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                                                                   EXHIBIT 10.46

The Directors,                                            28th September 2001
Medscreen Limited,
Harbour Quay,
100 Preston's Road,
London E14 9PH


Dear Sirs,

POUND STERLING350,000 TERM LOAN FACILITY

We, Lloyd's TSB Bank plc (the "BANK") are pleased to offer to Medscreen Limited
(company registered number 2055216 and herein referred to as the "BORROWER") a
loan facility of Pound Sterling350,000 (three hundred and fifty thousand pounds
sterling) (the "FACILITY") upon and subject to the terms and conditions of this
letter.

1.  DEFINITIONS

"Business Day" means a day other than a Saturday or a Sunday on which banks are
open for general business in London.

"Commitment Termination Date" means 31st October 2001 or the date on which the
Facility is drawn, whichever shall first occur.

"Consolidated Net Worth" mean at any particular time the aggregate of the amount
paid up on the issued share capital of the Borrower and the consolidated
distributable and non-distributable reserves of the Borrower and its Subsidiary
Undertakings but (a) after deducting the total of any debit balance on profit
and loss account and the book value of any intangible assets including but not
limited to goodwill, and (b) excluding any minority interests in Subsidiary
Undertakings and any increase in the valuation of assets subsequent to the date
of the Financial Statement.

"Current Account" means the sterling current account of the Borrower with the
Bank's Threadneedle Street Branch (numbered 300009 02437621) or any account
opened with the Bank in replacement of or in substitution for such account.

"Dollars" and "US$" means the lawful currency of the united States of America
and, in relation to all payments and transfers of funds to be made hereunder in
Dollars, such funds as are customary on the date payment is made for settlement
of international banking transactions through the New York Clearing House
Interbank Payments System (or such other Dollar funds as may be specified by the
Bank to the Borrower in writing).

"Equivalent Amount" means the sterling equivalent of the relevant amount of
Dollars, as conclusively determined by the Bank on the basis of its spot selling
rate for Dollars against sterling at or about 10 a.m. 2 Business Days prior to
the day such calculation falls to be made.

"Event of Default" means an event described in Clause 9 here or any
circumstances which with the giving of notice and/or the passing of time could
become such an event.

"Facility Limit" means Pound Sterling350,000 subject to any cancellation or
other reduction thereof within the terms of this letter.


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                                       2



"Financial Statement" means at any particular time the then latest audited
consolidated balance sheet and profit and loss account (each prepared on the
same basis and in accordance with the same accounting principles as the latest
such balance sheet and profit and loss account received by the Bank prior to the
date of this letter) of the Borrower and its Subsidiary Undertakings together
with the notes to both.

"Loan" means at any particular time, the principal amount available to be
borrowed hereunder or, as the case may be, the principal amount borrowed and
remaining outstanding hereunder.

"Notification Date" means the date which is 2 Business Days prior to the date
the Facility is to be drawn down.

"Parent" means Pharmchem Laboratories Inc.

"PBIT" means the consolidated profit of the Borrower and its Subsidiary
Undertakings before taxation and interest paid and payable. Credit items of an
extraordinary nature and credit items of an exceptional nature shall be excluded
for the purpose of any relevant computation hereunder unless otherwise expressly
agreed by the Bank.

"Repayment Date" means the date which is 1 month after the date the Facility is
drawn down and each date occurring at monthly intervals thereafter until all
amounts owing hereunder have been repaid in full.

"Sterling Facility" means the sterling loan equal to Pound Sterling900,000
provided to the Borrower by the Bank pursuant to a facility letter of even date
to this letter.

"Subsidiary Undertaking" shall have the meaning ascribed to it in Section 258 of
the Companies Act 1985. During any period in which the Borrower does not have a
Subsidiary Undertaking all references herein to "Subsidiary Undertakings" of the
Borrower shall be ignored and the appropriate text read and construed
accordingly.

Words denoting the singular number only shall include the plural and vice-versa.

