Document:

<PAGE>

                                                                   EXHIBIT 10.12

                                February 17, 1998

Michael A. Harpold
3009 New Bern Avenue
Raleigh, North Carolina 27610

Dear Mike:

         This letter sets forth the terms and conditions under which LipoMed,
Inc. (the "Company") will engage you as an employee of the Company effective as
of November 14, 1997 and ending on November 14, 1998 (the "Initial Term") and
shall automatically be renewed on a year-to year basis on the same terms and
conditions set forth in this letter (the "Renewal Term") unless terminated as
provided herein or unless amended or modified by mutual agreement. You will
serve as Chief Operating Officer for the Company.

         The initial compensation for your services shall be as follows: (i) a
base salary of One Hundred Thousand Dollars ($100,000) for the first year to be
paid consistent with the payroll schedule established by the Company and subject
to annual review by the Board of Directors of the Company; (ii) a Non-Qualified
Stock Option to purchase fifty thousand (50,000) shares of the Common Stock of
the Company on the terms and conditions set forth in the Non-Qualified Stock
Option Agreement attached hereto as Exhibit A; (iii) an annual bonus of up to
                                    ---------
25% of your base salary upon the achievement of certain Company goals as
determined by the Board of Directors of the Company; (iv) four weeks of vacation
per fiscal year; and (v) other employee benefits as those benefits become
available and as those benefits are provided to other executive employees of the
Company. Further, the Company will pay all reasonable expenses incurred by you
which are directly related to the conduct of the business of the Company,
provided that you comply with the policies for reimbursement or advance of
business expenses as established by the Board of Directors of the Company.

         This agreement may be voluntarily terminated by either party by giving
written notice of intention not to renew for any Renewal Term to the other party
("Voluntary Termination"), such notice to be delivered at least ninety (90) days
prior to the last day of the Term or any Renewal Term. In the event that the
Company terminates this agreement other than by Voluntary Termination or "for
cause" (as that term is hereinafter defined), the Company shall pay you the base
salary for a period of six months following such termination (the "Severance
Period") and you shall be entitled to all benefits which were provided to you at
the time of such termination during the Severance Period to the extent allowed
under the terms of the applicable benefit plans (or if not allowed, the cash
equivalent thereof). For the purposes of this agreement, "for cause" means (i)
any material breach of this agreement, or any other agreement between you and
the Company, by you or failure by you to diligently and properly perform your
duties for the

<PAGE>

Company, such failure to be determined in the reasonable judgment of the Board
of Directors of the Company and which failure is not corrected within thirty
(30) days after notice of such failure; (ii) any material failure to comply with
the policies and/or directives of the Board of Directors, which failure is not
corrected within thirty (30) days after notice of such failure; (iii) any
dishonest or illegal action, or any other action whether or not dishonest or
illegal, which is materially detrimental to the Company; (iv) any failure to
fully disclose any material conflict of interest you may have with the Company
and any third party which is materially detrimental to the Company or (v) any
adverse act or omission which would be required to be disclosed pursuant to
public securities laws or which would limit the ability of the Company or any
entity affiliated with the Company to sell securities under any Federal or state
law or which would disqualify the Company or any affiliated entity from any
exemption otherwise available to it, all of which are materially detrimental to
the Company. Further, upon termination of this agreement, all property of the
Company in your possession, including all books and records, shall be returned
immediately to the Company.

         The Company further agrees to pay you Twenty-Seven Thousand Five
Hundred Dollars ($27,500) for past consulting services and Fifty Thousand
Dollars ($50,000) for accrued salary for services rendered as President and
Chief Executive Officer of the Company during the period from May 14, 1997 to
and including November 14, 1997 upon the closing of at least Five Hundred
Thousand Dollars ($500,000) of the offering of Series A Convertible Preferred
Shares of the Company. You hereby waive and release any and all claims which you
may have to salary or other compensation for your services as Chief Executive
Officer and President for the period from May 14, 1997 to and including November
14, 1997 and for any consulting services provided by you to the Company on or
before November 14, 1997.

         During the term of this agreement and upon termination of this
agreement for any reason, neither you nor anyone acting on your behalf shall at
any time disclose or use for your or their own advantage or the advantage of any
other person or entity, any information concerning the Company which came from
your association with the Company. You shall treat all confidential information
received with respect to the Company as confidential and trade secrets and shall
not use such information for any purpose other than to fulfill your obligations
under this agreement.

         You shall have no obligation of confidentiality as to information that:
(a) is known to you at the time of disclosure other than through disclosure to
you as a consultant or employee of the Company; or (b) is independently
developed by you without breach of this agreement; or (c) becomes known to you
from another source without confidentiality restriction on subsequent disclosure
or use; or (d) is or becomes publicly known through no wrongful act on your
behalf; or (e) is disclosed pursuant to any judicial or governmental request,
requirement or order, provided that you give the Company sufficient prior notice
in order to contest such request, requirement or order.

         You agree that all inventions, discoveries, improvements, trade
secrets, techniques, processes, know-how and works of authorships, whether
patentable or protectable by copyright or not, which you develop, produce or
make during the term of this agreement or while a consultant to the Company and
related to the present or contemplated business of the Company, and all rights
in the same under any copyright, patent or similar statute, shall be the sole

<PAGE>

exclusive property of the Company. Upon request from the Company, but at no
expense to you, you will execute any and all proper applications for copyright
and patent assignments and other instruments and you will give testimony when
and where requested to protect title in the Company for all such rights and
inventions, both United States and foreign, belonging to the Company.

You hereby represent that your performance of services for the Company will not
violate any obligation which you may have to any previous employer, including,
without limitation, any agreements to refrain from competing, directly or
indirectly, with the business of any previous employer or any other third party.
You further represent that your performance of all the terms of this agreement
and as a consultant to the Company does not and will not breach any agreement to
keep in confidence proprietary information, trade secrets, knowledge or data
acquired by you in confidence or in trust prior to your engagement as a
consultant by the Company or induce the Company to use any confidential or
proprietary information, trade secrets or material belonging to any previous
employer or others, and you agree to indemnify and hold harmless the Company
from and against all claims of loss or liability (including reasonable
attorneys' fees) arising out of or connected with your breach or alleged breach
of any of the representations set forth above.

         The Company will indemnify and hold you harmless from and against any
and all claims of loss or liability (including reasonable attorney's fees)
arising from or in connection with this agreement or the services provided
hereunder, except to the extent that the same shall be determined to have
resulted solely from actions taken or omitted due to your willful misconduct,
negligence or knowing violation of the law.

