pursuant to Section 5(a) shall
immediately vest and be non-forfeitable; provided, however, that no such
Restricted Shares shall be sold during the six months following the date of
grant;

          (iii) any Restricted Share Units granted pursuant to Section 5(a)
shall immediately vest and shall become payable at the times specified in the
related Award Agreement without regard to the Eligible Director's termination of
service as a director; and

          (iv) any Restricted Shares or Restricted Share Units granted pursuant
to Sections 5(b) shall vest at the end of the applicable Restriction Period.

6.   STOCK OPTIONS

     (a) Administration

          The Committee may impose such conditions with respect to any Award,
including the exercise of Stock Options, as it shall deem appropriate,
including, without limitation, conditions relating to the application of federal
or state securities laws. No shares shall be delivered pursuant to any exercise
of a Stock Option unless arrangements satisfactory to the Committee have been
made to assure full payment of the option price therefore and taxes, if any, as
provided in Section 10(a), below. In the discretion of the Committee, payment of
the option price may be made in cash or its equivalent or by exchanging Common
Shares owned by the optionee that are not the subject of any pledge or other
security interest, or by a combination of the foregoing. In any such case, the
combined value of all cash

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and cash equivalents and the Fair Market Value, as of the date of exercise, of
any Common Shares delivered to the Company must be equal to the exercise price.

     (b) Termination of Service

          A Stock Option shall be exercisable following the termination of an
Eligible Director's status as a director only to the extent provided in this
Section 7(b). If an Eligible Director's participation on the Board terminates
due to such director's death, disability, or Retirement or otherwise with the
consent of the Committee, all Stock Options vested and exercisable at the time
of such termination shall continue to be exercisable by such director or, in the
case of death or incompetence, such director's estate or legal guardian, for the
earlier of three years from the date of such termination or the expiration date
of the Stock Option. Stock Options shall terminate on the earlier of three
months following the date the Eligible Director ceases to be a director of the
expiration date of the Stock Option. All unvested stock options shall lapse upon
termination of service as a director unless the Committee provides otherwise in
its discretion.

7.   RESTRICTED SHARES.

     (a) Stock Certificates

          (i) Registration. Each Eligible Director receiving an Award of
Restricted Shares pursuant to this Section 7 shall be issued a stock certificate
in respect of such Restricted Shares. Such certificate shall be registered in
the name of such Eligible Director, and shall bear an appropriate legend
referring to the Award Agreement and the terms, conditions and restrictions
applicable to such Award.

          (ii) Custody. The Committee shall require that (A) the stock
certificates evidencing Restricted Shares be held in the custody of the Company
until the restrictions thereon shall have lapsed in the case of a Periodic Grant
(or six months in the case of an Initial Grant or Annual Grant) and (B) as a
condition of any Award of Restricted Shares award, the Eligible Director shall
have delivered a stock power, endorsed in blank, relating to the Restricted
Shares covered by such award.

          (iii) Delivery of Shares. Upon the expiration or termination of the
Restriction Period and the satisfaction (as determined by the Committee) of any
other conditions determined by the Committee, the restrictions applicable to the
Restricted Shares shall lapse and a stock certificate for the number of Common
Shares with respect to which the restrictions have lapsed shall be delivered,
free of all such restrictions, except any that may be imposed by law, to the
Eligible Director or the Eligible Director's beneficiary, estate or legal
representative, as the case may be. No payment will be required to be made by
the Eligible Director upon the delivery of such Common Shares and/or cash,
except as otherwise provided in Section 10(a) of the Plan.

     (b) Restrictions and Conditions

          Awards of Restricted Shares shall be subject to the following
restrictions and conditions:

          (i) Restriction Period. With respect to any Annual Grant, the
Committee shall set the Restriction Period, which shall commence with the date
of such Award, during which the Eligible Director shall not be permitted to
sell, transfer, pledge or assign Restricted Shares awarded under the Plan and
during which the Restricted Shares in the Annual Grant are subject to
forfeiture. Subject to the

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provisions of the Plan and the Restricted Share Award Agreement, the Committee,
in its sole discretion, may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions in whole or in part,
based on service, performance and/or such other factors or criteria as the
Committee may, in its sole discretion, determine. Subject to the applicable
provisions of the Restricted Share Award Agreement and this Section 7, upon
termination from the Board for any reason during the Restriction Period, all
Restricted Shares still subject to restriction will vest, or be forfeited, in
accordance with the terms and conditions established by the Committee at or
after grant.