2.   DRAWING & INTEREST

2.1  The Facility may be drawn down hereunder in full in one amount (being the
     amount in Dollars with an Equivalent Amount equal to the Facility Limit) on
     any Business Day occurring on or before the Commitment Termination Date
     (failing which the Facility shall be cancelled) subject to receipt by the
     Bank of notice from the Borrower no later than 10 a.m. on the Notification
     Date and provided that at the time of drawing the currency of the drawing
     is, in the Bank's opinion, readily available to the Bank in the amount of
     the drawing and that the Bank is able to determine the applicable rate of
     interest pursuant to the terms of this letter.

     The notice of drawing shall also specify the account to which the proceeds
     are to be paid. The proceeds of the drawing shall be utilised by the
     Borrower in or towards providing a loan to the Parent to assist in the
     relocation of the Parent's research and testing facility and shall be held
     in trust for the Bank until so applied.

2.2  If at any time the Bank determines that the Loan exceeds the Facility Limit
     by more than 10% then the Borrower shall repay to the Bank on demand in
     Dollars the amount by which the Facility Limit is exceeded.

2.3  Interest will be calculated on the Loan at 1.75% per annum above the Bank's
     Dollar short-term offered rate from time to time and shall be paid by the
     Borrower on such quarterly dates in each year as the Bank may from time to
     time require and additionally on the date of final repayment of the Loan.

3.   REPAYMENT

3.1  The drawing made hereunder shall be repaid by the Borrower in 48
     consecutive equal monthly instalments, one on each Repayment Date.


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                                       3


Each such repayment shall be made in Dollars and each shall be equal to 1/16 of
the Loan as at the Commitment Termination Date (save that the last such
instalment shall be in such amount as to repay in full all amounts then owing to
the Bank under or pursuant to this letter).

4.   EARLY REPAYMENT

4.1  The Borrower may by not less than 5 Business Days' prior notice specifying
     the date of prepayment prepay together with accrued interest the whole or
     any part of the Loan in minimum amounts of equivalent to US$50,000 and a
     multiple of US$10,000 on any Business Day.

4.2  No part of the Loan repaid or prepaid (whether prepaid pursuant to this
     clause or pursuant to any other clause of this letter) may be redrawn. The
     Bank will decide how to apply any part prepayment of the Loan, either by
     reducing subsequent repayments proportionately or by applying the part
     prepayment to the then latest repayment instalment(s) so as to reduce the
     term of the Facility.

5.   ADDITIONAL COSTS & CHANGES IN CIRCUMSTANCES

5.1  If the application of or introduction of or any change in any applicable
     law, regulation, requirement, directive or request or any change in the
     interpretation thereof by any governmental, fiscal, monetary or other
     authority charged with the administration thereof or by any self-regulating
     organisation or court of competent jurisdiction (in any case whether or not
     having the force of law) shall subject the Bank or any holding company of
     the Bank to any tax, duty or other charge with respect hereto or change the
     basis of taxation on any amounts payable to the Bank hereunder (except in
     respect of tax on the overall net income of the Bank or any such holding
     company) or impose, modify or deem applicable requirements in respect of
     any liquid asset, special or other deposit or prudential or cash ratio or
     other requirements against, or the allocation by the Bank or any holding
     company of the Bank of capital in support of, any assets or liabilities or
     contingent liabilities of, deposits with or for the account of, or advances
     or commitments made by the Bank, and this shall increase the cost (to the
     Bank or any such holding company) of the Bank maintaining the Facility or
     shall reduce the amount of principal or interest receivable by the Bank or
     shall otherwise reduce the return to the Bank hereunder by an amount which
     the Bank deems material, the Borrower shall pay to the Bank upon demand
     such additional amounts as are necessary to compensate for such increased
     cost or reduction.

5.2  If at any time the currency in which any amount outstanding or owing in
     connection with the Facility is denominated is due to be or has been
     converted into the euro or into any other currency as a result of a change
     in the law or by agreement between the Bank and the Borrower then:

     (a)  the Bank may in its sole discretion determine and shall give written
          notice to the Borrower of the currency or currency unit in which all
          or any amounts payable under or in connection with this letter shall
          be paid. After the expiry of 7 days from the date of such notice all
          such payments shall be made in such currency or currency unit and all
          references in this letter to currency shall mean and include reference
          to a currency unit; and

     (b)  the Bank may by giving not less than 21 days' written notice to the
          Borrower change any of the terms applying to the Facility but only to
          the extent that the Bank reasonably considers any such change
          necessary to take account of differences in market practice or to
          compensate for increases in costs to the Bank or to any holding
          company of the Bank arising from or related to such conversion or
          arising from or related to the introduction of or to the extension of
          monetary union within the European Union. Any such change shall amend
          the terms of this letter upon expiry of such period of notice.

