Document:

Exhibit 10.18.4

                          REGISTRATION RIGHTS AGREEMENT

         This  Registration  Rights  Agreement  (this  "Agreement")  is made and
entered  into as of October  29,  2003,  by and  between  INYX,  Inc.,  a Nevada
corporation (the "Company"), and Laurus Master Fund, Ltd. (the "Purchaser").

         This Agreement is made pursuant to the Securities  Purchase  Agreement,
dated as of the date hereof,  by and between the  Purchaser and the Company (the
"Securities  Purchase  Agreement"),  and  pursuant to the Note and the  Warrants
referred to therein.

         The Company and the Purchaser hereby agree as follows:

         1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Securities  Purchase  Agreement  shall have the meanings
given  such  terms  in the  Securities  Purchase  Agreement.  As  used  in  this
Agreement, the following terms shall have the following meanings:

         "Commission" means the Securities and Exchange Commission.

         "Common  Stock" means shares of the Company's  common stock,  par value
$.001 per share.

         "Effectiveness  Date" means the 150th day following the date upon which
the  principal  amount of the Term Loan to the  Company  in  original  principal
amount of $4,500,000 has been funded to the Company (the "Closing Date").

         "Effectiveness  Period"  shall  have the  meaning  set forth in Section
2(a).

         "Exchange Act" means the  Securities  Exchange Act of 1934, as amended,
and any successor statute.

         "Filing  Date"  means,  with  respect  to  the  Registration  Statement
required  to be filed  hereunder,  a date no later  than  forty  five  (45) days
following the Closing Date.

         "Holder" or "Holders"  means the Purchaser or any of its  affiliates or
transferees to the extent any of them hold Registrable Securities.

         "Indemnified Party" shall have the meaning set forth in Section 5(c).

         "Indemnifying Party" shall have the meaning set forth in Section 5(c).

         "Note" has the meaning set forth in the Securities Purchase Agreement.

         "Proceeding" means an action, claim, suit,  investigation or proceeding
(including,  without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

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         "Prospectus"   means  the  prospectus   included  in  the  Registration
Statement  (including,  without  limitation,  a  prospectus  that  includes  any
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  upon  Rule  430A  promulgated  under  the
Securities Act), as amended or supplemented by any prospectus  supplement,  with
respect  to  the  terms  of  the  offering  of any  portion  of the  Registrable
Securities covered by the Registration  Statement,  and all other amendments and
supplements to the  Prospectus,  including  post-effective  amendments,  and all
material  incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

         "Registrable  Securities"  means the shares of Common Stock issued upon
the conversion of the Note and issuable upon exercise of the Warrants.

         "Registration  Statement" means each registration statement required to
be filed hereunder, including the Prospectus, amendments and supplements to such
registration   statement  or  Prospectus,   including  pre-  and  post-effective
amendments,  all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

         "Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "Securities Act" means the Securities Act of 1933, as amended,  and any
successor statute.

         "Trading  Market"  means  any of the NASD OTC  Bulletin  Board,  NASDAQ
SmallCap Market,  the Nasdaq National Market, the American Stock Exchange or the
New York Stock Exchange.

         "Warrants" means the Common Stock purchase  warrants issued pursuant to
the Security Agreement.

         2. Registration.

                  (a) On or prior to the Filing Date the Company  shall  prepare
and file with the Commission a Registration  Statement  covering the Registrable
Securities  for an offering to be made on a  continuous  basis  pursuant to Rule
415. The  Registration  Statement shall be on Form SB-2(except if the Company is
not then  eligible to register  for resale the  Registrable  Securities  on Form
SB-2, in which case such  registration  shall be on another  appropriate form in
accordance  herewith).  The Company  shall cause the  Registration  Statement to
become effective and remain effective as provided herein.  The Company shall use

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its  reasonable  commercial  efforts to cause the  Registration  Statement to be
declared  effective  under the  Securities Act as promptly as possible after the
filing  thereof,  but in any event no later  than the  Effectiveness  Date.  The
Company shall use its  reasonable  commercial  efforts to keep the  Registration
Statement  continuously  effective under the Securities Act until the date which
is the earlier  date of when (i) all  Registrable  Securities  have been sold or
(ii) all Registrable  Securities may be sold  immediately  without  registration
under the  Securities  Act and  without  volume  restrictions  pursuant  to Rule
144(k),  as  determined  by the  counsel to the  Company  pursuant  to a written
opinion  letter  to such  effect,  addressed  and  acceptable  to the  Company's
transfer agent and the affected Holders (the "Effectiveness Period").

                  (b) If:  (i) the  Registration  Statement  is not  filed on or
prior to the  Filing  Date;  (ii) the  Registration  Statement  is not  declared
effective  by  the  Commission  by  the  Effectiveness  Date;  (iii)  after  the
Registration  Statement is filed with and declared  effective by the Commission,
the  Registration  Statement ceases to be effective (by suspension or otherwise)
as to all  Registrable  Securities to which it is required to relate at any time
prior to the expiration of the  Effectiveness  Period  (without being  succeeded
immediately  by  an  additional   registration   statement  filed  and  declared
effective)  for a period of time which shall exceed 30 days in the aggregate per
year or more than 20 consecutive  calendar days (defined as a period of 365 days
commencing on the date the  Registration  Statement is declared  effective);  or
(iv) the Common Stock is not listed or quoted,  or is suspended  from trading on
any Trading Market for a period of three (3) consecutive  Trading Days (provided
the Company shall not have been able to cure such trading  suspension  within 30
days of the notice thereof or list the Common Stock on another Trading  Market);
(any such failure or breach being referred to as an "Event," and for purposes of
clause (i) or (ii) the date on which  such  Event  occurs,  or for  purposes  of
clause  (iii) the date  which such 30 day or 20  consecutive  day period (as the
case may be) is exceeded,  or for purposes of clause (iv) the date on which such
three (3) Trading Day period is exceeded,  being  referred to as "Event  Date"),
then until the applicable  Event is cured,  the Company shall pay to each Holder
an amount in cash, as liquidated damages and not as a penalty, equal to 1.0% for
each thirty (30) day period  (prorated for partial  periods) on a daily basis of
the original  principal  amount of the Note.  While such Event  continues,  such
liquidated  damages shall be paid not less often than each thirty (30) days. Any
unpaid  liquidated  damages  as of the date when an Event has been  cured by the
Company  shall be paid within  three (3) days  following  the date on which such
Event has been cured by the Company.

         3. Registration Procedures.  If and whenever the Company is required by
the provisions  hereof to effect the registration of any Registrable  Securities
under the Securities Act, the Company will, as expeditiously as possible:

                  (a)  prepare  and file with the  Commission  the  Registration
Statement with respect to such  Registrable  Securities,  respond as promptly as
possible to any comments received from the Commission,  and use its best efforts
to cause the  Registration  Statement  to become  and remain  effective  for the
Effectiveness Period with respect thereto, and promptly provide to the Purchaser
copies of all filings and Commission letters of comment relating thereto;

                  (b) prepare and file with the Commission  such  amendments and
supplements to the Registration  Statement and the Prospectus used in connection

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therewith as may be necessary to comply with the  provisions  of the  Securities
Act with respect to the disposition of all Registrable Securities covered by the
Registration  Statement and to keep such Registration  Statement effective until
the expiration of the Effectiveness Period;

                  (c)  furnish  to the  Purchaser  such  number of copies of the
Registration  Statement and the  Prospectus  included  therein  (including  each
preliminary  Prospectus)  as the Purchaser  reasonably may request to facilitate
the public sale or  disposition  of the  Registrable  Securities  covered by the
Registration Statement;

                  (d) use its  commercially  reasonable  efforts to  register or
qualify  the  Purchaser's  Registrable  Securities  covered by the  Registration
Statement under the securities or "blue sky" laws of such  jurisdictions  within
the United States as the Purchaser may reasonably  request,  provided,  however,
that the Company shall not for any such purpose be required to qualify generally
to transact  business as a foreign  corporation in any jurisdiction  where it is
not so  qualified  or to  consent  to  general  service  of  process in any such
jurisdiction;

                  (e)   list  the   Registrable   Securities   covered   by  the
Registration Statement with any securities exchange on which the Common Stock of
the Company is then listed;

                  (f)  immediately  notify  the  Purchaser  at any  time  when a
Prospectus  relating  thereto is required to be delivered  under the  Securities
Act,  of the  happening  of any event of which the Company  has  knowledge  as a
result of which the Prospectus contained in such Registration Statement, as then
in effect,  includes an untrue  statement of a material fact or omits to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading in light of the circumstances then existing; and

                  (g) make  available  for  inspection  by the Purchaser and any
attorney,  accountant  or other agent  retained by the  Purchaser,  all publicly
available,  non-confidential  financial and other records,  pertinent  corporate
documents  and  properties  of the Company,  and cause the  Company's  officers,
directors  and  employees  to supply all  publicly  available,  non-confidential
information  reasonably  requested by the  attorney,  accountant or agent of the
Purchaser.

         4.  Registration  Expenses.  All  expenses  relating  to the  Company's
compliance  with Sections 2 and 3 hereof,  including,  without  limitation,  all
registration  and filing fees,  printing  expenses,  fees and  disbursements  of
counsel and independent  public  accountants for the Company,  fees and expenses
(including  reasonable  counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD,  transfer taxes,  fees of
transfer agents and registrars,  reasonable fees of, and disbursements  incurred
by, one counsel for the Holders, are called "Registration Expenses". All selling
commissions applicable to the sale of Registrable Securities, including any fees
and disbursements of any special counsel to the Holders beyond those included in
Registration  Expenses, are called "Selling Expenses." The Company shall only be
responsible for all Registration Expenses.

         5. Indemnification.

                  (a)  In  the  event  of  a  registration  of  any  Registrable
Securities under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the Purchaser, and its officers,  directors and each

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other  person,  if any,  who controls  the  Purchaser  within the meaning of the
Securities Act,  against any losses,  claims,  damages or liabilities,  joint or
several,  to which the  Purchaser,  or such persons may become subject under the
Securities  Act or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof) arise out of or are based upon any
untrue  statement or alleged untrue  statement of any material fact contained in
any  Registration   Statement  under  which  such  Registrable  Securities  were
registered under the Securities Act pursuant to this Agreement,  any preliminary
Prospectus or final Prospectus contained therein, or any amendment or supplement
thereof,  or arise out of or are based upon the omission or alleged  omission to
state therein a material fact required to be stated therein or necessary to make
the statements  therein not  misleading,  and will reimburse the Purchaser,  and
each such person for any reasonable legal or other expenses  incurred by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action;  provided,  however, that the Company will not be liable in
any such  case if and to the  extent  that  any  such  loss,  claim,  damage  or
liability  arises out of or is based upon an untrue  statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished  by or on  behalf  of the  Purchaser  or any such  person  in  writing
specifically for use in any such document.

                  (b)  In  the  event  of  a  registration  of  the  Registrable
Securities  under the Securities Act pursuant to this  Agreement,  the Purchaser
will  indemnify and hold harmless the Company,  and its officers,  directors and
each other  person,  if any, who controls the Company  within the meaning of the
Securities Act,  against all losses,  claims,  damages or liabilities,  joint or
several,  to which the  Company or such  persons  may become  subject  under the
Securities  Act or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof) arise out of or are based upon any
untrue  statement or alleged  untrue  statement  of any material  fact which was
furnished in writing by the  Purchaser to the Company  expressly for use in (and
such  information is contained in) the  Registration  Statement under which such
Registrable Securities were registered under the Securities Act pursuant to this
Agreement,  any preliminary Prospectus or final Prospectus contained therein, or
any  amendment  or  supplement  thereof,  or arise out of or are based  upon the
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements  therein not misleading,  and
will  reimburse  the Company and each such  person for any  reasonable  legal or
other expenses  incurred by them in connection with  investigating  or defending
any such loss, claim, damage, liability or action,  provided,  however, that the
Purchaser  will be liable in any such  case if and only to the  extent  that any
such loss,  claim,  damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information  furnished in writing to the Company by or on behalf
of the Purchaser specifically for use in any such document.  Notwithstanding the
provisions of this  paragraph,  the Purchaser shall not be required to indemnify
any  person or entity in excess  of the  amount of the  aggregate  net  proceeds
received by the  Purchaser in respect of  Registrable  Securities  in connection
with any such registration under the Securities Act.

                  (c)  Promptly  after  receipt  by a party  entitled  to  claim
indemnification hereunder (an "Indemnified Party") of notice of the commencement
of any action,  such Indemnified Party shall, if a claim for  indemnification in
respect thereof is to be made against a party hereto obligated to indemnify such
Indemnified Party (an "Indemnifying  Party"),  notify the Indemnifying  Party in

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writing thereof,  but the omission so to notify the Indemnifying Party shall not
relieve it from any liability which it may have to such Indemnified  Party other
than under this Section 5(c) and shall only relieve it from any liability  which
it may have to such  Indemnified  Party  under this  Section  5(c) if and to the
extent the Indemnifying  Party is prejudiced by such omission.  In case any such
action shall be brought  against any  Indemnified  Party and it shall notify the
Indemnifying Party of the commencement  thereof, the Indemnifying Party shall be
entitled  to  participate  in and,  to the extent it shall  wish,  to assume and
undertake  the defense  thereof with counsel  satisfactory  to such  Indemnified
Party,  and, after notice from the Indemnifying  Party to such Indemnified Party
of its election so to assume and undertake the defense thereof, the Indemnifying
Party shall not be liable to such Indemnified  Party under this Section 5(c) for
any legal expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; if the Indemnified Party retains its own counsel, then
the  Indemnified  Party shall pay all fees,  costs and expenses of such counsel,
provided,  however,  that, if the defendants in any such action include both the
indemnified  party and the  Indemnifying  Party and the Indemnified  Party shall
have reasonably  concluded that there may be reasonable defenses available to it
which are different  from or additional to those  available to the  Indemnifying
Party or if the interests of the Indemnified  Party  reasonably may be deemed to
conflict with the interests of the  Indemnifying  Party,  the Indemnified  Party
shall have the right to select one  separate  counsel  and to assume  such legal
defenses and otherwise to  participate  in the defense of such action,  with the
reasonable expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the Indemnifying Party as incurred.

                  (d) In order to provide for just and equitable contribution in
the  event of joint  liability  under  the  Securities  Act in any case in which
either (i) the Purchaser, or any officer,  director or controlling person of the
Purchaser,  makes a claim for indemnification  pursuant to this Section 5 but it
is judicially  determined (by the entry of a final judgment or decree by a court
of competent  jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such  indemnification may not be enforced in such
case  notwithstanding  the fact that this Section 5 provides for indemnification
in such case, or (ii)  contribution  under the Securities Act may be required on
the part of the Purchaser or such officer, director or controlling person of the
Purchaser in  circumstances  for which  indemnification  is provided  under this
Section 5; then,  and in each such case,  the  Company  and the  Purchaser  will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after  contribution  from others) in such proportion so that the
Purchaser is responsible only for the portion represented by the percentage that
the  public  offering  price  of its  securities  offered  by  the  Registration
Statement bears to the public  offering price of all securities  offered by such
Registration  Statement,  provided,  however,  that,  in any such case,  (A) the
Purchaser  will not be required to contribute any amount in excess of the public
offering  price  of  all  such  securities   offered  by  it  pursuant  to  such
Fegistration  Statement;  and (B) no  person  or  entity  guilty  of  fraudulent
misrepresentation  (within  the  meaning  of  Section  10(f) of the Act) will be
entitled  to  contribution  from any person or entity who was not guilty of such
fraudulent misrepresentation.

         6. Representations and Warranties.

                  (a) The Company files reports pursuant to Section 15(d) of the
Exchange Act and,  except with respect to certain  matters which the Company has
disclosed  to  the  Purchaser  on  Schedule  4.21  to  the  Securities  Purchase
Agreement,  the  Company  has  timely  filed  all  proxy  statements,   reports,
schedules,  forms,  statements  and other  documents  required to be filed by it
under the  Exchange  Act.  The Company  has filed (i) its Annual  Report on Form
10-KSB for the fiscal year ended December 31, 2002 and (ii) its Quarterly Report

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on Form  10-QSB for the fiscal  quarters  ended March 31, 2003 and June 30, 2003
(collectively,  the "SEC  Reports").  Each SEC  Report  was,  at the time of its
filing,  in substantial  compliance with the requirements of its respective form
and  none of the SEC  Reports,  nor the  financial  statements  (and  the  notes
thereto)  included in the SEC  Reports,  as of their  respective  filing  dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements  therein,
in light of the  circumstances  under which they were made, not misleading.  The
financial  statements  of the Company  included in the SEC Reports  comply as to
form in all material  respects with applicable  accounting  requirements and the
published rules and regulations of the Commission or other  applicable rules and
regulations with respect thereto.  Such financial  statements have been prepared
in accordance with generally accepted accounting  principles ("GAAP") applied on
a consistent  basis during the periods  involved (except (i) as may be otherwise
indicated in such financial  statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be  condensed)  and fairly  present in all material  respects the  financial
condition,  the results of operations  and the cash flows of the Company and its
subsidiaries,  on a consolidated basis, as of, and for, the periods presented in
each such SEC Report.

                  (b) The Common  Stock is listed  for  trading on the NASD Over
the  Counter  Bulletin  Board or  American  Stock  Exchange  and  satisfies  all
requirements for the continuation of such listing.  The Company has not received
any notice that its Common Stock will be delisted from the NASD Over the Counter
Bulletin Board or American Stock Exchange or that the Common Stock does not meet
all requirements for the continuation of such listing.

                  (c) Neither the Company,  nor any of its  affiliates,  nor any
person acting on its or their behalf, has directly or indirectly made any offers
or sales of any security or solicited any offers to buy any security (other than
a concurrent  offering to the Purchaser under a Note Purchase  Agreement between
the Company and the Purchaser dated as of October__,  2003) under  circumstances
that  would  cause the  offering  of the  Securities  pursuant  to the  Security
Agreement to be integrated  with prior  offerings by the Company for purposes of
the Securities Act which would prevent the Company from selling the Common Stock
pursuant   to  Rule  506   under  the   Securities   Act,   or  any   applicable
exchange-related stockholder approval provisions, nor will the Company or any of
its  affiliates  or  subsidiaries  take any action or steps that would cause the
offering of the  Securities to be integrated  with other  offerings  (other than
such concurrent offering to the Purchaser).

                  (d) The  Warrants,  the Note and the  shares of  Common  Stock
which the  Purchaser  may acquire  pursuant to the Warrants and the Note are all
restricted securities under the Securities Act as of the date of this Agreement.
The Company will not issue any stop transfer  order or other order  impeding the
sale and  delivery  of any of the  Registrable  Securities  at such time as such
Registrable  Securities  are  registered  for public sale or an  exemption  from
registration  is  available,  except as required by federal or state  securities
laws.

                  (e) The  Company  understands  the  nature of the  Registrable
Securities  issuable  upon the  conversion  of the Note and the  exercise of the
Warrant and recognizes that the issuance of such Registrable Securities may have

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a potential  dilutive effect.  The Company  specifically  acknowledges  that its
obligation to issue the  Registrable  Securities is binding upon the Company and
enforceable  regardless  of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.

                  (f)  Except  for  agreements  made in the  ordinary  course of
business,  there is no agreement  that has not been filed with the Commission as
an exhibit to a registration  statement or to a form required to be filed by the
Company under the Exchange Act, the breach of which could reasonably be expected
to have a material and adverse  effect on the Company and its  subsidiaries,  or
would  prohibit or otherwise  interfere with the ability of the Company to enter
into and perform any of its  obligations  under this  Agreement  in any material
respect.

