Exhibit 10.07

                          LIFESCIENCE VENTURES LIMITED


                              September, 28th, 2004


BIOACCELERATE HOLDINGS, Inc.
712 Fifth Avenue
New York, NY, 10019
Attn:  President and CEO


         Re:      Credit Facility
                  ---------------

Gentlemen:


LIFESCIENCE VENTURES LIMITED ("LIFESCIENCE VENTURES LIMITED") is pleased to make
available to BIOACCELERATE HOLDINGS, Inc. (the "Company") a senior, secured
credit facility (the "Credit Facility"), pursuant to which LIFESCIENCE VENTURES
LIMITED shall provide the Company one or more loans (each, a "Tranche") in the
aggregate principal amount of up to Twelve Million Five Hundred Thousand Dollars
($12,500,000) dollars (the "Maximum Funded Amount"), subject to the terms and
conditions as hereinafter provided in this letter agreement (this "Letter
Agreement").

The First Tranche (the "Initial Tranche") will be payable to the Company or its
Creditors on an as needed basis and will be provided and funded to the Company
upon receipt of the following documents from the Company: (i) a grid promissory
note (the "Note"), executed by an authorized officer of the Company evidencing
the principal amount of funds available under the Credit Facility and the draw
down of the Initial Tranche (in the form attached hereto as Exhibit A), (ii) a
security agreement (the "Security Agreement") and other collateral documents
pursuant to which certain assets and subsequently acquired assets of the Company
shall be pledged to secure the repayment of the indebtedness evidenced by the
Note (the "Security Documents"), executed by an authorized officer of the
Company (in the form attached hereto as Exhibit B), (iii) the warrant (as
defined herein), executed by an authorized officer of the Company, (iv) such
other documents, each in form and substance satisfactory to LIFESCIENCE VENTURES
LIMITED, as LIFESCIENCE VENTURES LIMITED shall reasonably request. This Credit
Facility and associated documents shall rank pari-passu with an identical
agreement that BIOACCELERATE HOLDINGS INC is entering into with JANO HOLDINGS
LIMITED.

Subject to the conditions specified herein, additional Tranches shall be made
available on as needed basis (each a "Funding Date"). Each Additional Tranche
will be funded within two (2) business days following receipt by LIFESCIENCE
VENTURES LIMITED on a Funding Date of a request for the funding of an Additional
Tranche (each, a "Request") from the Company.

The Company covenants to use the proceeds of each Tranche solely for the
purposes as agreed with LIFESCIENCE VENTURES LIMITED. In connection with the
foregoing covenant, LIFESCIENCE VENTURES LIMITED shall have the right (the
"Audit and Demand Right"), subject to customary confidentiality provisions, at
any time during the term of the Note and for such extended period of time as
indebtedness remains outstanding under any Note to (a) audit and inspect the
books and records of the Company for the purpose of determining the use of
proceeds from any Tranche at reasonable times and with reasonable prior notice
in accordance with the terms and conditions of the Note or (b) demand reasonable
evidence from the Company that the Company is in compliance with the foregoing
covenant, which evidence the Company shall provide to LIFESCIENCE VENTURES
LIMITED promptly upon written request.


<PAGE>

Notwithstanding anything to the contrary provided herein or elsewhere,
LIFESCIENCE VENTURES LIMITED shall have no obligation to fund a Tranche if at
the time a Request is received by LIFESCIENCE VENTURES LIMITED and prior to when
the funds requested in the Tranche are sent, one or more of the following events
shall have occurred:

      (vii) There shall be any material change in the business, properties,
assets, results of operations, prospects or financial condition of the Company
since January 31, 2004;

      (viii) The Company shall be in breach of or default under any material
contract, license or other agreement or instrument; or

      (ix) There shall not have occurred (a) any domestic or international
event, act or occurrence which has materially disrupted, or is likely in the
immediate future to materially disrupt, the securities markets; (b) a general
suspension of, or a general limitation on prices for, trading in securities on
the New York Stock Exchange or the American Stock Exchange or in the
over-the-counter market; (c) any outbreak of major hostilities or other national
or international calamity; (d) any banking moratorium declared by a state or
federal authority; (e) any moratorium declared in foreign exchange trading by
major international banks or other persons; (f) any material interruption in the
mail service or other means of communication within the United States; (g) any
change in the market for securities in general or in political, financial, or
economic conditions; or (h) neither the Company nor any of its officers,
directors and/or controlling shareholders have become the subject of or a named
party in any investigation or action involving any regulatory or self-regulatory
organization including, but not limited to, the SEC, the NASD or any state
and/or federal agency (each as set forth in this clause (iii), a "Pro Rata
Event").

As an inducement to LIFESCIENCE VENTURES LIMITED to provide the Credit Facility
to the Company, the Company shall issue to LIFESCIENCE VENTURES LIMITED (on the
date of the funding of the Initial Tranche) five (5) year warrants (the
"Warrants") to purchase 1,000,000 shares of the Company's common stock (the
"Common Stock"), at an exercise price of $14 per share and 1,000,000 shares at
an exercise price of $28 per share (subject to adjustment for anti-dilution and
other customary adjustments) .

This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without regard to the conflicts of laws
principles thereof. The parties hereto hereby agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this instrument or the
consummation of the transactions contemplated hereby, shall be brought solely in
a federal or state court located in the City, County and State of New York. By
its execution hereof, the parties hereby covenant and irrevocably submit to the
in personam jurisdiction of the federal and state courts located in the City,
County and State of New York and agree that any process in any such action may
be served upon any of them personally, or by certified mail or registered mail
upon them or their agent, return receipt requested, with the same fall force and
effect as if personally served upon them in New York City. The parties hereto
waive any claim that any such jurisdiction is not a convenient forum for any
such suit or proceeding and any defense or lack of in personam jurisdiction with
respect thereto. In the event of any such action or proceeding, the party
prevailing therein shall be entitled to payment from the other party hereto of
its reasonable counsel fees and disbursements in an amount judicially
determined.

Any notice, consent, request, or other communication given hereunder shall be
deemed sufficient if in writing and sent by registered or certified mail, return
receipt requested addressed to the Company, at its principal office as first
provided above, Attention: CEO . And to LIFESCIENCE VENTURES LIMITED at its
addressed provided above (or to such other address as either the Company and/or
LIFESCIENCE VENTURES LIMITED shall provide in writing to the other party).
Notices shall be deemed to have been given on the date of receipt by the other
party.


<PAGE>

                                       Very truly yours,

                                       LIFESCIENCE VENTURES LIMITED


                                       By: _____________________________________
                                           Name:
                                           Title:
Accepted and agreed as of the
date first appearing above

BIOACCELERATE HOLDINGS, INC.

By: ___________________________________
    Name:
    Title:


THE NOTE REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS NOTE MAY NOT BE TRANSFERRED
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR (B) PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS. THIS LEGEND SHALL BE
ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.

                          BIOACCELERATE HOLDINGS, INC.

                            Senior Secured Grid Note


Up to $12,500,000                                           September 28th, 2004

      FOR VALUE RECEIVED, BIOACCELERATE HOLDINGS, Inc., a Delaware corporation
(the "Company"), with its principal executive office 712 Fifth Avenue, New York,
NY, 10019, promises to pay to the order of Lifescience Ventures Limited, a BVI
Corporation with offices at Suite F8, International Commercial Centre,
Casemates, Main Road, Gibraltar (together with any permitted registered assigns,
the "Payee") the principal sum of $12,500,000 or, if less, the aggregate unpaid
principal amount of all Tranches made to the Company by Payee (the "Principal
Amount") pursuant to the letter agreement, dated as of even date herewith,
between the Company and the Payee (the "Letter Agreement"), on the Maturity
Date. Capitalized terms used, and not defined, herein shall have the meanings
ascribed thereto in the Letter Agreement.

      The Initial Tranche of will be immediately available to the Company,
subject to the satisfaction of all required conditions under the Letter
Agreement. Additional Tranches will be made available to the Company as per the
agreed budget thereafter from drawdown of initial tranche(each a "Funding
Date"). Each Additional Tranche will be funded within two (2) business days
following receipt by the Payee on a Funding Date of a Request Letter and a
certification (in form and substance satisfactory to Bioaccelerate) signed by an
authorized officer of the Company that all conditions to funding set forth
herein have been satisfied and that the Company is not in breach of any
representation, warranty or covenant provided in this Note, the Letter
Agreement, the Security Documents, the Security Agreement, any Warrant issued by
the Company to the Payee, the Engagement Letter or any agreement between the
Company and either the Payee or Bioaccelerate Limited related to the subject
matter contained in such agreements or documents.


<PAGE>

      The Company hereby authorizes the Payee to endorse on the Schedule of
Tranches annexed to this Note all Tranches made to the Company and all payments
of principal amounts in respect of such Traches, which endorsements shall, in
the absence of manifest error, be conclusive as to the outstanding principal
amount of all Tranches; provided, however, that the failure to make such
notation with respect to any Tranche or payment shall not limit or otherwise
affect the obligations of the Company under the Letter Agreement or this Note.

      The Maturity Date shall mean the earliest of (i) the date on which any
Placement occurs, (ii) the date on which an Event of Default (as defined herein)
occurs, (iii) the date on which a Change in Control occurs. "Change in Control"
shall mean (a) a merger , consolidation or any other combination of the Company
(other than a merger, consolidation or combination of a wholly-owned subsidiary
of the Company or any other person or entity with respect to which the Payee has
given its approval in writing) with any entity or person, (b) the sale of all or
substantially all of the assets of the Company, or (c) the purchase by a single
entity or group, as defined in Section 13(d) of the Securities Exchange Act of
1934, as amended, of more than 25% of the voting stock of the Company in a
single transaction or a series of related transactions. A "Placement" shall mean
the closing of either debt or equity financing in which the Company receives at
least Fifty Million Dollars ($50,000,000) in gross proceeds in any transaction
or series of related transactions after the date hereof. The Principal Amount,
accrued interest and any other amounts due under this senior secured grid note
(this "Note") are payable in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts. Interest on this Note shall accrue on the Principal
Amount outstanding from time to time at a rate per annum computed in accordance
with Section 4 hereof. This Note is made with full recourse to the Company and
upon all the warranties, representations, covenants and agreements contained
herein.

      The Company (i) waives presentment, demand, protest or notice of any kind
in connection with this Note and (ii) agrees, in the event of an Event of
Default (as defined below), to pay to the holder of this Note, on demand, all
reasonable out-of-pocket costs and expenses (including legal fees) incurred in
connection with the enforcement and collection of this Note.