          (ii) Dividends. The Committee, in its sole discretion, as determined
at the time of Award, may permit or require the payment of cash dividends to be
deferred and, if the Committee so determines, reinvested, in additional
Restricted Shares to the extent shares are available under the Plan, at the Fair
Market Value of the Common Shares on the record date for such dividend. Stock
dividends, splits and distributions issued with respect to Restricted Shares
shall be treated as additional Restricted Shares that are subject to the same
restrictions and other terms and conditions that apply to the Restricted Shares
with respect to which such dividends are issued, and the Committee may require
the participant to deliver an additional stock power covering the Restricted
Shares issuable pursuant to such stock dividend, split or distribution. Any
other dividends or property distributed with regard to Restricted Shares, other
than regular dividends payable and paid out of current earnings, shall be held
by the Company subject to the same restrictions as the Restricted Shares.

     (c) Rights as a Shareholder

          Except as provided in this Section 7, the holder of an Award of
Restricted Shares shall have, with respect to such Restricted Shares, all of the
rights of a shareholder of the Company, including the right to vote the shares
and subject to Section 7(b)(ii), the right to receive any regular cash dividends
paid out of current earnings.

8.   RESTRICTED SHARE UNITS

     (a) Restrictions and Conditions

          Restricted Share Units are an unfunded obligation of the company. The
Committee shall determine the date upon which the payment of Common Shares or
cash pursuant to an Award of Restricted Share Units shall be payable under the
Award, the time or times within which such awards may be subject to forfeiture,
and all other terms and conditions of the Awards. The Restricted Stock Units
awarded pursuant to this Section 8 shall be subject to forfeiture in the same
manner as Restricted Shares under Section 7, as determined by the Committee, in
its sole discretion.

     (b) Delivery of Common Shares

          Upon the lapse or waiver of restrictions and the Restriction Period,
and the satisfaction (as determined by the Committee) of any other conditions
determined by the Committee, relating to Restricted Share Units evidencing the
right to receive Company Shares, such Company Shares shall be issued and
delivered to the holder of the Restricted Stock Units, free of all such
restrictions, except any that may be imposed by law, to the Eligible Director or
the Eligible Director's beneficiary, estate or legal representative, as the case
may be. The Eligible Directors shall have no rights as a shareholder with
respect to common shares subject to Restricted Share Units prior to the time
Common Shares are distributed to or for the benefit of the Eligible Director at
the end of the Restriction Period.

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9.   CHANGE IN CONTROL

          In the event of a Change in Control, each outstanding Stock Option
shall promptly be cancelled in exchange for a payment in cash of an amount equal
to the excess of the Change in Control Price over the exercise price for such
Stock Option. The Restriction Period shall lapse with respect to any Awards of
Restricted Shares or Restricted Share Units subject to a Restriction Period as
of the date of the Change in Control, and shall become immediately fully vested
and, in the case of Restricted Share Units, payable immediately in common
shares, or, in the discretion of the Committee, in cash..

          2.   10. GENERAL PROVISIONS

     (a) Withholding

          Should an amount realized or recognized by an Eligible Director in
connection with the exercise of a Stock Option, or the lapsing of restrictions
on Restricted Shares or the payment in respect of Restricted Stock Units,
subject the Company to a tax withholding requirement under Federal, state, local
or foreign law, such Eligible Director shall be required to make the necessary
arrangements to satisfy the Company's obligations, if any, to withhold any tax
with respect to such amount prior to the issuance to the Eligible Director of
any Common Shares and authorizes the Company to withhold such amounts from any
other payment due the individual.

     (b) Award Agreements

          Each Award hereunder shall be evidenced by an Award Agreement. The
written agreement shall be delivered to the Eligible Director and shall
incorporate the terms of the Plan by reference and specify the terms and
conditions thereof and any rules applicable thereto.

     (c) Non-transferability

          No Award shall be assignable or transferable except as expressly
provided in this Section 10(c). No right or interest of any Eligible Director
shall be subject to any lien, obligation or liability of the Eligible Director;
provided, however, Stock Options, and Restricted Shares awarded pursuant to the
Plan may be transferred to an Eligible Director's family member, as defined in
the instructions to Form S-8 under the Securities Act of 1933, as amended
(collectively, the "Permitted Transferees") provided that such family members
acquired the Stock Options or Common Shares by gift or pursuant to a domestic
relations order, and provided, further, that nothing in this Section 10(c) shall
be construed to permit a transfer which would render the Plan and the Restricted
Shares issuable pursuant to the Plan ineligible for registration under the
Securities Act of 1933, as amended, on a Form S-8, or any subsequent similar
form. Except as otherwise expressly provided in the Plan, all rights with
respect to Awards granted to an Eligible Director's may be exercised, during his
or her lifetime, only by such Eligible Director or, if applicable, the Permitted
Transferees.