         This agreement constitutes a full and complete understanding of the
parties with respect to the subject matter hereof, and all prior written and
oral agreements concerning the subject matter hereof, including without
limitation, the letter agreement between you and the Company executed as of
November 20, 1997, are hereby terminated. This agreement shall be governed by
the laws of the State of North Carolina.

         If you are in agreement with the terms and conditions set forth herein,
please execute one copy of this letter and return it to me.

                                            Sincerely,

                                            LipoMed, Inc.

                                            /s/ Richard A. Franco
                                            -----------------------------
                                            Richard A. Franco, CEO
Agreed to and accepted this
17/th/ day of February, 1998

/s/ Michael A. Harpold
---------------------------
Michael A. Harpold<PAGE>

                                                                   EXHIBIT 10.13

                       MASTER LOAN AND SECURITY AGREEMENT

No. 4110853                                           Dated: September 27, 2000
    -------

<TABLE>
<S>                                                   <C>
LENDER:                                            CUSTOMER:
        OXFORD VENTURE FINANCE, LLC                    LIPOMED, INC.
        A Virginia Limited Liability Corporation          a Delaware corporation
Address:                                              Address:
        133 NORTH FAIRFAX STREET                   3009 NEW BERN AVENUE
        ALEXANDRIA, VIRGINIA 22314                 RALEIGH, NORTH CAROLINA 27610
</TABLE>

          In consideration of each Loan Agreement, Customer hereby agrees with
Lender that, whenever Customer shall be at any time or times directly or
contingently indebted, liable or obligated to Lender in any manner whatsoever,
Lender shall have the following rights:

          1.   DEFINITIONS. To the extent not otherwise specifically defined in
this Agreement, unless the context otherwise requires, all other terms contained
in this Agreement shall have the meanings assigned or referred to them in the
UCC. The following terms shall have the following meanings:

          "Acceptance Date" with respect to each item of Equipment shall have
the meaning assigned to such term in Section 3 of this Agreement.

          (Tom does not see a need to define Advance Payment
Amount. The fee and application of the fee are in Oxford's Proposal letter with
the Customer. If they insist on adding this language, we will need to modify the
language in our Notice of Assignment document to state that GECC does not hold
the deposit and is not liable for any applications thereof.)

          "Affiliate" shall mean, with respect to any person, firm or entity,
any other person, firm or entity controlling, controlled by, or under common
control with such person, firm or entity; for the purposes hereof "control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of any such person, firm or
entity, whether through the legal or beneficial ownership of voting securities,
by contract or otherwise.

          "Agreement" shall mean this Master Loan and Security Agreement, as
amended or modified from time to time.

          "Attorneys' Fees and Expenses" shall mean all reasonable attorneys'
fees and legal costs and expenses (including, without limitation, those fees,
costs and expenses incurred in connection with bankruptcy proceedings, including
Relief from Stay Motions, Cash Collateral Motions and disputes concerning any
proposed disclosure statement and/or bankruptcy plan).

          "Collateral" shall mean all Equipment and any licenses, trademarks or
other tangible or intangible property ancillary to the Equipment and all
products, proceeds, rents and profits therefrom or thereof including proceeds in
the form of goods, accounts, chattel paper, documents, instruments and insurance
proceeds.

          "Default" shall have the meaning ascribed to such term in Section 8 of
this Agreement.

          "Equipment" shall mean one or more items or units of personal property
now owned or hereafter acquired by Customer, as described in each Equipment
Schedule, wherever the same may be located, including all present and future
additions, attachments, accessions and accessories thereto and all replacements,
substitutions and a right to use license for any software related to any of the
foregoing and proceeds thereof, including all proceeds of insurance thereon.

          "Equipment Schedule" shall mean each Equipment Schedule, which
incorporates by reference the terms and conditions of this Agreement and
describes one or more items of Equipment and specific terms and conditions with
respect thereto.

          "Event of Default" shall have the meaning ascribed to such term in
Section 8 of this Agreement.

          "Loan Agreement" shall mean the applicable Equipment Schedule
incorporating the terms and conditions of this Agreement, including all
exhibits, addenda, schedules, certificates, riders and all other documents and
instruments executed and delivered in connection with the applicable Equipment
Schedule or this Master Loan and Security Agreement.

                                                      Initial JAP/RAF
                                                              -------

                                  Page 1 of 13

<PAGE>

                       MASTER LOAN AND SECURITY AGREEMENT

          "Note" shall mean a promissory note of Customer in favor of Lender
evidencing Customer's obligations to Lender with respect to a Loan Agreement.

          "Obligations" shall mean all liabilities, absolute or contingent,
joint, several or independent, of Customer or any Affiliate of Customer now or
hereafter existing, due or to become due to, or held or to be held by, Lender
for its own account or as agent for another or others, whether created directly
or acquired by assignment or otherwise and howsoever evidenced, including,
without limitation, the Loan Agreement, and all interest, taxes, fees, charges,
expenses and Attorneys' Fees and Expenses chargeable to Customer or incurred by
Lender under the Loan Agreement, or any other document or instrument delivered
in connection herewith.

          "Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust, or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.

          "Security Deposit" with respect to each item of Equipment shall have
the meaning assigned to such term in the Equipment Schedule applicable to such
item of Equipment.

          "UCC" shall mean the Uniform Commercial Code as enacted in the State
of Connecticut.

          2.   INDEPENDENT LOAN; CROSS-COLLATERALIZATION; SECURITY INTEREST.
Each Equipment Schedule shall constitute a separate, distinct and independent
Loan Agreement and contractual obligation of Customer. As security for the due
and punctual payment of any and all of the present and future Obligations of
Customer to Lender, Customer hereby (i) grants to Lender with respect to each
Loan Agreement and for the full amount of all Obligations, a security interest
in all of the Collateral and all collateral securing any other lease or security
agreement between Customer and Lender, whether now in existence or hereafter
entered into and (ii) assigns to Lender all of its rights, title and interest in
surplus money to which Customer may be entitled upon the sale of all such
Collateral provided that such assignment shall not apply to proceeds received by
Customer once the Obligations have been paid in full. The extent to which
Lender's security interest in any item of Collateral shall be entitled to
purchase money priority shall be determined by reference to the unpaid principal
balance of any Note evidencing the financing of the purchase price of such item
of Equipment.