     At any time within 21 days of receipt of such notice from the Bank the
     Borrower may prepay all (but not part) of the Loan. Once prepaid the Loan
     may not be redrawn.

5.3  All legal and other costs and expenses including any stamp and other duties
     and registration fees on a full indemnity basis and value added tax thereon
     incurred by the Bank in assessing the Facility, in the preparation of this
     letter, in the preparation, valuation, taking and release of any guarantee
     or security


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                                       4

     given in connection with this letter and in connection with the
     enforcement, administration and preservation of its rights under the
     Facility shall be payable by the Borrower on demand.

6.   CONDITIONS PRECEDENT & SECURITY

6.1  The obligations of the Bank hereunder shall not come into effect unless and
     until it has received in form and substance satisfactory to it:

     (a)  a certified copy of the board resolution of the Borrower authorising
          acceptance of this letter and nominating the person(s) authorised to
          sign this letter on its behalf, and the person(s) authorised to give
          notices of drawing and other communications required hereunder,
          together with their duly authenticated specimen signatures; and

     (b)  the security described in Clause 6.2 hereof together with such
          evidence as the Bank shall require to confirm that such security is in
          full force and effect.

6.2  All amounts owing to the Bank under or pursuant to the Facility shall at
     all times be secured by an unlimited debenture from the Borrower (the
     "Security").

     The Security and all other security held by the Bank now or in the future
     shall be continuing security not only for the Facility but also for all
     other moneys obligations and liabilities whether certain or contingent at
     any time due owing or incurred by the Borrower [or the relevant guarantor]
     to the Bank.

7.   REPRESENTATIONS & WARRANTIES

7.1  The Borrower hereby represents and warrants to the Bank that:

     (a)  all action necessary to authorise its execution of this letter and the
          security documents required pursuant to the terms of this letter to
          which it is a party and its performance of its respective obligations
          hereunder and thereunder has been duly taken and neither such
          execution nor such performance will cause any limit or restriction on
          its borrowing or other powers, or on the right or ability of its
          directors (or any of them) to exercise such powers, to be exceeded or
          breached or will constitute or result in any breach of any agreement,
          law, requirement or regulation;

     (b)  no material litigation, administrative or judicial proceeding are
          presently pending or threatened against it or any of its Subsidiary
          Undertakings;

     (c)  there has been no material adverse change in the financial condition
          of it or any of its Subsidiary Undertakings since the date of the
          Financial Statement received by the Bank prior to the date of this
          letter; and

     (d)  no Event of Default has occurred and is continuing.

7.2  The Borrower shall be deemed to repeat the representations and warranties
     set out in Clause 7.1 hereof on each day on which any amount remains owing
     to the Bank hereunder or for as long as the Bank is under any obligation to
     make the Facility available in each case as if made at each such time with
     reference to the facts and circumstances then existing.

8.   UNDERTAKINGS OF THE BORROWER

For as long as the Bank is under any obligation to make the Facility available
or for as long as any moneys or liabilities are owing or incurred to the Bank
hereunder the Borrower;

8.1  shall not, and shall procure that none of its Subsidiary Undertakings
     shall, without the prior written consent of the Bank:


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                                       5

     (a)  factor or otherwise assign or deal with any book or other debts or
          securities for money now and from time to time due or owing to it or
          such a Subsidiary Undertaking otherwise than by getting in and
          realising the same in the ordinary course of business as now
          conducted;

     (b)  materially change the nature of its respective business as now
          conducted;

     (c)  create or permit to subsist or arise any mortgage, charge, pledge or
          lien or any other security interest or encumbrance (other than a lien
          arising solely by operation of law in the ordinary course of business)
          over any of its or such Subsidiary Undertaking's present or future
          undertaking, property, revenue or assets (except as provided herein);