     (d) Compliance with Legal and Exchange Requirements

          The Plan, the granting and exercise of Awards hereunder, and the other
obligations of the Company under the Plan, shall be subject to all applicable
federal and state laws, rules, and regulations, and to such approvals by any
regulatory or governmental agency as may be required. The Company, in its
discretion, may postpone the granting and exercising of Awards, the issuance or
delivery of Common

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Shares under any Award or any other action permitted under the Plan to permit
the Company, with reasonable diligence, to complete such Exchange listing or
registration or qualification of such Common Shares or other required action
under any federal or state law, rule, or regulation and may require any Eligible
Director to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of Common
Shares in compliance with applicable laws, rules, and regulations. The Company
shall not be obligated by virtue of any provision of the Plan to recognize the
exercise of any Award or to otherwise sell or issue Common Shares in violation
of any such laws, rules, or regulations; and any postponement of the exercise or
settlement of any Award under this provision shall not extend the term of such
Awards, and neither the Company nor its directors or officers shall have any
obligation or liability to the Eligible Director with respect to any Award (or
Common Shares issuable thereunder) that shall lapse because of such
postponement.

     (e) Construction of the Plan

          The validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and rights relating to the Plan,
shall be determined solely in accordance with the laws of the State of New York
without reference to its conflict of law rules.

     (f) Effective Date

          The Effective Date of this Plan is April 27, 2004. The Plan will
become effective as of that date provided that the Plan receives the approval,
within 12 months of its approval by the board, by the Company's shareholders. If
such approval is not obtained, the Plan and all Awards shall be null and void.

                                       17<PAGE>
                                                                     Exhibit 4.3

NEITHER THIS NOTE NOR ANY SECURITIES THAT MAY BE ISSUED UPON CONVERSION HEREOF
HAVE BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN SO REGISTERED AND QUALIFIED OR
EVIDENCE IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION AND
QUALIFICATION IS NOT REQUIRED.

                FOURTH AMENDED AND RESTATED CONVERTIBLE TERM NOTE

                               DUE APRIL 30, 2005

                                                    Englewood Cliffs, New Jersey
$___________                                              As of November 4, 2002

     For value received, EpiCept Corporation, a Delaware corporation (the
"Company"), hereby promises to pay to the order of ________________________
(hereinafter referred to as the "Payee") the principal sum of $_______________
(the "Maximum Principal Amount"), or so much thereof as shall have been advanced
by Payee to the Company, with interest from the date hereof on the unpaid
balance at the rate of 8% per annum, such interest to accrue on a daily basis
from time to time from the date hereof until the date on which this Fourth
Amended and Restated Convertible Term Note (this "Note") is paid in full. This
Note is one of a series of notes being issued on the date hereof or that
hereafter may be issued to certain investors in the aggregate maximum principal
amount of $5,000,000 (this Note, together with such other notes shall be
collectively referenced to as the "Convertible Notes"). As additional
consideration for the Payee's loan to the Company of up to the Maximum Principal
Amount, the Company issued to the Payee a certain Preferred Stock Purchase
Warrant of even date herewith (as amended and/or restated, the "Stock Purchase
Warrant," and collectively with all other Stock Purchase Warrants issued to
other holders of Convertible Notes, the "Stock Purchase Warrants"). Subject to
the conversion provisions set forth in Section 5 and Section 6, all outstanding
principal and accrued interest under this Note shall become due and payable on
April 30, 2005.