      - Prepayments; Mandatory Prepayments. The Company may prepay at any time
all or any portion of the principal sum hereunder without penalty or premium;
provided, however, that (i) any prepayment (whether voluntary or involuntary)
shall be applied first to any accrued and unpaid interest hereunder up to the
date of such prepayment, then to any other sums which may be payable to Payee
hereunder, and then to the principal balance outstanding hereunder, and (ii) the
acceptance of any such prepayment following the occurrence and during the
continuance of any Event of Default hereunder shall not constitute a waiver,
release or accord and satisfaction thereof or of any rights with respect thereto
by Payee. Notwithstanding anything to the contrary provided herein or elsewhere,
in the event that prior to the Maturity Date, a Placement has occurred, then the
Company, upon the closing of such transaction or transactions, as the case may
be, will immediately repay in full the Principal Amount and all accrued and
unpaid interest thereon. The Company shall provide in any applicable financing
document that the Company uses in connection with any Placement that the
required amount of funds raised will be used to repay the Principal Amount and
all accrued and unpaid interest thereon and the Company shall provide to the
Payee no later than five (5) Business Days prior to the date of funding of any
such financing the date such financing is expected to close, the amount of
financing to be received and the place and time of such closing. The Company
shall provide to the Payee all other such applicable information the Payee shall
subsequently reasonably request. The Company shall provide to the Payee at the
closing of such financing in immediately available funds such funds as is
necessary to repay the entire Principal Amount and all accrued and unpaid
interest thereon.


<PAGE>

      - Day of Payment. Whenever any payment to be made hereunder shall become
due and payable on a day which is not a Business Day (as defined below), such
payment may be made on the next succeeding Business Day without being deemed
past due and, in the case of any payment of principal, such extension of time
shall in such case be included in computing interest on such payment. As used
herein, "Business Day" shall mean any day which is not a Saturday or Sunday and
on which banks in the State of New York are not authorized or required to close.
Interest on past due principal and accrued interest thereon shall be calculated
as follows: the amount of principal and interest past due multiplied by the
Penalty Interest Rate (as defined herein) and multiplied by a fraction, the
numerator of which is the number of days such principal and interest is past due
and the denominator of which is 360.

      - Use of Proceeds. The Company shall use the proceeds of each Tranche
solely for the purposes as agreed with Bioaccelerate Inc.

      13. Computation of Interest.

            A. Base Interest Rate. Subject to subsections 4B and 4C below, the
outstanding Principal Amount shall bear interest per annum at the Applicable
Federal Rate (the "Base Interest Rate"), as defined in Section 1274(d) of the
Internal Revenue Code of 1986, as amended (the "Code"), payable on the Maturity
Date.

            B. Penalty Interest. In the event the Note is not repaid on the
Maturity Date, the rate of interest applicable to the unpaid Principal Amount
and accrued interest thereon shall be adjusted to ten percent (10%) per annum
(the "Penalty Interest Rate") from the date of default until repayment;
provided, that in no event shall the interest rate exceed the Maximum Rate
provided in Section 4C below.

            C. Maximum Rate. In the event that it is determined that New York
law is not applicable to the indebtedness evidenced by this Note or that under
New York law ("Applicable Usury Laws") the interest, charges and fees payable by
the Company in connection herewith or in connection with any other document or
instrument executed and delivered in connection herewith cause the effective
interest rate applicable to the indebtedness evidenced by this Note to exceed
the maximum rate allowed by law (the "Maximum Rate"), then such interest shall
be recalculated for the period in question and any excess over the Maximum Rate
paid with respect to such period shall be credited, without further agreement or
notice, to the Principal Amount outstanding hereunder to reduce said balance by
such amount with the same force and effect as though the Company had
specifically designated such extra sums to be so applied to principal and the
Payee had agreed to accept such extra payment(s) as a premium-free prepayment.
All such deemed prepayments shall be applied to the principal balance payable at
maturity.


<PAGE>

      14. Collateral. This Note is secured by a Security Agreement dated the
date hereof (as amended, modified or supplemented from time to time, the
"Security Agreement") of the Company in favor of the Payee covering all assets
and future assets of the Company therein described (collectively, the
"Collateral"), and is entitled to the benefits thereof. The Security Agreement,
the Uniform Commercial Code financing statements in connection with the Security
Agreement, and any and all other documents executed and delivered by the Company
to the Payee under which the Payee is granted liens on assets of the Company are
collectively referred to as the "Security Documents."

      15. Covenants of Company.

            A. Affirmative Covenants. The Company covenants and agrees with
respect to the Company and each of its Subsidiaries (which, for purposes of this
Note means any entity (i) in which the Company, directly or indirectly, owns 51%
of the capital stock or holds an equity or similar interest and (ii) which
conducts substantive business activities or holds material assets) that on and
after the date hereof, so long as this Note shall remain in effect, or the
Principal Amount of, or interest thereon, or any fee, expense or amount payable
hereunder or with respect to this Note shall be unpaid, it will perform the
obligations set forth in this Section 6A:

                  (i) Conduct of Business. The Company will, and cause each of
its Subsidiaries to, use its best efforts to conduct its business in a manner
consistent with past practices, do or to be done all things necessary to
preserve relationship with its material vendors, customers, distributors, sales
representatives and others having material business relationships with the
Company or any of its Subsidiaries, and inform and consult with the Payee on any
key decisions involving any capital expenditure in excess of $300,000;

                  (ii) Taxes and Levies. The Company will, and cause each of its
Subsidiaries to, promptly pay and discharge all taxes, assessments, and
governmental charges or levies imposed upon the Company or any of its
Subsidiaries, or upon any of their income and profits, or upon any of their
property, before the same shall become delinquent, as well as all claims for
labor, materials and supplies which, if unpaid, might become a lien or charge
upon such properties or any part thereof; provided, however, that neither the
Company nor any of its Subsidiaries shall be required to pay and discharge any
such tax, assessment, charge, levy or claim so long as the validity thereof
shall be contested in good faith by appropriate proceedings and the Company and
each of its Subsidiaries shall set aside on its books adequate reserves in
accordance with generally accepted accounting principles ("GAAP") with respect
to any such tax, assessment, charge, levy or claim so contested; provided,
further, that this Section 6A(ii) shall not apply to those claims for labor,
materials and supplies which the Payee consents in writing shall be excluded
herewith, notwithstanding that such claims, if unpaid, might become a lien or
charge upon such properties or any part thereof.


<PAGE>

                  (iii) Maintenance of Existence. The Company will, and cause
each of its Subsidiaries to, do or cause to be done all things reasonably
necessary to preserve and keep in full force and effect its corporate existence,
rights (character and statutory) and franchises, except where the failure to
comply would not have a Material Adverse Effect (as defined herein) on the
Company or any of its Subsidiaries;

                  (iv) Maintenance of Property. The Company will, and cause each
of its Subsidiaries to, at all times maintain, preserve, protect and keep its
property used or useful in the conduct of its business in good repair, working
order and condition, and from time to time make all needful and proper repairs,
renewals, replacements and improvements thereto as shall be reasonably required
in the conduct of its business and protect and maintain its licenses and its
patents, copyrights, trademarks and trade secrets and all registrations and
application for registration thereof except where the failure to take such
action would not reasonably be expected to have a Material Adverse Effect;

                        o Compliance with Laws. The Company will, and cause each
of its Subsidiaries to, use its best efforts to comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
any governmental agency, in respect of the conduct of its business and the
ownership of its properties (including without limitation applicable statutes,
regulations and orders relating to equal employment opportunities or
environmental standards or controls), except such as are being contested in good
faith by appropriate proceedings, except where failure to comply would not have
a Material Adverse Effect;

                  (v) Insurance. The Company will, and cause each of its
Subsidiaries to, keep adequately insured all property of a character usually
insured by similar corporations and carry such other insurance as is usually
carried by similar corporations;

                  (vi) Books and Records. The Company will, and cause each of
its Subsidiaries to, at all times keep true and correct books, records and
accounts reflecting all of its business affairs and transactions in accordance
with GAAP. Such books and records shall be open at reasonable times and upon
reasonable notice to the inspection of the Payee or its agents, subject to
customary confidentiality restrictions but in no event more than once in each
month absent a good-faith showing of need for such restrictions;

                  (vii) Notice of Certain Events. The Company will, and cause
each of its Subsidiaries to, give prompt written notice (with a description in
reasonable detail) to the Payee of:

                        (a) the occurrence of any Event of Default or any event
which, with the giving of notice or the lapse of time, would constitute an Event
of Default; and

                        (b) the delivery of any notice effecting the
acceleration of any indebtedness which singly or together with any other
accelerated indebtedness exceeds $25,000;

                        (c) the issuance by any court or governmental agency or
authority of any injunction, order, decision or other restraint prohibiting, or
having the effect of prohibiting, the making of or invalidating, or having the
effect of invalidating, any material provision of this Agreement, of the
initiation of any litigation or similar proceedings seeking any such injunction,
order, decision, or other restraint;


<PAGE>

                        (d) the filing or commencement of any action, suit or
proceeding against the Company or any of its Subsidiaries, whether at law or in
equity or by or before any court of any Federal, state, municipal or other
governmental agency or authority, which is brought by or on behalf of any
governmental agency or authority, or in which injunctive or other equitable
relief is sought and such relief, if obtained, would materially impair the right
or ability of the Company to perform it obligations under this Note;

                        (e) the commencement of any claim, litigation,
proceeding or tax audit not covered by insurance when the amount claimed is in
any individual claim, litigation, proceeding or tax audit in excess of $50,000
or, in the aggregate, $100,000; and

                        (f) of any material development materially and adversely
affecting the business, properties, liabilities, obligations, financial
condition, prospects, operations or results of operations of the Company and its
Subsidiaries, taken as a whole;

                  (viii) Financial Statements and Information. The Company shall
furnish or cause to be furnished to the Payee:

                        (a) within 90 days after the end of each fiscal year (or
such time as permitted under Rule 12b-25 of the Securities Exchange Act of 1934,
as amended; provided however, that in no event shall the Company be permitted
more than one extension pursuant to either Section 6A(ix)(a) or (b)), a copy of
the audited consolidated balance sheet of the Company and its Subsidiaries,
together with the related statements of income, changes in stockholder's equity,
changes in cash flows as of the end of and for such fiscal year, all reported on
by the accountants to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;

                        (b) within 45 days after the end of each of the first
three fiscal quarters of each fiscal year (or such time as permitted under Rule
12b-25 of the Securities Exchange Act of 1934, as amended; provided, however,
that in no event shall the Company be permitted more than one extension pursuant
to either Section 6A(ix)(a) or (b); provided, further, however, that the
extension with respect to the restatement of the quarterly report for the period
ending September 30, 2001 shall not be deemed to count as an extension pursuant
to (i) above), a copy of the consolidated balance sheet of the Company and each
of its Subsidiaries together with the related statements of income and cash
flows as of the end of and for such fiscal quarter and the then elapsed portion
of the fiscal year, all certified by one of its financial officers as presenting
fairly in all material respects the financial conditions and results of
operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;

                        (c) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other materials
filed by the Company or any of its Subsidiary with the SEC or with any national
securities exchange, or distributed by the Company or any of its Subsidiaries to
its shareholders, as the case may be; and


<PAGE>

                        (d) promptly following any request therefor, such other
information regarding the business, financial condition or operations of the
Company or compliance with the terms of this Note, as the Payee may reasonably
request, subject to customary confidentiality agreements and without causing
undue expense to the Company or undue distraction of its employees or
management.