     (d)  enter into or permit to subsist any transaction which, in legal terms,
          is not secured indebtedness but which in the Bank's opinion has an
          economic or a financial or commercial effect similar to that of
          secured indebtedness;

     (e)  part with, sell, transfer, lease or otherwise dispose of (or attempt
          or agree to do any such thing) the whole or any material part of its
          or such Subsidiary Undertaking's undertaking, property, revenue or
          assets (either by a single transaction or a number of transactions
          whether related or not) other than for full value on an arm's length
          basis; or

     (f)  other than pursuant to this letter and the facility letter relating to
          the Sterling Facility, provide any loans or pay any dividends to the
          Parent until the date that the aggregate of the amounts owing by the
          borrower to the Bank, as determined by the Bank, in respect of the
          Facility and the Sterling Facility is less than Pound Sterling
          500,000; and

8.2  shall comply with the following financial covenants, which covenants shall
     be tested against the Financial Statement:

     (a)  the Borrower shall maintain the Consolidated Net Worth at not less
          than Pound Sterling1,500,000 as per the Audited Accounts;

     (b)  the Borrower shall procure that PBIT at all times exceeds 500% of the
          aggregate amount of interest paid and payable; and

8.3  shall supply to Lloyds TSB Commercial, Central and West London:

     (a)  as soon as practicable (and in any event within 150 days after the
          close of each of its financial years) copies of the Financial
          Statement and the accounts of such of its Subsidiary Undertakings as
          the Bank may from time to time require for that financial year;

     (b)  as soon as practicable (and in any event within 60 days of the end of
          each month) copies of the management accounts of the Borrower for that
          month, such as accounts to be in form, substance and content
          acceptable to the Bank and to be certified by a director of the
          Borrower; and

     (c)  promptly on request, such other information regarding the financial
          condition or the business of the Borrower or any of its Subsidiary
          Undertakings as the Bank may reasonably require; and

8.4  shall ensure that (a) it and each of its Subsidiary Undertakings maintains
     with reputable underwriters or insurance companies adequate insurance on
     and over its respective business and assets, such insurance to be against
     such risks and to the extent usual for persons carrying on a business such
     as that carried on by the Borrower or, as the case may be by the relevant
     Subsidiary Undertaking and from time to time upon the request of the Bank,
     shall furnish the Bank with evidence of compliance with this obligation and
     (b) the Borrower and each of its Subsidiary Undertakings has the right and
     is duly qualified to conduct its respective business as it is now conducted
     and will maintain all franchises, licences and rights necessary to conduct
     such business and, in the case of the Borrower, to comply with the
     obligations of the Borrower under this letter; and


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                                       6

8.5  shall immediately upon becoming aware of the same give the Bank notice of
     the occurrence of any Event of Default.

9.   EVENTS OF DEFAULT

9.1  In the event that:

     (a)  the Borrower fails to pay any sum due hereunder on its due date;

     (b)  the Borrower defaults in the due performance or observance of any
          obligation accepted or undertaking given by it to the Bank or any
          representation warranty or statement made or deemed made by the
          Borrower herein or pursuant hereto proves to be incorrect or
          misleading;

     (c)  any other indebtedness of the Borrower becomes due or capable of being
          declared due prior to the stated due date for payment thereof or the
          Borrower defaults in the payment when due of any indebtedness or
          defaults in paying on the due date any sum payable by it under any
          guarantee, indemnity or similar undertaking given by it or steps are
          taken to enforce any security for any liability of the Borrower
          present or future;

     (d)  an encumbrancer takes possession or a receiver or similar official is
          appointed of any of the assets or undertaking of the Borrower or a
          petition is presented for the making of an administration order or any
          judgment made against the Borrower is not paid out, stayed or
          discharged within 14 days;