     1. Further Advances. On the date hereof, the Payee has advanced to the
Company only a portion of the Maximum Principal Amount. The Company may from
time to time request additional advances under the Convertible Notes. Such
requests shall be made in writing by the Chief Executive Officer of the Company
and shall be directed to TVM IV GmbH & Co. KG ("TVM"), Merlin General Partner II
Limited as general partner of the Merlin Biosciences Fund L.P. and as managing
partner of the Merlin Biosciences Fund GbR ("Merlin") and Private Equity US
Direct Finance ("Private Equity Holding"). Each such request for an additional
advance shall also contain a detailed explanation of the reasons the additional
advance is required and a certification by the Company's Chief Executive Officer
that no Event of Default (as defined below) has occurred. Each such request
shall be made no later than 5 business days prior to the date on which the
Company requires the requested amount. Should TVM and Merlin each agree that an
additional advance should be made, TVM and Merlin shall together send a notice
to each holder of a Convertible Note indicating that portion of the Maximum
Principal Amount of their
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Convertible Notes that TVM and Merlin have agreed shall be advanced to the
Company, which, for the avoidance of doubt, may be for a lesser amount than that
originally requested by the Company (it being understood that each holder will
thereby become obligated to advance an equal proportion of the maximum principal
amount of his Convertible Note). Upon such notices from time to time transmitted
by TVM and Merlin in accordance with the terms of this Note, the Payee agrees to
make additional advances to the Company, provided, that the aggregate amount of
all advances by the Payee shall not exceed the Maximum Principal Amount.
Notwithstanding the foregoing, the Payee, at any time and from time to time,
upon 5 business days notice (delivered in the manner prescribed in the
Subscription Agreement pursuant to which the Note was purchased) to the Company
and each other person or entity that holds one or more of the Convertible Notes,
may advance to the Company any amount up to that amount that, together with all
amounts previously advanced to the Company by the Payee, equals the Maximum
Principal Amount. Each such advance shall be made by wire transfer to the
Company's account within three business days after receipt by the Payee of the
notice from TVM and Merlin specified above. Notwithstanding anything in the
foregoing to the contrary, no additional advances shall be made under the
Convertible Notes unless on or before November 30, 2002, the date of maturity of
that certain loan from IKB Private Equity GmbH f/k/a IKB Venture Capital GmbH
("IKB") to EpiCept GmbH (formerly known as Pharmed Labs GmbH) dated on or about
April 13, 1998 has been extended to April 30, 2004, unless TVM, Merlin and
Private Equity Holding shall unanimously waive or extend the period for
compliance with this provision.

     2. Payments. Principal and interest shall be payable in lawful money of the
United States of America, by wire transfer to a bank account designated by the
Payee or by bank check delivered to the principal office of the Payee or at such
other place as the Payee may designate from time to time in writing to the
Company.

     3. Prepayment.

          (a) The Company shall have the right at its option at any time to
prepay this Note without premium or penalty, provided, that the Company notifies
the Payee of the date that it intends to make payment on this Note not less than
twenty (20) days prior to such date so as to provide the Payee the opportunity
to convert this Note into capital stock of the Company and, provided, further,
that the Company may not prepay this Note in anticipation of an Extraordinary
Event (as defined below). Any prepayment of this Note shall be accompanied by
the interest accrued on the prepaid principal amount.

          (b) Notwithstanding anything in this Note to the contrary, if not
sooner prepaid or converted in accordance with the terms hereof, upon the
consummation of a Qualified Public Offering (as such term is defined in the
Current Charter (defined in Section 6 below)), the entire principal amount of
this Note and all accrued and unpaid interest thereon shall be prepaid by the
Company, without notice to or the consent of the Payee, with proceeds from such
offering.

     4. Principal Amount; Grid Notation. The unpaid principal balance of this
Note at any time shall be the total amount advanced by the Payee to the Company,
less the total amount of principal payments made hereon by the Company. The date
and amount of each such advance and each payment on account of the principal of
this Note may be endorsed by the Payee on the

                                        2
<PAGE>
grid attached to and made part of this Note, and when so stated shall represent
evidence thereof in the absence of manifest error. Any failure by the Payee to
so endorse shall in no way mitigate or discharge the obligation of the Company
to repay any advances actually made.