                  (g) The Company will at all times have authorized and reserved
a  sufficient  number of shares of Common Stock for the full  conversion  of the
Note and exercise of the Warrants.

         7. Miscellaneous.

                  (a) Remedies.  In the event of a breach by the Company or by a
Holder, of any of their respective obligations under this Agreement, each Holder
or the  Company,  as the case may be, in addition to being  entitled to exercise
all rights  granted  by law and under  this  Agreement,  including  recovery  of
damages,  will be  entitled  to specific  performance  of its rights  under this
Agreement.

                  (b) No Piggyback on Registrations. Except as and to the extent
specified in Schedule  7(b) hereto,  neither the Company nor any of its security
holders  (other than the Holders in such capacity  pursuant  hereto) may include
securities  of  the  Company  in  any  Registration  Statement  other  than  the
Registrable  Securities,  and the Company  shall not after the date hereof enter
into any  agreement  providing  any such  right for  inclusion  of shares in the
Registration  Statement  to any of its  security  holders.  Except as and to the
extent specified in Schedule 7(b) hereto, the Company has not previously entered
into any agreement  granting any registration  rights with respect to any of its
securities to any Person that have not been fully satisfied.

                  (c) Compliance.  Each Holder covenants and agrees that it will
comply  with the  prospectus  delivery  requirements  of the  Securities  Act as
applicable to it in connection with sales of Registrable  Securities pursuant to
the Registration Statement.

                  (d)  Discontinued  Disposition.  Each  Holder  agrees  by  its
acquisition of such  Registrable  Securities that, upon receipt of a notice from
the Company of the  occurrence of a  Discontinuation  Event (as defined  below),
such  Holder  will  forthwith   discontinue   disposition  of  such  Registrable
Securities  under the  applicable  Registration  Statement  until such  Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement or until it is advised in writing  (the  "Advice") by the Company that
the use of the applicable  Prospectus  may be resumed,  and, in either case, has
received copies of any additional or supplemental  filings that are incorporated
or deemed to be  incorporated  by reference in such  Prospectus or  Registration
Statement.  The  Company  may  provide  appropriate  stop  orders to enforce the
provisions   of  this   paragraph.   For  purposes  of  this  Section   7(d),  a
"Discontinuation  Event" shall mean (i) when the Commission notifies the Company

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whether there will be a "review" of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company shall
provide true and complete  copies thereof and all written  responses  thereto to
each of the Holders); (ii) any request by the Commission or any other Federal or
state governmental  authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by the
Commission of any stop order suspending the  effectiveness of such  Registration
Statement covering any or all of the Registrable Securities or the initiation of
any  Proceedings  for that  purpose;  (iv) the  receipt  by the  Company  of any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction,  or the  initiation  or  threatening  of any  Proceeding  for such
purpose;  and/or (v) the  occurrence  of any event or passage of time that makes
the financial statements included in such Registration  Statement ineligible for
inclusion  therein  or any  statement  made in such  Registration  Statement  or
Prospectus or any document  incorporated or deemed to be incorporated therein by
reference  untrue in any material respect or that requires any revisions to such
Registration  Statement,  Prospectus or other  documents so that, in the case of
such  Registration  Statement  or  Prospectus,  as the case may be,  it will not
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the circumstances under which they were made, not misleading.

                  (e)  Piggy-Back  Registrations.  If at  any  time  during  the
Effectiveness Period there is not an effective  Registration  Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the  Commission a registration  statement  relating to an offering for
its own account or the account of others under the  Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents  relating to equity  securities to
be issued solely in connection with any acquisition of any entity or business or
equity  securities  issuable in connection  with stock option or other  employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen days after receipt of such notice, any such
Holder  shall  so  request  in  writing,  the  Company  shall  include  in  such
registration  statement  all or any  part of such  Registrable  Securities  such
holder  requests  to be  registered  to the extent the Company may do so without
violating  registration  rights  of  others  which  exist as of the date of this
Agreement,  subject to customary  underwriter cutbacks applicable to all holders
of registration  rights and subject to obtaining any required the consent of any
selling stockholder(s) to such inclusion under such registration statement.

                  (f) Amendments and Waivers.  The provisions of this Agreement,
including  the  provisions  of this  sentence,  may not be amended,  modified or
supplemented,  and waivers or consents to departures from the provisions  hereof
may not be given,  unless the same shall be in writing and signed by the Company
and the Holders of the then outstanding Registrable Securities.  Notwithstanding
the  foregoing,  a waiver or consent to depart from the  provisions  hereof with
respect to a matter that relates  exclusively  to the rights of certain  Holders
and that does not directly or indirectly  affect the rights of other Holders may
be given by Holders  of at least a majority  of the  Registrable  Securities  to
which such waiver or consent relates; provided,  however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.

                                       9
<PAGE>

                  (g) Notices.  Any notice or request  hereunder may be given to
the Company or the Purchaser at the  respective  addresses set forth below or as
may  hereafter be specified in a notice  designated as a change of address under
this Section 7(g). Any notice or request  hereunder shall be given by registered
or certified mail, return receipt  requested,  hand delivery,  overnight mail or
telecopy  (confirmed  by mail).  Notices and  requests  shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party to
whom it is addressed,  in the case of those by mail or overnight mail, deemed to
have been given three (3)  business  days after the date when  deposited  in the
mail or with the overnight  mail carrier,  and, in the case of a telecopy,  when
confirmed. The address for such notices and communications shall be as follows:

                  If to the Company:       INYX, Inc.
                                           Attention:  Chief financial officer
                                           Facsimile: (416) 250-2663
                                           With a copy to: Ronald L. Brown, Esq.
                                           Facsimile (214) 659-4819

                  If to a Purchaser:       To the address set forth under
                                           such Purchaser name on the
                                           signature pages hereto.

                  If to any other Person who is then the registered Holder:

                                           To the address of such Holder as it
                                           appears in the stock transfer books
                                           of the Company

or such other address as may be  designated  in writing  hereafter in accordance
with this Section 7(g) by such Person.

                  (h) Successors and Assigns.  This Agreement shall inure to the
benefit of and be binding upon the successors  and permitted  assigns of each of
the parties and shall inure to the benefit of each  Holder.  The Company may not
assign its rights or obligations  hereunder without the prior written consent of
each Holder.  Each Holder may assign their  respective  rights  hereunder in the
manner  and to the  Persons  as  permitted  under  the  Notes  and the  Security
Agreement with the prior written consent of the Company, which consent shall not
be unreasonably withheld.

                  (i) Execution and Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and, all of which taken  together  shall  constitute  one and the
same  Agreement.  In the event that any  signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  binding  obligation of the
party  executing  (or on whose behalf such  signature is executed) the same with
the same  force and  effect as if such  facsimile  signature  were the  original
thereof.

                                       10
<PAGE>

                  (j) Governing Law. All questions  concerning the construction,
validity,  enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance  with the internal laws of the State of
New York,  without  regard to the  principles of conflicts of law thereof.  Each
party agrees that all Proceedings  concerning the  interpretations,  enforcement
and  defense  of the  transactions  contemplated  by  this  Agreement  shall  be
commenced exclusively in the state and federal courts sitting in the City of New
York, Borough of Manhattan.  Each party hereto hereby irrevocably submits to the
exclusive  jurisdiction  of the state and federal  courts sitting in the City of
New York,  Borough of Manhattan for the adjudication of any dispute hereunder or
in connection herewith or with any transaction  contemplated hereby or discussed
herein,  and  hereby  irrevocably  waives,  and  agrees  not  to  assert  in any
Proceeding,  any claim that it is not personally  subject to the jurisdiction of
any such court,  that such  Proceeding  is improper.  Each party  hereto  hereby
irrevocably  waives  personal  service of process and consents to process  being
served in any such  Proceeding  by  mailing a copy  thereof  via  registered  or
certified  mail or overnight  delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this  Agreement and agrees that
such service shall constitute good and sufficient  service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve  process in any manner  permitted  by law.  Each  party  hereto  hereby
irrevocably  waives,  to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions  contemplated  hereby.  If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document,  then
the prevailing  party in such Proceeding  shall be reimbursed by the other party
for its reasonable attorneys fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

                  (k)  Cumulative  Remedies.  The remedies  provided  herein are
cumulative and not exclusive of any remedies provided by law.

                  (l)  Severability.   If  any  term,  provision,   covenant  or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  reasonable  efforts to find and  employ an  alternative
means to achieve the same or substantially  the same result as that contemplated
by such term,  provision,  covenant or restriction.  It is hereby stipulated and
declared to be the  intention of the parties  that they would have  executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

 (m) Headings. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.

       [Balance of page intentionally left blank; signature page follows.]

                                       11
<PAGE>

         IN WITNESS WHEREOF,  the parties have executed this Registration Rights
Agreement as of the date first written above.

                                           INYX, INC.

                                           By:      /S/ Jack Kachkar
                                              ----------------------------------
                                                    Jack Kachkar, Chairman

                                           LAURUS MASTER FUND, LTD.

                                           By:      /S/ Eugene Grin
                                              ----------------------------------
                                                    Eugene Grin, Director

                                           Address for Notices:

                                           825 Third Avenue, 14th Floor
                                           New York, New York 10022
                                           Attention:  David Grin
                                           Facsimile:  212-541-4434

                                       12Exhibit 10.18.5

DEBENTURE

Date:    October 2003

PARTIES:

(1)      INYX  PHARMA  LIMITED  a  company  incorporated  in  England  and Wales
         (registered  in England no.  04573515)  whose  registered  office is at
         Innovation House, 6 Seymour Court, Manor Park, Runcorn,  Cheshire,  WA7
         1SY, United Kingdom (the "Company"); and

(2)      LAURUS MASTER FUND, LTD., a company  incorporated in the Cayman Islands
         of  c/o  Ironshore  Corporate  Services,  Ltd.,  P.O.  Box  1234  G.T.,
         Queensgate House,  South Church Street,  Grand Cayman,  Cayman Islands)
         ("Laurus", which expression includes its successors and assigns).

                                    SECTION 1
                                 INTERPRETATION

1.       DEFINITIONS AND INTERPRETATION

1.1      Definitions

         In this Deed:

         "Bank  Accounts"  means the bank accounts listed in Schedule 2 (Details
         of  the  Bank  Account[s])  and  all  other  bank  accounts  opened  or
         maintained by the Company with any bank or other person,  including all
         credit  balances  now or at any time in  future on such  accounts,  all
         debts from time to time  represented  by such credit  balances  and all
         other rights accruing or arising in relation to each of such accounts.

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

         "Charged Investments" means:

         (a)      all Further Charged Investments and all Derived Investments;

         (b)      all  dividends,  interest and other  distributions  and income
                  paid or payable in respect of any of the above;

         (c)      the benefit of any  warranties  or covenants  given or entered
                  into in respect of any of the foregoing by any  predecessor in
                  title;

         (d)      all rights from time to time attached to any of the foregoing;

         (e)      all rights to acquire any of the foregoing; and

<PAGE>
                                       2

         (f)      all proceeds of sale of any of the foregoing.

         "Costs  and  Expenses"  means  costs,  charges,  losses,   liabilities,
         expenses  and  other  sums  (including  legal,  accountants'  and other
         professional fees) and any Taxes thereon.

         "Deed of  Priority"  means the Deed of  Priority to be made on the date
         hereof between  Venture Finance PLC, Laurus and the Company in relation
         to this Deed and the Existing Debenture.

         "Delegate"  means a delegate  or  sub-delegate  appointed  pursuant  to
         clause 18 (Delegation).

         "Derived  Investments"  means  all  Investments,  rights or assets of a
         capital  nature which are offered,  issued or paid in respect of any of
         the Charged  Investments,  including (but without limitation) by way of
         bonus,  rights,   redemption,   conversion,   exchange,   substitution,
         consolidation, sub-division, preference, warrant, option or purchase.

         "Direct Agreement" means each agreement  constituted by the giving of a
         notice  of  assignment  in the  form  set out in Part 1 of  Schedule  4
         (Notice of  Assignment of Relevant  Documents)  and the delivery of the
         corresponding acknowledgement in the form set out in Part 2 of Schedule
         4 (Notice of Assignment of Relevant Documents) or in such other form as
         may in any particular case apply.

         "Eligible  Company" means a company which satisfies the requirements of
         paragraph  2 of  Schedule  A1 to the  Insolvency  Act on the  date  the
         documents  required by paragraph 7 of that  Schedule are filed with the
         court.

         "Enforcement" (and all grammatical  variations or derivations  thereof)
         means the taking of steps (or attempting to do so) by Laurus to:

         (a)      sell, repossess or take possession of any rights or assets the
                  subject of the security conferred by this Deed; or

         (b)      appoint a Receiver under this Deed; or

         (c)      appoint an administrator in respect of the Company; or

         (d)      enforce any security  interest  created by or pursuant to this
                  Deed or to  exercise  any  rights  or powers  in  relation  to
                  enforcement   conferred   by  this  Deed  after  the  security
                  conferred by this Deed has become enforceable,

         unless  such action is taken to  preserve  or protect  (rather  than to
         enforce) such security interest.

         "Enforcement  Event"  in  relation  to the  Company,  means  any of the
         following events:

         (a)      It does not pay any Secured Liability on the due date therefor
                  or (if there is an  applicable  grace period) on the expiry of
                  such  grace  period,  at the place at and in the  currency  in
                  which it is expressed to be payable.

<PAGE>
                                       3

         (b)      It fails to comply  with any  provision  of this Deed and that
                  failure is not remedied  within thirty Business Days of Laurus
                  giving notice to the Company of such failure, provided that in
                  the case of any failure to comply with clause 22  (Covenant to
                  Pay) an  Enforcement  Event  shall  occur  forthwith  upon any
                  failure to make any  payment of any Secured  Liability  on the
                  due date therefor or (if there is an applicable  grace period)
                  on the expiry of such grace period.

         (c)      Any representation, warranty or statement made or deemed to be
                  made by it in or in connection  with this Deed is or proves to
                  have been incorrect or misleading in any material respect when
                  made  or  deemed  to be  made  and,  if  that  representation,
                  warranty or statement is capable of remedy, it is not remedied
                  within  thirty days of Laurus  giving notice to the Company of
                  such failure.

         (d)      It is unable or admits inability to pay its debts as they fall
                  due,  suspends  making  payments  on any of its  debts  or, by
                  reason  of  actual  or  anticipated  financial   difficulties,
                  commences  negotiations with one or more of its creditors with
                  a view to rescheduling any of its indebtedness.

         (e)      The value of its assets is and continues to be for a period of
                  3 months or  longer  less than its  liabilities  (taking  into
                  account contingent and prospective liabilities).

         (f)      A  moratorium  is  obtained  or  declared  in  respect  of any
                  indebtedness of the Company.

         (g)      Any corporate action,  legal proceedings or other procedure or
                  step is taken by it in relation to or which may lead to:

                  (i)      the  suspension  of  payments,  a  moratorium  of any
                           indebtedness, winding-up, dissolution, administration
                           or reorganisation  (by way of voluntary  arrangement,
                           scheme of  arrangement  or  otherwise) of the Company
                           other than a solvent liquidation or reorganisation;

                  (ii)     a composition,  assignment or arrangement with any of
                           its  creditors  including,  but  not  limited  to,  a
                           company voluntary  arrangement  pursuant to Part 1 of
                           the Insolvency Act;

                  (iii)    the  appointment  of  a  liquidator  (other  than  in
                           respect   of   a   solvent   liquidation,   receiver,
                           administrator,  administrative  receiver,  compulsory
                           manager,  supervisor  or  other  similar  officer  in
                           respect of the Company or any of its assets; or

                  (iv)     enforcement of any security over any of its assets,

                  or  any   analogous   procedure   or  step  is  taken  in  any
                  jurisdiction.

         (h)      Any  expropriation,  attachment,  sequestration,  distress  or
                  execution in any jurisdiction affects any of its assets.

         "Existing  Debenture"  means the all assets  debenture dated 7th March,
         2003 between the Company and Venture Finance plc.

<PAGE>
                                       4

         "Financial Indebtedness" means any indebtedness for or in respect of:

         (a)      moneys borrowed;

         (b)      any amount raised by acceptance  under any  acceptance  credit
                  facility;

         (c)      any amount raised  pursuant to any note  purchase  facility or
                  the  issue of  bonds,  notes,  debentures,  loan  stock or any
                  similar instrument;

         (d)      the  amount of any  liability  in respect of any lease or hire
                  purchase  contract  which would,  in accordance  with GAAP, be
                  treated as a finance or capital lease;

         (e)      receivables sold or discounted  (other than any receivables to
                  the extent they are sold on a non-recourse basis);

         (f)      any amount raised under any other  transaction  (including any
                  forward  sale or  purchase  agreement)  having the  commercial
                  effect of a borrowing;

         (g)      any  derivative  transaction  entered into in connection  with
                  protection  against or benefit from fluctuation in any rate or
                  price  (and,  when  calculating  the  value of any  derivative
                  transaction,  only the marked to market  value  shall be taken
                  into account);

         (h)      any  counter-indemnity  obligation  in respect of a guarantee,
                  indemnity,  bond,  standby or documentary  letter of credit or
                  any  other   instrument   issued   by  a  bank  or   financial
                  institution; and

         (i)      the amount of any  liability  in respect of any  guarantee  or
                  indemnity for any of the items  referred to in paragraphs  (a)
                  to (h) above.

         "Fixtures" means fixtures  (including  construction  work in progress),
         fittings  (including  trade and other  fixtures and fittings) and fixed
         plant, machinery and equipment.

         "Further Charged  Investments"  means all Investments  which may at any
         time in the  future  be  registered  or  otherwise  held in the name of
         Laurus or its nominee, or deposited with (or in any escrow account for)
         or otherwise held by any person to the order of Laurus, as security for
         the Secured Liabilities.

         "GAAP" means  generally  accepted  accounting  principles in the United
         Kingdom.

         "Insolvency Act" means the Insolvency Act 1986.

         "Insurance  Proceeds"  means all moneys or proceeds of claims  which at
         any time may be or become  payable to or be received by any the Company
         pursuant to any Insurances.

         "Insurances" means:

<PAGE>
                                       5

         (a)      each policy or contract of insurance  or  indemnity  taken out
                  now or at  any  time  in the  future  by or on  behalf  of the
                  Company or (to the extent of its  interest) in which it has an
                  interest (but  excluding any contract of insurance  which is a
                  third party liability contract of insurance); and

         (b)      the  benefit  of all  claims,  rights to  payment,  returns of
                  premium and all other rights in respect of any of them.

         "Intellectual  Property  Rights"  means all rights and interests in all
         know-how,  patents, designs, utility models,  copyrights,  trade marks,
         service marks,  business names, domain names,  topographical or similar
         rights,  any data base or any confidential  information,  and any other
         associated or similar  rights  subsisting or arising in any part of the
         world,  in each case  whether  registered  or not,  and  including  all
         applications  for  registration  of any of them and rights to apply for
         them  in any  part  of the  world)  and all  rights  and any  interests
         (including by way of licence) in, and other rights to use, any of them.

         "Investments" means:

         (a)      shares, stock and debentures;

         (b)      warrants, options or other rights to subscribe, purchase, call
                  for  delivery  of  or  otherwise  acquire  shares,   stock  or
                  debentures; and

         (c)      any other assets and rights  falling  within any  paragraph in
                  Part II of Schedule 2 to the  Financial  Services  and Markets
                  Act 2000 as in force at the date hereof.

         "Letting Document" means any (or any agreement for any) lease,  tenancy
         or licence to occupy  granted or entered  into by the  Company  (or any
         predecessor  in title) in respect of any of its Real Property in favour
         of any  tenant,  lessee or  licensee,  and all  licences,  consents  or
         approvals given under any of them.