     (e)  proceedings are commenced or a petition is presented (and is not
          dismissed within 14 days) or an order is made or an effective
          resolution is passed for the winding up of the Borrower or the
          Borrower is or becomes insolvent or stops or threatens to stop payment
          of its debts generally or is deemed unable to pay such debts (whether
          within the meaning of Section 123 of the Insolvency Act 1986 or
          otherwise) or the directors of the Borrower become obliged to convene
          a meeting pursuant to Section 142 of the Companies Act 1985 or an
          application is made in connection with a proposal to creditors for a
          voluntary arrangement or the Borrower makes or seeks to make any
          arrangement or composition with its creditors (whether under Part I of
          the Insolvency Act 1986 or otherwise);

     (f)  any guarantee, other security or other document or arrangement relied
          upon by the Bank in connection with the Facility ceases to be
          continuing or ceases to remain in full force and effect or notice of
          discontinuance is received by the Bank or the Bank reasonably believes
          that the effectiveness of any such document or arrangement is in doubt
          or if any provision of such document or arrangement is not complied
          with for any reason whatsoever;

     (g)  the Borrower ceases or threatens to cease to carry on its business in
          the normal course or breaches any legislation relating to its
          business, including without limitation any applicable environmental
          protection laws;

     (h)  the Borrower ceases to be a wholly owned Subsidiary Undertaking of the
          Parent, or the persons who now have control of the Borrower cease to
          have control of the Borrower ("control" having the meaning ascribed to
          it in Section 840 of the Income and Corporation Taxes Act 1988) or
          voting control of the Borrower is acquired by any person, or company
          or group of connected persons (as defined in Section 839 of the Income
          and Corporation Taxes Act 1988) not having control of the Borrower at
          the date hereof;

     (i)  any of the above events mutatis mutandis occur or proceedings
          analogous or equivalent thereto arise in relation to the Parent, any
          Subsidiary Undertaking of the Parent or the Borrower or any guarantor
          of the Facility; or

     (j)  the Borrower fails or has failed to disclose to the Bank any important
          information that is relevant to the Facility or to any security
          document or undertakes or is subject to any action or


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                                       7

          occurrence which in the opinion of the Bank causes the payment of any
          amount owing hereunder to be at risk,

     then the Bank shall have the right at any time or times thereafter to
     declare it commitments hereunder cancelled and/or all amounts then
     outstanding hereunder payable on demand, whereupon such commitments shall
     be so cancelled and/or such outstandings shall be so payable, and /or to
     declare the Facility immediately due and payable, whereupon the Borrower
     shall pay to the Bank the total principal amount outstanding hereunder
     together with accrued interest thereon and any other amounts payable
     hereunder.

9.2  The Bank shall have the right at the time of making such demand or any time
     thereafter to convert all amounts then due and payable hereunder in Dollars
     into sterling at the Bank's spot selling rate for such currency against
     sterling at that time.

9.3  If any amount is not paid when due hereunder (including under this clause)
     the Borrower shall pay to the Bank on demand interest on such sum (whether
     before or after judgment) at 4.75% per annum above the cost to the Bank as
     certified by the Bank of funding such sum on the London interbank market
     for such period or consecutive periods as the Bank in its sole discretion
     may select, running from the date of such default to the date of receipt of
     such sum in full by the Bank. Interest, if unpaid, shall be added to the
     sum in default on the last day of each such period or at 3 monthly
     intervals whichever is more frequent.

10.  INDEMNITIES

10.1 The Borrower shall indemnify the Bank, without prejudice to any of the
     Bank's other rights hereunder, against any loss or expense as certified by
     the Bank including legal expenses on a full indemnity basis and loss of
     profit which the Bank may incur or sustain as a consequence of the
     occurrence of any Event of Default or any failure by the Borrower to pay
     any sum demanded by the Bank as a result thereof, or any amount payable to
     the Bank hereunder in one currency being converted into another currency,
     whether pursuant to any judgment or order or otherwise.

11.  NOTICES

11.1 All communications from the Borrower in respect of the Facility shall be
     irrevocable and shall, unless otherwise specified in this letter, be sent
     by letter to the Bank's Threadneedle Street Branch or to such address as
     the Bank may notify in writing to the Borrower from time to time.

11.2 Any notice or demand to be given by the Bank shall be given in writing and
     without prejudice to any other effective mode of service shall be deemed to
     have been sufficiently served if sent to the Borrower at its address given
     above or to its registered office for the time being.