     5. Next Round Conversion. If the Company consummates a convertible
preferred stock financing with gross proceeds to the Company of at least
$10,000,000 (including the principal and accrued interest under the Convertible
Notes) and pursuant to which investors in such financing receive securities
representing a percentage of the Company's capital stock on a fully-diluted
basis immediately after the consummation of such financing equal to no more than
the Maximum Percentage of the Company (as defined below) (assuming for the
purpose of such calculation the exercise and/or conversion of all options,
warrants, preferred stock and other convertible securities) (a "Qualifying
Financing"), then, simultaneously with the closing of such Qualifying Financing,
the outstanding principal and accrued interest on this Note shall be converted
into shares of the new series of convertible preferred stock of the Company (the
"Next Round Preferred Stock") which is authorized by the Company in connection
with the Qualifying Financing. The terms of the Next Round Preferred Stock shall
be subject to negotiation by the Company and the purchasers of Next Round
Preferred Stock in the Qualifying Financing, including the Payee, and shall be
subject to the unanimous approval of each of TVM, Merlin and Private Equity
Holding. Such conversion shall occur at the lower of (i) the lowest price per
share paid by any purchaser in the Qualifying Financing and (ii) the price per
share calculated so as to assure that, immediately following such conversion of
each such Convertible Note, the shares of the Company's common stock, $0.0001
par value per share (the "Common Stock"), issuable upon conversion of the Next
Round Preferred Stock bears a proportion to the total number of shares of the
Common Stock outstanding or issuable upon exercise and/or conversion of all
options, warrants, preferred stock (including the Next Round Preferred Stock)
and other convertible securities then outstanding equal to the outstanding
principal and accrued interest on all of the Convertible Notes divided by the
sum of the outstanding principal and accrued interest on all of the Convertible
Notes and $20,000,000.00. To effect such conversion, the Payee shall on or
before the closing of the Qualifying Financing become a party to all agreements
between the Company and the purchasers of the Next Round Preferred Stock which
set forth the terms and conditions of such purchase and the Payee shall be
entitled to all the rights granted to the purchasers thereunder and subject to
any restrictions or obligations imposed generally on such purchasers. As used in
this Note, the term "Maximum Percentage of the Company" shall mean the quotient
(expressed as a percentage) obtained by dividing the aggregate consideration
paid for Next Round Preferred Stock (including the aggregate outstanding
principal and accrued interest of the Convertible Notes (the "Next Round
Consideration"), by the sum of (a) the Next Round Consideration and (b)
$15,000,000.00.

     6. Optional Conversion. So long as the Company does not consummate a
Qualifying Financing prior thereto, at any time hereinafter upon the unanimous
written election (the "Optional Conversion Election") of TVM, Merlin and Private
Equity Holding to effect the conversion of all of the Convertible Notes, the
outstanding principal and accrued interest on this Note shall be converted into
shares of a new series of the convertible preferred stock of the Company (the
"Optional Conversion Preferred Stock"), at a price per share calculated so as to
assure that, immediately following such conversion of the Convertible Notes, the
shares of the Common Stock issuable upon conversion of the Optional Conversion
Preferred Stock bears a

                                        3
<PAGE>
proportion to the total number of shares of the Company's Common Stock
outstanding or issuable upon exercise and/or conversion of all options, warrants
(excluding all Stock Purchase Warrants), preferred stock (including the Optional
Conversion Preferred Stock) and other convertible securities then outstanding
equal to the outstanding principal and accrued interest on all of the
Convertible Notes divided by the sum of the outstanding principal and accrued
interest on all of the Convertible Notes and $20,000,000.00. Such conversion
shall occur as soon as reasonably practicable after the delivery of the Optional
Conversion Election. The terms of the Optional Conversion Preferred Stock shall
be subject to negotiation by the Company and the holders of the Convertible
Notes, including the Payee, but in any event shall (a) provide that (1)upon any
liquidation or deemed liquidation event (as described in Section 1 of Article
FOURTH of the Company's Certificate of Incorporation as amended and/or restated
from time to time (the "Current Charter")) holders of Optional Convertible
Preferred Stock shall be entitled to receive on account of each of their shares
of Optional Convertible Preferred Stock first out of the assets of the Company
available to holders of the Company's capital stock, an amount not less than
three (3) times the amount per share at which the Convertible Notes are
converted into Optional Conversion Preferred Stock and (2) provide the Optional
Convertible Preferred Stock with so-called "full ratchet anti-dilution
protection," and (b) be subject to the unanimous approval of each of TVM, Merlin
and Private Equity Holding. To effect such conversion, the Company and the Payee
shall become parties to all ordinary and customary agreements necessary to fully
set forth the terms and conditions of such purchase and to provide the Payee
with all the rights, and subject the Payee to all of the restrictions or
obligations, granted to or imposed on the holders of the Optional Conversion
Preferred Stock in connection with their purchase thereof, as such rights,
restrictions and obligations may have been amended from time to time. Promptly
after the delivery by TVM, Merlin and Private Equity Holding of the Optional
Conversion Election, the Company shall use its best efforts to cause to be taken
all corporate action necessary to amend its Certificate of Incorporation to
authorize the shares of Optional Conversion Preferred Stock issuable upon
conversion of the Convertible Notes and the exercise of all Stock Purchase
Warrants and the shares of Common Stock issuable upon conversion of such shares
of Optional Conversion Preferred Stock and to effect all other changes to the
Company's Certificate of Incorporation as may be required.