         "LPA 1925" means the Law of Property Act 1925.

         "Material  Contract" means a contract producing for the Company revenue
         of not less than  (pound)200,000  (or the US dollar  equivalent) in any
         twelve month period.

         "Mortgaged Property" means:

         (a)      the property described in Schedule 1 (Mortgaged Property);

         (b)      all buildings  and Fixtures  (including  construction  work in
                  progress) from time to time in or on any of the foregoing;

         (c)      the benefit of any  warranties or covenants for title given or
                  entered  into  in  respect  of  any of  the  foregoing  by any
                  predecessor in title;

         (d)      all rights from time to time attached or appurtenant to any of
                  the foregoing;

         (e)      all rights to acquire any of the foregoing; and

<PAGE>
                                       6

         (f)      all proceeds of sale of any of the foregoing.

         "Note" means the  Convertible  Term Note signed on or about the date of
         this  document  by which  each of Inyx Inc and the  Company  joint  and
         severally promise to pay Laurus the sum of US $4,500,000 on and subject
         to the terms and conditions therein set out.

         "Other  Currency" has the meaning given to it in clause 25.1  (Currency
         indemnity).

         "Party" means a party to this Deed.

         "Permitted  Security  Interest" means any security  interest  permitted
         under subclause 6.3(c).

         "Planning  Acts"  means the Town and  Country  Planning  Act 1990,  the
         Planning  (Listed  Buildings  and  Conservation  Areas)  Act 1990,  the
         Planning  (Consequential  Provisions) Act 1990, the Planning (Hazardous
         Substances)  Act 1990 and the Local  Government  Planning  and Land Act
         1980, and any other legislation of a similar nature.

         "Proceedings" means any proceeding, suit or action arising out of or in
         connection with this Deed and/or any other document referred to in this
         Deed.

         "Real Property" means:

         (a)      any freehold or leasehold property in England and Wales;

         (b)      any  land  and   other   immovable   property   in  any  other
                  jurisdiction anywhere else in the world;

         (c)      all  buildings  and Fixtures from time to time in or on any of
                  the foregoing;

         (d)      the benefit of any  covenants  for title given or entered into
                  in  respect  of any of the  foregoing  by any  predecessor  in
                  title;

         (e)      all rights from time to time attached or appurtenant to any of
                  the foregoing;

         (f)      all rights to acquire any of the foregoing; and

         (g)      all proceeds of sale of any of the foregoing.

         "Receivables"  means all book and other  debts of any  nature  whatever
         (other  than  those  represented  by the Bank  Accounts)  and all other
         moneys  due or  owing  at any  time to the  Company  and all  proceeds,
         rights,  securities  and guarantees of any nature enjoyed or held by it
         in relation to any of the foregoing.

         "Receiver" means any one or more persons, individually or together with
         additional persons,  appointed as an administrative receiver,  receiver
         and  manager,  or other  receiver  appointed in respect of the Security
         Assets by Laurus pursuant to powers conferred by this Deed,  statute or
         otherwise.

<PAGE>
                                       7

         "Relevant Documents" means the documents listed in Schedule 3 (Relevant
         Documents) and any other contracts or documents to which the Company is
         a party and which become the subject of a fixed charge under this deed
         by virtue of the provisions of clause 12.4 (Additional Relevant
         Documents), including in each case:

         (a)      any form of  security,  bond,  guarantee,  indemnity  or other
                  support  of any  kind  issued  to or  expressed  to be for the
                  benefit  of the  Company  under  or in  respect  of  any  such
                  document;

         (b)      any and all rights to make claims or otherwise require payment
                  of any amount under,  or performance  of, any provision of any
                  such document;

         (c)      the  benefit  of the  right  to  sue  on all  representations,
                  warranties,  undertakings  or  other  assurances  given to the
                  Company under or in respect of any such document;

         (d)      all causes and rights of action arising under or in respect of
                  any such document  against any  counterparty to that document;
                  and

         (e)      any  and  all   Intellectual   Property   Rights  directly  or
                  indirectly  granted  or  howsoever  arising  in  favour of the
                  Company under any of such documents.]

         "Relevant  Transaction"  has the  meaning  given to it in  clause  13.3
         (Retention of Security Assets).

         "Required  Currency"  has  the  meaning  given  to  it in  clause  25.1
         (Currency indemnity).

         "Retention  Period"  has  the  meaning  given  to  it  in  clause  13.4
         (Retention Period).

         "Secured Liabilities" means

         (a)      each and every present and future  obligation and liability of
                  the Chargor  (whether  actual or  contingent  and whether owed
                  jointly or  severally  or in any other  capacity  whatever and
                  whether  direct  or  owed  by  contribution  or  indemnity  or
                  otherwise  howsoever)  which is, or is expressed to be, or may
                  become,  due,  owing or payable to Laurus  upon any banking or
                  trading account or otherwise,  and whether or not Laurus shall
                  have  been an  original  party  to the  relevant  transaction,
                  including without limitation all liabilities of the Chargor to
                  Laurus howsoever arising under the Security Agreement;

         (b)      all interest, costs,  commissions,  fees and other charges and
                  expenses which are, or are expressed to be, or may become due,
                  owing or payable by the Company  under the Security  Documents
                  at any time to Laurus; and

         (c)      all legal and other costs,  charges and expenses  which Laurus
                  may incur in enforcing or obtaining,  or attempting to enforce
                  or  obtain,  payment  of any  obligation,  liability  or money
                  referred to in paragraphs (a) and (b) above.

         "Security  Assets"  means all or any of the assets and rights from time
         to time subject or expressed to be subject to the security created,  or
         which may at any time be  created,  pursuant to any  provision  of this
         Deed.

<PAGE>
                                       8

         "Security Documents" means the Note, Related Documents (as that term is
         defined in the  Purchase  Agreement  defined in the Note) and any other
         documents  pursuant  to  which  the  Company  may  at  any  time  incur
         liabilities  to  Laurus in  connection  with any  borrowing,  financing
         arrangement or otherwise.

         "Special  Account"  has the meaning  given to it in clause 9.2 (Payment
         into designated account).

         "Stiefel" means Stiefel Laboratories Inc.

         "Stiefel  Contracts" means the Relevant  Contracts listed in Schedule 3
         (Relevant Documents).

         "Tangible  Movable Property" means in relation to Company the machinery
         and equipment listed in Schedule 5 (Tangible Movable Property) and:

         (a)      all plant,  machinery or  equipment  owned by it now or at any
                  time in the future and its interest in any plant, machinery or
                  equipment in its possession now, or at any time in the future;

         (b)      all its present and future  rights  against any  manufacturer,
                  supplier  or   installer  of  such   property,   any  builder,
                  contractor or professional  adviser engaged in relation to any
                  such  property and any lessee,  sub-lessee or licensee of such
                  property and any  guarantor or surety for the  obligations  of
                  such person; and

         (c)      to the extent that any of such  property is now or at any time
                  hereafter  hired,  leased or rented to any other  person,  the
                  rights  under the hiring,  leasing or rental  contract and any
                  guarantee,  indemnity or security for the  performance  of the
                  obligations  of such person and any other  rights and benefits
                  relating thereto.

         "Tax" includes any present or future tax, levy,  impost,  duty or other
         charge or  withholding  of a similar  nature  (including any penalty or
         interest  payable in connection with any failure to pay or any delay in
         paying any of the same).

         "Value  Added Tax" means value  added tax as provided  for in the Value
         Added Tax Act 1994 and any other tax of a similar nature.

         "Venture Finance Factoring  Arrangements" means transactions which have
         been or may be entered into by the Company under or in connection  with
         the Venture Finance Factoring Agreement and the Existing Debenture.

         "Venture  Finance  Factoring  Agreement" means the agreement (as at the
         date of this  Deed)  for the  purchase  of debts  entered  between  the
         Company and Venture Finance plc dated 7 March 2003.

1.2      Construction of particular terms

         In this Deed, unless otherwise specified, any reference to:

<PAGE>
                                       9

         (a)      any  document  being in "agreed  form" shall be  construed  as
                  referring to such document in form agreed  between  Laurus and
                  the  Company  and  initialled  by  them  for the  purposes  of
                  identification only;

         (b)      "assets"  includes  properties,  revenues  and rights of every
                  kind, present, future and contingent,  and whether tangible or
                  intangible;

         (c)      "authorisation"  or "consent" shall be construed as including,
                  without  limitation,  any  authorisation,  consent,  approval,
                  resolution,   licence,  exemption,   filing,  notarisation  or
                  registration;

         (d)      a "company"  includes any company,  corporation  or other body
                  corporate, wherever and however incorporated or established;

         (e)      "this  Deed"  or  any  other  agreement  or  instrument  is  a
                  reference to this Deed or other  agreement or instrument as it
                  may have been amended, supplemented,  replaced or novated from
                  time to time;

         (f)      "indebtedness"  includes any obligation  (whether  incurred as
                  principal or as surety) for the payment or repayment of money,
                  whether present or future, actual or contingent;

         (g)      "law" includes  common or customary law,  principles of equity
                  and any  constitution,  code of practice,  decree,  judgement,
                  decision, legislation, order, ordinance,  regulation, bye-law,
                  statute,   treaty  or  other   legislative   measure   in  any
                  jurisdiction or any present or future  directive,  regulation,
                  guideline, request, rule or requirement (in each case, whether
                  or not having the force of law but, if not having the force of
                  law,  the  compliance  with  which is in  accordance  with the
                  general practice of persons to whom the directive, regulation,
                  guideline,  request, rule or requirement is intended to apply)
                  of any governmental,  intergovernmental or supranational body,
                  agency,  department or  regulatory,  self-regulatory  or other
                  authority or organisation;

         (h)      a "person"  includes any person,  firm,  company,  government,
                  state or agency of a state, any local or municipal  authority,
                  trust,  or any  association  or  partnership  (whether  or not
                  having  separate  legal  personality)  of two or  more  of the
                  foregoing;

         (i)      "qualified  person" means a person who,  under the  Insolvency
                  Act, is  qualified to act as a receiver of the property of any
                  company   with   respect  to  which  he  is  appointed  or  an
                  administrative receiver of any such company;

         (j)      a  "regulation"   includes  any  regulation,   rule,  official
                  directive,  request or  guideline  (whether  or not having the
                  force  of  law)  of  any  governmental,  intergovernmental  or
                  supranational   body,   agency,   department  or   regulatory,
                  self-regulatory or other authority or organisation;

         (k)      "rights"  includes  all  rights,  title,   benefits,   powers,
                  privileges,   interests,  claims,  authorities,   discretions,
                  remedies,    liberties,    easements,    quasi-easements   and
                  appurtenances  (in each case, of every kind,  present,  future
                  and contingent); and

<PAGE>
                                       10

         (l)      "security"  or  "security  interest"  includes  any  mortgage,
                  charge,  pledge, lien, security  assignment,  hypothecation or
                  trust  arrangement  for the purpose of providing  security and
                  any other  encumbrance or security interest of any kind having
                  the  effect  of  securing   any   obligation   of  any  person
                  (including,  without  limitation,  the  deposit  of  moneys or
                  property  with a person with the  intention of affording  such
                  person a right of set-off or lien) and any other  agreement or
                  any other type of arrangement having a similar effect.

1.3      Interpretation of this Deed

(a)      Words importing the singular shall include the plural and vice versa.

(b)      Unless a  contrary  indication  appears,  a  reference  to any party or
         person  shall  be  construed  as  including  its  and  any   subsequent
         successors in title,  permitted  transferees and permitted assigns,  in
         each case in accordance with their respective interests.

(c)      Section,  clause and Schedule  headings are for ease of reference  only
         and shall be ignored in construing this Deed.

(d)      References  to  any  provision  of  any  law  or  regulation  are to be
         construed as referring  to that  provision as it may have been,  or may
         from time to time be,  amended or  re-enacted,  and as referring to all
         bye-laws,  instruments,  orders and regulations for the time being made
         under or deriving validity from that provision.

(e)      An  Enforcement  Event is  "continuing"  if it has not been remedied or
         waived.

1.4      Third Party Rights

         The  Parties  do not  intend  that  any  term of this  Deed  should  be
         enforceable  by virtue of the Contracts  (Rights of Third  Parties) Act
         1999, by any person who is not a party to this Deed.

1.5      Deed of Priority and Existing Debenture

         Notwithstanding  any other provision of this Deed, this Deed is entered
         into subject to the provisions of the Deed of Priority and the Existing
         Debenture,  and the  obligations  of the  Company  under  this Deed are
         subject  to  those   agreements  and  the  Venture  Finance   Factoring
         Arrangements.

<PAGE>
                                       11

                                    SECTION 2
                       CREATION AND PERFECTION OF SECURITY

2.       CREATION OF FIXED SECURITY

         As continuing  security for the full and punctual payment,  performance
         and discharge of all Secured Liabilities,  the Company, with full title
         guarantee  and free from any other  security  interest  other  than any
         Permitted  Security  Interest,  creates the security  interests set out
         below in favour of Laurus.

2.1      Real Property

(a)      It charges all the Mortgaged Property, by way of first legal mortgage.

(b)      It charges all Real Property now vested in it and not effectively
         mortgaged by clause 2.1(a) and all Real Property acquired by it after
         the date of this Deed, by way of first fixed equitable charge.

2.2      Other fixed charge(s)

         It charges by way of first  fixed  charge all its rights (to the extent
         they are not the subject of a mortgage or an  assignment  under  clause
         2.1 (Real Property), under or in respect of:

         (a)      its Tangible Movable Property;

         (b)      its Insurances;

         (c)      its Charged Investments;

         (d)      its Intellectual Property Rights;

         (e)      each of the Relevant Documents to which it is a party or under
                  or in respect of which it has any rights;

         (f)      all bills of exchange and other negotiable instruments held by
                  it;

         (g)      all present and future  authorisations  and  consents  held in
                  connection  with its  business  of or the use of any  Security
                  Asset (but  excluding  any such  licence  which  requires  the
                  consent of the licensor for the creation of security over this
                  Deed and in  respect of which  such  consent  has for the time
                  being not been obtained), and the right to recover and receive
                  all  compensation  which  might be payable to it in respect of
                  such licences;

         (h)      its goodwill;

         (i)      its uncalled capital; and

         (j)      all  claims,  causes and  rights of action  and all  judgments
                  arising under or in connection with any of the foregoing.

<PAGE>
                                       12

3.       FLOATING CHARGE

3.1      Creation of floating charge

         As continuing  security for the full and punctual payment,  performance
         and discharge of all Secured Liabilities,  the Company, with full title
         guarantee and, subject to any Permitted  Security  Interest,  free from
         any  other  security  interest,  charges  in favour of Laurus by way of
         first floating charge,  its Receivables,  its Bank Accounts and all its
         present and future assets, property, business, undertaking and uncalled
         capital,  and  all  rights  and  interests  in any  of  the  foregoing,
         including all the Security Assets  expressed to be mortgaged or charged
         by clause 2 (Creation of Fixed Security).

3.2      Ranking

         The floating  charge  created by the Company in clause 3.1 (Creation of
         floating  charge) shall rank behind all the fixed charges and mortgages
         created  by clause 2  (Creation  of Fixed  Security)  but shall rank in
         priority  to any other  security  created  by it after the date of this
         Deed,  except for any  Permitted  Security  Interest  and any  security
         ranking in priority in accordance with clause 15.7 (Borrow money).

3.3      Crystallisation by notice from Laurus

         Laurus may, at any time after any Enforcement Event has occurred and is
         continuing or if Laurus reasonably considers any of the Security Assets
         to be in danger of being  seized  or sold  under any form of  distress,
         attachment,  execution  or other legal  process or to be  otherwise  in
         jeopardy,  convert the floating  charge created by clause 3.1 (Creation
         of floating  charge) into a fixed charge on all or such of the Security
         Assets of the  Company  as shall be  specified  (whether  generally  or
         specifically) by notice to the Company.

3.4      Automatic crystallisation

         In the event that,  without the prior  written  consent of Laurus (such
         consent not to be unreasonably withheld or delayed):

         (a)      the  Company  creates  or  permits  to  subsist  any  security
                  interest,  other than a Permitted Security  Interest,  over or
                  with respect to any of the Security Assets,  or attempts to do
                  so; or

         (b)      any  person   levies  or  attempts   to  levy  any   distress,
                  attachment,  execution or other legal  process  against any of
                  the Security Assets; or

         (c)      an administrator is appointed in respect of the Company,

         the floating  charge  created by this Deed shall,  with effect from the
         instant  before such event occurs,  automatically  convert into a fixed
         charge over the Security  Assets which are the subject of such security
         interest  or  process  or,  in  the  case  of  the  appointment  of  an
         administrator, over all of the Security Assets.

3.5      Qualifying floating charge

<PAGE>
                                       13

         Paragraph  14 of  Schedule  B1 to the  Insolvency  Act  applies  to the
         floating charge created by this Deed.

4.       PERFECTION OF SECURITY

         The Company  gives to Laurus the  undertakings  in this clause 4, which
         shall  remain in force from the date of this Deed for so long as any of
         the Secured Liabilities is outstanding or any security interest created
         under this Deed has not been released or discharged.

4.1      Existing Real Property

(a)      Documents of title:  It shall deposit with Laurus,  as security for the
         Secured  Liabilities,  all deeds and documents evidencing its title and
         interest  in the  Mortgaged  Property  and all its other Real  Property
         promptly upon execution of this Deed or, if later,  promptly upon those
         deeds or documents first being received by it or held to its order.

(b)      H.M. Land  Registry:  It and Laurus shall apply  forthwith to H.M. Land
         Registry for each of the following to be entered on the register of the
         title to the  Mortgaged  Property  and all of its other  Real  Property
         registered under the Land Registration Act 2002:

         (i)      Fixed charge: A notice in the following terms:

                  "No disposition of the registered  estate by the proprietor of
                  the  registered  estate or by the proprietor of any registered
                  charge is to be registered without a written consent signed by
                  the  proprietor  for the time being of the  charge  dated [the
                  date of this  Deed] in  favour  of Laurus  Master  Fund,  Ltd.
                  referred to in the charges register or, if appropriate, signed
                  on such proprietor's behalf by its secretary";

         (ii)     Floating  charge:  A notice of the floating  charge created by
                  this Deed; and

         (iii)    Further  advances:  A notice of the obligation to make further
                  advances.

(c)      Leasehold  property:  It shall  notify the  landlord  of any  leasehold
         property  having a  remaining  term of not less  than  three  years and
         forming part of the Security Assets,  and use reasonable  endeavours to
         obtain written confirmation, in form reasonably satisfactory to Laurus,
         from  each  landlord  that  it  consents  to the  security  created  or
         evidenced by this Deed.

4.2      Future Real Property

(a)      Notification: It shall promptly notify Laurus:

         (i)      of any  contract for the  acquisition  by it or its nominee of
                  any estate or interest in any Real Property  immediately  upon
                  execution  of  this  Deed,  or,  if  later,  immediately  upon
                  entering into any such contract in future; and

<PAGE>
                                       14

         (ii)     upon  becoming  entitled  to acquire  legal  title to any such
                  estate or  interest  and take such steps as Laurus  reasonably
                  may require to vest such title in the Company or, following an
                  Enforcement Event that is continuing,  in Laurus or such other
                  person Laurus may direct.