            B. Negative Covenants. The Company covenants and agrees with respect
to the Company and each of its Subsidiaries that, so long as this Note shall
remain in effect, or the Principal Amount of, or interest thereon, or any fee,
expense or amount payable hereunder or with respect to this Note shall be
unpaid, it will perform the obligations set forth in this Section 6B:

                  (i) Business in the Ordinary Course. The Company will, and
will cause each of its Subsidiaries to, (i) refrain from engaging in
transactions other than in the ordinary course of business consistent with past
practice; (ii) operate its respective businesses in accordance and in compliance
with all applicable laws, ordinances, rules or regulations or orders, including,
without limitation environmental laws, and all permits, authorizations, consents
and approvals; (iii) maintain all permits and licenses in effect and, if
necessary, make all appropriate filings for the renewal of any permits or
licenses; (iv) refrain from entering into any transaction involving capital
expenditures or commitments therefor (including any borrowings in connection
with such transaction except for the agreement with Jano Holdings Limited) of
more than $100,000, individually, or $500,000 in the aggregate, or the disposal
of any properties or assets (other than inventory in the ordinary course) with a
value of more than $25,000, individually, or $50,000, in the aggregate, except
in the case of foregoing clauses (ii) and (iii) where the failure to take such
action would not reasonably be expected to have a Material Adverse Effect, and
except, in the case of all of the foregoing clauses, with respect to any
financing transaction, or as otherwise contemplated by the agreements entered
into in connection with this Note;

                  (ii) Merger, Liquidation, Dissolution. The Company will not,
and will not permit any of its Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with, any other corporation or other entity
(other than a merger or consolidation of a wholly-owned subsidiary of the
Company.), except that any wholly-owned subsidiary may merge with another
wholly-owned subsidiary or with the Company (so long as the Company is the
surviving corporation and no Event of Default shall occur as a result thereof);
provided, however, that the Company may permit its Subsidiaries to liquidate or
dissolve only on the condition that all of the assets of such Subsidiaries are
immediately transferred to the Company and only if such liquidation or
dissolution, as the case may be, would not result in a Material Adverse Effect;

                  (iii) Sales of Assets. The Company will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease or otherwise dispose
of, or grant options, warrants or other rights with respect to, all or a
substantial part of its properties or assets to any person or entity, provided
that this clause (iii) shall not restrict any disposition made in the ordinary
course of business and consisting of capital goods which are obsolete or have no
remaining useful life;

                  (iv) Redemptions. The Company will not redeem or repurchase
any outstanding equity and/or debt securities of the Company or its Subsidiaries
(or securities convertible into or exchangeable for equity securities of such
entity);


<PAGE>

                  (v) Indebtedness. Other than indebtedness for borrowed money
of the Company or any of its Subsidiaries existing on the date of this Note and
identified on the schedule delivered to the Payee on the date hereof, neither
the Company nor any of its Subsidiaries will hereafter create, incur, assume or
suffer to exist, contingently or otherwise, any indebtedness for borrowed money,
except in the ordinary course of business (consistent with past practice) but
not to exceed $50,000 at any time outstanding;

                  (vi) Negative Pledge. Other than Liens existing on the date of
this Note and expressly identified in the schedule delivered to the Payee on the
date hereof, the Company will not, and will not permit any of its Subsidiaries
to, hereafter create, incur, assume or suffer to exist any mortgage, pledge,
hypothecation, assignment, security interest, encumbrance, lien (statutory or
other), preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any financing lease) (each, a "Lien") upon
any of its property, revenues or assets, whether now owned or hereafter
acquired, except:

                        o Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter payable without
penalty or being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books;

                        o Liens of carriers, warehousemen, mechanics,
materialman and landlords incurred in the ordinary course of business for sums
not overdue or being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books;

                        o Liens (other than Liens arising under the Employee
Retirement Income Security Act of 1974, as amended, or Section 412(n) of the
Internal Revenue Code of 1986, as amended) incurred in the ordinary course of
business in connection with workers' compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to secure obligations
on surety or appeal bonds; and

                        o Judgment Liens in existence less than 30 days after
the entry thereof or with respect to which execution has been stayed in an
amount not to exceed $25,000 singly or in the aggregate (the liens described in
(a)-(d) being referred to herein as "Permitted Liens");

                  (vii) Investments. The Company will not, and will not permit
any of its Subsidiaries to, purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities or make or permit to exist
any investment or capital contribution or acquire any interest whatsoever in any
other person or entity or permit to exist any loans or advances for such
purposes except for the development of its business and (i) investments in
direct obligations of the United States of America or any agency thereof, (ii)
obligations guaranteed by the United States of America, (iii) certificates of
deposit or other obligations of any bank or trust company organized under the
laws of the United States or any state thereof and having capital and surplus of
at least $500,000, (iv) existing investments in Subsidiaries and the development
of new subsidiaries, or (v) an investment in any subsidiary created for the
purpose of making that investment;


<PAGE>

                  (viii) Transactions with Affiliates. The Company will not, and
will not permit any of its Subsidiaries to, enter into any transaction,
including, without limitation, the purchase, sale, lease or exchange of
property, real or personal, the purchase or sale of any security, the borrowing
or lending of any money, or the rendering of any service, with any person or
entity affiliated with the Company or any of its Subsidiaries (including
officers, directors and shareholders owning five (5%) percent or more of the
Company's outstanding capital stock), except (i) in the ordinary course of and
pursuant to the reasonable requirements of its business and upon fair and
reasonable terms not less favorable than would be obtained in a comparable
arms-length transaction with any other person or entity not affiliated with the
Company and, where the transaction is valued at in excess of $5,000 with the
prior written consent of the Payee, which shall not be unreasonably withheld,
(ii) transactions pursuant to existing agreements as set forth on the schedule
delivered to the Payee on the date hereof and (iii) transactions contemplated by
the agreements entered into in connection with this Note;

                  (ix) Fundamental Changes. The Company will not, and will not
permit any of its Subsidiaries to, consolidate or merge with any other person or
entity, or to permit any other person or entity to merge into or consolidate
with it or any of its Subsidiaries (other than a merger, consolidation or any
other combination of a wholly-owned subsidiary of the Company);

                  (x) Acquisitions. The Company will not, and will not permit
any of it Subsidiaries to, at any time, acquire all or substantially all of the
assets or any of the capital stock of any person or entity;

                  (xi) Restricted Payments. The Company will not, and will not
permit any of its Subsidiaries to, declare, play or make any dividend or other
distribution, direct or indirect, on account of any shares of capital stock in
such person or entity now or hereafter outstanding (other than a dividend
payable solely in shares of such capital stock to the holders of such shares) or
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition, direct or indirect, of any shares of any class of its capital stock
now or hereafter outstanding (collectively, "Restricted Payments"), except:

                        (a) any wholly-owned subsidiary of the Company may make
Restricted Payments to the Company; and

                        (b) Restricted Payments made by any Subsidiary of the
Company to the Company in amounts sufficient to enable the Company, as the
consolidated taxpayer for itself and its Subsidiaries, if applicable, to pay
taxes when due;

                  (xii) Lines of Business. Except as contemplated by the
agreements entered into in connection with this Note, the Company will not, and
will not permit any of its Subsidiaries to, materially change the nature of the
business of the Company and its Subsidiaries as conducted on the date hereof or
enter into any new business which materially increase the risk profile of the
Company and its Subsidiaries, taken as a whole; and


<PAGE>

                  (xiii) Amendment of Documents. The Company will not, and will
not permit any of its Subsidiaries to, modify, amend, supplement or terminate,
or agree to modify, amend, supplement or terminate, their organizational
documents in any way that could result in a Material Adverse Effect without the
written consent of the Payee; provided, however, that with respect to the
following (to the extent deemed to result in a Material Adverse Effect), such
consent shall not be unreasonably withheld: (i) amendment to the by-laws of the
Company or any Subsidiary to preclude actions by written consent or nominations
of directors other than through a prescribed nominations process, and (ii)
amendment to the Company's or any Subsidiaries' certificate of incorporation to
increase its authorized common stock.

                  (xiv) Stock Option Plan; Board of Directors. Notwithstanding
anything to the contrary set forth in this Note, the Company will not, and not
permit any of its Subsidiaries to, without the written consent of the Lender (a)
adopt a stock option plan, or to increase the number of shares of common stock
issuable pursuant to an existing stock option plan or (b) amend its by-laws to
increase the number of directors serving on its board of directors.

      16. Events of Default.

            A. The term "Event of Default" shall mean any of the events set
forth in this Section 7A:

                  (i) Non-Payment of Obligations. The Company shall default in
the payment of the principal or accrued interest of this Note as and when the
same shall become due and payable, whether by acceleration or otherwise.

                  (ii) Non-Performance of Affirmative Covenants. The Company
shall default in the due observance or performance of any covenant set forth in
(a) clauses (i), (iii), (vi), (viii) and (ix) of Section 6A or (b) clauses (ii),
(iv), (v) and (vii) of Section 6A and such default of clauses (ii), (iv), (v)
and (vii) of Section 6A shall continue remedial for ten (10) Business Days.

                  (iii) Non-Performance of Negative Covenants. The Company shall
default in the due observance or performance of any covenant set forth in
Section 6B.