     7. Mandatory Conversion. Effective immediately prior to the Effective Time
(as defined in the Merger Agreement) of the Merger, the outstanding principal
and accrued interest on this Note (which for the avoidance of doubt shall mean
any amounts in excess of that used to pay the exercise price of the Payee's
accompanying Stock Purchase Warrants) shall automatically convert, without
further act on the part of the Purchaser, into shares of Common Stock at a
conversion price of $1.50. For purposes of this Section 7, "Merger" means the
merger of Maxim Acquisition Corp., a wholly owned subsidiary of the Company with
and into Maxim Pharmaceuticals, Inc. pursuant to that certain agreement and plan
of merger (the "Merger Agreement") among the Company, Maxim Acquisition Corp.
and Maxim Pharmaceuticals Inc. dated as of September __, 2005.

     8. Payment Upon Liquidation. At the unanimous election of TVM, Merlin and
Private Equity Holding, upon the occurrence of an Extraordinary Event, the
holder hereof shall be entitled to receive (subject to Section 2.3 of the
Intercreditor Agreement (as defined below)) an amount in full satisfaction of
this Note, such amount to be paid out of the assets of the

                                        4
<PAGE>
Company before any payments are made on account of any capital stock of the
Company, equal to three (3) times the principal amount of this Note, plus all
interest accrued on this Note. The Company shall not incur any obligation
(except with respect to its issuance of Convertible Notes) outside of its
ordinary course of business after the date hereof that would be have priority
over the obligation described herein, except with the unanimous consent of TVM,
Merlin and Private Equity Holding. The Company shall not participate in an
Extraordinary Event without notifying the Payee of its intention to so
participate in such Extraordinary Event at least 10 business days prior to such
Extraordinary Event. As used in this Note, the term "Extraordinary Event" means
(a) a merger, consolidation, share exchange or other form of corporate
reorganization involving the Company in which the stockholders of the Company
immediately before such merger, consolidation, share exchange or other corporate
reorganization dispose of in excess of fifty percent (50%) of the issued and
outstanding capital stock of the Company; (b) any transaction or series of
related transactions in which (i) all or substantially all of the assets of the
Company are sold, or (ii) in excess of fifty percent (50%) of the shares of
Common Stock (assuming conversion of all convertible securities) is issued
transferred to any person (other than in a Qualifying Financing); or (c) any
event that would trigger payments to the holders of any series of the Preferred
Stock under Section 1(c) of Article FOURTH of the Current Charter in the absence
of the prescribed vote of the holders of such series to the contrary.
Notwithstanding anything in this Note to the contrary, an Extraordinary Event
shall be deemed a "Termination Event" as such term is defined in the
Intercreditor Agreement, dated as of November 4, 2002 (the "Intercreditor
Agreement"), among the Company, IKB, EpiCept GmbH, Payee, and the other holders
of Convertible Notes; if an Extraordinary Event occurs, then the proceeds of the
Extraordinary Event shall be distributed first in accordance with Section 2.3 of
the Intercreditor Agreement.

     9. Cancellation of Note. Upon conversion of this Note, in accordance with
Sections 5 or 6 hereunder, all rights with respect to this Note shall terminate,
whether or not the Note has been surrendered for cancellation, and the Company
will be forever released from its obligation under this Note, except its
obligation under Sections 5 or 6 herein.

     10. Events of Default.

          If any of the following events ("Events of Default") shall occur:

          (a) A final judgment or settlement shall be rendered against or agreed
to by the Company or any of its subsidiaries for the payment of money that,
after deducting the amount of any insurance proceeds paid or payable to or on
behalf of the Company or such subsidiary in connection with such judgment or
settlement, as the case may be, is in excess of $50,000, and such judgment shall
remain undischarged for a period of thirty (30) days, during which period
execution shall not effectively be stayed, or such settlement shall remain
unpaid for a period of thirty (30) days after the agreed payment date unless
such delay has been agreed to by the other party. If a dispute exists with
respect to the liability of any insurance underwriter under any insurance policy
of the Company or such subsidiary, no deduction under this subsection shall be
made for any portion of the insurance proceeds that are the subject of such
dispute;

                                        5
<PAGE>
          (b) The Company or any of its subsidiaries shall (i) voluntarily
terminate operations or apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of it or
of all or a substantial part of its assets, (ii) admit in writing its inability,
or be generally unable, to pay its debts as the debts become due, (iii) make, or
enter into negotiations to make, a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code of
the United States (as now or hereafter in effect), (v) file a petition (relating
to itself) seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts,
(vi) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under the
Federal Bankruptcy Code of the United States or other applicable bankruptcy law
or (vii) take any corporate action for the purpose of effecting any of the
foregoing;