12.  PAYMENTS

12.1 All payments due from the Borrower hereunder shall be made without any
     set-off, deduction or withholding of any nature whatsoever.

12.2 The Borrower hereby authorises the Bank to debit the Current Account with
     the amount of all sterling payments due to the Bank from time to time under
     the terms of this letter and undertakes to ensure that there will be
     sufficient cleared funds available on that account or sufficient
     availability within any agreed overdraft thereon by 12 noon on any relevant
     date to cover all such payments falling due on that date.

13.  MISCELLANEOUS

13.1 If at any time the Bank delays exercising any of the rights it has under
     this letter or exercises only part of those rights, it will still have the
     right to exercise all or any other rights at any later time.


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                                       8

13.2 Without prejudice to the Bank's rights under any set off arrangements the
     Bank may at any time whether before or after any demand hereunder for
     payment without notice to the Borrower apply any moneys standing to the
     credit of the Borrower on any account and whether subject to notice or not
     and whether denominated in sterling or in any other currency in or towards
     satisfaction of any liabilities of the Borrower under this letter.

13.3 If the due date for any payment would otherwise fall on a non-Business Day,
     the effective date shall be the next succeeding Business Day.

13.4 This letter shall be binding upon and shall inure only to the benefit of
     the Bank and the Borrower and their respective successors and assigns,
     provided that the Borrower shall not assign any of its rights or transfer
     any of its obligations hereunder without the prior written consent of the
     Bank. For the avoidance of doubt, the Bank and Borrower do not intend that
     any of the terms of this letter should otherwise be enforceable, by virtue
     of the Contracts (Rights of Third Parties) Act 1999, by any person who is
     not a party to this letter.

13.5 Members of the Lloyds TSB group may transfer any information regarding the
     Borrower among themselves, to their auditors for the time being and to any
     potential assignee or transferee of the Facility. Information may not be
     transferred further or otherwise (including for marketing purposes) without
     the prior written consent of the Borrower unless such information is in the
     public domain or unless the Bank is required by laws so to do.

13.6 All calculations in respect of interest due to the Bank under the Facility
     shall be on the basis of the actual number of days elapsed and a 360 day
     year.

13.7 In this letter reference to (a) any statutory provision shall be deemed to
     mean and to include a reference to any modification or re-enactment thereof
     for the time being in force, and (b) the Bank's Base Rate shall mean and
     include any rate replacing that rate from time to time.

13.8 This letter shall be governed by and construed in accordance with the laws
     of England and Wales.

14.  PERIOD OF OFFER

14.1 The offer of the Facility is open for acceptance by returning the attached
     duplicate of this letter with the acknowledgment duly signed by authorised
     officers of the Borrower to be received by Lloyds TSB Commercial, Central &
     West London not later than one month hence failing which the offer will
     lapse.

Yours faithfully,
For and on behalf of Lloyds TSB Bank plc

/S/ RNA MILNE

R.N.A. Milne
Senior Manager


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                                       9

THIS LETTER CREATES LEGAL OBLIGATIONS. BEFORE SIGNING YOU MAY WISH TO TAKE
INDEPENDENT ADVISE.

We hereby acknowledge and accept the terms of your offer dated 28th September
2001 of which this is a duplicate and agree all the terms and conditions therein
contained. We also acknowledge that your offer contains all the terms currently
applicable to the Facility and that no representation made in good faith,
warranty or undertaking has been made by you or on your behalf in connection
with the Facility which is not expressly set out in your offer and, in deciding
to accept your offer and to proceed with any transaction or project for which
the Facility has been sought, you have no duty to give us advice and we have not
relied on any advice given by you or on your behalf.

Signed for and on behalf of Medscreen Limited


<TABLE>
<S>                                              <C>
/S/ JOSEPH HALLIGAN                              /S/ FIONA BEGLEY
-----------------------                          ---------------------
     (signature)                                      (signature)

*Director                                        *Director





     J. Halligan                                       F. Begley
-----------------------                           ---------------------
       (name)                                             (name)
</TABLE>


Pursuant to a Resolution of the Board dated         October 9             2001
                                            ---------------------------
Date    October 9     2001
     ----------------