                  (iv) Bankruptcy. The Company (or any of its Subsidiaries)
shall:

                        o apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, sequestrator or other custodian for the
Company or any of its Subsidiaries, or any of their property, or make a general
assignment for the benefit of creditors; or

                        o in the absence of such application, consent or
acquiesce in the appointment of a trustee, receiver, sequestrator or other
custodian for the Company or any of its Subsidiaries, or for any part of their
property; or

                        o permit or suffer to exist (i) the commencement of any
bankruptcy, reorganization, debt arrangement or other case or proceeding under
any bankruptcy or insolvency law, (ii) any dissolution, winding up or
liquidation proceeding, in respect of the Company or any of its Subsidiaries, or
(iii) the appointment of a trustee, receiver, sequestrator or other custodian,
without causing the same to be dismissed within forty-five (45) days; and, if
such case or proceeding is not commenced by the Company or converted to a
voluntary case, such case or proceeding shall be consented to or acquiesced in
by the Company or any of its Subsidiaries, or shall result in the entry of an
order for relief; or


<PAGE>

                        o take any corporate or other action authorizing, or in
furtherance of, any of the foregoing; or

                  (v) Cross-Default. The Company (or any of its Subsidiary)
shall default in the payment when due of any amount payable under any other
obligation for money borrowed in an amount exceeding Fifty Thousand Dollars
($50,000); or

                  (vi) Cross-Acceleration. Any indebtedness for borrowed money
of the Company (or any of its Subsidiaries) identified on the schedule delivered
to the Payee on the date hereof in an aggregate principal amount exceeding
Twenty Five Thousand Dollars ($25,000) shall be duly declared to be or shall
become due and payable prior to the stated maturity thereof; or

                  (vii) Orders, Judgments or Decrees. If any order, judgment, or
decree shall be entered in any proceeding against the Company (or any
Subsidiary) requiring such party to divest itself of a substantial part of its
or his assets, or awarding a money judgment or judgments against any such entity
aggregating more than $25,000, and if, within thirty (30) days after entry
thereof, such order, judgment or decree shall not have been discharged or
execution thereof stayed pending appeal; or if, within thirty (30) days after
the expiration of any such stay, such judgment, order or decree shall not have
been discharged; or

                  (viii) Invalidity of Note or Security Documents. This Note or
any other Security Document shall for any reason cease to be, or shall be
asserted by the Company not to be, a legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, or the security interest or
Lien purported to be created by any of the Security Documents shall for any
reason cease to be, or be asserted by the Company not to be, a valid, first
priority perfected security interest in any Collateral (except to the extent
otherwise permitted under any of the Security Documents); or

                  (ix) Other Breaches, Defaults. The Company shall default
and/or be in breach of any representation, warranty or covenant made by the
Company to the Payee provided under this Note, any Security Document, the
Warrant, the Letter Agreement, the Engagement Letter or any other agreement
between the Company and either the Payee or Bioaccelerate Limited related to the
subject matter contained in such agreements or documents.

            B. Rights and Remedies Cumulative. No right or remedy herein
conferred upon the Payee is intended to be exclusive of any other right or
remedy contained herein or in any instrument or document delivered in connection
with or pursuant to this Note or the Security Documents, and every such right or
remedy shall be cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter existing at law or in
equity or by statute, or otherwise.


<PAGE>

            C. Rights and Remedies Not Waived. No course of dealing between the
Company and the Payee or any failure or delay on the part of the Payee in
exercising any rights or remedies of the Payee and no single or partial exercise
of any rights or remedies hereunder or under the Security Documents shall
operate as a waiver or preclude the exercise of any other rights or remedies
hereunder.

      17. Representations of the Company. The Company represents and warrants to
the Payee that:

            A. Corporate Organization; Etc. The Company and its Subsidiaries are
corporations duly organized, validly existing and in good standing under the
laws of the jurisdiction in which they are incorporated, and have the full
corporate power and authority to carry on their business as they are now being
conducted and to own the properties and assets they now own; are duly qualified
or licensed to do business as a foreign corporation in good standing in the
jurisdictions in which such qualification is required, except where the failure
to so qualify or to be so licensed would not have a Material Adverse Effect on
its business, financial condition, results of operations or on its ability to
continue to conduct its business as currently conducted. The copies of the
articles of incorporation and by-laws (or other relevant organization documents)
and any amendments thereto of the Company and each of its Subsidiaries
heretofore delivered to the Payee are complete and correct copies of such
instruments as currently in effect. As used in this Note, "Material Adverse
Effect" means any material adverse effect on the business, properties, assets,
operations, results of operations, prospects or financial condition of the
Company and its Subsidiaries, taken as a whole. The term "Material Adverse
Effect" does not include any material developments adversely affecting (i) the
industry in which the Company is engaged generally or (ii) the national economy,
security, stability or peace of the United States or any country, taken as a
whole.

            B. Capitalization. The authorized, issued and outstanding capital
stock of the Company prior to the consummation of the transactions contemplated
hereby is set forth in Schedule 8B. All of such outstanding shares have been and
are, or upon issuance will be, validly issued, fully paid and non-assessable.
Except as disclosed in the schedule delivered to the Payee on the date hereof,
(i) no shares of the Company's capital stock are subject to preemptive rights
under Delaware law or any other similar rights or any liens or encumbrances
suffered or permitted by the Company; (ii) there are no outstanding debt
securities issued by the Company (other than as may be issued pursuant to the
Letter Agreement); (iii) there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries; (iv) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the
sale of any of their securities under the 1933 Act; (v) there are no outstanding
securities of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
this Note; and (vii) the Company does not have any stock appreciation rights or
"phantom stock" plans or agreements or any similar plan or agreement. All prior
sales of securities of the Company or any of its Subsidiaries were either
registered under the 1933 Act and applicable state securities laws or exempt
from such registration, and no security holder has any rescission rights with
respect thereto except to the extent any such rights would not reasonably be
expected to have a Material Adverse Effect.


<PAGE>

            C. Title. Except as set forth in or contemplated by the schedule to
be delivered to the Payee on the date hereof, the Company has good and
marketable title to all material properties and assets owned by it, free and
clear of all liens, charges, encumbrances or restrictions, except as not
prohibited by Section 6(B)(vi) hereof or such as are not significant or
important in relation to the Company's business; all of the material leases and
subleases under which the Company is the lessor or sublessor of properties or
assets or under which the Company holds properties or assets as lessee or
sublessee are in full force and effect, and the Company is not in default in any
material respect with respect to any of the terms or provisions of any of such
leases or subleases, and no material claim has been asserted by anyone adverse
to rights of the Company as lessor, sublessor, lessee or sublessee under any of
the leases or subleases mentioned above, or affecting or questioning the right
of the Company to continued possession of the leased or subleased premises or
assets under any such lease or sublease. .

            D. Intellectual Property Rights. The Company and its Subsidiaries
own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. Except as set forth on the schedule delivered to
the Payee on the date hereof, none of the Company's trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, government authorizations,
trade secrets or other intellectual property rights has expired or terminated,
or is expected to expire or terminate within two years from the date of this
Note, except where such expiration or termination would not have either
individually or in the aggregate a Material Adverse Effect. The Company and its
Subsidiaries do not have any knowledge of any infringement by the Company or its
Subsidiaries of trademarks, trade name rights, patents, patent rights,
copyrights, inventions, licenses, service names, service marks, service mark
registrations, trade secrets or other similar rights of others, or of any such
development of similar or identical trade secrets or technical information by
others and, except as set forth on such schedule, no claim, action or proceeding
has been made or brought against, or to the Company's knowledge, has been
threatened against, the Company or its Subsidiaries regarding trademarks, trade
name rights, patents, patent rights, inventions, copyrights, licenses, service
names, service marks, service mark registrations, trade secrets or other
infringement, except where such infringement, claim, action or proceeding would
not reasonably be expected to have either individually or in the aggregate a
Material Adverse Effect. Except as set forth on such schedule, the Company and
its Subsidiaries are unaware of any facts or circumstances which might give rise
to any of the foregoing. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties except where the failure to do so would not
reasonably be expected to have either individually or in the aggregate a
Material Adverse Effect.


<PAGE>

            E. Litigation. Except as set forth in or contemplated by the
schedule delivered to the Payee on the date hereof, there is no material action,
suit, investigation, customer complaint, claim or proceeding at law or in equity
by or before any court, arbitrator, governmental instrumentality or authority or
other agency now pending or, to the knowledge of the Company, threatened against
the Company, the adverse outcome of which would be reasonably likely to have a
Material Adverse Effect. The Company is not subject to any judgment, order,
writ, injunction or decree of any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign which have a Material Adverse Effect.

            F. Taxes. Except as set forth in or contemplated by the schedule
delivered to the Payee on the date hereof, the Company has filed all Federal,
state, local and foreign tax returns which are required to be filed by it or
otherwise met its disclosure obligations to the relevant agencies and all such
returns are true and correct in all material respects. The Company has paid or
adequately provided for all tax liabilities of the Company as reflected on such
returns or determined to be due on such returns or pursuant to any assessments
received by it or which it is obligated to withhold from amounts owing to any
employee, creditor or third party. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim. The Company has
properly accrued all taxes required to be accrued by GAAP consistently applied.
The tax returns of the Company have never been audited by any state or Federal
authorities. The Company has not waived any statute of limitations with respect
to taxes or agreed to any extension of time with respect to any tax assessment
or deficiency.

            G. Compliance With Laws; Licenses; Etc. The business of the Company
and its Subsidiaries is not being conducted in violation of any law, ordinance
or regulation of any governmental entity except for such violations the
sanctions for which either individually or in the aggregate would not reasonably
be expected to have a Material Adverse Effect, and the Company has not received
notice of any violation of or noncompliance with any Federal, state, local or
foreign, laws, ordinances, regulations and orders applicable to its business
which has not been cured, the violation of, or noncompliance with which, would
be reasonably likely to have a Material Adverse Effect. The Company has all
material licenses and permits and other governmental certificates,
authorizations and permits and approvals (collectively, "Licenses") required by
every Federal, state and local government or regulatory body for the operation
of its business as currently conducted and the use of its properties, except
where the failure to be licensed or possess a permit would not reasonably be
expected to have a Material Adverse Effect. The Licenses are in full force and
effect and to the Company's knowledge no violations currently exist in respect
of any License and no proceeding is pending or threatened to revoke or limit any
thereof.

            H. Existing Indebtedness. The schedule delivered to the Payee on the
date hereof is a complete and correct list of all indebtedness for borrowed
money of the Company and its Subsidiaries in an unpaid principal amount
exceeding $10,000, showing as to each item of such indebtedness the obligor, the
aggregate principal amount outstanding and a brief description of any security
therefor (after giving effect to the application of the proceeds of the sale of
this Note). The Company is not in default in any material respect in the
performance or observance of any of the terms, covenants or conditions contained
in any instrument evidencing any such indebtedness and no event has occurred and
is continuing which, with notice or the lapse of time or both, would become such
a default.


<PAGE>

            I. Security Interest. Assuming that the Security Documents are in
proper form and are perfected in accordance with applicable laws and regulations
on the date thereof, the Security Documents create and grant to the Payee a
legal, valid and perfected first priority security interest in the Collateral.
The Collateral is not subject to any other Lien or security interest whatsoever
except Permitted Liens.

            J. Subsidiaries. As of the date hereof, (i) the Company has only the
Subsidiaries set forth on, and the authorized, issued and outstanding capital
stock of each Subsidiary is as set forth on, the schedule delivered to the Payee
on the date hereof and (ii) the ownership interests in each Subsidiary of the
Company are duly authorized, validly issued, fully paid and nonassessable and
are owned beneficially and of record by the persons set forth on such schedule,
free and clear of all Liens. As of the date hereof, the Subsidiaries of the
Company have not issued any securities convertible into, or options or warrants
for, any common or preferred equity securities thereof, except as set forth on
such schedule. Except as set forth on such schedule, there are no agreements,
voting trusts or understandings binding on the Company or any of its
Subsidiaries restricting the transfer of the voting securities of any of the
Company's Subsidiaries or affecting in any manner the sale, pledge, assignment
or other dispositions thereof, including any right of first refusal, option,
redemption, call or other right with respect thereto, whether similar or
dissimilar to any of the foregoing.