          3.   ACCEPTANCE OF EQUIPMENT. The Equipment is to be delivered and
installed at the location specified or referred to in the applicable Equipment
Schedule. The Equipment shall be deemed to have been accepted by Customer for
all purposes under this Agreement upon Customer's execution of an Equipment
Schedule (the "Acceptance Date"). Lender shall not be liable or responsible for
any failure or delay in the delivery of the Equipment to Customer for whatever
reason.

          4.   TERM; PRINCIPAL AND INTEREST; NO PREPAYMENT; LATE CHARGES. The
term for any Loan Agreement shall be as specified in the applicable Equipment
Schedule. Each Loan Agreement is prepayable by Customer, in whole or in part,at
any time Principal and interest payments shall be in the amounts and shall be
due and payable as set forth in the applicable Equipment Schedule. If any
payment of principal or interest or other amount payable hereunder shall not be
paid within 5 days of the date when due, Customer shall pay as an administrative
and late charge an amount equal to 5% of the amount of any such overdue payment.
In addition, Customer shall pay overdue interest on any delinquent payment or
other amounts due under any Loan Agreement (by reason of acceleration or
otherwise) from the due date until paid at the rate of one and one-half percent
(1.5%) per month or the maximum amount permitted by applicable law, whichever is
lower. All payments to be made to Lender shall be made to Lender in immediately
available funds at the address shown above, or at such other place, as Lender
shall specify in writing.

          5.   REPRESENTATIONS, WARRANTIES AND COVENANTS. Customer hereby
represents and warrants to and covenants with Lender (provided that if Customer
is an individual or sole proprietorship, the representations, warranties and
covenants relating to corporate status shall not apply) that, as of the date
hereof and for so long as any Obligations shall remain outstanding:

                                                         Initial JAP/RAF
                                                                 -------

                                  Page 2 of 13

<PAGE>

                       MASTER LOAN AND SECURITY AGREEMENT

          (a)  Customer is duly organized and is existing in good standing under
the laws of its jurisdiction of organization and is duly qualified and in good
standing in those jurisdictions where the conduct of its business or the
ownership of its properties requires qualification;

          (b)  Customer has the power and authority to own the Collateral, to
enter into and perform this Agreement and any other document or instrument
delivered in connection herewith and to incur the Obligations;

          (c)  Customer's chief executive office is located at the address set
forth above;

          (d)  Customer does not utilize, and has not in the last five years
utilized, any trade names in the conduct of its business except as set forth on
Schedule 1 hereto;

          (e)  Customer has not changed its name, been the surviving entity in a
merger, acquired any business or changed the location of its chief executive
office within the previous five years, except as set forth on Schedule 2 hereto;

          (f)  Neither the execution, delivery or performance by Customer of the
Loan Agreement nor compliance by it with the terms and provisions hereof, nor
the consummation of the transactions contemplated herein, (i) will contravene
any applicable provision of any law, statute, rule or regulation, or any order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
will conflict or be inconsistent with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in any lien upon any property, pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement or any other material agreement or
instrument to which Customer is a party or by which it or any of its property or
assets are bound or to which it may be subject or (iii) will violate any
provision of its Certificate of Incorporation or By-Laws, or other governance
documents;

          (g)  The Loan Agreement, the Note and any document or instrument
delivered in connection herewith and the transactions contemplated hereby or
thereby are duly authorized, executed and delivered, and the Loan Agreement, the
Note and such other documents and instruments constitute valid and legally
binding obligations of Customer and are enforceable against Customer in
accordance with their respective terms;

          (h)  Other than filings required by the UCC, no order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by any governmental or public body or authority,
or any subdivision thereof, is required to authorize or required in connection
with (i) the grant by Customer of the security interest in connection with the
Loan Agreement, (ii) the execution, delivery and performance of the Loan
Agreement, (iii) the legality, validity, binding effect or enforceability of the
Loan Agreement or (iv) the perfection or maintenance of the aforementioned lien
and security interest;

          (i)  Except for the filing of extensions of time within which to file
federal and state income tax returns, (this is fine.) Customer has filed all
federal, state and local tax returns and other reports it is required to file,
has paid or made adequate provision for payment of all such taxes, assessments
and other governmental charges, and shall pay or deposit promptly when due all
sales, use, excise, personal property, income, withholding, corporate, franchise
and other taxes, assessments and governmental charges upon or relating to the
manufacture, purchase, ownership, maintenance, modification, delivery,
installation, possession, condition, use, acceptance, rejection, operation or
return of the Equipment and, upon request by Lender, Customer will submit to
Lender proof satisfactory to Lender that such payments and/or deposits have
been made;

          (j)  There are no pending or, to the best knowledge of the Customer
after due and diligent inquiry, threatened actions or proceedings before any
court or administrative agency, an unfavorable resolution of which could have a
material adverse effect on Customer's financial condition or operations;

          (k)  No representation, warranty or statement by Customer contained in
the Loan Agreement or in any certificate or other document furnished or to be
furnished by Customer pursuant to the Loan Agreement contains or at the time of
delivery shall contain any untrue statement of material fact, or omits, or shall
omit at the time of delivery, to state a material fact necessary to make it not
misleading;

          (l)  All financial statements delivered and to be delivered by
Customer to Lender in connection with the execution and delivery of the Loan
Agreement present fairly in all material respects the assets, liabilities and
financial condition

                                                          Initial JAP/RAF
                                                                  -------

                                  Page 3 of 13

<PAGE>

                       MASTER LOAN AND SECURITY AGREEMENT

of customer on the date of such financial statements and have been prepared in
accordance with generally accepted accounting principles, and at all times since
the date of the most recent financial statements, there has been no material
change in Customer's financial affairs or business operations. Customer shall
furnish Lender: (i) within 90 days after the last day of each fiscal year of
Customer, a financial statement including a balance sheet, income statement,
statement of retained earnings and statement of cash flows, each prepared in
accordance with generally accepted accounting principles consistently applied
with a report signed by an independent certified public accountant satisfactory
to Lender; (ii) upon the request of Lender, within 45 days after the close of
each quarter of each fiscal year of Customer, financial statements similar to
those described in the immediately preceding clause, prepared by Customer and
certified by the chief financial officer of Customer; (iii) promptly upon the
request of Lender, such tax returns or financial statements regarding any
guarantor of the Obligations or any Affiliate of Customer as Lender may
reasonably request from time to time; (iv) promptly upon request of Lender, in
form satisfactory to Lender, such other and additional information as Lender may
reasonably request from time to time, and; (v) promptly inform Lender of any
Defaults (defined below) or any events or changes in the financial condition of
Customer occurring since the date of the last financial statements of Customer
delivered to Lender which, individually or cumulatively, when viewed in light of
prior financial statements, may result in a material adverse change in the
financial condition of Customer;