(b)      Security documents: It shall execute and deliver, or procure that there
         is executed,  and delivered to Laurus,  one of the following in respect
         of such estate or interest:

         (i)      if such estate or interest relates to Real Property in England
                  or  Wales,  a first  legal  mortgage  in the  form  reasonably
                  required by Laurus  which will be  supplemental  to and on the
                  terms and conditions of this Deed; and

         (ii)     if such estate or interest  relates to Real  Property  outside
                  England  and  Wales,  an  instrument  appropriate  to create a
                  similar   security   (to  the   extent   available)   in  that
                  jurisdiction  in favour of Laurus  containing  such  terms and
                  conditions as Laurus may reasonably require,

         in each  case to  secure  the  payment  and  discharge  of the  Secured
         Liabilities.

(c)      Registration:  If title to such estate or interest is (either before or
         after its  acquisition)  registered or required to be registered  under
         the Land Registration Act 2002, it shall:

         (i)      promptly  notify  Laurus of the title  number as soon as it is
                  available; and

         (ii)     when applying to H.M. Land Registry for  registration  request
                  H.M.  Land  Registry  to  enter a  notice  of this  Deed,  the
                  restriction  referred to in clause 4.1(b) (H.M. Land Registry)
                  and the  notice of the  obligation  to make  further  advances
                  referred to in clause  4.1(b)(iii) on the register in the form
                  reasonably required by Laurus.

(d)      Security  trust:  It shall,  pending  deposit of deeds and documents in
         accordance with clause 4.1(a) (Documents of title) and execution of any
         security documents  referred to in clause 4.2(b) (Security  documents),
         hold all its estate and interest in the  relevant  Real  Property  upon
         trust for Laurus, as security for the Secured Liabilities.

4.3      Tangible Moveable Property

(a)      Lessor waivers:  It shall (if any Tangible Moveable Property,  which is
         subject to a fixed  charge  under this  Deed,  is located on  leasehold
         premises) use reasonable endeavours to obtain written confirmation from
         the lessor of those  premises that it waives  absolutely  all rights it
         may  have now or at any time in the  future  over any of that  Tangible
         Moveable Property.

4.4      Insurances

(a)      Insurances:  It shall use  reasonable  endeavours  to procure  that the
         fixed charge created by this Deed is noted on all  Insurances  effected
         and maintained in its name.

(b)      Documents: It shall promptly supply to Laurus on request copies of each
         receipt  issued  to it for all  premiums  payable  by it  under,  and a
         certified copy of, each policy relating to Insurances in its name or in
         which it has an interest.

<PAGE>
                                       15

4.5      Relevant Documents

(a)      Notice to  contract  counterparties:  It shall if  requested  by Laurus
         promptly give notice in or  substantially in the form set out in Part 1
         of  Schedule 4 (Notice  of  Assignment  of  Relevant  Documents),  duly
         completed,  to any  counterparty  to a Relevant  Document  specified by
         Laurus provided that (i) no such notice shall be given to Stiefel until
         Stiefel's consent to the assignment of the Stiefel Contracts  hereunder
         has been obtained  (which  consent the Company shall use all reasonable
         endeavours  to obtain)  and (ii) no such  notice  shall be given to any
         counterparty  to a contract at present  subject to the Venture  Finance
         Factoring  Arrangements  for so long as the Venture  Finance  Factoring
         Arrangements subsist; and

(b)      Acknowledgements  and Direct  Agreements:  It shall use all  reasonable
         endeavours  to  procure  that  each of the  addressees  of that  notice
         promptly acknowledges that notice in writing to Laurus by executing and
         delivering to Laurus an  acknowledgement  in the form set out in Part 2
         of Schedule 4 (Notice of Assignment of Relevant  Documents) (or in such
         other similar form as Laurus may in any particular  case require) so as
         to complete a Direct Agreement.

(c)      Notwithstanding  any other  provision of this Deed, if a provision of a
         Relevant Document, or a document that this Deed requires or that Laurus
         requests to become a Relevant  Document  prohibits  the exercise of, or
         limits in any way (or  purports to do so),  the right of the Company to
         transfer its rights or obligations  under or concerning  that document,
         nothing in this Deed  obliges the Company to give notice  described  in
         paragraph  (a),  or to procure the  execution  of either or both of the
         acknowledgement  described in paragraph (b) or a Direct Agrement, until
         the relevant  counterparty  has consented to that  document  becoming a
         Relevant Document.  The Company must use reasonable endeavors to obtain
         that consent.

4.6      Charged Investments

(a)      Further  Charged  Investments:  The Company  shall notify Laurus of its
         intention  to  acquire  any  Investments,   and  immediately  upon  its
         acquiring the same, they shall become Charged Investments.  Within five
         Business  Days of the Company's  acquisition  of such  Investments,  it
         shall deliver to Laurus or such agent or custodian as it may specify:

         (i)      all  certificates,  documents  of title and other  documentary
                  evidence of ownership in relation to the acquired Investments;

         (ii)     transfers of the such  Investments  duly executed by it or its
                  nominee  with the name of the  transferee  left  blank  or, if
                  Laurus so requires,  in favour of Laurus (or Laurus'  nominee)
                  and duly stamped; and

         (iii)    all other  documents  Laurus may require to enable  Laurus (or
                  Laurus'  nominee) or any  purchaser  to be  registered  as the
                  owner of, or  otherwise to obtain legal title to, the acquired
                  Investments.

(b)      Notification  and  registration:  Within  five  business  days  of  the
         acquisition of any Further Charged Investments it shall:

<PAGE>
                                       16

         (i)      enter in the register kept in  accordance  with section 407 of
                  the  Companies  Act 1985  details  of the  security  interests
                  created under this Deed;

         (ii)     notify  any   nominee  or   custodian   holding   any  Charged
                  Investments  on its  behalf  that  they are  held as  security
                  pursuant to provisions of this Deed; and

         (iii)    notify any subsequent chargee or person acquiring any interest
                  whatsoever in the Charged  Investments of the security created
                  pursuant to this Deed.

(c)      Derived  Investments:  It  shall  also,  in  relation  to  any  Derived
         Investments,  perform each of the obligations set out in paragraphs (i)
         to (iii) of clause 4.6(a) (Further Charged  Investments) and paragraphs
         (i) to (iii) of clause 4.6(b)  (Notification and  registration)  within
         five  Business  Days of the accrual,  offer,  issue or payment or other
         receipt by it, of any Derived Investments.

4.7      Further assurance

         In addition and without  prejudice to any other provision of this Deed,
         it shall,  at the  reasonable  request of Laurus or any Receiver but at
         its own cost,  promptly take whatever action Laurus or any Receiver may
         from time to time reasonably require:

         (a)      to ensure that the security intended to be constituted by this
                  Deed is and remains valid, legally binding and enforceable;

         (b)      to  perfect,   preserve  or  protect  the  security  interests
                  constituted  or  intended  to be  conferred  on  Laurus  by or
                  pursuant  to  this  Deed  or the  priority  of  such  security
                  interests; and

         (c)      to facilitate the exercise of any and all of the rights vested
                  or  intended  to be vested in  Laurus  or any  Receiver  by or
                  pursuant to this Deed and to facilitate the realisation of the
                  Security Assets,

         and for such purposes it shall in particular,  but without  limitation,
         execute all such  documents,  transfers,  conveyances,  assignments and
         assurances  in  respect  of the  Security  Assets,  and  give  all such
         notices, orders,  instructions and directions as Laurus or any Receiver
         may reasonably consider necessary. The obligations of the Company under
         this clause 4.7 shall be in addition to and not in substitution for the
         covenants for further  assurance  deemed to be included in this Deed by
         virtue of the Law of Property (Miscellaneous Provisions) Act 1994.

4.8      Specific security

         Without prejudice to the generality of clause 4.7 (Further  assurance),
         it shall, at its own cost,  promptly execute and deliver to Laurus,  in
         such form as Laurus may  reasonably  require,  such other security over
         such of its assets and rights as shall be reasonably required by Laurus
         (whether  generally  or  specifically,  and  whether for the purpose of
         obtaining  legal  title to the  relevant  assets  or  rights,  creating
         security which is effective  under the laws of a foreign  jurisdiction,
         or otherwise).

5.       NATURE AND PROTECTION OF SECURITY; INSOLVENCY ACT 2000

<PAGE>
                                       17

5.1      Continuing security

         The security  created by this Deed shall be a  continuing  security and
         will  extend to the  ultimate  balance of all the  Secured  Liabilities
         regardless  of any  intermediate  discharge  or  payment in whole or in
         part.

5.2      Additional security

         The security  created by this Deed and the rights given to Laurus under
         this  Deed  shall be in  addition  to and shall  not  prejudice,  or be
         prejudiced by, any other security or guarantee or any other right which
         Laurus has respect of or in  connection  with any or all of the Secured
         Liabilities.  All such  rights  may be  exercised  from time to time as
         often as Laurus may deem expedient.

5.3      Immediate recourse

         Laurus need not, before  exercising any of the rights,  title,  benefit
         and interest  conferred  upon it by this Deed or by law (i) take action
         or obtain  judgement  against  the  Company or any other  person in any
         court,  (ii) make or file any claim or proof in the  liquidation of the
         Company or any other  person or (iii)  enforce  or seek to enforce  the
         recovery  of the moneys and  liabilities  hereby  secured or enforce or
         seek to enforce any other security interest or guarantee.

5.4      Exercise of rights

(a)      Each of the  mortgages  and  charges  on the  terms set out in clause 2
         (Creation of Fixed  Security)  constitutes and effects an immediate and
         full mortgage charge of the Security Assets and shall be effective, and
         the security  intended to be created by this Deed shall be constituted,
         immediately upon its execution.

(b)      Notwithstanding  but without  prejudice to  paragraph  (a) above Laurus
         agrees that, subject to paragraph (c) below, the Company shall continue
         to be entitled to receive  payments  and to exercise all of the rights,
         powers,  discretions,  claims and  remedies  which  would (but for this
         Deed) be vested in the  Company  under and in respect  of the  Security
         Assets unless and except to the extent that either:

         (i)      any such  exercise is prohibited  by or would  contravene,  or
                  result  in a  contravention  of,  or would  conflict  with the
                  rights of Laurus under, any provision of any other document to
                  which both  Laurus and the  Company are parties or amongst the
                  parties; or

         (ii)     Laurus  requires  otherwise  following  the  occurrence  of an
                  Enforcement Event that is continuing.

(c)      Nothing in this clause 5.4 limits or affects the rights of Laurus under
         clause 14 (Enforcement Events) to clause 19 (Application of Enforcement
         Proceeds) (inclusive).

5.5      Performance of the Company's obligations

<PAGE>
                                       18

(a)      The  Company  shall  remain at all times bound by and liable to perform
         all of the  obligations  and  liabilities  assumed  by it  under  or in
         respect of the  Security  Assets to the same extent as if the  security
         Laurus created pursuant to this Deed had not been created.

(b)      The exercise by Laurus or any Delegate or any  Receiver,  or any of its
         or their agents or nominees, of any of the rights, benefits,  interests
         or claims  created  pursuant to this Deed shall not release the Company
         from any of its obligations towards Laurus.

(c)      Laurus shall not by reason of this Deed or anything arising out of this
         Deed or anything done or in connection  with it, have any obligation or
         liability whatsoever to any person (including the Company) to:

         (i)      perform any of the obligations assumed by the Company under or
                  in respect of the Secured Liabilities or the Security Assets;

         (ii)     enforce  payment  or  performance  of any  obligations  of any
                  person or party to any of the Secured Liabilities; or

         (iii)    make  any  enquiry  as to the  nature  or  sufficiency  of any
                  payment received by it under or in respect of this Deed or any
                  of the Security Assets or to make any claim or take any action
                  to  collect  any  moneys  or to  exercise  any of  the  rights
                  assigned to Laurus to which Laurus may be at any time entitled
                  pursuant  to this Deed,  or to make any  payment in respect of
                  the Security Assets.

(d)      The provisions of this clause 5.5 shall apply notwithstanding any other
         provision of this Deed or any contrary or inconsistent provision of any
         other agreement or document.

5.6      Waiver of defences

         Without  prejudice  to the other  provisions  of this clause 5, neither
         this Deed nor the security created under this Deed nor the liability of
         the Company for the Secured Liabilities shall be prejudiced or affected
         by:

         (a)      any  variation or amendment  of, or waiver or release  granted
                  under  or in  connection  with,  any  other  security  or  any
                  guarantee or indemnity or other document; or

         (b)      any  time  or  waiver  granted,  or any  other  indulgence  or
                  concession  granted,  by  Laurus to the  Company  or any other
                  person; or

         (c)      the  taking,  holding,  failure  to  take  or  hold,  varying,
                  realisation,  non-enforcement,  non-perfection  or  release by
                  Laurus  or any  other  person  of any  other  security  or any
                  guarantee or indemnity or other document; or

         (d)      the insolvency, administration, reorganisation, liquidation or
                  dissolution of, or any analogous  proceeding in respect of the
                  Company or any other person; or

         (e)      any change in the constitution of the Company; or

<PAGE>
                                       19

         (f)      any  amalgamation,   merger  or  reconstruction  that  may  be
                  effected  by  Laurus  with any  other  person,  including  any
                  reconstruction  by Laurus  involving  the  formation  of a new
                  company  and the  transfer of all or any of its assets to that
                  company,  or any sale or  transfer of the whole or any part of
                  the undertaking and assets of Laurus to any other person; or

         (g)      the existence of any claim, set-off or other right the Company
                  may have at any time against Laurus or any other person; or

         (h)      the making or absence of any demand for  payment or  discharge
                  of any Secured Liabilities on the Company or any other person,
                  whether by Laurus or any other person; or

         (i)      any arrangement or compromise  entered into by Laurus with the
                  Company, or any other person; or

         (j)      any other  thing done or omitted  or  neglected  to be done by
                  Laurus or any other person or any other dealing,  fact, matter
                  or thing  which,  but for this  provision,  might  operate  to
                  prejudice  or affect  any of the  security  interests  created
                  under  this  Deed  or the  liability  of the  Company  for the
                  Secured Liabilities.

5.7      New account

         At any time after:

         (a)      Laurus receives, or is deemed to be affected by notice (either
                  actual or constructive) of any subsequent security interest or
                  any disposition  affecting any Security Asset, or part thereof
                  or interest therein; or

         (b)      the   commencement   of   the   insolvency,    administration,
                  reorganisation,   liquidation  or   dissolution   of,  or  any
                  analogous proceeding in respect of, the Company,

         Laurus may open a new  account in the name of the  Company  (whether or
         not it permits any existing  account to  continue).  If Laurus does not
         open such a new account,  it shall nevertheless be treated as if it had
         done so at the time when the notice was  received or was deemed to have
         been received or, as the case may be, the  insolvency,  administration,
         reorganisation, liquidation, dissolution or other proceeding commenced.
         As from  that  time,  all  payments  made by the  Company  to Laurus or
         received by Laurus for the  account  the  Company  shall be credited or
         treated as having been credited to the new account and will not operate
         to reduce the amount secured by this Deed at any time.

5.8      Non-competition

(a)      Until  all  the  Secured  Liabilities  have  been  unconditionally  and
         irrevocably  paid and  discharged in full, the Company shall not (other
         than with the prior  written  consent of Laurus (such consent not to be
         unreasonably  withheld or delayed)  and  pursuant to and in  accordance
         with the Security Documents):

         (i)      claim, rank, prove or vote as a creditor of any other party to
                  the Security Documents or its estate; or

<PAGE>
                                       20

         (ii)     receive,   claim  or  have  the   benefit   of  any   payment,
                  distribution or security from or on account of any such party,
                  or   exercise   any  right  of   combination,   counter-claim,
                  "flawed-asset" arrangement or set-off as against such party.

(b)      The Company will hold on trust for, and  forthwith  pay or transfer to,
         Laurus any  payment or benefit of  security  received by it contrary to
         the above. If the Company exercises any right of set-off,  counterclaim
         or  combination  contrary to the above,  it will promptly pay an amount
         equal to the amount set-off, counterclaimed or combined to Laurus.

5.9      Further advances

         The  security  created  by this  Deed is  intended  to  secure  further
         advances.  Subject to the terms of the Security  Documents Laurus shall
         perform its  obligations  under the Security  Documents  (including any
         obligation to make available further advances).

5.10     Insolvency Act 2000

         Notwithstanding  the other  provisions  of this  Deed,  if the  Company
         becomes an Eligible Company, the obtaining of a moratorium, or anything
         done with a view to obtaining a moratorium,  in relation to a voluntary
         arrangement  under the Insolvency  Act for the Company,  will by itself
         not:

         (a)      cause any floating  charge  granted by the Company  under this
                  Deed to crystallise, nor

         (b)      cause  restrictions  in this Deed  which  would not  otherwise
                  apply  to be  imposed  on  the  disposal  of  property  by the
                  Company, nor

         (c)      be a ground for the appointment of a Receiver of the Company.

<PAGE>
                                       21

                                    SECTION 3
                                    COVENANTS

6.       GENERAL COVENANTS

         The  undertakings  in this  clause 6 are given to Laurus by the Company
         and will  remain in force from the date of this Deed for so long as any
         of the Secured  Liabilities  is  outstanding  or any security  interest
         created under this Deed has not been released or discharged.

6.1      Authorisations

         It shall promptly:

         (a)      obtain,  comply with and do all that is  necessary to maintain
                  in full force and effect; and

         (b)      supply certified copies to Laurus of,

         any authorisation  required under any law or regulation of to enable it
         to create security and perform its  obligations  under this Deed and to
         ensure the  legality,  validity,  enforceability  or  admissibility  in
         evidence of this Deed  subject to any  qualifications  as to matters of
         law contained in any legal opinion issued to Laurus in connection  with
         this Deed and the security created under this Deed.

6.2      Compliance with laws

         It shall comply in all respects with all laws and  regulations to which
         it may be subject,  if failure so to comply would materially impair the
         security  created  under or  evidenced  by this Deed or its  ability to
         perform its  obligations  under this Deed or would impose any liability
         or obligation on Laurus.

6.3      Negative pledge

(a)      Creation  of  security  interests:  It shall  not  create  or permit to
         subsist any security over any of the Security Assets, without the prior
         written consent of Laurus (such consent not to be unreasonably withheld
         or delayed).

(b)      Transactions in the nature of security:  It shall not without the prior
         written consent of Laurus (such consent not to be unreasonably withheld
         or delayed):

         (i)      sell,  transfer or  otherwise  dispose of any of the  Security
                  Assets or its other assets on terms whereby they are or may be
                  leased to or re-acquired by it,

         (ii)     sell,  transfer or otherwise dispose of any of its receivables
                  on recourse terms;

         (iii)    other than in relation to bank accounts  operated by it in the
                  ordinary  course of its business,  enter into any  arrangement
                  under which  money or the  benefit of a bank or other  account
                  may be applied,  set-off or made subject to a  combination  of
                  accounts; or

<PAGE>
                                       22

         (iv)     enter into any other preferential arrangement having a similar
                  effect in  circumstances  where the arrangement or transaction
                  is entered  into  primarily  as a method of raising  Financial
                  Indebtedness or of financing the acquisition of an asset.

