<PAGE>

                                                                   EXHIBIT 10.38

                              EQUIPMENT SCHEDULE
                                      TO
                      MASTER LOAN AND SECURITY AGREEMENT


MASTER LOAN AND SECURITY AGREEMENT NO. 7237      DATED:  June 18, 1998
EQUIPMENT SCHEDULE NO. 04


LENDER:                                 CUSTOMER:
OXFORD VENTURE LEASING, LLC             PARADIGM GENETICS, INC.
8180 GREENSBORO DRIVE, STE 1000         106 ALEXANDER DRIVE, BLG 6
McLEAN, VA 22102                        RESEARCH TRIANGLE PARK, NC 27709

LENDER AND CUSTOMER HAVE ENTERED INTO MASTER LOAN AND SECURITY AGREEMENT NO.
7237 DATED JUNE 18, 1998 (THE "AGREEMENT") WHICH IS INCORPORATED HEREIN. THIS IS
AN EQUIPMENT SCHEDULE TO THE AGREEMENT. ALL WORDS AND TERMS USED HEREIN AND NOT
SPECIFICALLY DEFINED HEREIN SHALL HAVE THE SAME MEANINGS AS SET FORTH IN THE
AGREEMENT.

     1.  EQUIPMENT LOCATION (if other than above address of Customer): none

     2.  EQUIPMENT: (See attached Exhibit A)

     3.  ACQUISITION COST OF THE EQUIPMENT: $483,274.41

     4.  SUPPLIER(S): (See attached Exhibit A)

     5.  THE LOAN AND LOAN AGREEMENT REPAYMENT. As requested by Customer
pursuant to the Agreement, Lender agrees to lend to Customer the sum of four
hundred eighty-three thousand two hundred seventy-four and 41/100 dollars.
Customer agrees to repay the Loan Agreement in successive installments (which
installment payments are inclusive of interest) as set forth in the following
Schedule:

          SCHEDULE

          Advance Payment Amount: $5,134.79
          Number of Installments (Exclusive of Advance Payment): 48
          Payment Period:
          ___X ___ Monthly ____ Quarterly

          Periodic Installment Payment Amount Per Period: $5,134.79 for the next
          eleven (11) months, followed by $14,934.63 for thirty-six months,
          followed by one payment of $48,327.44.

          Commencement Date: __________________
          Special Provisions (if any): none
<PAGE>

     6.  SECURITY DEPOSIT: None

     7.  DISBURSEMENT OF PROCEEDS. Customer hereby authorizes Lender to disburse
the $539,626.43 proceeds as follows:

         (a)  $483,274.41  to: Paradigm Genetics, Inc.

              $483,274.41  TOTAL PROCEEDS

Customer may direct the Lender in writing to withhold payments from Supplier(s),
either now or in the future. Lender shall be entitled to rely on such written
direction of Customer as being conclusive as to the intent of the Customer with
regard to withheld payments.

Customer hereby acknowledges and agrees that it shall constitute an additional
Event of Default under the Loan Agreement if, for any reason, the Acquisition
Cost of the Equipment has not been fully paid to the appropriate Supplier(s)
thereof within ten (10) days after demand therefor by Lender. Customer hereby
agrees to indemnify, and hold harmless Lender from and against any liability,
claim, loss or damage, including Attorneys' Fees and Expenses, that may be
incurred by Lender as a result of any amounts to be withheld hereunder,
including any claims of the Supplier(s) therefor.

     8.  ADJUSTMENTS: Customer acknowledges that payments under the Loan
Agreement herein are based upon the Acquisition Cost of the Equipment set forth
above, and as a result of authorized changes to the Equipment, the final
Acquisition Cost of the Equipment may increase or decrease by up to l0%. In such
event, the Loan Payments shall be adjusted accordingly, and Customer authorizes
Lender to correct the Loan Agreement (and all related documentation) to reflect
such changes and Customer, if requested by Lender, shall confirm such changes to
Lender in writing.

     9.  SUPPLY CONTRACT: Customer acknowledges either that (a) Customer has
reviewed and approved any written purchase agreement or purchase order covering
the Equipment ("Supply Contract") purchased from Supplier, or (b) Lender has
informed or advised Customer, in writing, either previously or by the Loan
Agreement, of the following: (i) the identity of the Supplier, (ii) that
Customer may have rights under the Supply Contract and (iii) that Customer may
contact the Supplier for a description of any such rights Customer may have
under the Supply Contract. If Customer has entered into a written Supply
Contract, then Customer hereby assigns to Lender all of Customer's rights and
interests in and to the Equipment and the Supply Contract. If requested by
Lender, Customer shall obtain any consent required for such assignment. If
Customer has not entered into any such Supply Contract, Customer authorizes
Lender to (and Lender may at its option) act on behalf of Customer to obtain a
Supply Contract from Supplier. Except for the obligation to pay Supplier for the
Equipment, if (and only if) the Equipment is accepted by Customer under the Loan
Agreement, such assignment shall not include any of Customer's obligations under
such Supply Contract and Customer shall at all times remain liable to perform
all of its duties and obligations under the Supply Contract to the same extent
as if an assignment has not occurred. Customer hereby represents and warrants
that: (i) Customer has delivered herewith a true and correct copy of the Supply
Contract, neither Supplier nor Customer is in default under the Supply Contract
and it shall not be amended without Lender's prior written consent and (ii) the
Supply Contract is free from all claims, security interests, liens and
encumbrances, except for the interest being conveyed by the Loan Agreement.
Customer indemnifies and holds Lender harmless with respect to any and all
claims relating to the performance of Customer's obligations under the Supply
Contract.