          (m)  Customer shall permit Lender at Lender's expense, through its
authorized attorneys, accountants and representatives, to inspect and examine
the Equipment and the books, accounts, records, ledgers and assets of every kind
and description of Customer with respect thereto at all reasonable times;
provided, however, that the failure of Lender to inspect the Equipment or to
inform Customer of any noncompliance shall not relieve Customer of any of its
Obligations hereunder;

          (n)  Except as set forth on Schedule 2 and other than lien and
security interest granted to Lender and liens for taxes not yet due and payable,
Customer is the owner of the Equipment free and clear of all rights, title,
security interests, encumbrances or liens of any party, will defend the
Equipment against all claims and demands of all persons at any time claiming any
interest therein and shall deliver to Lender any and all evidence of ownership
of, and certificates of title to, any and all of the Equipment;

          (o)  The Equipment is personal property and not a fixture under the
law of the jurisdiction in which the Equipment is located even though the
Equipment may hereafter become attached or affixed to real property;

          (p)  Each site where Equipment is located, if not owned by Customer,
is leased by Customer pursuant to a valid lease or rental agreement which
permits the possession, use and operation of the Equipment at such location;

          (q)  Customer shall use its best efforts to provide Lender with
disclaimers and waivers from landlords, mortgagees and other persons holding any
interest or claim in and to any premises where Equipment is located, acceptable
in all respects to Lender, which may be necessary or advisable in the reasonable
discretion of Lender to confirm that the first priority security interest and
rights of Lender in the Equipment are and will remain valid and superior against
all other parties;

          (r)  The Equipment is in the possession of Customer at the location(s)
specified in the applicable Equipment Schedule, and shall not be removed from
such location without the prior written consent of Lender, which consent shall
in any event be conditioned upon Customer having completed all notifications,
filings, recordings, and other actions in such new location as Lender may
require to protect and perfect Lender's interests in the Collateral;

          (s)  Customer shall not, without the prior written consent of Lender,
sell, offer to sell, lease, rent, hire or in any other manner dispose, transfer
or surrender use and possession of any Equipment;

          (t)  Customer will not, directly or indirectly, create, incur or
permit to exist any lien, encumbrance, mortgage, pledge, attachment or security
interest on or with respect to the Equipment other than in connection with the
execution and delivery of the Loan Agreement and liens for taxes not yet due and
payable;

          (u)  Customer shall permit each item of Equipment to be used only
within the continental United States by qualified personnel solely for business
purposes and the purpose for which it was designed and, at its sole expense,
shall service, repair, overhaul and maintain each item of Equipment in the same
condition as when received, ordinary wear and tear excepted, in good operating
order, consistent with prudent industry practice (but, in no event less than the
same extent to which Customer maintains other similar equipment in the prudent
management of its assets and properties) and in compliance with all

                                                                 Initial JAP/RAF
                                                                         -------

                                  Page 4 of 13

<PAGE>

                       MASTER LOAN AND SECURITY AGREEMENT

applicable laws, ordinances, regulations, and conditions of all insurance
policies required to be maintained by Customer under the Loan Agreement and all
manuals, orders, recommendations, instructions and other written requirements as
to the repair and maintenance of such item of Equipment issued at any time by
the vendor and/or manufacturer thereof;

          (v)  If any item of Equipment does not comply with the requirements of
the Loan Agreement, Customer shall bring such Equipment into compliance with the
provisions hereof; and Customer shall not use any Equipment, nor allow the same
to be used, for any unlawful purpose;

          (w)  Customer acknowledges that Lender has not selected, manufactured
or supplied the Equipment to Customer and has acquired any Equipment subject
hereto solely in connection with this Loan Agreement and Customer has received
and approved the terms of any purchase order or agreement with respect to the
Equipment; and

          (x)  Customer has all permits, licenses and other authorizations which
are required with respect to its business under Environmental Laws (as defined
below) and is in compliance with all terms and conditions of such permits,
licenses and other authorizations, including all limitations, restrictions,
standards, prohibitions, requirements, obligations, schedules and timetables.
The Customer is not presently in violation of any Environmental Laws.
"Environmental Laws" shall mean any Federal, state or local law relating to
releases or threatened releases of Hazardous Substances; the manufacture,
handling, transport, use, treatment, storage or disposal of Hazardous Substances
or materials containing Hazardous Substances; or otherwise relating to pollution
of the environment or the protection of human health. "Hazardous Substances"
shall mean substances or materials which contain substances defined in or
regulated as toxic or hazardous materials, chemicals, substances, waste or
pollutants under any present or future Federal statutes and their state
counterparts, as well as any implementing regulations as amended from time to
time and as interpreted by administering agencies.

          6.   DISCLAIMER OF WARRANTIES; LIMITATION OF REMEDY; LIMITATION OF
LIABILITY. Customer has selected both the Equipment and the supplier (identified
in the Equipment Schedule, herein ("Supplier") from whom Customer agrees to
purchase the Equipment. CUSTOMER ACKNOWLEDGES THAT LENDER HAS NO SPECIAL
FAMILIARITY OR EXPERTISE WITH RESPECT TO THE EQUIPMENT. CUSTOMER AGREES THAT THE
EQUIPMENT IS "AS IS" AND IS OF A SIZE, DESIGN AND CAPACITY SELECTED BY CUSTOMER
AND THAT CUSTOMER IS SATISFIED THAT THE SAME IS SUITABLE FOR CUSTOMER'S
PURPOSES, AND THAT EXCEPT AS MAY OTHERWISE BE SPECIFICALLY PROVIDED HEREIN OR IN
THE EQUIPMENT SCHEDULE, LENDER HAS MADE NO REPRESENTATION OR WARRANTY AS TO ANY
MATTER WHATSOEVER. LENDER DISCLAIMS, AND CUSTOMER HEREBY EXPRESSLY WAIVES AS TO
LENDER, ALL WARRANTIES WITH RESPECT TO THE EQUIPMENT INCLUDING BUT NOT LIMITED
TO ALL EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, QUALITY, CAPACITY, OR WORKMANSHIP, ALL EXPRESS OR IMPLIED
WARRANTIES AGAINST PATENT INFRINGEMENTS OR DEFECTS, WHETHER HIDDEN OR APPARENT,
AND ALL EXPRESS OR IMPLIED WARRANTIES WITH RESPECT TO COMPLIANCE OF THE
EQUIPMENT WITH THE REQUIREMENTS OF ANY LAW, REGULATION, SPECIFICATION OR
CONTRACT RELATIVE THERETO. IN NO EVENT SHALL LENDER BE LIABLE (INCLUDING WITHOUT
LIMITATION, UNDER ANY THEORY IN TORTS) FOR ANY LOSS OF USE, REVENUE, ANTICIPATED
PROFITS OR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF
OR IN CONNECTION WITH THE LOAN OR THE USE, PERFORMANCE OR MAINTENANCE OF THE
EQUIPMENT. If the Equipment is not properly installed, does not operate as
represented or warranted by the Supplier, manufacturer and/or service company or
is unsatisfactory for any reason, Customer shall make any claim on account
thereof solely against the Supplier, manufacturer and/or service company and
shall, nevertheless, pay Lender all amounts payable under the Loan Agreement and
any such claims shall not act as a defense, counterclaim, deduction, setoff or
otherwise limit Customer's Obligations under the Loan Agreement.