(c)      Exceptions:  Paragraphs  (a) and (b) above do not apply to the security
         created by or pursuant to this Deed or:

         (i)      any netting or set-off  arrangement entered into by any member
                  of  the  Group  in  the   ordinary   course  of  its   banking
                  arrangements  for the  purpose  of  netting  debit and  credit
                  balances;

         (ii)     any lien arising by operation  of law and in  connection  with
                  any trade  transaction  entered into in the ordinary course of
                  business;

         (iii)    the Existing Debenture;

         (iv)     any other security interests arising under the Venture Finance
                  Factoring Arrangements;

         (v)      any  lien  by  operation  of law or by a  contract  having  an
                  equivalent  effect  and in the  ordinary  course  of  business
                  either  securing  amounts not more than 30 days overdue or, if
                  more  than 30  days,  are  being  contested  in good  faith by
                  appropriate means;

         (vi)     pledges over and assignments of documents of title,  insurance
                  policies and sale  contracts in relation to  commercial  goods
                  created or made in the  ordinary  course of business to secure
                  the  purchase  price of those  goods or loans to  finance  the
                  purchase price of those goods;

         (vii)    any  security   interest   arising  out  of  title   retention
                  provisions in a supplier's  conditions of supply in respect of
                  goods acquired by it in the ordinary course of business;

         (viii)   any  security  interest  over any asset which is  developed or
                  improved  by it after  the  date of this  Deed but only if the
                  security  interest is to secure  financing for the development
                  or improvement concerned;

         (ix)     any security  interest  securing taxes and other  governmental
                  levies and arising by statute but only if the taxes and levies
                  are not more than 60 days  overdue  or, if  longer,  are being
                  contested in good faith by appropriate measures and sufficient
                  reserves in cash or other liquid  assets are  available to pay
                  the amount of those taxes or levies; or

         (x)      any security  interest  created over one or more of the rights
                  to  receive,  or  the  proceeds  of,  refunds  or  returns  of
                  insurance  premiums where such security interest is granted in
                  favour of a party  providing  finance for the sole  purpose of
                  funding insurance premiums.

6.4      Disposals of assets

(a)      Restrictions:  It shall not enter into a single transaction or a series
         of  transactions  (whether  related or not) and  whether  voluntary  or
         involuntary  to sell,  transfer,  assign,  lease,  licence or otherwise
         dispose  of any  interest  in any of the  Security  Assets or any other
         asset.

<PAGE>
                                       23

(b)      Exceptions:  Paragraph (a) above does not apply to any sale,  transfer,
         assignment,  lease,  licence or other disposal prior to any Enforcement
         Event:

         (i)      which is made, in the ordinary  course of trading,  in respect
                  of assets  which are not  expressed to be subject to any fixed
                  charge created or evidenced by or pursuant to this Deed;

         (ii)     which is permitted under clause 6.3 (Negative pledge);

                  (x)      disposals of assets in exchange for (or  disposals of
                           assets for cash and the application within six months
                           of the  cash  in the  acquisition  of)  other  assets
                           comparable or superior as to type, value and quality;
                           or

                  (y)      disposals  of obsolete  assets no longer  required in
                           its business;

         (iii)    where the net proceeds of that  disposal  are applied  against
                  the Secured Liabilities;

         (iv)     disposals  of cash raised or  borrowed  for the  purposes  for
                  which it was raised or borrowed; or

         (v)      (while the  Venture  Finance  Factoring  Agreement  remains in
                  effect)  disposals  of debts  pursuant to the Venture  Finance
                  Factoring Agreement.

6.5      Mergers

         It shall not, without the prior written consent of Laurus (such consent
         not  to  be   unreasonably   withheld   or   delayed).enter   into  any
         amalgamation, demerger, merger or corporate reconstruction.

6.6      Conduct of business

(a)      Proper conduct: It shall carry on and conduct its affairs and business,
         in a proper and efficient manner.

(b)      Change of business: It shall procure that no substantial change is made
         to the general  nature of the business of the Company from that carried
         on at the date of this Deed.

(c)      Payments:  It shall  punctually  pay, as they become due, all debts and
         liabilities  which by law would have  priority  over all or any part of
         the Secured Liabilities.

(d)      Litigation:   It  shall  promptly  notify  Laurus  of  any  litigation,
         arbitration  or  administrative   proceedings  commenced,   pending  or
         threatened against it and any other event which could reasonably have a
         material adverse effect on it.

(e)      Venture  finance:  It shall not amend or agree to any  amendment of the
         Venture Finance Factoring Agreement without the consent of Laurus (such
         consent not to be unreasonably withheld or delayed).

6.7      Security Assets

<PAGE>
                                       24

(a)      Good repair:  It shall keep or cause to be kept in good and substantial
         repair and good working order all the material Security Assets.

(b)      Inspection:  It shall  ensure  that any  authorised  representative  of
         Laurus is able at all  reasonable  times to view the state of repair of
         the Security Assets.

(c)      Outgoings:  It shall  punctually  pay, as they  become  due,  all rent,
         rates, taxes, assessments, impositions and outgoings payable in respect
         of the  Security  Assets,  and  produce to Laurus  within a  reasonable
         period following a demand the related receipts.

(d)      Fixtures:  It  shall  not  fix or  permit  the  affixing  of any of the
         Security  Assets to any Real  Property  which is not  itself a Security
         Asset.

(e)      Compliance:  It shall comply in all material respects with the terms of
         all  material   obligations,   covenants,   authorisations   and  other
         conditions  to which the Security  Assets and their usage and enjoyment
         are subject.

(f)      Other  impairment or prejudice:  It shall not do, or suffer to be done,
         anything which could materially depreciate,  impair or prejudice any of
         the security created or the position of Laurus under this Deed.

6.8      Accounts and other information

(a)      Accounts, records and inspection: It shall keep such accounting records
         and  prepare  such  accounting  statements  as are  required by law and
         permit  representatives  of  Laurus  at  all  reasonable  times  and on
         reasonable  notice  to  inspect  and take  copies of such  records  and
         statements.

(b)      Annual financial statements: It shall, as soon as they become available
         and in any event within 5 months after the end of each of its financial
         years,  deliver to Laurus its  audited  accounts  and,  if  applicable,
         audited consolidated accounts of those companies and other undertakings
         for  which it  produces,  or is  required  by law to  produce,  audited
         consolidated  accounts,  as at the end of and for that period,  in each
         case  comprising  accounting  statements  complying  with clause 6.8(a)
         (Accounts,  records and inspections)  above together with the auditors'
         report and the report of its directors relating to that period.

(c)      Shareholders  reports:  At the same time as any  circular,  document or
         other written information  (including any half-yearly or interim report
         on its activities) is sent to its  shareholders,  loan  stockholders or
         debenture  holders (or any class of them) in their capacity as such, it
         shall deliver a copy to Laurus.

(d)      Other  information:  It shall  promptly  deliver  to Laurus  such other
         information  relating to its business,  affairs,  financial  condition,
         assets and  liabilities or those of any of its  Subsidiaries  as Laurus
         may from time to time request to enable  Laurus to verify the existence
         and condition of the Security Assets and monitor the performance by the
         Company with its obligations under this Deed.

7.       COVENANTS RELATING TO REAL PROPERTY

<PAGE>
                                       25

         The  undertakings  in this  clause 7 are given to Laurus by the Company
         and will  remain in force from the date of this Deed for so long as any
         of the Secured  Liabilities  is  outstanding  or any security  interest
         created under this Deed has not been released or  discharged.  All such
         undertakings  are given with the intent  that they apply in relation to
         all Real  Property  now vested in or  acquired  by it after the date of
         this Deed.

7.1      Fabric of buildings

(a)      Repair:  It shall keep or cause to be kept all  buildings  and Fixtures
         from time to time owned by it on or in any of its Real Property and all
         other material plant, machinery, equipment and other assets owned by it
         in or on that Real  Property  in good and  substantial  repair and good
         working order.

(b)      Alterations:  It shall not make or permit any  material  alteration  or
         addition to any of its Real  Property nor commit,  or permit any person
         to  commit,  any waste  upon or injure or in any manner or by any means
         lessen  the value of its Real  Property  or sever  from any of its Real
         Property any Fixtures  except for the purpose of replacing them as soon
         as practicable with others of equal or greater value.

         Nothing in this clause affects any  alteration or addition  required by
         applicable  law,  and,  in the  case of  Leasehold  Property,  anything
         consented, or agreed, to by the relevant landlord.

(c)      Inspection: If it fails to perform any term affecting the Real Property
         or any Fixture, It shall permit any authorised representative of Laurus
         at any  reasonable  time to  enter  any of its  Real  Property  for any
         purpose without becoming liable to account as a mortgagee in possession
         and to inspect  and test any work being  carried  out and,  in case any
         breach of  covenant,  defect,  disrepair  or  unauthorised  alteration,
         improvement  or addition  shall be found,  remedy all such breaches and
         execute all such repairs or removals as Laurus may  reasonably  require
         within 90 days after receiving notice thereof (or immediately,  in case
         of emergency).

7.2      Statutes

(a)      Compliance:   It  shall  comply  in  all  material  respects  with  the
         provisions  of all  statutes  and  the  requirements  of any  competent
         authority affecting any of its Real Property or the use of, or anything
         done on, any of its Real Property.

(b)      Planning   Acts:   It  shall   without   prejudice  to  clause   7.2(a)
         (Compliance):

         (i)      comply  with the  Planning  Acts but not make any  application
                  for,  or  implement,  any  consent  or  permission  under  the
                  Planning  Acts  without  the prior  written  consent of Laurus
                  (such consent not be unreasonably withheld or delayed);

         (ii)     not enter into any agreement under section 106 of the Town and
                  Country Planning Act 1990,  section 33 of the Local Government
                  (Miscellaneous  Provisions)  Act  1982  or  section  38 of the
                  Highways Act 1980, without the prior written consent of Laurus
                  (such consent not be unreasonably withheld or delayed); and

<PAGE>
                                       26

         (iii)    pay and satisfy in  accordance  with its terms any charge that
                  may be imposed under the Planning Acts.

(a)      Consents and approvals: It shall ensure that all necessary consents and
         approvals  under all statutes and the regulations and codes of practice
         of any competent authority affecting any of its Real Property have been
         obtained and are complied with, and produce within a reasonable  period
         following a demand such  evidence as Laurus may  reasonably  require to
         satisfy  itself that such consents and approvals have been obtained and
         are complied with.

7.3      Leasehold property

(a)      Rent and other  obligations:  It shall pay the  rents and  observe  and
         perform all material covenants,  conditions,  agreements or obligations
         on its part to be observed and  performed  contained in any lease under
         which any of its Real Property is held and any licence or consent given
         thereunder,  and use all reasonable  efforts to enforce  observance and
         performance  of the lessor's  covenants  in any such lease,  licence or
         consent.

(b)      Applications  for  licences and  approvals:  It shall not apply for any
         licence, consent or approval under any such lease or any superior lease
         without the prior  written  consent of Laurus  (such  consent not to be
         unreasonably withheld or delayed).

(c)      Forfeiture and re-entry:  It shall promptly give notice to Laurus if it
         receives  notice under  section 146 of the LPA 1925 or any  proceedings
         are commenced for forfeiture of any such lease or any superior lease or
         the lessor or any  superior  lessor  re-enters  or attempts to re-enter
         thereunder,  and at the  request  of  Laurus  but  at the  cost  of the
         Company,  take such steps as Laurus may reasonably  require in relation
         thereto.

7.4      Power of leasing

         It shall not, without the prior written consent of Laurus (such consent
         not to be unreasonably withheld or delayed), exercise any of the powers
         of leasing or agreeing to lease vested in or conferred on mortgagors by
         common law or by statute or create or suffer to be created a tenancy of
         any  description  of any of its Real Property or confer or permit to be
         conferred upon any person any contractual licence, right or interest to
         occupy or use or grant any licence or permission to assign, underlet or
         part with  possession  of the whole or any part of its Real Property or
         agree to do any of the  foregoing[,  and sections 99 and 100 of the LPA
         1925 shall not apply to this Deed.

7.5      Letting Documents

(a)      Surrender:  It shall not accept or agree to accept the surrender of any
         of the Letting  Documents  without the prior written  consent of Laurus
         (such consent not to be unreasonably withheld or delayed).

(b)      Compliance:  It shall  observe  and  perform  all  material  covenants,
         conditions,  agreements or  obligations  on its part to be observed and
         performed and contained in any of the Letting Documents.

<PAGE>
                                       27

(c)      Enforcement  of rental  and other  obligations:  It shall  collect  the
         moneys due under all the Letting Documents and take reasonable steps to
         enforce  (and not waive,  release,  modify,  terminate  or suspend  any
         provision of, or  performance  of, any of) the  covenants,  conditions,
         agreements  and  obligations  contained  in or  imposed  by  any of the
         Letting Documents or any guarantee in respect of the obligations of any
         tenant, lessee or licensee thereunder, and give prompt notice to Laurus
         in writing of any breach or  non-observance  by other  parties  thereto
         together  with  the  Company's  proposals  for  causing  the same to be
         remedied and,  subject to Laurus' written approval (such consent not to
         be unreasonably withheld or delayed) of such proposals,  implement them
         at the Company's cost to the reasonable satisfaction of Laurus.

(d)      Set off and withholdings:  It shall give prompt notice to Laurus if any
         tenant,  lessee or licensee  withholds  rent or exercises  any right of
         set-off  against  sums  payable  under any of the Letting  Documents or
         purports, attempts or threatens to do so.

(e)      Licences  and  consents:  It shall  not give any  licence,  consent  or
         approval under any of the Letting  Documents  without the prior written
         consent of Laurus  (such  consent  not to be  unreasonably  withheld or
         delayed).

(f)      Occupation:  It shall  deliver to Laurus  within 7 days of demand  full
         particulars of all agreements,  leases, tenancies or licences to occupy
         materially affecting any of its Real Property.

7.6      Compulsory acquisition.

         It shall not without the prior written  consent of Laurus (such consent
         not to be unreasonably withheld or delayed) enter into any negotiations
         with any competent authority with regard to the compulsory  acquisition
         of any of its Real Property or consent to the compulsory acquisition of
         any of its Real Property.

7.7      Outgoings

         It shall promptly pay all rates, Taxes,  duties,  charges,  assessments
         and other  outgoings  payable in respect of its Real  Property,  as and
         when they become due and payable.

7.8      Security interests

         It shall comply with:

         (a)      all material obligations, covenants, exceptions, reservations,
                  licences, approvals, consents, stipulations,  restrictions and
                  conditions  relating to any of its Real Property or the use or
                  enjoyment  of any of its Real  Property or imposed  upon it as
                  owner, tenant, occupier or user, as the case may be, of any of
                  its Real Property; and

         (b)      its material obligations under any security having priority to
                  the security created under this Deed.

8.       COVENANTS RELATING TO INSURANCES

<PAGE>
                                       28

         The  undertakings  in this  clause 8 are given to Laurus by the Company
         and will  remain in force from the date of this Deed for so long as any
         of the Secured  Liabilities  is  outstanding  or any security  interest
         created under this Deed has not been released or  discharged.  All such
         undertakings  are given with the intent  that they apply in relation to
         all  Insurance  now vested in or  acquired by it after the date of this
         Deed.

8.1      Scope

         It shall effect and maintain:

         (a)      such  insurance  against  loss or damage to its Real  Property
                  (including all  construction  work in progress) and such other
                  insurances in respect of its assets as are normally maintained
                  by,  and in  respect  of such  risks as are  normally  insured
                  against by, prudent companies  carrying on similar  businesses
                  to that of the Company; and

         (b)      any other  insurances  in  respect of such risks as Laurus may
                  reasonably require,

         with insurers previously approved by Laurus (such approval not to be
         unreasonably withheld or delayed) and, if Laurus so requires (and if
         applicable), in the joint names of Laurus and the Company, in such
         amounts and on such terms as Laurus may reasonably require.

8.2      Policy terms and endorsements

         It shall take  reasonable  steps to ensure that each  insurance  policy
         maintained  pursuant  to clause  8.1  (Scope)  shall  provide  that the
         insurance shall not, as against Laurus,  be rendered void,  voidable or
         unenforceable  by reason of any act,  omission,  breach of  warranty or
         non-disclosure by it or any other person and that:

         (a)      Laurus  will  not in  any  circumstances  be  liable  for  the
                  relevant premiums;

         (b)      all  moneys  payable  by the  insurer  at any  time  after  an
                  Enforcement  Event has occurred and is continuing will be paid
                  to Laurus; and

         (c)      the insurer  will not permit the policy to lapse or attempt to
                  avoid it  without  giving  at least  28  days'  notice  to the
                  Company   (following  receipt  of  which,  the  company  shall
                  promptly notify Laurus of it).

8.3      Non-avoidance

         It  shall  not do or omit to do,  or  permit  or  suffer  to be done or
         omitted to be done,  anything  which might render any of its insurances
         void, voidable or unenforceable.

8.4      Documents

         It shall  deposit with Laurus  within a reasonable  period  following a
         demand a certified  copy of all insurance  policies  effected by it and
         the related premium receipts.

<PAGE>
                                       29

8.5      Application of proceeds

         It shall pay or cause any moneys received from any insurances  (whether
         or not effected pursuant to this clause 8) to be applied towards making
         good the loss or damage in respect of which the  moneys  were  received
         or, if an  Enforcement  Event has occurred and is  continuing,  paid to
         Laurus towards the discharge of the Secured Liabilities which shall for
         such purpose be deemed to be immediately due and payable.

9.       COVENANTS RELATING TO RECEIVABLES AND BANK ACCOUNTS

         The  undertakings  in this  clause 9 are given to Laurus by the Company
         and will remain in force and take effect subject to the Venture Finance
         Factoring Arrangements, the Existing Debenture and the Deed of Priority
         from  the  date  of  this  Deed  for so  long  as  any  of the  Secured
         Liabilities is outstanding or any security  interest created under this
         Deed has not been released or  discharged.  All such  undertakings  are
         given with the intent that they apply in relation to the Bank  Accounts
         and all  Receivables  now vested in or acquired by it after the date of
         this Deed.

9.1      Collection of debts

         It shall,  unless and except to the extent  that  Laurus may  otherwise
         direct,  get in and  realise  (which  shall  not  include  or extend to
         selling or assigning or in any other way factoring or discounting other
         than the Venture Finance Factoring  Arrangements),  all Receivables and
         other income  arising in the  ordinary  course of its business and hold
         the  proceeds  of such  getting in and  realisation  (until  payment in
         accordance with clause 9.2 (Payment into designated account) upon trust
         for Laurus.

9.2      Payment into designated account

         It shall pay the proceeds of such getting in and realisation  into such
         Bank Account or Bank Accounts  (which may or may not be with Laurus) as
         may be specified  in writing by Laurus from time to time  (collectively
         the "Special Accounts").

9.3      Conversion of floating charge to fixed charge

         In the event that Laurus converts the floating charge created by clause
         3.1 into a fixed charge  pursuant to clause 3.3 then  immediately  upon
         such conversion,  except with the prior written consent of Laurus (such
         consent not to be unreasonably withheld or delayed), it shall not do or
         agree or seek to do any of the following:

         (a)      withdraw or require repayment of all or any part of any credit
                  balance on any Bank  Account  and Laurus will not be under any
                  obligation to permit any amount to be withdrawn or paid out of
                  any Bank Account; or

         (b)      except for the security  created under this Deed any Permitted
                  Security  Interest,  create or permit to subsist any  security
                  over all or any of the Bank Accounts or the Receivables; or

<PAGE>
                                       30

         (c)      compromise,  compound, discharge,  postpone, release, set-off,
                  settle  or  subordinate  any of its  Receivables  or waive its
                  rights of action in connection  with them, or do or omit to do
                  anything which may delay or prejudice their full recovery; or

         (d)      sell, assign, transfer, lend or dispose of (or otherwise cause
                  or allow any person to acquire or gain a right to acquire) any
                  right,  title or interest in any of its assets,  or enter into
                  or permit to  subsist  any  arrangement  which  would have the
                  commercial  effect of factoring or discounting  the underlying
                  Receivables  or other income stream  payable in respect of any
                  such asset,

         other than pursuant to the Venture Finance Factoring Arrangements.