            K. Investment Companies and Other Regulated Entities. Neither the
Company nor any of its Subsidiaries is (i) an "investment company" or a company
"controlled" by an "investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended, or (ii) a "holding
company" as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935 or the Federal Power Act, as amended.

            L. Absence of Certain Restrictions. No indenture, certificate of
designation for preferred stock, agreement or instrument to which the Company or
any of its Subsidiary is a party (other than this Note or any Note issued
pursuant to the Letter Agreement), prohibits or limits in any way, directly or
indirectly the ability of any such Subsidiary to make Restricted Payments or
repay any indebtedness to the Company or to another Subsidiary of the Company.

            M. ERISA. Each Pension Plan is in compliance with the Employee
Retirement Income Security Act of 1974, as amended from time to time, and the
rules and regulations issued thereunder, as from time to time in effect
("ERISA") and the Code, where applicable, in all material respects and no ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other ERISA Events for which liability is reasonably expected to occur,
is reasonably expected to result in a Material Adverse Effect. As used in this
Note, "Pension Plan" means, at any date of determination, any employee pension
benefit plan, the funding of which (under Section 302 of ERISA or Section 412 of
the Code) are, or at any time within the six years immediately preceding such
date, were in whole or in part, the responsibility of the Company or any of its
Subsidiaries, or any person or entity which is a member of any group of
organizations within the meaning of Section 414(b) or (c) of the Code (or,
solely for the purposes of potential liability under Section 302(c)(11) of
ERISA, and Section 412(n) of the Code, Sections 414(m) or (o) of the Code) which


<PAGE>

the Company or any of its Subsidiaries is a member (each, an "ERISA Affiliate").
As used in this Note, "ERISA Event" means (i) a "reportable event", as defined
in Section 4043 of ERISA with respect to a Pension Plan (other than an event for
which the 30-day notice period is waived), (ii) the existence with respect to
any Pension Plan of an "accumulated funding deficiency" (as defined in Section
412 of the Code or Section 302 of ERISA), whether or not waived; (iii) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Pension Plan; (iv) the incurrence by the Company or its Subsidiaries or any
ERISA Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Pension Plan; (v) the receipt by the Company or any of its
Subsidiaries or any ERISA Affiliate from the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA (or any
governmental authority succeeding to the functions thereof) or a plan
administrator of any notice relating to an intention to terminate any Pension
Plan or Pension Plans or to appoint a trustee to administer any Pension Plan;
(vi) the incurrence by the Company or any of its Subsidiaries or any ERISA
Affiliate of any liability with respect to the withdrawal or partial withdrawal
from any Pension Plan or Multiemployer Plan (as defined in Section 4003(a)(3) of
ERISA); or (vii) the receipt by the Company or any of its Subsidiaries or ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability (as
defined in Part I of Subtitle E of Title IV of ERISA) or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

            N. Authorization; No Violation.

                  (a) The Company has full corporate power and authority
necessary to enter into this Note and the Security Documents to carry out the
transactions contemplated by the Documents. The Board of Directors of the
Company has taken such necessary action to authorize the execution and delivery
of this Note and the Security Documents and the consummation of the transactions
contemplated thereby. This Note and the Security Documents have been duly
executed and delivered by the Company and are legal, valid and binding
obligations of the Company enforceable against it in accordance with its terms
except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefore may be brought.

                        o Neither the execution and delivery of any of the
Security Documents nor the consummation of the transactions contemplated thereby
will violate any provision of the articles or certificate of incorporation or
by-laws or other organizational documents of the Company, be in conflict with,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under or result in the termination of, or
accelerate the performance required by, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation or
imposition of any security interest, lien or other encumbrance upon any property
or assets of the Company, any agreement or commitment to which the Company is a
party or by which the Company is bound or to which the property of the Company
is subject, or violate any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority applicable to the
Company.


<PAGE>

      18. Miscellaneous.

            A. Parties in Interest. All covenants, agreements and undertakings
in this Note binding upon the Company or the Payee shall bind and inure to the
benefit of the successors and permitted assigns of the Company and the Payee,
respectively. The Payee shall not be entitled to assign this Note without the
written consent of the Company, which consent shall not be unreasonably
withheld.

            B. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
conflicts of laws or principles thereof. The parties hereto hereby agree that
any suit or proceeding arising directly and/or indirectly pursuant to or under
this instrument or the consummation of the transactions contemplated hereby,
shall be brought solely in a federal or state court located in the City, County
and State of New York. By its execution hereof, the parties hereby covenant and
irrevocably submit to the in personam jurisdiction of the federal and state
courts located in the City, County and State of New York and agree that any
process in any such action may be served upon any of them personally, or by
certified mail or registered mail upon them or their agent, return receipt
requested, with the same full force and effect as if personally served upon them
in New York City. The parties hereto waive any claim that any such jurisdiction
is not a convenient forum for any such suit or proceeding and any defense or
lack of in personam jurisdiction with respect thereto. In the event of any such
action or proceeding, the party prevailing therein shall be entitled to payment
from the other party hereto of its reasonable counsel fees and disbursements in
an amount judicially determined.

            C. Waiver of Jury Trial. THE PAYEE AND THE COMPANY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED AND
DELIVERED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PAYEE OR THE COMPANY.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE'S PURCHASING THIS NOTE.

            D. Expenses and Fees. All fees, costs and expenses of every kind and
nature, including but not limited to the reasonable attorneys' fees and legal
expenses, incurred by Payee in connection with the collection, administration,
or enforcement of its rights under this Note or in defending or prosecuting any
actions or proceedings arising out of or related to any amounts due to Payee
under this Note shall be borne and paid by the Company upon written demand by
the Payee and until paid, shall be added to the amounts due hereunder and bear
interest at a rate per annum equal to 6% over base.

            E. Repricing of Options. No representation or covenant shall be
deemed to be breached in the event that the Company effectuates a repricing of
any options previously issued pursuant to a stock option plan in accordance with
the terms therewith as a result of the receipt by Holder of any Warrant;
provided, however, that under no circumstances shall such repricing result in an
exercise price less than the Warrant Share Price.


<PAGE>

            F. Entire Agreement. This Note (including any schedule referenced
herein), the Security Documents and the Letter Agreement set forth the entire
agreement of the parties with respect to the subject matter hereof and thereof,
superseding and replacing any agreement or understanding that may have existed
between the parties prior to the date hereof in respect to such subject matter.


<PAGE>

            IN WITNESS WHEREOF, this Note has been executed and delivered on the
date first specified above by the duly authorized representative of the Company.


                                       BIOACCELERATE HOLDINGS, INC.



                                       By: _____________________________________
                                           Name:
                                           Title:


<PAGE>

                               SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Agreement") is dated as of September 28th, 2004,
by BIOACCELERATE HOLDINGS, INC., a Nevada corporation (the "Grantor"), in favor
of Lifescience Ventures Limited, a BVI, corporation (the "Lender").

                                    Recitals

WHEREAS, pursuant to that certain letter agreement (the "Letter Agreement") of
even date herewith between the Grantor and Lender, Lender has made available a
senior, secured credit facility in the aggregate principal amount of up to
Twelve Million Five Hundred Thousand Dollars ($12,500,000);

WHEREAS, pursuant to that certain Note of even date herewith, issued by the
Grantor in favor of the Lender (as the same may from time to time be amended,
modified, supplemented or restated, the "Note"), Grantor has promised to pay the
Obligations (as defined herein) to the Lender; and

WHEREAS, the obligations of the Lender under the Letter Agreement are subject to
the condition, among others, that Grantor shall have executed and delivered to
Lender this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by Grantor, Grantor hereby represents,
covenants and agrees with Lender as follows:

55.   Definitions.

      a.    When used in this Agreement the following terms shall have the
            following meanings (such meanings being equally applicable to both
            the singular and plural forms of the terms defined):

"Collateral" has the meaning assigned to such term in Section 2 of this
Agreement.

"Contracts" means all contracts (including any customer, vendor, supplier,
service or maintenance contract), leases, licenses, undertakings, purchase
orders, permits, franchise agreements or other agreements (other than any right
evidenced by Chattel Paper, Documents or Instruments), whether in written or
electronic form, in or under which Grantor now holds or hereafter acquires any
right, title or interest, including, without limitation, with respect to an
Account, any agreement relating to the terms of payment or the terms of
performance thereof.


<PAGE>

"Copyrights" means all of the following now owned or hereafter acquired or
created (as a work for hire for the benefit of Grantor) by Grantor or in which
Grantor now holds or hereafter acquires or receives any right or interest, in
whole or in part: (a) all copyrights, whether registered or unregistered, held
pursuant to the laws of the United States, any State thereof or any other
country; (b) registrations, applications, recordings and proceedings in the
United States Copyright Office or in any similar office or agency of the United
States, any State thereof or any other country; (c) any continuations, renewals
or extensions thereof; (d) any registrations to be issued in any pending
applications, and shall include any right or interest in and to work protectable
by any of the foregoing which are presently or in the future owned, created or
authorized (as a work for hire for the benefit of Grantor) or acquired by
Grantor, in whole or in part; (e) prior versions of works covered by copyright
and all works based upon, derived from or incorporating such works; (f) income,
royalties, damages, claims and payments now and hereafter due and/or payable
with respect to copyrights, including, without limitation, damages, claims and
recoveries for past, present or future infringement; (g) rights to sue for past,
present and future infringements of any copyright; and (h) any other rights
corresponding to any of the foregoing rights throughout the world.

"Obligations" has the meaning set forth in Section 3 of this Agreement.

"Patents" means all of the following in which Grantor now holds or hereafter
acquires any interest: (a) all letters patent of the United States or any other
country, all registrations and recordings thereof and all applications for
letters patent of the United States or any other country, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country; (b) all reissues, divisions,
continuations, renewals, continuations-in-part or extensions thereof; (c) all
petty patents, divisionals and patents of addition; (d) all patents to issue in
any such applications; (e) income, royalties, damages, claims and payments now
and hereafter due and/or payable with respect to patents, including, without
limitation, damages, claims and recoveries for past, present or future
infringement; and (f) rights to sue for past, present and future infringements
of any patent.

"Trademark" means any of the following in which Grantor now holds or hereafter
acquires any interest: (a) all trademarks, whether registered or unregistered,
held pursuant to the laws of the United States, and State thereof, or any
country (b) registrations, applications, recordings and proceedings in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country; (c) any
continuations, renewals or extensions thereof; (d) any registrations to be
issued in any pending applications (e) income, royalties, damages, claims and
payments now and hereafter due and/or payable with respect to trademarks,
including, without limitation, damages, claims and recoveries for past, present
or future infringement; (g) rights to sue for past, present and future
infringements of any trademark; and (h) any other rights corresponding to any of
the foregoing rights throughout the world.