          (c) Without its application, approval or consent, a proceeding shall
be commenced, in any court of competent jurisdiction, seeking in respect of the
Company or any of its subsidiaries the liquidation, reorganization, dissolution,
winding-up, or composition or readjustment of debt, the appointment of a
trustee, receiver, liquidator or the like of such entity or of all or any
substantial part of its assets, or other like relief in respect of such entity
under any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts; and, if the proceeding is being contested in
good faith by such entity, the same shall continue undismissed, or unstayed and
in effect for any period of forty-five (45) consecutive days, or an order for
relief against such entity shall be entered in any case under the Federal
Bankruptcy Code of the United States or other applicable bankruptcy law;

          (d) Any foreclosure or other proceedings shall be commenced to
enforce, execute or realize upon any lien, encumbrance, attachment, trustee
process, mortgage or security interest for payment of an amount in excess of
$50,000 against the Company or any of its subsidiaries;

          (e) There shall occur any default not cured within the applicable
grace period under any instrument or agreement evidencing any indebtedness in
excess of $50,000 for money borrowed by the Company or any of its subsidiaries;

          (f) There shall occur any acceleration or any default not cured within
the applicable grace period under any of the agreements relating to the loans to
the Company or EpiCept GmbH from IKB or Technologie-Beteiligungs-Gesellschaft
mbH der Deutschen Ausgleichsbank;

          (g) There shall occur, in the reasonable opinion TVM, Merlin and
Private Equity Holding, any material adverse change in the financial condition
of the Company or any of its subsidiaries as compared to the Company's condition
on the date hereof;

          (h) There shall occur any merger, consolidation, share exchange or
other form of corporate reorganization involving the Company in which the
stockholders of the Company immediately before such merger, consolidation, share
exchange or other corporate reorganization

                                        6
<PAGE>
dispose of in excess of fifty percent (50%) of the issued and outstanding
capital stock of the Company;

          (i) There shall occur any transaction or series of related
transactions in which (i) all or substantially all of the assets of the Company
are sold, or (ii) in excess of fifty percent (50%) of the shares of Common Stock
(assuming conversion of all convertible securities) is issued transferred to any
person (other than in a Qualifying Financing or a Qualified Public Offering); or

          (j) There shall occur any event that will trigger payments to the
holders of any series of the Preferred Stock under Section 1(c) of Article
FOURTH of the Current Charter in the absence of the prescribed vote of the
holders of such series to the contrary;

then, upon the written consent of the holders of at least a majority in
aggregate principal amount of the Convertible Notes then outstanding (the
"Majority Holders") at any time thereafter when such Event of Default is
continuing, if such Event of Default or any other Event of Default shall have
not been waived by the Majority Holders, the Payee may by notice to the Company
declare this Note due and payable, upon which an amount equal to three (3) times
the principal amount of this Note, plus all interest accrued on this Note any
other amounts owing hereunder immediately shall be due and payable, and the same
shall forthwith become immediately due and payable without presentment, demand,
protest, notice or other formality of any kind, all of which are hereby
expressly waived; provided, however, that notwithstanding the above, if there
shall occur an Event of Default under clause (b) or (c) above, then an amount
equal to three (3) times the principal amount of this Note, plus all interest
accrued on this Note any other amounts owing hereunder, shall be immediately due
and payable without the necessity of any action by the Majority Holders or the
Payee, or notice to the Company. The Company shall notify Payee forthwith and in
any event within one (1) business day of the occurrence of any Event of Default.

     11. Transfer and Exchange of Note.

          (a) Transfer. Subject to evidence of compliance with the Securities
Act of 1933, as amended, (the "Securities Act"), and applicable state securities
laws, this Note may be transferred or succeeded to by any person; provided,
however, that the Company is given written notice at the time of such transfer
stating the name and address of the transferee.

          (b) Exchange. Upon surrender of this Note for transfer or exchange, a
new note or new notes of the same tenor dated the date to which interest has
been paid on the surrendered Note and in an aggregate principal amount equal to
the unpaid principal amount of the Note so surrendered will be issued to, and
registered in the name of, the transferee or transferees. The Company may treat
the person in whose name this Note is registered, as the owner hereof and the
Payee hereunder for the purpose of receiving payment and for all other purposes.

     12. Compliance with Securities Act. The Payee, by acceptance hereof, agrees
that this Note is being acquired for investment for its own account and not with
a view towards its distribution and that the Payee will not offer, sell or
otherwise dispose of this Note or shares of

                                        7
<PAGE>
capital stock of the Company issued upon conversion of this Note except under
circumstances which will not result in a violation of the Securities Act and
applicable state securities laws. The Payee represents that he/she/it is an
"accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act, and shall promptly notify the Company if at any time prior to
April 30, 2005 such Payee is no longer an "accredited investor."