9.4      Preservation of security

         Following the occurrence of an  Enforcement  Event which is continuing,
         it  shall,  subject  to the  Venture  Finance  Factoring  Arrangements,
         immediately on demand by Laurus:

         (a)      deliver such  documents  relating to the  Receivables  and the
                  Bank Accounts as Laurus may specify; and

         (b)      execute and deliver a statutory  assignment of all its present
                  and future rights in and to any  Receivables and Bank Accounts
                  as Laurus may specify (either generally or specifically),  and
                  in the form  specified  by Laurus and give such notices to the
                  relevant  debtors  and take all such other steps as Laurus may
                  reasonably require to perfect or protect that assignment.

10.      COVENANTS RELATING TO CHARGED INVESTMENTS

         The  undertakings  in this clause 10 are given to Laurus by the Company
         and will  remain in force from the date of this Deed for so long as any
         of the Secured  Liabilities  is  outstanding  or any security  interest
         created under this Deed has not been released or  discharged.  All such
         undertakings  are given with the intent  that they apply in relation to
         all Charged  Investments now vested in or acquired by it after the date
         of this Deed.

10.1     Calls

         It shall duly and promptly pay, and indemnify Laurus (and its nominees)
         against,  all calls and other  moneys which may lawfully be required to
         be paid  and all  other  liabilities,  costs  and  demands  that may be
         sustained,  incurred or made against Laurus (including its nominees and
         custodians)  in respect of any of the  Charged  Investments;  and if it
         fails to pay any such call or other moneys due within seven days of the
         due date  Laurus  may  elect to make  such  payments  on  behalf of the
         Company.

10.2     Liabilities

         It  shall  remain  liable  to  observe  and  perform  all of the  other
         conditions  and  obligations  assumed  by it in  respect  of any of the
         Charged Investments.  Laurus shall not be required to perform or fulfil
         any obligation of the Company in respect of any Charged Investment.

<PAGE>
                                       31

10.3     Documents and information

         If Laurus  reasonably  requests  (from time to time) the Company shall,
         within a  reasonable  period of  receipt  of that  request,  deliver to
         Laurus a copy of every  circular,  notice,  report,  set of accounts or
         other  document  in  its  possession  concerning  any  of  the  Charged
         Investments.

10.4     Voting rights, dividends, etc.

(a)      Prior  to  Enforcement:  Until  an  Enforcement  Event  occurs  and  is
         continuing:

         (i)      all  voting  and  other   rights   relating   to  the  Charged
                  Investments  may be  exercised  by the  Company,  or  shall be
                  exercised in accordance  with its  direction,  for any purpose
                  not inconsistent with the terms of this Deed; and

         (ii)     the  Company  shall be  entitled  to  receive  and  retain all
                  dividends, interest and other distributions and income paid in
                  respect of the Charged Investments.

(b)      Post  Enforcement:   If  an  Enforcement  Event  has  occurred  and  is
         continuing:

         (i)      Laurus or, as the case may be, the Receiver  shall be entitled
                  (in the name of the  Company and  without  further  consent or
                  authority  from it) to exercise or direct the  exercise of all
                  voting  rights and other rights now or at any time relating to
                  the Charged Investments;

         (ii)     the Company  shall comply or procure the  compliance  with any
                  direction  of Laurus or, as the case may be, the  Receiver  in
                  respect of the  exercise of such  voting and other  rights and
                  shall  deliver to Laurus or, as the case may be, the  Receiver
                  such   forms  of  proxy   or   other   appropriate   forms  of
                  authorisation  to enable  Laurus  or, as the case may be,  the
                  Receiver to exercise such voting and other rights;

         (iii)    Laurus shall be entitled to receive and retain all  dividends,
                  interest and other distributions and income paid in respect of
                  the  Charged  Investments  and apply  them in or  towards  the
                  payment or discharge of the Secured Liabilities;

         (iv)     Laurus or, as the case may be, the Receiver  shall be entitled
                  and  authorised to arrange for any of the Charged  Investments
                  which are in  registered  form to be registered in the name of
                  Laurus or its nominee, if required by Laurus to perfect any of
                  the security created under this Deed; and

         (v)      Laurus or, as the case may be, the Receiver  shall be entitled
                  (under its powers of  realisation)  to  transfer  or cause the
                  transfer of any of the Charged  Investments  to be transferred
                  and registered in the name of any purchaser or transferee; and

         (vi)     the Company shall promptly, at the request of Laurus,  execute
                  and sign all transfers, powers of attorney and other documents
                  and give  such  instructions  and  directions  as  Laurus  may
                  require  for  perfecting  Laurus'  title to any of the Charged
                  Investments  or for  vesting  them in Laurus or any nominee or
                  any purchaser or transferee.

<PAGE>
                                       32

10.5     Exceptions

         This clause 10 shall not apply to those Charged  Investments  which are
         held by the Company by way of temporary investment and which Laurus has
         agreed in writing shall not be subject to this clause 10.

11.      COVENANTS RELATING TO INTELLECTUAL PROPERTY RIGHTS

         The  undertakings  in this clause 11 are given to Laurus by the Company
         and will  remain in force from the date of this Deed for so long as any
         of the Secured  Liabilities  is  outstanding  or any security  interest
         created under this Deed has not been released or  discharged.  All such
         undertakings  are given with the intent  that they apply in relation to
         all Intellectual  Property Rights now vested in or acquired by it after
         the date of this Deed.

11.1     Preservation of Intellectual Property Rights

         It shall do all things  reasonably  necessary to safeguard and maintain
         its Intellectual  Property Rights now or hereafter used in or necessary
         for its business including:

         (a)      maintaining any registerable  Intellectual  Property Rights on
                  the  relevant  register,  including,  but without  limitation,
                  payment of all renewal fees due in respect thereof;

         (b)      observing  all  covenants  and  stipulations  relating to such
                  Intellectual Property Rights;

         (c)      obtaining  all  necessary  registrations  in  relation to such
                  Intellectual Property Rights; and

         (d)      commencing  and  diligently  prosecuting,  and at all material
                  times  consulting with Laurus  regarding the  commencement and
                  prosecution  of, all  proceedings  necessary  to  prevent  any
                  infringement  of any such  Intellectual  Property Rights or to
                  recover damages in respect thereof.

 11.2    User agreements and licences

         It shall not, without the prior written consent of Laurus (such consent
         not to be  unreasonably  withheld  or  delayed),  grant  any  exclusive
         registered user agreement or exclusive  licence in relation to any such
         Intellectual  Property Rights, other than in the ordinary course of its
         business.

11.3     Future Intellectual Property Rights

         It shall promptly  notify Laurus of any existing or future contract for
         it to acquire (by licence or  otherwise),  or  application to register,
         any Intellectual Property Rights.

12.      COVENANTS RELATING TO RELEVANT DOCUMENTS

         The  undertakings  in this clause 12 are given to Laurus by the Company
         and will  remain in force from the date of this Deed for so long as any
         of the Secured  Liabilities  is  outstanding  or any security  interest

<PAGE>
                                       33

         created under this Deed has not been released or  discharged.  All such
         undertakings  are given with the intent  that they apply in relation to
         all rights  under  Relevant  Documents  now vested in or acquired by it
         after the date of this Deed.

12.1     Amendments, termination and suspension

         It shall not amend,  modify,  give  waivers,  terminate  or suspend any
         provision of or performance of any  obligation  under,  or exercise any
         discretion under, any Relevant Document unless:

         (a)      it has the prior  written  consent of Laurus (such consent not
                  to be unreasonably withheld or delayed); or

         (b)      it (i) is  reasonably  of the  opinion  that  such  amendment,
                  modification, waiver, termination or suspension is unlikely to
                  be to the  detriment  of Laurus,  (ii) has given to Laurus not
                  less than 30 (thirty)  Business  Days' prior written notice of
                  such amendment,  modification, waiver or termination and (iii)
                  has not received any  notification  from Laurus that it is not
                  satisfied  with such  documentation  or that it objects to the
                  relevant  amendment,  modification,  waiver or  termination or
                  suspension.  Laurus  will be deemed to have given its  consent
                  under  this  paragraph  (b) if it does not  object in  writing
                  within ten Business Days of receiving the notice  described in
                  subparagraph (ii).

         The Company will notify Laurus in writing, not earlier than 90 (ninety)
         Business Days and not later than 60 (sixty) Business Days prior to such
         date, of the date on which any Relevant  Document,  or the  substantive
         obligations  of any other party thereto,  will, in accordance  with the
         terms of the Relevant Document, cease to have effect.

12.2     Enforcement of rights

         It will  maintain and enforce its rights and  exercise its  discretions
         under the Relevant  Documents  where  failure to do so likely to affect
         materially  and adversely the ability of the Company to comply with any
         of its obligations in respect of the Secured Liabilities,  or is likely
         to be material to the  interests of Laurus.  The Company will  promptly
         notify  Laurus  upon its  becoming  aware  that any party to a Relevant
         Document (other than the Company) intends,  for any reason, to cease to
         comply  (in  whole or in  part)  with  any of its  obligations  under a
         Relevant  Document  prior to any date on which such  obligations  would
         cease  to have  effect  under  the  terms  of the  applicable  Relevant
         Document.

<PAGE>
                                       34

12.3     Performance of obligations

         It will  perform  all  its  material  obligations  under  the  Relevant
         Documents.

12.4     Additional Relevant Documents

(A)      Upon  the  termination  or  expiry  of the  Venture  Finance  Factoring
         Arrangements,  Laurus may require that any Material Contract at present
         subject  thereto  become the subject of a fixed charge under this Deed.
         Thereafter such contracts will be Relevant Documents and the provisions
         of this Deed will apply to them accordingly.

(B)      The Company will promptly  notify Laurus of its intention to enter into
         any  contract  which on  reasonable  grounds is likely to be a Material
         Contract  and,  if Laurus so  requests,  will  supply  Laurus with full
         particulars  thereof.  Laurus  may at any time  after the  Company  has
         entered  into any such  contract  to require  that the same  become the
         subject of a fixed charge under this Deed and  thereafter  the contract
         will become a Relevant  Document and the  provisions  of this Deed will
         apply to it accordingly.

<PAGE>
                                       35

                                    SECTION 4
                               RELEASE OF SECURITY

13.      RELEASE

13.1     Release of Security Assets

         If:

         (a)      all  Secured   Liabilities  have  been   unconditionally   and
                  irrevocably  paid or  discharged  in full and Laurus  does not
                  have any further  liability or obligation to advance any funds
                  to the Company; or

         (b)      security or a guarantee for the Secured  Liabilities,  in each
                  case  acceptable to Laurus,  has been provided in substitution
                  for this Deed;

         then, subject to clause 13.2 (Reinstatement) and clause 13.3 (Retention
         of  Security  Assets),  Laurus  shall  at the  request  and cost of the
         Company  take  whatever  action is  necessary  to release the  Security
         Assets,  or such part thereof as may still be subsisting  and vested in
         Laurus, from the security created under this Deed.

13.2     Reinstatement

(a)      Any re-assignment, release, settlement or discharge (whether in respect
         of any of the Secured Liabilities or any security for those liabilities
         or  otherwise)  shall be  conditional  upon no payment  to, or security
         provided  to,  Laurus in respect of the  relevant  Secured  Liabilities
         being  avoided,  invalidated  or reduced or  required to be restored or
         paid away by virtue of any requirement having the force of law.

(b)      Where any such re-assignment,  release, settlement or discharge is made
         in whole or in part on the faith of any payment, guarantee, security or
         other  disposition,  transaction or arrangement which is or is required
         to be repaid, restored or otherwise avoided,  invalidated or reduced by
         virtue  of  any   requirement   having  the  force  of  law,  any  such
         re-assignment,   release,   settlement   or  discharge   of,  or  other
         arrangement in connection with, the Security Assets shall ipso facto be
         treated  as null and void and shall for all  purposes  be deemed not to
         have  occurred,  and Laurus  shall be  entitled to recover the value or
         amount of any such payment,  guarantee,  security or other  disposition
         and  the  relevant   Secured   Liability   shall  continue  as  if  the
         re-assignment, release, settlement or discharge had not occurred.

13.3     Retention of Security Assets

         If the Company requests Laurus to release any Security Assets from this
         Deed  following any payment or discharge  made or security  interest or
         guarantee given in relation to the relevant Secured  Liabilities by any
         person  (a  "Relevant   Transaction"),   and  which  Laurus  reasonably
         considers, on the basis of independent legal advice, to be likely to be
         avoided or  invalidated  or reduced or  required to be restored or paid
         away by virtue of any requirement having the force of law, Laurus shall
         be  entitled  to retain and shall not be obliged to release  any of the

<PAGE>
                                       36

         relevant Security Assets or the security constituted by this Deed until
         the  expiry  of the  Retention  Period  in  relation  to that  Relevant
         Transaction.  If at any time before the expiry of that Retention Period
         any  step  has  been  taken  for or with a view to the  administration,
         liquidation  or  dissolution  of such  other  person  or any  analogous
         proceeding in respect of such other person, then Laurus:

         (a)      may  continue to retain the relevant  Security  Assets and the
                  security  constituted  by  this  Deed  for  a  further  period
                  expiring  on the later of the expiry of the  Retention  Period
                  and  the  date  on  which  all  proceedings  relating  to such
                  administration,  liquidation,  dissolution or other proceeding
                  are determined; and

         (b)      shall not be obliged  during such period to release any of the
                  relevant Security Assets from the security constituted by this
                  Deed.

13.4     Retention Period

         For  the  purpose  of  clause  13.3  (Retention  of  Security  Assets),
         "Retention Period" means, in relation to any Relevant Transaction,  the
         period which  commences on the date when that Relevant  Transaction was
         made or given,  and which ends on the date  falling one month after the
         expiration of the maximum period within which that Relevant Transaction
         can be avoided, reduced or invalidated by virtue of any applicable law.

<PAGE>
                                       37

                                    SECTION 5
                                   ENFORCEMENT

14.      ENFORCEMENT EVENTS

         Immediately upon and at any time after:

         (a)      the occurrence of an Enforcement Event which is continuing or

         (b)      the making of an application or the presentation of a petition
                  for an administration  order in relation to the Company or the
                  giving or filing by any  person of notice in  relation  to the
                  appointment of an administrator of the Company,

         the  security  constituted  by this Deed shall become  enforceable  and
         Laurus shall be entitled (whether or not it shall have taken possession
         or  appointed a Receiver)  without any further  notice to exercise  the
         power of sale and other  powers  conferred  by section 101 LPA 1925 (as
         varied by this Deed) and all or any of its rights and powers set out in
         this clause 14 and clause 15 (Enforcement Powers) in relation to all or
         any  part of the  Security  Assets  or  otherwise  conferred  by law on
         mortgagees, chargees or receivers.

15.      ENFORCEMENT POWERS

15.1     Exercise of powers

         At any  time  after  the  security  constituted  by this  Deed  becomes
         enforceable,  Laurus shall be entitled,  without notice to the Company,
         either itself (without first  appointing a Receiver or  notwithstanding
         the  appointment of any Receiver) or acting jointly with or through the
         Receiver (or Receivers) or any Delegate (or Delegates),  in the name or
         on behalf of the Company or otherwise and at the cost of the Company to
         exercise all or any of the rights,  powers and  discretions  set out in
         this clause 15 to the fullest extent permitted by law.

15.2     Notice of Enforcement

         It may give any  notice or  notices to any  person,  giving  directions
         (which shall apply to the exclusion of any directions given at any time
         by or on behalf of the Company, regarding the exercise of all or any of
         the rights, powers,  discretions and remedies which would (but for this
         Deed) be vested in the  Company  under and in respect  of the  Security
         Assets.

15.3     Possession

         It may enter upon, take immediate possession of, get in and collect all
         or any of the Security Assets.

15.4     Carry on business

         It may manage and carry on any business of the Company  (including  the
         right to  enter  into  any  contract  or  arrangement  and to  perform,
         repudiate,  rescind or vary any  contract or  arrangement  to which the
         Company is a party) as it sees fit.

<PAGE>
                                       38

15.5     Deal with Security Assets

         It may sell, transfer,  assign, redeem, exchange, hire out and lend the
         Security Assets, grant leases, tenancies,  licences, rights of user and
         renewals  (for any term and at any rent) and may accept  surrenders  of
         and re-enter upon leases, tenancies, licences and rights of user of the
         Security Assets, and otherwise apply,  dispose of or realise any or all
         of the Security Assets (including in each case any Fixtures,  which may
         be severed and sold separately from the Real Property containing them),
         either by public offer or auction,  tender or private contract (with or
         without advertisement and in any lots) to any person (including Laurus)
         and for rents, premiums or other compensation or consideration (whether
         comprising cash, debentures or other obligations,  investments or other
         valuable  consideration of any kind, and whether payable or deliverable
         in a lump sum or by instalments) and generally in any manner and on any
         terms it thinks  proper.  It may give valid receipts for all moneys and
         execute all  assurances  and things  which it considers to be proper or
         desirable for realising any Security Asset.

15.6     Transfer business

         Without  prejudice to the generality of clause 15.5 (Deal with Security
         Assets),  it may do any of the  following  acts and things as may to it
         seem expedient:

         (a)      to  promote  or  procure  the  formation  of any new  company,
                  whether or not a wholly owned  subsidiary or other  associated
                  company of Laurus;

         (b)      to  subscribe  for or  acquire  (for  cash or  otherwise)  any
                  Investment in or of such new company;

         (c)      to  sell,  transfer,  assign,  redeem,  hire  out and lend the
                  Security Assets, and to grant leases, tenancies,  licences and
                  rights of user of the Security Assets, to any such new company
                  or any person  whatsoever and accept as  consideration or part
                  of the  consideration  therefor any  Investments  in or of any
                  such new  company or person or allow the  payment of the whole
                  or any  part of  such  consideration  to  remain  deferred  or
                  outstanding; and

         (d)      to sell, transfer,  assign,  exchange and otherwise dispose of
                  or realise any such  Investments or deferred  consideration or
                  part thereof or any rights relating thereto;

15.7     Borrow money

         For the purpose of exercising  any of the rights  conferred on it by or
         pursuant  to this Deed or of  defraying  any  costs,  charges,  losses,
         liabilities or expenses (including its remuneration) incurred by or due
         to it in the exercise  thereof or for any other purpose,  it may borrow
         or raise money  either  unsecured  or on the  security of the  Security
         Assets  (either  in  priority  to  the  security  under  this  Deed  or
         otherwise)  and  generally  on  such  terms  and  conditions  as may be
         generally  available in the money market to a borrower  having a credit
         rating  similar to that of the  Company.  No person  lending that money
         shall be  concerned  to enquire  into the  propriety  or purpose of the
         exercise  of this  power or to check  the  application  of any money so
         raised or borrowed.

<PAGE>
                                       39

15.8     Calls

         It may make or require the  directors of the Company to make such calls
         in  respect  of any  uncalled  capital  the  Company  as it  may  think
         expedient and may enforce payment of any call so made by action (in the
         name  of  the  Company  or the  Receiver  as may  be  thought  fit)  or
         otherwise.

15.9     Covenants and guarantees

         It  may  enter  into   bonds,   covenants,   commitments,   guarantees,
         indemnities  and like matters and make all  payments  needed to effect,
         maintain or satisfy them, as it sees fit.

15.10    Dealings with tenants

         It may reach agreements and make arrangements with, and make allowances
         to,  any  lessees,  tenants  or other  persons  from  whom any rents or
         profits may be receivable (including those relating to the grant of any
         licences,  or the review of rent in  accordance  with the terms of, and
         the variation of, the provisions of any leases, tenancies,  licences or
         rights of user affecting the Security Assets),  in each case as it sees
         fit.