"UCC" means the Uniform Commercial Code as the same may from time to time be in
effect in the State of New York; provided, however, in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of Lender's security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, the term "UCC" shall mean the Uniform Commercial Code (including the
Articles thereof) as in effect at such time in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions. In
addition, the following terms shall have the meanings set forth for such terms
in the UCC: "Account," "Account Debtor," "Chattel Paper" (including tangible and


                                       2
<PAGE>

electronic chattel paper), "Commercial Tort Claims," "Commodity Account,"
"Deposit Account," "Documents," "Equipment," "Fixtures," "Fixture Filing,"
"General Intangible" (including, without limitation, Payment Intangibles,
Copyrights, Patents, Trademarks, designs, drawings, technical information,
marketing plans, customer lists, trade secrets, proprietary or confidential
information, inventions (whether or not patentable), procedures, know-how,
models and data), "Instrument," "Intellectual Property," "Inventory" (including
all goods held for sale or lease or to be furnished under a contract of service,
and including returns and repossessions), "Investment Property" (including
Securities, Securities Accounts and Securities entitlements), "Letter-of-Credit
Right" (whether or not the letter of credit is evidenced by a writing), "Payment
Intangibles," "Proceeds," "Promissory Notes," "Securities," "Securities
Account," "Securities Entitlement" and "Supporting Obligations." Each of the
foregoing terms shall include all of such items now owned, or hereafter
acquired, by Grantor.

      b.    Except as otherwise defined herein, all capitalized terms used in
            this Agreement have the meanings stated in the Note.

56.   Grant of Security. As collateral security for the full, prompt, complete
      and final payment and performance when due (whether at stated maturity, by
      acceleration or otherwise) of all the Obligations, Grantor hereby grants
      to Lender a lien on and security interest in, all of Grantor's right,
      title and interest in, to and under the following, whether now owned or
      hereafter acquired (all of which being collectively referred to herein as
      the "Collateral"):

      a.    All Accounts of Grantor (including, but not limited to, and
            notwithstanding anything in this Agreement to the contrary, any and
            all proceeds, money or accounts under all Contracts (without
            exception).

      b.    All Chattel Paper of Grantor;

      c.    All Contracts of Grantor;

      d.    All Deposit Accounts of Grantor;

      e.    All Documents of Grantor;

      f.    All Equipment of Grantor;

      g.    All Fixtures of Grantor;

      h.    All General Intangibles of Grantor;

      i.    All Instruments of Grantor, including, without limitation,
            Promissory Notes;

      j.    All Inventory of Grantor;

      k.    All Investment Property of Grantor;

      l.    All Letter-of Credit Rights of Grantor;


                                       3
<PAGE>

      m.    All Supporting Obligations of Grantor;

      n.    All property of Grantor held by Lender, including, without
            limitation, all property of every description now or hereafter in
            the possession or custody of or in transit to Lender for any
            purpose, including, without limitation, safekeeping, collection or
            pledge, for the account of Grantor, or as to which Grantor may have
            any right or power;

      o.    All other goods and personal property of Grantor wherever located,
            whether tangible or intangible, and whether now owned or hereafter
            acquired, existing, leased or consigned by or to Grantor, except
            those goods and personal property which are excluded pursuant to
            Section 2(c) or 2(h) hereunder; and

      p.    To the extent not otherwise included, all Proceeds of each of the
            foregoing and all accessions to, substitutions and replacements for
            and rents, profits and products of each of the foregoing.

If Grantor shall at any time acquire a Commercial Tort Claim, Grantor shall
promptly notify the Lender in a writing signed by Grantor of the brief details
thereof and grant to Lender in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing to
be in form and substance reasonably satisfactory to the Lender.

Grantor hereby authorizes the Lender to file, without Grantor's signature
thereon and at Grantor's expense, financing statements, continuation statements
(including "in lieu" continuation statements) and amendments thereto, that
describe the Collateral and which contain any other information required by Part
5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any
financing statement, continuation statement or amendment, including if Grantor
is an organization, the type of organization and any organization identification
number issued to Grantor.

Grantor accepts that this agreement ranks pari-passu with the facility provided
by Technology Finance Inc on 9th February 2004, and with the agreement being
entered into With Jano Holdings Limited as of the date hereof.

57.   Security for Obligations. This Agreement secures the payment of (i) all of
      the unpaid principal amount of, and accrued interest on (including any
      interest that accrues after the commencement of any bankruptcy proceeding)
      the Note, (ii) the obligation of Grantor to pay any fees, costs and
      expenses of Lender under the Note, and (iii) all other obligations,
      liabilities and indebtedness owed by Grantor to the Lender under the Note,
      in each case, whether now existing or hereafter incurred (collectively,
      the "Obligations").

58.   Rights of Lender; Collection of Accounts.


                                       4
<PAGE>

      a.    Grantor expressly agrees that Grantor shall remain liable under each
            of its Contracts to observe and perform all the conditions and
            obligations to be observed and performed by it thereunder and that
            Grantor shall perform all of its duties and obligations thereunder
            such that the Grantor shall not be deemed to be in breach of each
            such Contract. The Lender shall not have any obligation or liability
            under any Contract by reason of or arising out of this Agreement or
            the granting to the Lender of a lien therein or the receipt by the
            Lender of any payment relating to any Contract pursuant hereto, nor
            shall the Lender be required or obligated in any manner to perform
            or fulfill any of the obligations of Grantor under or pursuant to
            any Contract, or to make any payment, or to make any inquiry as to
            the nature or the sufficiency of any payment received by them or the
            sufficiency of any performance by any party under any Contract, or
            to present or file any claim, or to take any action to collect or
            enforce any performance or the payment of any amounts which may have
            been assigned to them or to which they may be entitled at any time
            or times.

      b.    The Lender authorizes Grantor to collect its accounts, provided that
            such collection is performed in a prudent and businesslike manner,
            and the Lender may, upon the occurrence and during the continuation
            of any Event of Default and without notice, limit or terminate said
            authority at any time. Upon the occurrence and during the
            continuance of any Event of Default, at the request of the Lender,
            Grantor shall deliver to Lender all original and other documents
            which created and/or relate to such accounts, including, without
            limitation, all original orders, invoices and shipping receipts.

      c.    The Lender may at any time, upon the occurrence and during the
            continuance of any Event of Default, without notifying Grantor of
            its intention to do so, notify Account Debtors of Grantor, parties
            to the Contracts of Grantor, obligors in respect of Instruments of
            Grantor and obligors in respect of Chattel Paper of Grantor that the
            Accounts and the right, title and interest of Grantor in, to and
            under such Contracts, Instruments and Chattel Paper have been
            assigned to Lender and that payments thereunder or with respect
            thereto are to be made directly to the Lender. Upon the request of
            the Lender, Grantor shall promptly so notify such Account Debtors,
            parties to such Contracts, obligors in respect of such Instruments
            and obligors in respect of such Chattel Paper. Upon the occurrence
            and during the continuance of any Event of Default, the Lender may,
            in Lender's name or in the name of others, communicate with such
            Account Debtors, parties to such Contracts, obligors in respect of
            such Instruments and obligors in respect of such Chattel Paper to
            verify with such parties, to the Lender's satisfaction, the
            existence, amount and terms of any such Accounts, Contracts,
            Instruments or Chattel Paper. Notwithstanding the foregoing, Lender
            shall not notify or otherwise communicate with any parties to
            Contracts or Account Debtors of Grantor except upon the occurrence
            of any Event of Default.

      d.    Without limiting the foregoing and Lender's rights as set forth in
            the foregoing, any action by the Lender pursuant to or as described
            in Section 4(b) or Section 4(c) hereof shall be in compliance with
            the provisions set forth in Section 12(b)(v) hereof.


                                       5
<PAGE>

59.   Representations and Warranties of Grantor. Grantor represents and warrants
      as follows:

      a.    Grantor is a corporation duly organized, existing and in good
            standing under the laws of the Delaware, (b) has the legal power to
            own its property and to carry on its business as now being
            conducted, and (c) is duly qualified to do business and is in good
            standing in each jurisdiction in which the character of the
            properties owned or leased by it therein or in which the transaction
            of its business makes such qualification necessary, except where the
            failure to so qualify or be in good standing would not have a
            Material Adverse Effect;

      b.    Grantor is, and as to Collateral acquired by it from time to time
            after the date hereof Grantor will be, the owner of all Collateral
            free from any liens, other than liens created hereby and other than
            Permitted Liens;

      c.    This Agreement creates, for the benefit and security of Lender in
            respect of the Obligations, a legally valid and binding lien on,
            pledge of, and security interest in the Collateral and, upon the
            filing of a UCC Financing Statement, and any applicable filings with
            respect to Copyrights, Patents or Trademarks in respect of the
            Collateral, such lien, pledge and security interest will be
            perfected and will have priority over the claims of any other
            present and future creditors of the Company (other than Permitted
            Liens or liens upon such of the Collateral that must be perfected by
            possession or control of such Collateral); and

      d.    Grantor's chief executive office, principal place of business and
            the place where Grantor maintains its records concerning the
            Collateral are each presently located at the address set forth on
            the signature page hereof; and Grantor's Federal taxpayer
            identification number and Grantor's organizational identification
            number under the laws of the State in which Grantor, as a registered
            organization, was organized are as set forth on the signature page
            hereto.

60.   As to the Collateral.

      a.    Notwithstanding anything to the contrary contained herein, the
            assignment by Grantor herein stated is intended to be an assignment
            for security purposes and is not intended to divest Grantor of its
            ownership of the Collateral, except as otherwise provided herein.

      b.    So long as no Event of Default has occurred and is continuing, (i)
            Grantor shall retain title to and record ownership of the
            Collateral, and (ii) Grantor shall be entitled to receive any and
            all income or distributions made with respect to the Collateral,
            except as provided in Section 6(c) hereof.

      c.    Upon the occurrence and during the continuance of an Event of
            Default, all income and proceeds of the Collateral which are
            received by Grantor shall be (i) received in trust for the benefit
            of the Lender, (ii) segregated from other funds of Grantor, and
            (iii) forthwith paid over by Grantor to the Lender (for application
            in accordance with this Agreement) in the same form as so received.