          7.   RISK OF LOSS AND DAMAGE; INSURANCE. Customer assumes all risk of
loss, damage or destruction to the Equipment from whatever cause and for
whatever reason. If all or a portion of an item of Equipment shall become lost,
stolen, destroyed, damaged beyond repair or rendered permanently unfit for use
for any reason, or in the event of any condemnation, confiscation, theft or
seizure or requisition of title to or use of such item of Equipment, Customer
shall immediately pay to Lender an amount equal to the outstanding principal
balance of and accrued and unpaid interest on any Note with respect to such
Equipment, less the net amount of the recovery, if any, received by Lender from
insurance on the Equipment. For so long as any Obligations shall remain
outstanding, Customer shall procure and maintain insurance in such amounts and
with such coverages, and upon such terms and with such companies, as Lender may
approve, at Customer's

                                                        Initial JAP/RAF
                                                                -------

                                  Page 5 of 13

<PAGE>

                       MASTER LOAN AND SECURITY AGREEMENT

expense; provided, however, that in no event shall such insurance be less than
the following coverages and amounts: (a) Worker's Compensation and Employer's
Liability Insurance, in the full statutory amounts provided by law; (b)
Comprehensive General Liability Insurance including product/completed operations
and contractual liability coverage, with minimum limits on a per occurrence
basis, as reasonably required by Lender, and Combined Single Limit Bodily Injury
and Property Damage on an aggregate basis, as reasonably required by Lender or,
in either case, as otherwise specified in any Equipment Schedule hereto; and (c)
All Risk Physical Damage Insurance, including earthquake and flood, on each item
of Equipment, in an amount not less than the greater of (i) the outstanding
principal balance owing under any Note with respect to such Equipment; or (ii)
its full replacement value. Customer shall cause Lender to be included as an
additional insured on each such Comprehensive General Liability Insurance
policy. On each such All Risk Physical Damage Insurance policy Lender shall be
named as loss payee. Such policies shall be endorsed to provide that the
coverage afforded to Lender shall not be rescinded, impaired or invalidated by
any act or neglect of Customer. Customer agrees to waive Customer's rights and
its insurance carrier's rights of subrogation against Lender for any and all
loss or damage. In addition to the foregoing minimum insurance coverage,
Customer shall procure and maintain such other insurance coverage as Lender may
reasonably require. All policies shall be endorsed or contain a clause requiring
the insurer to furnish Lender with at least 30 days prior written notice of any
material change, cancellation or non-renewal of coverage. Upon execution of this
Agreement, and thereafter, 30 days prior to the expiration of each insurance
policy required hereunder, Customer shall furnish Lender with a certificate of
insurance or other evidence satisfactory to Lender that the insurance coverages
required under such policy are and will continue in effect, provided, however,
that Lender shall be under no duty either to ascertain the existence of or to
examine such insurance coverage or to advise Customer in the event such
insurance coverage should not comply with the requirements hereof. If Customer
shall at any time or times hereafter fail to obtain and/or maintain any of the
policies of insurance required herein, or fail to pay any premium in whole or in
part relating to any such policies, Lender may, but shall not be obligated to,
obtain and/or cause to be maintained insurance coverage with respect to the
Collateral, including, at Lender's option, the coverage provided by all or any
of the policies of Customer and pay all or any part of the premium therefor,
without waiving any Event of Default by Customer, and any sums so disbursed by
Lender shall be additional Obligations of Customer to Lender payable on demand.
Lender shall have the right to settle and compromise any and all claims under
any of the All Risk Physical Damage policies required to be maintained by
Customer hereunder and Customer hereby appoints Lender as its attorney-in-fact,
with power to demand, receive and receipt for all monies payable thereunder, to
execute in the name of Customer or Lender or both any proof of loss, notice,
draft or other instruments in connection with such policies or any loss
thereunder and generally to do and perform any and all acts as Customer, but for
this appointment, might or could perform.

          8.   EVENTS OF DEFAULT. An "Event of Default" under this Agreement
shall be deemed to have occurred upon the occurrence or existence of any one or
more of the following events or conditions (each a "Default") and after the
giving of any required notice or the passage of any required period of time (or
both) specified below with respect to such Default: (a) Customer shall fail to
make any payment due under any Note or as required under the Loan Agreement
within 5 days of its due date; or (b) Customer shall fail to obtain or maintain
any of the insurance required under the Loan Agreement; or (c) Customer shall
remove, sell, transfer, encumber, or part with possession of any Equipment; (d)
Customer shall fail to perform or observe any other covenant, condition or
agreement under the Loan Agreement, and such failure shall continue for 20 days
after notice thereof to Customer; or (e) Customer or any of its Affiliates shall
default in the payment or performance of any Obligation owing to Lender, and
such default shall continue for 20 days after notice thereof to Customer; or (f)
any representation or warranty made by Customer herein or in any certificate,
agreement, statement or document heretofore or hereafter furnished Lender,
including without limitation any financial information disclosed to Lender,
shall prove to be false or incorrect in any material respect; or (g) death or
judicial declaration of incompetence of Customer, if an individual; or (h) the
commencement of any bankruptcy, insolvency, arrangement, reorganization,
receivership, liquidation or other similar proceeding by or against Customer or
any of its properties or businesses, or the appointment of a trustee, receiver,
liquidator or custodian for Customer or any of its properties or businesses
which continues for a 30 day period, or if Customer suffers the entry of an
order for relief under Title 11 of the United States Code; or (i) the making by
Customer of a general assignment or deed of trust for the benefit of creditors;
or (j) Customer shall default in any payment or other material obligation to any
other lender and such lender has accelerated the debt in accordance with its
terms; or (k) Customer shall merge with or consolidate into any other entity or
sell all or substantially all of its assets or in any manner terminate its
existence; or (l) if Customer is a privately held corporation, more than 50% of
Customer's voting capital stock, or effective control of Customer's voting
capital stock, issued and outstanding from time to time, is not retained by the
holders of such stock on the date the Loan Agreement is executed; or (m) if
Customer is a publicly held corporation, there shall be a change in the
ownership of Customer's stock such that Customer is no longer subject to the
reporting requirements of the Securities Exchange Act of 1934 or no longer has a
class of equity securities registered under Section 12 of the Securities Act of
1933; or (n) Lender shall reasonably determine that