15.11    Rights of ownership

         It may manage,  use and apply all or any of the Security Assets and may
         exercise  and do (or permit the Company or its nominee to exercise  and
         do) all such rights and things as it would be capable of  exercising or
         doing if it were the absolute  beneficial  owner of the Security Assets
         and in particular,  but without limitation,  may exercise any rights of
         enforcing any security by foreclosure, sale or otherwise and all rights
         relating to  Investments  and arrange for or provide all services which
         it may deem proper for the efficient  management or use of the Security
         Assets or the exercise of such rights, in each case as it sees fit.

15.12    Protection of assets etc

         It may make and effect all repairs,  structural and other  alterations,
         improvements and additions in or to the Security Assets (including, but
         without  limitation,  the  development  or  redevelopment  of any  Real
         Property)  and  may  purchase  or  otherwise   acquire  any  materials,
         articles, insurances or other things and do anything else in connection
         with the Security  Assets as it may think  desirable for the purpose of
         the  protection or  improvement  of the Security  Assets or making them
         productive  or more  productive,  increasing  their  letting  or market
         value, or protecting the security interests created under this Deed, in
         each case as it sees fit.

15.13    Compromise and settle claims

         It may settle, adjust, refer to arbitration, compromise and arrange any
         claims, accounts, disputes, questions and demands with or by any person
         who is or claims to be a creditor of the Company or relating in any way
         to the Security Assets, in each case as it sees fit.

<PAGE>
                                       40

15.14    Legal actions

         It may bring, prosecute, enforce, defend and abandon actions, suits and
         proceedings in relation to the Security Assets or any of the businesses
         the Company, in each case as it sees fit.

15.15    Redemption of security

         It may redeem or transfer to itself any prior  security  interest  over
         the  Security  Assets  or  settle  and pass the  accounts  of the prior
         mortgagee,  chargee or  encumbrancers,  as it sees fit. Any accounts so
         settled and passed shall be conclusive and binding on the Company.  All
         principal moneys,  interest,  costs, charges,  losses,  liabilities and
         expenses of and incidental to and such redemption and/or transfer shall
         be paid by the Company on demand.

15.16    Employees, etc.

         It may  appoint,  hire and  employ  officers,  employees,  contractors,
         agents and advisors of all kinds and upon such terms as to remuneration
         or otherwise as it may think proper and may  discharge any such persons
         and any such persons appointed, hired or employed by the Company.

15.17    Insolvency Act

         It may exercise all the powers set out in Schedule 1 to the  Insolvency
         Act as in force at the date of this  Deed  (whether  or not in force at
         the  date  of  exercise   and  whether  or  not  the   Receiver  is  an
         administrative  receiver)  and all  powers  added to  Schedule 1 to the
         Insolvency Act after the date of this Deed.

15.18    Set-off and application of Bank Account balances

         It may, at any time or times without  restriction and without notice to
         the Company,  regardless of the place of payment or booking branch, and
         without  prejudice  to any of its other  rights,  set off or  otherwise
         apply  any  obligation  (whether  or  not  matured)  owed  by it to the
         Company, including the whole or any part or parts of any money standing
         to the credit of any Bank Account or other account,  against any or all
         of the Secured  Liabilities which are due and unpaid.  For this purpose
         it may  convert  one  currency  into  another  at the rate of  exchange
         determined  by it in its absolute  discretion  to be  prevailing at the
         date of set-off.

15.19    Other rights

         It may do all such other acts and things it may  consider  necessary or
         expedient for the  realisation  of any Security  Asset or incidental to
         the  exercise  of any of the  rights  conferred  upon  it  under  or in
         connection  with this Deed,  the LPA 1925 or the Insolvency Act and may
         concur in the doing of anything  which he has the right to do and to do
         any such thing jointly with any other person.

16.      EXTENSION AND VARIATION OF POWERS CONFERRED BY LAW

16.1     Power of sale

<PAGE>
                                       41

(a)      Notwithstanding   any  other  provisions  of  this  Deed,  the  Secured
         Liabilities  shall be deemed for the purposes of section 101 of the LPA
         1925 to have become due and  payable  within the meaning of section 101
         of the LPA 1925 ,and the power of sale and other  powers  conferred  on
         mortgagees by the LPA 1925 as varied or extended by this Deed including
         the power to appoint a receiver  or an  administrative  receiver  shall
         arise, immediately on execution of this Deed.

(b)      Section 103 of the LPA 1925 shall not  restrict  the exercise by Laurus
         of the  statutory  power of sale  conferred on it by section 101 of the
         LPA 1925 which power may be exercised by Laurus  without  notice to the
         Company on or at any time after the occurrence of an Enforcement  Event
         and the  provisions  of the LPA 1925  relating  to and  regulating  the
         exercise of the said power of sale shall,  so far as they relate to the
         Security Assets, be varied and extended accordingly.

(c)      Section 109(1) of the LPA 1925 shall not apply to this Deed.

16.2     Consolidation

         Laurus shall, so far as it is lawful, be entitled to consolidate all or
         any of the security  created under this Deed with any other  securities
         whether now in existence or hereafter  created.  The restriction on the
         right  of  consolidating  mortgage  securities  which is  contained  in
         sub-section 93(1) of the LPA 1925 shall not apply to this Deed.

16.3     Power of leasing

(a)      The statutory powers of leasing,  letting, entering into agreements for
         leases or  lettings  and  accepting  and  agreeing  to accept  LPA 1925
         surrenders  of leases  conferred by sections 99 and 100 of the LPA 1925
         may be exercised by Laurus at any time on or after the occurrence of an
         Enforcement  Event.  Whether or not Laurus is then in possession of the
         premises  proposed to be leased,  Laurus may make a lease or  agreement
         for lease at a premium and for any length of term and generally without
         any  restriction  on the kinds of leases and  agreements for lease that
         Laurus  may make and  generally  without  the  necessity  for Laurus to
         comply  with any other  provisions  of  sections  99 and 100 of the LPA
         1925. Laurus may delegate such powers to any person and such delegation
         shall not  preclude  the  subsequent  exercise of such powers by Laurus
         itself nor preclude Laurus from making a subsequent  delegation thereof
         to some other person or any revocation of such delegation.

(b)      For the purposes of sections 99 and 100 of the LPA 1925, the expression
         "mortgagor"  shall include any  encumbrancer  deriving  title under the
         original  mortgagor and  subsection  (18) of section 99 of the LPA 1925
         and subsection (12) of section 100 of the LPA 1925 shall not apply.

17.      APPOINTMENT OF RECEIVERS

17.1     Appointment

         At any time:

         (a)      after any of the  security  created  by this  Deed has  become
                  enforceable (whether or not Laurus shall have taken possession
                  of the Security Assets); or

<PAGE>
                                       42

         (b)      at the  written  request of the Company to Laurus at any time;
                  or

         (c)      after the making of an  application or the  presentation  of a
                  petition  for  an  administration  order  in  relation  to the
                  Company  or the  giving or  filing by any  person of notice in
                  relation  to  the  appointment  of  an  administrator  of  the
                  Company,

         Laurus may,  without  notice to the Company,  appoint  under seal or by
         instrument in writing signed by any officer or other person  authorised
         for such purpose by it, one or more qualified persons to be Receiver or
         Receivers. If Laurus appoints more than one person as Receiver,  Laurus
         may give the  relevant  persons  power  to  exercise  all or any of the
         powers  conferred on Receivers  individually  as well as jointly and to
         the exclusion of the other or others of them.

17.2     Scope of appointment

         Any  Receiver  may be  appointed  either  Receiver of all the  Security
         Assets or of such part of the  Security  Assets as may be  specified in
         the appointment. In the latter case, the rights and powers conferred by
         clause 17.4  (Powers of  Receivers)  shall have effect as though  every
         reference  in that clause to "rights and  powers"  were a reference  to
         rights and powers in  respect  of the part of such  Security  Assets so
         specified or any part thereof.

17.3     Removal

         Laurus may, by deed or by instrument  in writing  signed by any officer
         or other  person  authorised  for such  purpose  by it (so far as it is
         lawfully able and subject to any  requirement  of the court in the case
         of an administrative  receiver) remove any Receiver appointed by it and
         may,  whenever  it  deems  expedient,  appoint  any one or  more  other
         qualified  persons  in  place  of or to  act  jointly  with  any  other
         Receiver.

17.4     Powers of Receivers

(a)      Any Receiver  appointed  under this Deed will  (subject to any contrary
         provision   specified  in  his  appointment  but   notwithstanding  the
         liquidation or dissolution of the Company) have:

         (i)      all  the  rights  and  powers  conferred  by the  LPA  1925 on
                  mortgagors and on mortgagees in possession and on any receiver
                  appointed under the LPA 1925;

         (ii)     in  addition,  all the rights and powers of an  administrative
                  receiver  set out in  Schedule  1 to the  Insolvency  Act (and
                  whether  or not the  Receiver  is in  fact  an  administrative
                  receiver)   and  (in  the  event  that  the   Receiver  is  an
                  administrative  receiver)  all the  powers  exercisable  by an
                  administrative  receiver  by virtue of the  provisions  of the
                  Insolvency Act; and

         (iii)    in  addition,  all  the  rights  and  powers  expressed  to be
                  conferred  upon  Laurus  set  out in  clause  15  (Enforcement
                  Powers).

(b)      If there is more than one  Receiver  holding  office at the same  time,
         each Receiver may (unless the document appointing him states otherwise)
         exercise  all of the powers  conferred  on a  Receiver  under this Deed
         individually and to the exclusion of any other Receivers.

<PAGE>
                                       43

(c)      A Receiver who is an  administrative  receiver of Company will have all
         the rights, powers and discretions of an administrative  receiver under
         the Insolvency Act.

17.5     Agent of the Company

         Any Receiver  shall for all purposes and at all times be and be treated
         as the agent of the Company and  accordingly  any Receiver is deemed to
         be in the same  position as a Receiver  duly  appointed  by a mortgagee
         under the LPA 1925.  The Company  shall be solely  responsible  for his
         contracts,  engagements,  acts, omissions,  defaults and losses and for
         all   liabilities   incurred   by  him  and  for  the  payment  of  his
         remuneration. No Receiver shall at any time act as, or be deemed to be,
         agent of Laurus.  Laurus shall not incur any  liability  (either to the
         Company  or to any other  person) by reason of the  appointment  of any
         Receiver or for any other reason).

17.6     Remuneration

         Subject to section 36 of the  Insolvency  Act,  Laurus may from time to
         time fix the  remuneration  of any  Receiver  appointed  by it (without
         being  limited to the maximum rate  specified in section  109(6) of the
         LPA 1925) and may  direct  payment of such  remuneration  out of moneys
         accruing to him as Receiver,  but the Company alone shall be liable for
         the payment of such  remuneration and for all other costs,  charges and
         expenses of the Receiver.

18.      DELEGATION

(a)      Laurus and any  Receiver  may  delegate  by power of attorney or in any
         other manner to any person who in the  reasonable  opinion of Laurus or
         such  Receiver  (as the case  may be) is  appropriately  qualified  any
         right, power or discretion exercisable under this Deed.

(b)      Any such  delegation  may be made  upon the terms  (including  power to
         sub-delegate)  and  subject  to any  regulations  which  Laurus or such
         Receiver (as the case may be) may think fit.

(c)      No such delegation will preclude the subsequent  exercise of such power
         by Laurus or the  Receiver or Delegate  itself or preclude  Laurus from
         making  a  subsequent   delegation  to  some  other  person.  Any  such
         delegation  may be revoked by Laurus or the Receiver or Delegate at any
         time.

(d)      Neither  Laurus  nor  any  Receiver  will  be  in  any  way  liable  or
         responsible  to the Company for any loss or liability  arising from any
         act, default, omission or misconduct on the part of any Delegate, other
         than in relation to any act or omission  constituting  wilful  default,
         fraud or gross negligence by Laurus.

19.      APPLICATION OF ENFORCEMENT PROCEEDS

19.1     Suspense Account

         Laurus may, for as long as any of the Secured Liabilities for which any
         other person may be liable as principal debtor or as co-surety with the
         Company  have  not  been  paid  or  discharged  in  full,  at its  sole
         discretion,  place and retain on a suspense account,  for as long as it
         considers fit, any moneys  received,  recovered or realised under or in
         connection  with this Deed to the  extent of such  Secured  Liabilities
         without  any  obligation  on the part of  Laurus  to  apply  them in or
         towards the discharge of such Secured Liabilities.

<PAGE>
                                       44

19.2     Payments

         All moneys arising from the exercise of the powers of enforcement under
         this Deed shall (except as may be otherwise required by applicable law)
         be held by Laurus and any Receiver and applied in the  following  order
         of priority  (but  without  prejudice to the right of Laurus to recover
         any shortfall from the Company):

         (a)      in  or  towards  payment  of  all  costs,   charges,   losses,
                  liabilities  and expenses of and incidental to the appointment
                  of any  Receiver  and  the  exercise  of  any  of  his  rights
                  including his remuneration and all outgoings paid by him;

         (b)      in or towards the payment or  discharge of such of the Secured
                  Liabilities  in such as Laurus in its absolute  discretion may
                  from time to time determine; and

         (c)      after all the Secured Liabilities have been paid or discharged
                  in full,  in  payment of any  surplus to the  Company or other
                  person entitled to it,

         and section  109(8) of the LPA 1925 shall be deemed varied and extended
         in such respect.

20.      PROTECTION OF THIRD PARTIES

         No person  dealing with Laurus,  any Receiver or any Delegate  shall be
         bound to enquire:

         (a)      whether any Secured  Liabilities have become or remain due and
                  payable; or

         (b)      whether  any right or power  which  Laurus or any  Receiver or
                  Delegate  is   purporting   to  exercise   has  become  or  is
                  exercisable; or

         (c)      whether any consents, regulations,  restrictions or directions
                  relating  to such  rights or  powers  have  been  obtained  or
                  complied with or otherwise; or

         (d)      into the  application of any money borrowed or raised or other
                  proceeds of Enforcement.

         All the  protections  given to purchasers  from a mortgagee by sections
         104 and 107 of the LPA 1925, and to persons  dealing with a receiver in
         section 42(3) of the  Insolvency Act in any other  legislation  for the
         time being in force,  shall apply equally to any person purchasing from
         or dealing with Laurus, any Receiver or any Delegate.

21.      LIABILITY OF LAURUS, RECEIVERS AND DELEGATES

21.1     Possession

         If Laurus,  any Receiver or any Delegate  shall take  possession of the
         Security Assets, it or he may at any time relinquish such possession.

<PAGE>
                                       45

21.2     Laurus' liability

         Laurus  will not in any  circumstances  (whether  by  reason  of taking
         possession  of the Security  Assets or for any other reason  whatsoever
         and  whether  as  mortgagee  in   possession  or  on  any  other  basis
         whatsoever) be liable to the Company or any other person for any costs,
         charges,  losses,  damages,  liabilities  or expenses  arising  from or
         connected with any  realisation of the Security Assets or from any act,
         neglect,  default,  omission or misconduct of any nature of Laurus,  or
         any of its  officers,  employees  or agents in relation to the Security
         Assets,  except to the extent that they shall be caused by the fraud or
         wilful default or gross  negligence of Laurus or any Receiver or any of
         their respective officers, employees or agents.

21.3     Receiver's liability

         All the  provisions  of clause 21.2  (Laurus'  liability)  shall apply,
         mutatis  mutandis,  in  respect of the  liability  of any  Receiver  or
         Delegate or any officer,  employee or agent of Laurus,  any Receiver or
         any Delegate.

21.4     Indemnity

         Laurus and every Receiver,  Delegate, attorney, manager, agent or other
         person  appointed  by Laurus  under  this  Deed,  except in the case of
         fraud,  wilful  default or gross  negligence,  shall be  entitled to be
         indemnified  out of the Security  Assets in respect of all  liabilities
         and  expenses  incurred by any of them in the  execution  or  purported
         execution  of any of its rights and against all  actions,  proceedings,
         costs,  claims  and  demands  in respect of any matter or thing done or
         omitted in anyway  relating to this Deed or the  Security  Assets,  and
         Laurus and any such Receiver,  Delegate,  attorney,  manager,  agent or
         other person appointed by Laurus under this Deed may retain and pay all
         sums in respect of them out of any moneys received.

         The  obligations  contained  in this  clause  21.4  shall  survive  the
         expiration of this Deed.

<PAGE>
                                       46

                                    SECTION 6
                               GENERAL PROVISIONS

22.      COVENANT TO PAY

         The Company shall pay and discharge all Secured Liabilities at the time
         or times when, in the manner in which,  and in the currencies in which,
         they are expressed to be due and payable.

23.      COSTS AND EXPENSES

23.1     Transaction expenses

         The  Company  shall  indemnify  Laurus on demand  against all Costs and
         Expenses reasonably  expended,  paid, incurred or debited on account by
         Laurus  in  connection  with the  negotiation,  preparation,  printing,
         execution, stamping, filing, registration and perfection of this Deed.

23.2     Amendment costs

         The  Company  shall  indemnify  Laurus on demand  against all Costs and
         Expenses reasonably  expended,  paid, incurred or debited on account in
         connection with:

         (a)      any waiver or consent  sought by the  Company in  relation  to
                  this Deed and/or any other document  referred to in this Deed;
                  and

         (b)      any variation,  amendment,  extension or  modification  of, or
                  supplemental to, this Deed and/or any other document  referred
                  to in this Deed.

23.3     Enforcement costs

         The  Company  shall  indemnify  Laurus on demand  against all Costs and
         Expenses directly and properly expended,  paid,  incurred or debited on
         account by Laurus:

         (a)      in   enforcing,   protecting,   preserving   or  realising  or
                  attempting to enforce,  protect,  preserve or realise  Laurus'
                  rights under this Deed and any other  document  referred to in
                  this Deed including without  limitation any Costs and Expenses
                  suffered by Laurus by reason of the  withholding of any Tax on
                  any payment made to Laurus hereunder; and

         (b)      in connection with or in  contemplation  of any Proceedings or
                  the  recovery  or  attempted  recovery  of any of the  Secured
                  Liabilities.

24.      STAMP TAXES

         The Company  shall pay  promptly,  and in any event  before any penalty
         becomes  payable,  all stamp,  registration,  documentary  and  similar
         Taxes, if any, payable in connection with the entry into,  performance,
         enforcement  or  admissibility  in  evidence  of this Deed or any other
         document  referred to in this Deed, and shall indemnify  Laurus against
         any cost,  loss or liability  with  respect to, or  resulting  from any
         delay in paying or omission to pay, any such Tax.

<PAGE>
                                       47

25.      CURRENCY INDEMNITY

25.1     Currency indemnity

(a)      If, under any applicable law, whether  pursuant to a judgement  against
         the Company or the  administration,  liquidation  or dissolution of the
         Company or for any other  reason,  any payment  under or in  connection
         with  this Deed is made or falls to be  satisfied  in a  currency  (the
         "Other Currency") other than the currency in which the relevant payment
         is expressed  to be payable (the  "Required  Currency"),  then,  to the
         extent that the payment  actually  received by Laurus  (when  converted
         into  the  Required  Currency  at the rate of  exchange  on the date of
         payment or, if it is not  practicable for Laurus to make the conversion
         on that  date,  at the rate of  exchange  as soon  afterwards  as it is
         practicable for Laurus to do so or, in the case of a an administration,
         liquidation or dissolution,  at the rate of exchange on the latest date
         permitted by applicable  law for the  determination  of  liabilities in
         such  proceeding)  falls  short of the  amount  expressed  to be due or
         payable under or in connection with this Deed, the Company shall, as an
         original and independent obligation under this Deed, indemnify and hold
         Laurus harmless against the amount of such shortfall.