                                       6
<PAGE>

61.   Covenants of Grantor. Grantor covenants and agrees with Lender that unless
      approved by Lender:

      a.    Grantor shall not sell, assign (by operation of law or otherwise),
            or otherwise transfer any of the Collateral, or attempt or contract
            to do so, or grant any option with respect to any of the Collateral,
            except Inventory in the ordinary course of business.

      b.    Grantor shall not, directly or indirectly, create or permit to exist
            any lien upon or with respect to any of the Collateral, and shall
            defend the Collateral against, and take such other action as is
            necessary to remove, any lien on the Collateral, except for the lien
            created hereby and any Permitted Liens.

      c.    Grantor shall maintain all tangible Collateral in good condition and
            repair, ordinary wear and tear excepted.

      d.    Grantor shall maintain on the Collateral property damage and
            liability insurance in such amounts, against such risks, and in such
            forms and with such companies as are customarily maintained by
            businesses similar to Grantor. Each such policy shall not be
            materially altered or canceled, and the coverage will not be
            materially reduced, in any case, without at least thirty (30) days'
            prior written notice to the Lender. Grantor shall provide the Lender
            with satisfactory evidence of such insurance coverage at the request
            of the Lender.

      e.    Grantor shall promptly pay when due all property and other taxes,
            assessments and government charges or levies imposed upon, and all
            claims (including claims for labor, materials and supplies) against,
            the Collateral, except to the extent the validity thereof is being
            contested in good faith and by appropriate proceedings and adequate
            reserves are being maintained in connection therewith; provided that
            this Section 7(f) shall not apply to claims for labor, materials or
            supplies which Payee consents in writing shall be excluded herewith,
            notwithstanding that such claims, if unpaid, might become a lien or
            charge upon such properties or any part thereof.

      f.    Grantor shall keep and maintain at its own cost and expense
            satisfactory and reasonably complete records of the Collateral.
            Grantor shall furnish the Lender with such information regarding the
            Collateral as the Lender may reasonably request from time to time
            and shall allow the Lender, upon reasonable notice, access during
            normal business hours to inspect the Collateral and Grantor's
            records, accounts and books pertaining to the Collateral, provided
            that no restriction as to normal business hours shall be required
            during the continuance of an Event of Default.


                                       7
<PAGE>

      g.    Grantor shall not knowingly take or omit to take any action, the
            taking or omission of which might impair Lender's lien on the
            Collateral or adversely affect the value of the Collateral.

      h.    Upon the occurrence and during the continuance of any Event of
            Default, Grantor shall not grant any extension of the time of
            payment of any of its Accounts, Chattel Paper, Instruments or
            amounts due under any of its Contracts or Documents, compromise,
            compound or settle the same for less than the full amount thereof,
            release, wholly or partly, any Person liable for the payment
            thereof, or allow any credit or discount whatsoever thereon other
            than trade discounts and rebates granted in the ordinary course of
            Grantor's business.

      i.    Grantor shall (i) protect, defend and maintain the validity and
            enforceability of the Copyrights, Patents and Trademarks, (ii) use
            commercially reasonable efforts to detect infringements of the
            Copyrights, Patents and Trademarks and promptly advise the Lender in
            writing of material infringements detected, and (iii) not allow any
            material Copyrights, Patents or Trademarks to be abandoned,
            forfeited or dedicated to the public without the written consent of
            the Lender, unless any such abandonment is appropriate in accordance
            with reasonable and customary business practice.

      j.    Grantor shall not execute or authorize to be filed in any public
            office any UCC financing statement (or similar statement or
            instrument of registration under the law of any jurisdiction) except
            UCC financing statements filed or to be filed in respect of and
            covering the lien created by this Agreement.

      k.    Grantor shall not amend, modify, waive, take any action or fail to
            take any action with respect to all or a portion of any Contract
            which Grantor reasonably expects or should expect would adversely
            affect Lender's interest in the Collateral (including, but not
            limited to, the value of the Collateral) or which affect the timing,
            value or amount of any proceeds due under any Contract.

62.   Further Assurances. Grantor agrees, at any time and from time to time, at
      the expense of Grantor, and upon request of the Lender, to promptly
      execute and deliver all further instruments and documents, and take all
      further action, that may be necessary or desirable, in order to perfect
      and protect any security interest granted or purported to be granted
      hereby or to enable the Lender to exercise and enforce Lender's rights and
      remedies hereunder with respect to any Collateral, including, without
      limitation, (i) delivering and causing to be filed any financing or
      continuation statements (including "in lieu" continuation statements)
      under the UCC with respect to the security interests granted hereby, (ii)
      obtaining "control" by or on behalf of Lender of any Investment Property,


                                       8
<PAGE>

      Deposit Accounts, Letter-of-Credit Rights or Electronic Chatter Paper
      (with reference to applicable provisions of the UCC with respect to
      "control" for such items of Collateral), (iii) placing the interest of the
      Lender as lien holders on the certificate of title (or similar evidence of
      ownership) of any Equipment constituting Collateral owned by Grantor which
      is covered by a certificate of title (or similar evidence of ownership),
      (iv) filing or cooperating with the Lender in filing any forms or other
      documents required to be recorded with the United States Patent and
      Trademark Office, United States Copyright Office, or any actions, filings,
      recordings or registrations in any foreign jurisdiction or under any
      international treaty, required to secure or protect Lender's interest in
      the Collateral, (v) transferring Collateral to the possession of the
      Lender (if a security interest in such Collateral can only be perfected by
      possession), (vi) executing and delivering or causing to be delivered
      written notice to insurers of Lender's security interest in, or claim in
      or under, any policy of insurance (including unearned premiums), and (vii)
      using its best efforts to obtain acknowledgements from bailees having
      possession of any Collateral and waivers of liens from landlords and
      mortgagees of any location where any of the Collateral may from time to
      time be stored or located. If Grantor executes and delivers any document
      or instrument pursuant to this Section 8, such document or instrument
      shall be in form and substance reasonably satisfactory to the Lender and a
      copy thereof shall be provided by Grantor to the Lender; and if Grantor
      takes any other action pursuant to this Section 8, such action shall be
      taken with the prior written consent of the Lender and notice thereof
      shall be given by Grantor to the Lender.

63.   Security Interest Absolute. All rights of the Lender and the assignment
      and security interest hereunder, and all obligations of Grantor hereunder,
      shall remain in full force and effect and shall secure the Obligations,
      and shall be absolute and unconditional, irrespective of:

      a.    any change in the time, manner or place of payment of, or in any
            other term of, all or any of the Obligations or any other amendment
            or waiver of or any consent to any departure from the Note; or

      b.    any taking, exchange, release or non-perfection of any other
            collateral, or any release or amendment or waiver of or consent to
            departure from any guaranty, for all or any of the Obligations; or

      c.    any manner of application of any Collateral, or proceeds thereof, to
            all or any of the Obligations or any manner of sale or other
            disposition of any Collateral; or

      d.    any other circumstances other than releases, waivers and the like by
            the Lender that might otherwise constitute a defense available to,
            or a discharge of, Grantor's obligations hereunder or Lender's
            security interest hereunder.


                                       9
<PAGE>

64.   Continuing Security Interest; Sale of Participations; Release of
      Collateral. This Agreement shall create a continuing security interest in
      the Collateral and shall (i) remain in full force and effect until the
      payment in full of the Obligations (subject to Section 14 hereof), (ii) be
      binding upon Grantor, its successors and its permitted assigns under the
      Note, and (iii) inure to the benefit of, and be enforceable by (subject to
      the terms hereof), the Lender and its successors and assigns. No sales of
      participations in, and no other sales, assignments, transfers or other
      dispositions of, any agreement governing or instrument evidencing the
      Obligations or any portion thereof or interest therein by the Lender shall
      in any manner affect the lien granted to the Lender hereunder. Subject to
      Section 14 hereof, upon the payment in full of the Obligations, the
      security interest granted hereby shall terminate and all rights to the
      Collateral shall revert to Grantor. Upon any such termination, the Lender
      will, at Grantor' expense, execute and deliver to Grantor such documents
      as Grantor shall reasonably request to evidence such termination. The
      Lender shall, at the request of Grantor, deliver any document reasonably
      necessary to release any lien granted hereunder with respect to any
      Collateral Grantor is transferring.

65.   Lender's Duties. The powers conferred on the Lender hereunder are solely
      to protect Lender's interest in the Collateral as a secured party and
      shall not impose any duty upon the Lender to exercise any such powers.
      Except for the safe custody of any Collateral in Lender's possession and
      the accounting for money actually received by Lender hereunder, the Lender
      shall not have any duty as to any Collateral or as to the taking of any
      necessary steps to preserve any rights pertaining to any Collateral. The
      Lender shall not have any responsibility or liability for the collection
      of any proceeds of any Collateral or by reason of any invalidity, lack of
      value or uncollectability of any of the Collateral. The Lender shall be
      deemed to have exercised reasonable care in the custody and preservation
      of any Collateral in the Lender's possession if such Collateral is
      accorded treatment substantially equal to that which the Lender accords
      its own property.

66.   Events of Default; Remedies Upon Default; Actions by Lender.

      a.    The occurrence of an Event of Default under and as defined in the
            Note shall constitute an "Event of Default" hereunder.

      b.    If any Event of Default shall have occurred:

            i.    The Lender may exercise in respect of the Collateral, in
                  addition to other rights and remedies provided for herein or
                  otherwise available to Lender (or any of them), all the rights
                  and remedies of a secured party on default under the UCC
                  (whether or not the UCC applies to the affected Collateral),
                  and may also, without notice of any kind or demand of
                  performance or other demand (all and each of which demands and
                  notices are hereby expressly waived to the maximum extent
                  provided by the UCC and other applicable law) reclaim, take
                  possession, recover, store, maintain, finish, repair, prepare


                                       10
<PAGE>

                  for sale or lease, advertise for sale or lease and sell the
                  Collateral or any part thereof in one or more parcels at
                  public or private sale, at any exchange, broker's board or at
                  the Lender's offices or elsewhere, for cash, on credit, or for
                  future delivery, and upon such other terms as the Lender may
                  deem commercially reasonable. In connection with the
                  liquidation, sale or other disposition of the Collateral, the
                  Lender is granted a non-exclusive, royalty-free license or
                  other right to use, without charge, Grantor' labels, patents,
                  copyrights, trade secrets, trade names, trademarks, service
                  marks, or any similar property as it pertains to the
                  Collateral, in completing a liquidation, sale or other
                  disposition of the Collateral. The Lender shall not be
                  obligated to make any sale of Collateral regardless of notice
                  of sale having been given. The Lender may adjourn any public
                  or private sale from time to time by announcement at the time
                  and place fixed therefor, and such sale may, without further
                  notice, be made at the time and place to which it was so
                  adjourned. Grantor agrees that in any sale of any of the
                  Collateral, whether at a foreclosure sale or otherwise, the
                  Lender is hereby authorized to comply with any limitation or
                  restriction in connection with such sale as it may be advised
                  by counsel is necessary in order to avoid any violation of
                  applicable law (including compliance with such procedures as
                  may restrict the number of prospective bidders and the Lender,
                  require that such prospective bidders and the Lender have
                  certain qualifications and restrict such prospective bidders
                  and the Lender to Persons who will represent and agree that
                  they are purchasing for their own account for investment and
                  not with a view to the distribution or resale of such
                  Collateral), and Grantor further agrees that such compliance
                  shall not result in such sale being considered or deemed not
                  to have been made in a commercially reasonable manner, nor
                  shall the Lender be liable or accountable to Grantor for any
                  discount allowed by reason of the fact that such Collateral is
                  sold in compliance with any such limitation or restriction.

            ii.   Grantor authorizes the Lender, on the terms set forth herein,
                  to enter the premises where the Collateral (or any part of it)
                  is located, to take possession of the Collateral (or any part
                  of it), and to pay, purchase, contract, or compromise any
                  encumbrance, charge or lien which, in the opinion of the
                  Lender, appears to be prior or superior to its security
                  interest. Grantor further agrees, at the Lender's request, to
                  assemble the Collateral and make it available to the Lender at
                  places which the Lender shall reasonably select. To the
                  maximum extent permitted by applicable law, Grantor hereby
                  waives all claims, damages, and demands against the Lender
                  arising out of the repossession, retention or sale of the
                  Collateral.