                                                         Initial JAP/RAF
                                                                 -------

                                  Page 6 of 13

<PAGE>

                       MASTER LOAN AND SECURITY ARGEEMENT

there has been a material adverse change in the financial condition or business
operations of Customer since the date of the execution of the Loan Agreement, or
that Customer's ability to perform its obligations is materially impaired; or
(o) if Customer leases the premises where any Equipment is located, a breach by
Customer of any such lease and the commencement of an action by the landlord to
evict Customer or to repossess the premises; or Customer shall promptly notify
Lender of the occurrence of any Event of Default or the occurrence or existence
of any event or condition, which, upon the giving of notice or lapse of time, or
both, would constitute an Event of Default.

          9.  RIGHTS AND REMEDIES; ACCELERATION. (a) Upon the occurrence of an
Event of Default, Lender shall have all of the rights and remedies enumerated
herein (all of which are cumulative and not exclusive of any other right or
remedy available to Lender) and Lender may, at its sole option and discretion,
exercise one or more of the following remedies with respect to any or all of the
Collateral: (i) by written notice to Customer, terminate any or all Loan
Agreements as such notice shall specify, and, with respect to such terminated
Loan Agreements, declare immediately due and payable and recover from Customer,
as liquidated damages for loss of Lender's bargain and not as a penalty, an
amount equal to the aggregate of all unpaid periodic installment payments and
other sums due under Loan Agreements to the date of default plus the charges set
forth in Section 4 hereof, if any, plus an amount equal to the outstanding
principal balances of and accrued and unpaid interest on any of the Notes with
respect to the Loan Agreements, (ii) Lender may declare, at its option, all or
any part of the Obligations immediately due and payable, without demand, notice
of intention to accelerate, notice of acceleration, notice of nonpayment,
presentment, protest, notice of dishonor, or any other notice whatsoever, all of
which are hereby waived by Customer and any endorser, guarantor, surety or other
party liable in any capacity for any of the Obligations; (iii) cause Customer to
promptly ship, with insurance and freight prepaid by Customer, any or all
Equipment to such location as Lender may designate, or Lender, at its option,
may enter upon the premises where the Equipment is located and take immediate
possession of and remove the same by summary proceedings or otherwise, all
without liability to Lender for or by reason of damage to property or such entry
or taking possession except for Lender's gross negligence or willful misconduct;
(iv) sell any or all Collateral at public or private sale or otherwise dispose
of, hold, use, operate, lease to others or keep idle the Equipment, all as
Lender in its sole discretion may determine and all free and clear of any rights
of Customer; (v) remedy such default, including making repairs or modifications
to the Equipment, for the account and expense of Customer, and Customer agrees
to reimburse Lender for all of Lender's costs and expenses; (vi) apply any
Security Deposit or other cash collateral or sale or remarketing proceeds of the
Equipment at any time to reduce any amounts due to Lender, or (vii) exercise any
other right or remedy which may be available to Lender under applicable law, or
proceed by appropriate court action to enforce the terms hereof or to recover
damages for the breach hereof, including Attorneys' Fees and Expenses. Any
notice required to be given by Lender of a sale or other disposition or other
intended action which is made in accordance with the terms of the Loan Agreement
at least seven (7) days prior to such proposed action, shall constitute fair and
reasonable notice to Customer of any such action. Lender shall be liable to
Customer only for its gross negligence or willful misconduct in failing to
comply with any applicable law imposing duties upon Lender; Lender's liability
for any such failure shall be limited to the actual loss suffered by Customer
directly resulting from such failure; and in no event shall Lender have any
liability to Customer for incidental, consequential, punitive or exemplary
damages. No remedy referred to in this Section 9 shall be exclusive, but each
shall be cumulative and in addition to any other remedy referred to above or
otherwise available to Lender at law or in equity.

               (b)  The exercise or pursuit by Lender of any one or more of such
remedies shall not preclude the simultaneous or later exercise or pursuit by
Lender of any or all such other remedies, and all remedies hereunder shall
survive termination of the Loan Agreement. In the event Lender takes possession
and disposes of the Collateral, the proceeds of any such disposition shall be
applied in the following order: (1) to all of Lender's costs, charges and
expenses reasonably incurred in taking, removing, holding, repairing and selling
or leasing the Equipment; (2) to pay the Lender the remaining amount of any
Obligations owed to Lender and (3) the balance, if any, to Customer. A
termination shall occur only upon written notice by Lender and only with respect
to such Equipment, as Lender shall specify in such notice. Termination under
this Section 9 shall not affect Customer's duty to perform Customer's
Obligations under the Loan Agreement in full. Customer agrees to reimburse
Lender on demand for any and all costs and expenses reasonably incurred by
Lender in enforcing its rights and remedies hereunder following the occurrence
of an Event of Default, including, without limitation, Attorneys' Fees and
Expenses, and the costs of repossession, storage, insuring, reletting, selling
and disposing of any and all Equipment.