<PAGE>

10.  SEE RATE ADJUSTMENT RIDER ATTACHED AND INCORPORATED BY REFERENCE.

By execution hereof the signer certifies that he/she is a duly authorized
officer, partner or proprietor of Customer and that he/she has read, accepted
and duly executed this Equipment Schedule to the Master Loan and Security
Agreement on behalf of Customer.

ACCEPTED AT LESSOR'S OFFICE AT McLEAN, VIRGINIA.

OXFORD VENTURE LEASING, LLC    PARADIGM GENETICS, INC
(LENDER)                       (CUSTOMER)

<TABLE>
<CAPTION>
By:       By:
<S>       <C>              <C>     <C>

Name:     J. A. Philbrick  Name:   John Ryals
          ---------------          ----------

Title:    President        Title:  CEO
          ---------------          ----------

Date:             8/28/98  Date:      8/31/98
          ---------------          ----------
</TABLE>
<PAGE>

                                   EXHIBIT A

                               LIST OF EQUIPMENT


The following list and description of Equipment supplements and forms a part of
Equipment Schedule No. 04 to Master Loan and Security Agreement No. 7237 dated
June 18, 1998 between Lender and Customer and may be attached to said Equipment
Schedule and any related UCC Financing Statements, or other document relating to
the Master Loan and Security Agreement, the Equipment Schedule or any other
document describing the Equipment.

               SEE ATTACHED EQUIPMENT SCHEDULE EXHIBIT A ATTACHED

All property listed above, together with any and all attachments, accessions,
additions, replacements, improvements, modifications and substitutions thereto
and therefor and a right to use license for any software related to any of the
foregoing now or hereafter acquired and all proceeds, in the form of goods,
accounts, chattel paper, documents, instruments and insurance proceeds.


OXFORD VENTURE LEASING, LLC    PARADIGM GENETICS, INC
(LENDER)                       (CUSTOMER)

By:              By:

Name:    J.A. Philbrick        Name:    John Ryals
         --------------                 ----------

Title:    President        Title:      CEO
          ---------                    ---
<PAGE>

PROMISSORY NOTE TO:  MASTER LOAN AND SECURITY AGREEMENT NO. 7237
                     Dated June 18, 1998

                           EQUIPMENT SCHEDULE NO. 04

U.S. $483,274.41                                        McLean, Virginia

Dated: _____________________

     FOR VALUE RECEIVED, Paradigm Genetics, Inc., a North Carolina corporation
(the "Borrower"), hereby promises to pay to the order of OXFORD VENTURE LEASING,
LLC. or its successors or assigns (the "Payee") at its offices located at 8180
Greensboro Drive, suite 1000, McLean, Virginia 22102, or at such other place as
the Payee or any holder hereof may from time to time designate, the principal
amount of U.S. four hundred eighty-three thousand two hundred seventy-four and
41/100 dollars ($483,274.41), with interest (based on a year of 360 days and 30
day months) on the principal amount hereof remaining from time to time unpaid,
such principal and interest to be paid in consecutive monthly installments until
fully paid, in the manner and at a rate of interest per annum as determined and
provided in the Loan Agreement. Anything in this Note to the contrary
notwithstanding, in the event that any payment of interest hereunder shall
exceed the legal limit, such amount in excess of such limit shall be deemed a
payment of principal hereunder.

This Note evidences a loan by the Payee to the undersigned pursuant to the Loan
Agreement indicated above between the undersigned and the Payee as from time to
time may be amended, restated, replaced, supplemented, substituted for or
renewed, and the holder of this Note is entitled to the benefits thereof,
including without limitation, the security interest in the Equipment granted
therein. Each term defined in the Loan Agreement and not otherwise defined
herein shall have the same definition when used herein.

The principal hereof and accrued interest hereon shall become forthwith due and
payable as provided in the Loan Agreement. Payments hereunder not made when due
shall accrue late charges as provided in the Loan Agreement. This Note may not
be prepaid in whole or in part except as otherwise specifically provided in the
Loan Agreement.

The Borrower hereby waives diligence, demand, presentment, protest and notice of
any kind, and assents to extensions of the time of payment, release, surrender
or substitution of security, or forbearance or other indulgence, without notice.
No act or omission of the Payee, including without limitation any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver or
release of such right, remedy or recourse. Any waiver or release may be effected
only by a written document executed by Payee and then only to the extent
specified therein. The undersigned hereby promises to pay all Attorneys Fees and
Expenses that may be incurred in connection with the enforcement and/or
collection of this Note.