                                       11
<PAGE>

            iii.  The Lender may sell Collateral without giving warranties as to
                  such Collateral. The Lender may specifically disclaim any
                  warranties of title or the like. The foregoing will not be
                  considered adversely to affect the commercial reasonableness
                  of any sale of Collateral.

            iv.   If the Lender sells any of the Collateral upon credit, Grantor
                  will be credited only with, and at the time of, payments
                  actually made by the purchaser in such sale received by the
                  purchaser and applied to the indebtedness of such purchaser.
                  In the event the purchaser in such sale fails to pay for the
                  Collateral, the Lender may resell the Collateral and Grantor
                  shall be credited with the proceeds of the resale in
                  accordance with the preceding sentence. In the event the
                  Lender purchase any of the Collateral being sold, the Lender
                  may pay for the Collateral by crediting some or all of the
                  amounts described in clauses first, second, third and fourth
                  of Section 12(b)(vi) hereof.

            v.    Any cash held by the Lender as Collateral and all cash
                  proceeds received by the Lender in respect of any sale of,
                  collection from, or other realization upon, all or any part of
                  the Collateral or the exercise of any other remedies
                  consequent upon an Event of Default shall be applied in whole
                  or in part by the Lender against all or any part of the
                  Obligations in the following order:

                  First, to the Lender in an amount sufficient to pay in full
                  the Obligations, including all reasonable fees, costs,
                  expenses, liabilities and advances incurred or made by the
                  Lender in connection with the sale, disposition or other
                  realization of the Collateral, including without limitation,
                  reasonable attorneys' fees;

                  Second, upon payment in full of all the Obligations, to
                  Grantor or to whomsoever may be lawfully entitled to receive
                  such surplus.

            vi.   Grantor shall remain liable for any deficiency if the proceeds
                  of any sale or disposition of the Collateral are insufficient
                  to fully pay the Obligations, and Grantor also shall be liable
                  for the reasonable costs and expenses (including reasonable
                  attorneys' fees and expenses) incurred by Lender to collect
                  such deficiency.

            vii.  Grantor hereby waives presentment, demand, protest or any
                  notice (to the maximum extent permitted by applicable law) of
                  any kind in connection with this Agreement or any Collateral.

67.   Expenses. Grantor shall upon demand pay to the Lender the amount of any
      and all reasonable expenses, including the reasonable and necessary fees
      and expenses the Lender's counsel and of any experts and agents, which the
      Lender may incur in connection with (a) the administration of this
      Agreement, (b) the custody or preservation of, or the sale of, collection
      from, or other realization upon, any of the Collateral, (c) the exercise
      or enforcement of any of the rights of the Lender hereunder, or (d) the
      failure by Grantor to perform or observe any of the provisions hereof or
      of under the Note.


                                       12
<PAGE>

68.   Reinstatement. This Agreement shall remain in full force and effect and
      continue to be effective should any petition be filed by or against
      Grantor for liquidation or reorganization, should Grantor become insolvent
      or make an assignment for the benefit of creditors or should a receiver or
      trustee be appointed for all or any significant part of Grantor's property
      and assets, and shall continue to be effective or be reinstated, as the
      case may be, if at any time payment and performance of the Obligations, or
      any part thereof, is, pursuant to applicable law, rescinded or reduced in
      amount, or must otherwise be restored or returned by any obligee of the
      Obligations, whether as a "voidable preference," "fraudulent conveyance,"
      or otherwise, all as though such payment or performance had not been made.
      In the event that any payment, or any part thereof, is rescinded, reduced,
      restored or returned, the Obligations shall be reinstated and deemed
      reduced only by such amount paid and not so rescinded, reduced, restored
      or returned.

69.   Amendments, Etc. No amendment or waiver of any provision of this
      Agreement, nor consent to any departure by Grantor herefrom, shall in any
      event be effective unless the same shall be in writing and signed by the
      parties necessary to amend the Note, and then such waiver or consent shall
      be effective only in the specific instance and for the specific purpose
      for which given.

70.   Cumulative Remedies. The rights and remedies hereunder provided are
      cumulative and may be exercised singly or concurrently, and are not
      exclusive of any rights and remedies provided by law. The Lender shall not
      by any act, delay, omission or otherwise be deemed to have waived any of
      their respective rights or remedies hereunder, nor shall any single or
      partial exercise of any right or remedy hereunder on any one occasion
      preclude the further exercise thereof or the exercise of any other right
      or remedy.

71.   Lender May Perform; Reimbursement; Power of Attorney.

      a.    If Grantor fails to perform any obligation of Grantor under this
            Agreement, the Lender may, but shall not have the obligation to,
            without prior notice to or obtaining the consent of Grantor, perform
            that obligation on behalf of Grantor, including, without limitation,
            obtaining insurance coverage for the Collateral and satisfying tax
            obligations or liens on the Collateral. Grantor shall reimburse the
            Lender on demand for all reasonable expenses and reasonable
            attorneys' fees incurred by the Lender in performing any such
            obligation, including interest at the interest rate specified in the
            Note.

      b.    Grantor hereby absolutely and irrevocably constitutes and appoints
            the Lender as Grantor's true and lawful agent and attorney-in-fact,
            with full power of substitution, in the name of Grantor: (a) to take
            any and all such action as the Lender or any of its agents, nominees
            or attorneys may, in its or their sole and absolute discretion,
            reasonably determine as necessary or advisable for the purpose of


                                       13
<PAGE>

            maintaining, preserving or protecting the security constituted by
            this Agreement or any of the rights, remedies, powers or privileges
            of the Lender under this Agreement; and (b) generally, in the name
            of Grantor to exercise all or any of the powers, authorities and
            discretions, conferred on or reserved to the Lender by or pursuant
            to this Agreement, and (without prejudice to the generality of any
            of the foregoing) to seal and deliver or otherwise perfect any deed,
            assurance, agreement, instrument or act as the Lender may deem
            proper in or for the purpose of exercising any of such powers,
            authorities or discretions, in each case. Grantor hereby ratifies
            and confirms, and hereby agrees to ratify and confirm, whatever
            lawful acts the Lender or any of its agents, nominees or attorneys
            shall do or purport to do in the exercise of the power of attorney
            granted to the Lender pursuant to this Section 17(b), which power of
            attorney, being given for security, is irrevocable. Notwithstanding
            anything to the contrary in this Section 17(b), no such action as
            Grantor's true and lawful agent and attorney-in-fact may be taken by
            Lender except upon the occurrence of any Event of Default.

72.   Addresses for Notices. All notices and other communications to any party
      provided for hereunder shall be in writing and mailed by registered or
      certified mail, return receipt requested, to the addresses for the Grantor
      and the Lender set forth on the signature pages hereto, or, as to any
      party, to such other address as shall be designated by such party in a
      written notice to each other party complying as to delivery with the terms
      of this Section 18: All such notices and other communications shall be
      effective (i) upon personal delivery to the party to be notified; (ii) on
      the date of first attempted delivery after having been sent by registered
      or certified mail, return receipt requested, postage prepaid; (iii) one
      (1) day after deposit with a nationally recognized overnight courier,
      specifying next day delivery, with written verification of receipt.

73.   Forbearance; Delay. Any forbearance, failure or delay by the Lender in
      exercising any right, power or remedy hereunder shall not preclude the
      exercise thereof. Every right, power or remedy of the Lender shall
      continue in full force and effect until such right, power or remedy is
      specifically waived by an instrument in writing executed by the Lender.

74.   Severability. Any provision of this Agreement which is prohibited or
      unenforceable in any jurisdiction shall, as to such jurisdiction, be
      ineffective to the extent of such prohibition or unenforceability without
      invalidating the remaining provisions hereof, and any such prohibition or
      unenforceability in any jurisdiction shall not invalidate or render
      unenforceable such provision in any other jurisdiction.

75.   Successors and Assigns. This Agreement is for the benefit of the Lender
      and its successors and assigns, and in the event of an assignment of all
      or any of the Obligations, the rights hereunder, to the extent applicable
      to the indebtedness so assigned, may be transferred with such
      indebtedness. This Agreement shall be binding on the Grantor and its
      respective successors and assigns.


                                       14
<PAGE>

76.   Consent To Jurisdiction And Service Of Process. ANY LEGAL ACTION OR
      PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF
      THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
      NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF GRANTOR
      AND LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
      NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE GRANTOR AND LENDER
      IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
      VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
      HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
      JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.
      EACH OF GRANTOR AND LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
      COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED
      BY NEW YORK LAW.

77.   Waiver Of Jury Trial. EACH OF GRANTOR AND LENDER WAIVES ITS RIGHT TO A
      TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
      OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN
      ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
      PARTY AGAINST ANY OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
      TORT CLAIMS, OR OTHERWISE. EACH OF GRANTOR AND LENDER AGREES THAT ANY SUCH
      CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
      WITHOUT LIMITING THE FOREGOING, EACH OF GRANTOR AND LENDER FURTHER AGREES
      THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
      AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
      OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
      OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
      AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

78.   Advice of Counsel; Construction. Each of Grantor and Lender represents and
      warrants that it has discussed this Agreement, including, without
      limitation, Section 22 and Section 23 hereof, with its counsel. The
      parties hereto have participated jointly in the negotiation and drafting
      of this Agreement. In the event an ambiguity or question of intent or
      interpretation arises, this Agreement shall be construed as if drafted
      jointly by the parties hereto and no presumption or burden of proof shall
      arise favoring or disfavoring any party by virtue of the authorship of any
      provisions of the Agreement.


                                       15
<PAGE>

79.   Headings. The various headings in this Agreement are inserted for
      convenience only and shall not affect the meanings or interpretation of
      this Agreement or any provision hereof.

80.   Governing Law. This Agreement shall be governed by, and construed in
      accordance with, the internal laws of the State of New York determined
      without reference to principles of conflicts of law, except to the extent
      that the validity or perfection of any security interest created
      hereunder, or remedies hereunder, in respect of any item of the Collateral
      is governed by the laws of a jurisdiction other than the State of New
      York.

81.   Counterparts. This Agreement may be executed in counterparts, each of
      which shall constitute an original.


                                       16
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.


                                       BIOACCELERATE HOLDINGS, INC.



                                       By: _____________________________________
                                           Name:
                                           Title:





                                       LIFESCIENCE VENTURES LIMITED


                                       By: _____________________________________
                                           Name:
                                           Title:


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