          10.  INDEMNITY. (a) Customer agrees to indemnify, reimburse and hold
Lender and its successors, Affiliates, assigns, officers, directors, employees,
agents and servants (hereinafter in this Section 10 referred to individually as
"Indemnitee", and collectively as "Indemnitees") harmless from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs, expenses or disbursements,
including Attorneys' Fees and

                                                         Initial JAP/RAF
                                                                 -------

                                  Page 7 of 13

<PAGE>

                       MASTER LOAN AND SECURITY AGREEMENT

Expenses of whatsoever kind and nature imposed on, asserted against or incurred
by any of the Indemnitees in any way relating to or arising out of the Loan
Agreement or any other document executed in connection herewith or therewith or
in any other way connected with the administration of the transactions
contemplated hereby or thereby or the enforcement of any of the terms of, or the
preservation of any rights under any thereof, or in any way relating to or
arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Equipment (including, without
limitation, latent or other defects, whether or not discoverable), the violation
of the laws of any country, state or other governmental body or unit, any tort
(including, without limitation, claims arising or imposed under the doctrine of
strict liability, or for or on account of injury to or the death of any Person
(including any Indemnitee), or property damage), or contract claim, or any claim
based on patent, trademark or copyright infringement or any obligation or
liability to the manufacturer or supplier of the Equipment under any Supply
Contracts (referenced in the Equipment Schedule), including purchase orders
issued by Customer or Lender or assigned to Lender; provided, however, that no
Indemnitee shall be indemnified pursuant to this Section 10 for losses, damages
or liabilities to the extent caused solely by the gross negligence or willful
misconduct of such Indemnitee. Customer agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, damage, injury,
penalty, claim, demand, action, suit or judgment, Customer shall assume full
responsibility for the defense thereof. Each Indemnitee agrees to use its best
efforts to promptly notify Customer of any such assertion of which such
Indemnitee has knowledge.

               (b)  Without limiting the application of Section 10(a) hereof,
Customer agrees to pay, or reimburse Lender for any and all reasonable fees,
costs and expenses (including Attorneys' Fees and Expenses) of whatever kind or
nature reasonably incurred in connection with the creation, preservation or
protection of Lender's liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and Lender's interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral.

               (c)  Customer shall, at its sole cost and expense, protect,
defend, indemnify, release and hold harmless the Indemnitees from and against
any and all Losses imposed upon or incurred by or asserted against any
Indemnitees, and arising out of or in any way relating to any one or more of the
following, unless caused solely by the gross negligence or willful misconduct of
any Indemnitee: (i) any presence of any Hazardous Substances in, on, above or
under Customer's leased or owned real property (the "Property"); (ii) any past,
present or threatened Release of Hazardous Substances in, on, above, under or
from the Property; or (iii) any past or present violation of any Environmental
Laws. The term "Release" of any Hazardous Substance includes, but is not limited
to, any release, deposit, discharge, emission, leaking, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Substances. The term "Losses" includes any and
all claims, suits, liabilities (including, without limitation, strict
liabilities), actions, proceedings, obligations, debts, damages, losses, costs,
expenses, diminutions in value, fines, penalties, charges, fees, expenses,
judgments, awards, amounts paid in settlement, costs of remediating a Hazardous
Substance (whether or not performed voluntarily), engineers' fees, environmental
consultants' fees, and costs of investigation (including, but not limited to
sampling, testing and analysis of soil, water, air, building materials and other
materials and substances whether solid, liquid or gas) or punitive damages, of
whatever kind or nature (including, but not limited to Attorneys' Fees and
Expenses).

               (d)  Without limiting the application of Section 10(a) or (b), or
(c) hereof, Customer agrees to pay, indemnify and hold each Indemnitee harmless
from and against any loss, costs, damages and expenses (including Attorneys'
Fees and Expenses) which such Indemnitee may suffer, expend or incur in
consequence of or growing out of any misrepresentation or omission of a material
fact by Customer in the Loan Agreement or in any writing contemplated by or made
or delivered pursuant to or in connection with the Loan Agreement.

               (e)  If and to the extent that the obligations of Customer under
this Section 10 are unenforceable for any reason, Customer hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.

          11.  MAINTENANCE; INSPECTION. During the term of the Loan Agreement,
Customer shall, unless Lender shall otherwise consent in writing: (a) maintain
conspicuously on any Equipment such labels, plates, decals or other markings as
Lender may reasonably require, stating that Lender has a security interest in
such Equipment; (b) furnish to Lender

                                                                 Initial JAP/RAF
                                                                         -------

                                  Page 8 of 13

<PAGE>

                      MASTER LOAN AND SECURITY AGREEEMENT

such information concerning the condition, location, use and operation of the
Equipment as Lender may reasonably request; (c) permit any person designated by
Lender to visit and inspect any Equipment and any records maintained in
connection therewith during regular business hours and upon reasonable advance
notice, provided, however, that the failure of Lender to inspect the Equipment
or to inform Customer of any noncompliance shall not relieve Customer of any of
its obligations hereunder; and (d) make no additions, alterations, modifications
or improvements (collectively, "Improvements") to any item of Equipment that are
not readily removable without causing material damage to such item of Equipment
or which will cause the value, utility or useful life of such item of Equipment
to materially decline. If any such Improvement is made and cannot be removed
without causing material damage or decline in value, utility or useful life (a
"Non-Severable Improvement"), then Customer warrants that such Non-Severable
Improvement shall immediately become subject to Lender's security interest upon
being installed and shall be free and clear of all liens and encumbrances other
than Lender's security interest and shall become Equipment subject to all of the
terms and conditions of the Loan Agreement.

          12.  FURTHER ASSURANCES. Customer shall promptly execute and deliver
to Lender such further documents and take such further action as Lender may
reasonably require in order to more effectively carry out the intent and purpose
of the Loan Agreement. Customer shall execute and deliver to Lender upon
Lender's request any and all schedules, forms and other reports and information
as Lender may deem necessary or appropriate to respond to requirements or
regulations imposed by any governmental authorities or to comply with the
provisions of the law of any jurisdiction in which Customer may then be
conducting business or in which any of the Equipment may be located. Customer
shall execute and deliver to Lender upon Lender's request such further and
additional documents, instruments and assurances as Lender deems reasonably
necessary to acknowledge and confirm, for the benefit of Lender or any assignee
or transferee of any of Lender's rights, title and interests hereunder in
accordance with Section 13 hereof (an "Assignee"), all of the terms and
conditions of all or any part of the Loan Agreement and Lender's or Assignee's
rights with respect thereto, and Customer's compliance with all of the terms and
provisions thereof.