(b)      The Company waives any right it may have in any jurisdiction to pay any
         amount under or in connection  with this Deed in a currency or currency
         unit other than that in which it is expressed to be payable.

25.2     Rate of exchange

         For the purpose of clause 25.1 (Currency indemnity), "rate of exchange"
         means the rate at which Laurus is able on the relevant date to purchase
         the  Required  Currency  with the Other  Currency  and shall  take into
         account any  commission,  premium and other costs of exchange and Taxes
         payable in connection with such purchase.

26.      CERTIFICATES AND DETERMINATIONS

         For all purposes, including any Proceedings:

         (a)      a determination by Laurus; or

         (b)      a copy of a certificate signed by an officer of Laurus,

         of the amount of any indebtedness  comprised in the Secured Liabilities
         or any applicable  rate of interest  shall,  in the absence of manifest
         error,  be  conclusive  evidence  against the Company of the matters to
         which it relates.

27.      POWER OF ATTORNEY

27.1     Appointment

         The Company appoints,  irrevocably  (within the meaning of section 4 of
         the  Powers  of  Attorney  Act  1971)  and by way of  security  for the
         performance of its obligations under this Deed, Laurus,  every Receiver
         and every Delegate severally to be the attorney of the Company,  on its
         behalf and in its name or  otherwise  and as its act and deed,  at such
         time and in such manner as the attorney may think fit:

<PAGE>
                                       48

         (a)      to take any action which it is obliged to take under this Deed
                  but has not taken  promptly  following a request to do so from
                  Laurus or any Receiver; and

         (b)      to take  whatever  action may be required for enabling  Laurus
                  and any  Receiver  and  Delegate to exercise all or any of the
                  rights, powers,  authorities and discretions conferred on them
                  by or pursuant to this Deed or by law,

         and the taking of action by the attorney or attorneys shall (as between
         it and any third  party) be  conclusive  evidence  of its right to take
         such action.

27.2     Ratification

         The  Company  undertakes  to ratify  and  confirm  everything  that any
         attorney  does or purports to do in the exercise or purported  exercise
         of the power of attorney in clause 27.1 (Appointment).

28.      SET-OFF

         Following any  Enforcement  Event which is  continuing  Laurus may (but
         shall not be obliged to) set off against any  obligation of the Company
         due and payable by it to or for the  account of Laurus  under this Deed
         and not paid on the due date or,  where  applicable,  within  any grace
         period for  payment,  any moneys  held by Laurus for the account of the
         Company at any office of Laurus  anywhere and in any currency,  whether
         or  not  matured.   If  any  such   obligation   is   unliquidated   or
         unascertained,  Laurus may set off in an amount estimated by it in good
         faith to be amount of that obligation.  Laurus may effect such currency
         exchanges as are  appropriate  to  implement  the set-off and any usual
         charges and all applicable Taxes in relation to such currency exchanges
         shall be paid by the  Company.  If Laurus  has set off,  it shall  give
         prompt notice of that fact to the Company.

29.      ASSIGNMENT

29.1     Assignment by Laurus

         Laurus may, at any time,  with the consent of the Company (such consent
         not to be unreasonably withheld or delayed),  assign or transfer any of
         its rights and obligations under this Deed.

<PAGE>
<TABLE>
<CAPTION>
                                       49

29.2     Assignment by the Company

         The rights,  interests and  obligations  of the Company under this Deed
         are  personal  to it.  Accordingly,  they  are  not  capable  of  being
         assigned,   transferred  or  delegated  in  any  manner.   The  Company
         undertakes that it shall not at any time assign or transfer, or attempt
         to assign or  transfer,  any of its rights,  interests  or  obligations
         under or in respect of this Deed to any person.

30.      AMENDMENTS

         This  Deed  may not be  amended,  modified  or  waived  in any  respect
         whatsoever, without the prior written consent of Laurus and the Company
         (such consent not to be  unreasonably  withheld or delayed)  given with
         express reference to this clause 30 and expressly stated to be intended
         to operate as the consent of Laurus or the  Company to such  amendment,
         modification or waiver.

31.      NOTICES

31.1     Communications in writing

         Any  communication  to be made  under or in  connection  with this Deed
         shall be made in writing and, unless otherwise  stated,  may be made by
         fax or letter.

31.2     Addresses

         The address and fax number (and the department or officer,  if any, for
         whose attention the  communication is to be made) of each Party for any
         communication  or  document  to  be  made  or  delivered  under  or  in
         connection with this Deed is that identified with its name below or any
         substitute  address,  fax number or  department or officer as the Party
         may notify to the other  Parties by not less than five  Business  Days'
         notice.

              Party            Addressee                 Address                Fax No.
              -----            ---------                 -------                -------
         <S>                   <C>               <C>                        <C>
         Laurus Master Fund,   David Grin        Laurus Master Fund,        + 1 212 541 4434
         Ltd.                                    Ltd., c/o Laurus
                                                 Capital Management LLC,
                                                 152 West 57th Street,
                                                 New York, New York
                                                 10019, USA

         Inyx Pharma Limited   Steven Handley    Innovation House, 6       + 44 (0) 1928 597780
                                                 Seymour Court, Manor
                                                 Park, Runcorn,
                                                 Cheshire, WA7 1SY, U.K.
</TABLE>

<PAGE>
                                       50

31.3     Delivery

(a)      Any  communication  or  document  made or  delivered  by one  person to
         another under or in connection with this Deed will only be effective:

         (i)      if by way of fax, when received in legible form; or

         (ii)     if by way of  letter,  when it has been  left at the  relevant
                  address or five  Business  Days after being  deposited  in the
                  post  postage  prepaid in an envelope  addressed to it at that
                  address,

         and, if a particular  department or officer is specified as part of its
         address details provided under clause 31.2 (Addresses), if addressed to
         that department or officer.

32.4     English language

         Any  notice  given  under or in  connection  with  this Deed must be in
         English.

32.      REMEDIES AND WAIVERS

         No delay or omission by Laurus in exercising  any right provided by law
         or under this Deed  shall  impair,  affect,  or operate as a waiver of,
         that or any other  right.  The single or partial  exercise by Laurus of
         any right shall not preclude or prejudice any other or further exercise
         of that,  or the  exercise  of any other,  right.  The rights of Laurus
         under this Deed are in addition  to and do not affect any other  rights
         available  to it by law  including,  without  limitation,  the right to
         appoint an administrator under the Insolvency Act.

33.      PARTIAL INVALIDITY

(a)      If, at any time,  any  provision  of this Deed is or  becomes  illegal,
         invalid  or   unenforceable  in  any  respect  under  any  law  of  any
         jurisdiction,  neither the legality,  validity or enforceability of the
         remaining  provisions  under the law of that  jurisdiction or any other
         jurisdiction,  nor the  legality,  validity or  enforceability  of such
         provision  under the law of any other  jurisdiction  will in any way be
         affected or impaired.

(b)      The Parties shall enter into good faith  negotiations,  but without any
         liability  whatsoever in the event of no agreement  being  reached,  to
         replace any illegal, invalid, or unenforceable provision with a view to
         obtaining  the same  commercial  effect as this Deed  would have had if
         such provision had been legal, valid and enforceable.

34.      PERPETUITY PERIOD

         The perpetuity period of the trusts created under this Deed shall be 80
         years.

<PAGE>
                                       51

35.      EXECUTION AS A DEED

         Each of the Parties to this Deed  intends it to be a deed and  confirms
         that  it  is  executed  and   delivered   as  a  deed,   in  each  case
         notwithstanding  the fact that any one or more of the  Parties may only
         execute this Deed under hand.

36.      COUNTERPARTS

         This Deed may be  executed  in any number of  counterparts,  and by the
         Parties on separate counterparts,  but will not be effective until each
         Party has executed at least one  counterpart.  Each  counterpart  shall
         constitute  an original  of this Deed,  but all the  counterparts  will
         together constitute one and the same instrument.

37.      JURISDICTION

         Laurus and the Company hereby irrevocably submit to the jurisdiction of
         the English courts.

38.      GOVERNING LAW

         This Deed is governed by English law.

IN WITNESS of which this  document has been  executed as a deed and delivered on
the date stated at the beginning of this Deed.

<PAGE>
                                       52

                                   SCHEDULE 1
                               MORTGAGED PROPERTY

1        Freehold Property

1.1      3 Arkwright  Road,  Astmoor  Industrial  Estate,  Runcorn in respect of
         which the Company is  registered  at H. M. Land  Registry with freehold
         title absolute under title number CH271493.

1.2      5 - 8 Arkwright Road, Astmoor Industrial Estate,  Runcorn in respect of
         which the Company is  registered  at H. M. Land  Registry with freehold
         title absolute under title number CH309942.

1.3      9 Arkwright  Road,  Astmoor  Industrial  Estate,  Runcorn in respect of
         which the Company is  registered  at H. M. Land  Registry with freehold
         title absolute under title number CH309955.

1.4      9 Arkwright  Road,  Astmoor  Industrial  Estate,  Runcorn in respect of
         which the Company is  registered  at H. M. Land  Registry with freehold
         title absolute under title number CH310239.

1.5      18  Arkwright  Road,  Runcorn  in  respect  of  which  the  Company  is
         registered at H. M. Land Registry with freehold  title  absolute  under
         title number CH204430.

1.6      All that freehold land on the North side of Arkwright Road,  Runcorn in
         respect of which the Company is  registered at H. M. Land Registry with
         freehold title absolute under title number CH393632.

2        Leasehold Property

2.1      All  that  leasehold  land  known  as  1 - 2  Arkwright  Road,  Runcorn
         comprised in a lease dated 23rd June 1988 and made  between  Warrington
         and Runcorn  Development  Corporation (1) and Minipak  Aerosols Limited
         (2) whereby the same was demised for the term of twenty  years from 1st
         July 1988 at a rent of  (pound)13,500  per annum subject to five yearly
         upward only reviews.

2.2      All  that  leasehold  land  known  as  10/11  Arkwright  Road,  Runcorn
         comprised  in a lease  dated  23rd June  1988  between  Warrington  and
         Runcorn  Development  Corporation (1) and Minipak  Aerosols Limited (2)
         whereby  the same was  demised  for the term of twenty  years  from 7th
         March 1988 at a rent of (pound)48,000  per annum subject to five yearly
         upward only reviews.

2.3      All that  leasehold  land on the East side of Arkwright  Road,  Runcorn
         comprised in a lease dated 31st May 2000 between Stirling Group Plc (1)
         and David Russell  Property  Holdings  Limited (2) whereby the same was
         demised  for the term of 999  years  less 10 days from 31st May 2000 at
         the rent of a  peppercorn  and in  respect  of  which  the  Company  is
         registered  at H. M. Land  Registry  under title number  CH460749  with
         leasehold title absolute.

2.4      All that  leasehold  land known as Unit 6, Seymour  Court,  Manor Park,
         Runcorn  comprised  in a lease dated 22nd July 1994 between The Council
         of the Borough of Halton (1) and C.C.L.  Industries Limited (2) whereby
         the same was  demised  for the term of twenty five years from 13th July
         1994 at a commencement rent of (pound)59,850 subject to review.

<PAGE>
                                       53

3        Other Real Property

Every estate and interest of the Company in any other Real  Property  over which
it has power at law or in equity to create security at the date of this Deed.

<PAGE>
                                       54

                                   SCHEDULE 2
                         DETAILS OF THE BANK ACCOUNT[S]

1        UK Sterling Bank Account
         ------------------------

Bank Account name:                Inyx Pharma Ltd.

Bank Account bank:                Barclays Bank Plc

Address:                          Barclays Business Centre, P.O. Box 100, Leeds,
                                  LS1 1PA

Bank Account number:              20-48-46  00402087

Currency:                         UK Sterling

2        US Dollar Bank Account
         ----------------------

Bank Account name:                Inyx Pharma Ltd.

Bank Account bank:                Barclays Bank Plc

Address:                          Barclays Business Centre, P.O. Box 100, Leeds,
                                  LS1 1PA

Bank Account Number:              20-54-78  55199499

Currency:                         US Dollar

<PAGE>
                                       55

                                   SCHEDULE 3
                               RELEVANT DOCUMENTS

1.       The Development Agreement made between the Company and Stiefel, dated 6
         March 2003.

2.       The  Manufacturing  and Supply  Agreement  made between the Company and
         Stiefel, dated 6 March 2003.

3.       The Quality  Agreement  made between the Company and  Stiefel,  dated 6
         March 2003.

<PAGE>
                                       56

                                   SCHEDULE 4
                   NOTICE OF ASSIGNMENT OF RELEVANT DOCUMENTS

                                     Part 1
                          FORM OF NOTICE OF ASSIGNMENT

To:      [Name of counterparty to Relevant Document]

From:    Inyx Pharma Limited (the "Company")
         and
         Laurus Master Fund, Ltd.  "Laurus"

Date:    [              ]

Dear Sirs,

                              NOTICE OF ASSIGNMENT

We refer to the [describe agreement(s)] made between ourselves and you on [date]
[for the [provision of [briefly describe  agreement if necessary] (the "Relevant
Agreement").

We, the Company,  hereby give you notice that pursuant to a Debenture dated [?],
2003 and made between ourselves and Laurus (such debenture,  as it may from time
to time be amended,  assigned,  novated or supplemented,  being below called the
"Debenture"),  we have assigned and charged and agreed to assign and charge,  to
Laurus all our rights, title,  interest and benefit,  present and future, under,
to and in the Relevant Agreement.

Words and expressions  defined in the Debenture shall have the same meaning when
used in this letter.

A copy of the Debenture [is enclosed for your  attention]  [has  previously been
provided to you] and we request that you take note of its provisions.

Please note the following:

         (a)      The Company shall at all times remain solely liable to you for
                  the performance of all of the obligations  assumed by it under
                  or in respect of the  Relevant  Agreement.  Laurus will not be
                  under any  liability or obligation of any kind in the event of
                  any breach or failure by us to perform  any  obligation  under
                  the Relevant Agreement.

         (b)      The Company irrevocably and  unconditionally  instructs you to
                  pay the full  amount of any sum which you are (or  would,  but
                  for the Debenture,  be) at any time obliged to pay to it under
                  or in respect of the Relevant Agreement:

<PAGE>
                                       57

                  (i)      unless  and  until  Laurus  gives  you  notice  of an
                           Enforcement Event, to the following bank account:

                  Bank Account Bank:        [name and address of Account Bank]

                  Bank Account Name:        [                  ]

                  Bank Account Number:      [                  ]

                  and

                  (ii)     at all times after  Laurus has given you notice of an
                           Enforcement  Event as  referred to in  paragraph  (i)
                           above,  to such bank  account as Laurus may from time
                           to time specify to you.

         (b)      Laurus has agreed that,  notwithstanding  the  Debenture,  the
                  Company  remains  entitled  to  exercise  all of  the  rights,
                  powers,  discretions  and  remedies  which  would (but for the
                  Debenture)  be vested in the  Company  under and in respect of
                  the  Relevant  Agreement  unless and except to the extent that
                  Laurus  gives you  notice of an  Enforcement  Event.  Upon and
                  after the giving of any such notice of an  Enforcement  Event,
                  Laurus  shall be  entitled  to  exercise  and give  directions
                  regarding the exercise of all or any of those rights,  powers,
                  discretions  and remedies (to the exclusion of the Company and
                  to the exclusion of any directions  given at any time by or on
                  behalf of the  Company) to the extent  specified in the notice
                  of an Enforcement Event.

         (c)      The  Company has  irrevocably  and  unconditionally  appointed
                  Laurus  to be its  attorney  following  the  occurrence  of an
                  Enforcement  Event to do (among other things) all things which
                  the  Company  itself  could  do in  relation  to the  Relevant
                  Agreement.

         (d)      The Company confirms to you that:

                  (i)      in the event of any conflict  between  communications
                           received from the Company and from Laurus,  you shall
                           treat the  communication  from  Laurus as  prevailing
                           over the communication from the Company;

                  (ii)     you are and will at all times be  permitted to assume
                           and   rely   upon   the   correctness   of   anything
                           communicated  to  you  by  Laurus  including  without
                           limitation  statements  as to  the  occurrence  of an
                           Enforcement Event; and

                  (iii)    none   of  the   instructions,   authorisations   and
                           confirmations in this notice can be revoked or varied
                           in any way except with Laurus' specific prior written
                           consent.

<PAGE>
                                       58

Please acknowledge  receipt of this notice, and confirm your agreement to it, by
executing   and   returning   to  Laurus  an  original   copy  of  the  Form  of
Acknowledgement attached to this notice of assignment.

This notice is governed by English law.

Yours faithfully,

.....................................
For and on behalf of
Inyx Pharma Limited

.....................................
For and on behalf of
Laurus Master Fund, Ltd.

<PAGE>
                                       59

                                   SCHEDULE 4

                                     Part 2
                             FORM OF ACKNOWLEDGEMENT

                      [LETTERHEAD OF CONTRACT COUNTERPARTY]

To:      Laurus Master Fund, Ltd.
c/o Laurus Capital Management LLC,
152 West 57th Street,
New York, New York 10019, USA

Attn:    [               ]

Fax:     [               ]

Dear Sirs,

We acknowledge receipt of the notice dated [                ],  (a copy of which
is attached to this  letter) and the copy of the  Debenture  enclosed  with that
notice. Words and expressions defined in the Debenture have the same meanings in
this letter.

In  consideration  of Laurus agreeing to provide  finance and financial  support
pursuant to the [relevant  documents] and [         ],  we confirm to you in the
terms set out in this letter:

1.       We consent to the assignment of the Relevant  Agreement and have noted,
         and will act in accordance with, the terms of that notice.

2.       We have not previously  received notice of any other  assignment of the
         Relevant  Agreement  and we are not aware of any  interest of any third
         party in any of the  Company's  rights,  benefits,  interests or claims
         under or in respect of the Relevant Agreement.

3.       We irrevocably and unconditionally  agree to pay the full amount of any
         sum  which we are (or  would,  but for the  Debenture,  be) at any time
         obliged to pay under or in respect of the Relevant Agreement:

         (a)      unless  and until  Laurus  gives us  notice of an  Enforcement
                  Event, to the [details of pre-enforcement account(s)];

         (b)      at  all  times  after   Laurus  has  given  us  notice  of  an
                  Enforcement  Event,  to such bank  account  as Laurus may from
                  time to time specify.

<PAGE>
                                       60

4.       We acknowledge that the Company shall at all times remain solely liable
         to us for the performance of all of the obligations assumed by it under
         the Relevant Agreement, and that neither Laurus is or will be under any
         liability or obligation  whatever in the event of any breach or failure
         by the Company to perform its obligations under the Relevant Agreement.

This letter is governed by English law.

Yours faithfully,

Signed for and on behalf of
[counterparty to Relevant
Agreement]

By
................................................
(Print Name):

<PAGE>
                                       61

                                   SCHEDULE 5
                            TANGIBLE MOVABLE PROPERTY

All that plant,  machinery and equipment  listed in the Asset  Appraisal and the
appendices  thereto  dated 20th October  2003  provided to Laurus Funds by Henry
Butcher  International  Limited and all plant,  machinery and equipment owned by
the Company now or at any time in the future.

<PAGE>
                                       62

EXECUTION

Executed as a deed by Inyx Pharma       )
Limited  acting by [a director and its  )
secretary/two directors]                )

                            Director:../S/ W.J. Jackson ......

                            [Secretary/Director:]. W.J. Jackson, Secretary......

Executed as a deed by Laurus       )
Master Fund, Ltd., acting by       )
                                   )
                                   )
who, in  accordance with the laws  )       .....................................
of the Cayman Islands [is/are]     )       (Authorised Signatory[ies])
acting under the authority of      )
Laurus Master Fund, Ltd.           )

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]