The undersigned authorizes the Payee to insert above as the date of the Note,
the date on which Payee disburses funds pursuant to the Loan Agreement.
<PAGE>

This Note is freely assignable by the Payee, in whole or in part, and from time
to time. All of the terms and provisions of this Note inure to and are binding
upon the heirs, executors, administrators, successors, representatives,
receivers, trustees and assigns of the parties. None of the rights or
obligations of the Borrower hereunder may be assigned or otherwise transferred
without the prior written consent of the Payee.

THIS NOTE AND THE LEGAL RELATIONS OF THE PARTIES HERETO SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CONNECTICUT, WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE OF LAW. BORROWER
HEREBY CONSENTS AND SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF CONNECTICUT AND THE FEDERAL ACTION OR OTHER PROCEEDING ARISING OUT
OF ITS OBLIGATIONS HEREUNDER, AND EXPRESSLY WAIVES ANY OBJECTIONS THAT IT MAY
HAVE TO THE VENUE OF SUCH COURTS. BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS NOTE. Any action
by Borrower against Payee for any cause of action under this Note shall be
brought within one year after any suck cause of action first arises. If
requested by Payee, Borrower agrees that prior to the commencement of any
litigation regarding the terms and conditions of this Note, the parties hereto
shall subject themselves to non-binding mediation with a qualified mediator
mutually satisfactory to both parties.

     IN WITNESS WHEREOF, the Borrower by its duly authorized officer has
executed and delivered this Note as of the date first above written.


                                    PARADIGM GENETICS, INC.
                                    Borrower


                                    By:
                                       -------------------------
                                    Name:  John Ryals

                                    Title: CEO
<PAGE>

                    RATE ADJUSTMENT RIDER AND ACKNOWLEDGMENT


RATE ADJUSTMENT RIDER AND ACKNOWLEDGMENT (this "Rider") to the Promissory Note
dated _____________ 1998 (the "Note") issued in connection with the Master Loan
and Security Agreement No. 7237 dated June 18, 1998 and the Equipment Schedule
No. 04 (collectively, the "Loan Agreement"), between Paradigm Genetics, Inc., as
borrower (the "Customer") and OXFORD VENTURE LEASING, LLC, as Lender ("Oxford").
This Rider is entered into pursuant to and incorporates by this reference all of
the terms and provisions of the Loan Agreement and the Note. By its execution
and delivery of this Rider, Customer hereby reaffirms all of the
representations, warranties and covenants contained in the Loan Agreement and
the Note as of the date hereof, and further represents and warrants to Lender
that no Default has occurred and is continuing as of the date hereof.

1.  Purpose. This Rider amends and restates the tens of the payments set forth
in the Note.

2.  Definitions. The following terms shall have the following meanings herein:

(a)  "Adjustment Date" shall mean the date Oxford disburses any portion of the
     proceeds of the Loan Agreement.

(b)  "Final T-Note. Average" shall mean the average of the yields on U.S.
     Treasury Notes maturing in four years, as published by the Dow Jones
     Telerate Access Service, Page 19901, for the close of business on each
     business day of the two full calendar weeks immediately preceding the week
     containing the Adjustment Date.

(c)  "Preliminary Payments" shall mean the payments set forth in the Equipment
     Schedule and the Note, consisting of $5,134.79 due upon execution (the
     "Advance Payment") followed by eleven (11) consecutive monthly payments of
     $5,134.79, followed by thirty-six (36) consecutive monthly payments of
     $14,934.63, followed by one (1) final payment of $48,327.44.

(d)  "Preliminary T-Note Average" shall mean 5.6 15%.

3.  Adjustment of Payments. The Preliminary Payments were calculated based on a
spread over the Preliminary T-Note Average. Should the Final T-Note Average
differ from the Preliminary T-Note Average, then the Preliminary Payments shall
be revised. For each increase or decrease of one (1) basis point (i.e., 1/100 of
1%) in the Final T-Note Average above or below the Preliminary T-Note Average,
the Preliminary Payments shall be revised as follows (complete below as
applicable):

The Advance Payment, due upon execution of the Equipment Schedule, and the next
eleven payments shall remain unchanged.

     Each of the payments for the months number 13-48 initially scheduled in the
amount of $14,934.63 shall increase or decrease by $3.87.
<PAGE>

THE CALCULATION OF THE CONTRACT PAYMENTS UNDER THIS RIDER WILL SUPERSEDE ANY
PRIOR PROPOSAL OR QUOTATION. CUSTOMER HEREBY ACKNOWLEDGES AND AGREES TO THE
CALCULATION OF THE PAYMENT SCHEDULE SET FORTH HEREIN.

4.  Oxford's Requirements. The commencement of the Loan Agreement is subject to
satisfaction of all documentation and credit requirements of Oxford. If such
requirements are not satisfied by the Adjustment Date, then Oxford may, at its
sole option, declare that the Adjustment Date shall be the date when such
requirements are satisfied.

Dated as of: August 28, 1998

OXFORD VENTURE LEASING, LLC    PARADIGM GENETICS, INC


By:                            By:
         --------------                 ----------

Name:    J.A. Philbrick        Name:    John Ryals
         --------------                 ----------

Title:   President             Title:   CEO
         ---------                      ---