     13. Miscellaneous.

          (a) Expenses. The Company agrees to reimburse and indemnify the Payee
for all costs and expenses (including reasonable attorney's fees) incurred by
the Payee (i) in connection with the preparation of the Convertible Notes, the
Stock Purchase Warrants and the transactions contemplated by such notes and
warrants and (ii) in collecting payment hereof and in otherwise enforcing
compliance herewith.

          (b) Binding Benefit. This Note, and the obligations and rights of the
parties hereunder, shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Each of the holders of the
Convertible Notes is an intended third party beneficiary of the obligations of
the Payee hereunder.

          (c) No Waiver. No delay or omission on the part of the Payee in
exercising any right hereunder shall operate as a waiver of such right or of any
other right of the Payee, nor shall any delay, omission or waiver on any
occasion be deemed a bar to, or waiver of, the same or any other right on any
future occasion.

          (d) Waivers by the Company. The undersigned and every indorser or
guarantor of this Note, regardless of the time, order or place of signing,
waives presentment, demand, protest and notice of every kind and assents to any
one or more extensions or postponements of the time of payment or any other
indulgences, to any substitutions, exchanges or releases of collateral available
to the Payee, if any, and to the additions or releases of any other parties or
persons primarily or secondarily liable.

          (e) Rights of Action; Remedies. All rights of action with respect to
this Note are vested in the Payee, and the Payee may enforce against the Company
its right to convert this Note into shares of capital stock of the Company in
the manner provided in this Note. The Company stipulates that the remedies at
law of the Payee in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this Note
are not and will not be adequate, and that such terms may be specifically
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or
otherwise.

          (f) Loss or Mutilation. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Note and, if
requested in the case of any such loss, theft or destruction, upon delivery of
an indemnity agreement or security reasonably satisfactory to the Company, or,
in the case of any such mutilation, upon surrender and cancellation of this
Note, the Company at its expense will execute and deliver, in lieu hereof, a new
note of like tenor.

                                        8
<PAGE>
          (g) Amendments and Waivers; Supercedes Prior Notes. No provision of
this Note may be amended or waived except with the unanimous written consent of
TVM, Merlin, Private Equity Holding and the Company, and any amendment or waiver
of this Note and the other Convertible Notes made with such consent shall be
binding on all holders of the Convertible Notes (including this Note); provided,
however, that (i) no amendment or waiver respecting the amount of payment of
principal or interest on this Note shall be made without the written consent of
the holder of this Note, and (ii) the holder of this Note may waive any right or
benefit hereunder, but only as to itself, by its written consent. By
countersigning this Note on the signature page hereof, the undersigned consents
and agrees to all amendments to the Third Amended Note (defined below), the
Second Amended Note (defined below), the First Amended Note (defined below) and
the Original Note (defined below) contained in this Note. This Note supercedes
and replaces a certain (i) Third Amended and Restated Convertible Term Note of
even date herewith (the "Third Amended Note"), (ii) Second Amended and Restated
Convertible Term Note of even date herewith (the "Second Amended Note"), (iii)
Amended and Restated Convertible Term Note of even date herewith (the "First
Amended Note") and (iv) Convertible Term Note of even date herewith (the
"Original Note"), each issued by the Company to the Payee and Payee acknowledges
that the Third Amended Note, the Second Amended Note, the First Amended Note and
the Original Note are no longer outstanding or obligations of the Company.

          (h) Governing Law. All rights and obligations under this Note shall be
governed by, and construed and enforced in accordance with, the substantive laws
of the State of Delaware, without regard to its principles of conflicts of laws.

          (i) Pari Passu. The Convertible Notes rank equally and ratably without
priority over one another. No payment, including prepayment, shall be made
hereunder unless payment, including any prepayment, is made with respect to the
other Convertible Notes in an amount which bears the same ratio to the then
outstanding unpaid principal amount of such other Convertible Notes as the
payment made hereon bears to the then outstanding unpaid principal amount of
this Note.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                        9
<PAGE>
     IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first above written.

                                        EPICEPT CORPORATION

                                        By:
                                            ------------------------------------
                                                                     (signature)
                                        Name:
                                              ----------------------------------
                                                                       (printed)
                                        Its: Chief Financial Officer
                                                                         (title)

ACCEPTED AND AGREED:

[NAME OF HOLDER]

By:
    ---------------------------------
                          (signature)
Name:
      -------------------------------
                            (printed)
Title:
       ------------------------------
                              (title)

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