          13.  ASSIGNMENT. The provisions of the Loan Agreement shall be binding
upon and shall inure to the benefit of the heirs, administrators, successors and
assigns of Lender and Customer, provided, however, Customer may not assign any
of its rights, transfer any interest in the Equipment or delegate any of its
obligations under the Loan Agreement without the prior written consent of Lender
in its sole discretion. Lender may, from time to time, absolutely or as
security, without notice to Customer, sell, assign, transfer, participate,
pledge or otherwise dispose of all or any part of a Loan Agreement, the
Obligations and/or the Collateral therefor, subject to the rights of Customer
under the Loan Agreement for the use and possession of the Equipment. In such
event, each and every immediate and successive Assignee shall have the right to
enforce the Loan Agreement with respect to those Obligations and/or Collateral
transferred to the Assignee, by legal action or otherwise, for its own benefit
as fully as if such Assignee were herein by name specifically given such rights.
Customer agrees that the rights of any such Assignee hereunder or with respect
to the related Obligations, shall not be subject to any defense, set off or
counterclaim that Customer may assert or claim against Lender, and that any such
Assignee shall have all of Lender's rights hereunder but none of Lender's
obligations. Lender shall have an unimpaired right to enforce the Loan Agreement
for its benefit with respect to that portion of any Loan Agreement, Obligations
and/or Collateral that Lender has not sold, assigned, pledged or otherwise
transferred.

          14.  GOVERNING LAW; MEDIATION OF THE LOAN AGREEMENT. THE LOAN
AGREEMENT AND THE LEGAL RELATIONS OF THE PARTIES HERETO SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CONNECTICUT, WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE OF LAW. CUSTOMER
HEREBY CONSENTS AND SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF CONNECTICUT AND THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF
CONNECTICUT FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT
OF ITS OBLIGATIONS UNDER THE LOAN AGREEMENT, AND EXPRESSLY WAIVES ANY OBJECTIONS
THAT IT MAY HAVE TO THE VENUE OF SUCH COURTS. CUSTOMER HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THE LOAN
AGREEMENT. Any action by Customer against Lender for any cause of action under
the Loan Agreement shall be brought within one year after any such cause of
action first arises. If requested by Lender, Customer agrees that prior to the
commencement of any litigation regarding the terms and conditions of the Loan
Agreement, the parties hereto shall subject themselves to non-binding mediation
with a qualified mediator mutually satisfactory to both parties.

                                  Page 9 of 13

<PAGE>

                       MASTER LOAN AND SECURITY AGREEMENT

          15.  NOTICES. Any demand or notice required or permitted to be given
hereunder shall be deemed effective (a) when deposited in the United States
mail, and sent by certified mail, return receipt requested, postage prepaid,
addressed to Lender or to Customer at the addresses set forth herein, or to such
other address as may be hereafter provided by the party to be notified by
written notice complying with the provisions hereof or (b) when transmitted to
Lender or Customer by facsimile at the respective numbers provided for such
purpose; provided, that such facsimile notice is promptly followed by notice
given in accordance with the immediately preceding subsection (a).

          16.  SECURITY DEPOSIT. Lender may, at its option, apply the Security
Deposit, if any is indicated in an Equipment Schedule, to cure any default of
Customer, whereupon Customer shall promptly restore such Security Deposit to its
original amount. Lender shall return to Customer any unapplied Security Deposit,
without interest, upon full payment and performance of Customer's Obligations
under the Loan Agreement.

          17.  MISCELLANEOUS; GENERAL PROVISIONS. The Loan Agreement will not be
binding on Lender until accepted and executed by Lender at its executive office
in Alexandria, Virginia. All options, powers and rights granted to Lender
hereunder or under any promissory note, guaranty, letter of credit agreement,
depository agreement, instrument, document or other writing delivered to Lender
shall be cumulative and shall be in addition to any other options, powers or
rights which Lender may now or hereafter have under any applicable law or
otherwise. Time is of the essence in the payment and performance of all of
Customer's obligations under the Loan Agreement. The captions in the Loan
Agreement are for convenience only and shall not define or limit any of the
terms thereof.

          Any provisions of the Loan Agreement which are unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such unenforceability without invalidating the remaining provisions hereof, and
any such unenforceability in any jurisdiction shall not render unenforceable
such provisions in any other jurisdiction. To the extent permitted by applicable
law, Customer hereby waives any provisions of law, which render any provision of
the Loan Agreement unenforceable in any respect.

          CUSTOMER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS LOAN
AGREEMENT IS A PART IS A COMMERCIAL TRANSACTION AND EXCEPT AS OTHERWISE PROVIDED
IN THE LOAN AGREEMENT CUSTOMER HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH LENDER'S TAKING
POSSESSION OR LENDER'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT
LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
REMEDIES AND ANY SUCH RIGHT WHICH CUSTOMER WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE,

          THE LOAN AGREEMENT AND ANY OTHER WRITTEN AGREEMENT(S) BETWEEN THE
PARTIES EXECUTED SIMULTANEOUSLY HEREWITH, REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES CONCERNING THE SUBJECT MATTER HEREOF, AND SUPERSEDE AND MAY NOT BE
CONTRADICTED BY ANY PRIOR WRITTEN AGREEMENTS BETWEEN THE PARTIES, INCLUDING,
WITHOUT LIMITATION, PROPOSALS, LETTERS, COMMITMENT LETTERS OR BY ANY PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. CUSTOMER
ACKNOWLEDGES AND CERTIFIES THAT NO SUCH ORAL AGREEMENTS EXIST. THE LOAN
AGREEMENT MAY NOT BE AMENDED, NOR MAY ANY RIGHTS UNDER THE LOAN AGREEMENT BE
WAIVED, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY AGAINST WHOM SUCH
AGREEMENT OR WAIVER IS ASSERTED. The failure of Lender at any time or times
hereafter to require strict performance by Customer of any of the provisions,
warranties, terms and conditions contained in the Loan Agreement or in any other
agreement, guaranty, note, depository agreement, letter of credit, instrument or
document now or at any time or times hereafter executed by Customer or an
Affiliate of Customer and delivered to Lender shall not waive, affect or
diminish any right of Lender at any time or times hereafter to demand strict
performance thereof. The Loan Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument. Each reference herein
to "Lender" shall be deemed to include its successors and assigns, and each
reference to "Customer" and any pronouns referring thereto as used herein shall
be construed in the masculine, feminine, neuter, singular or plural, as the
context may require, and shall be deemed to include the legal representatives,
successors and assigns of Customer, all of whom shall be bound by the provisions
hereof. EACH

                                                                 Initial JAP/RAF
                                                                         -------

                                  Page 10 of 13

<PAGE>

                       MASTER LOAN AND SECURITY AGREEMENT

REFERENCE HEREIN TO "CUSTOMER" SHALL MEAN AND INCLUDE ANY AND ALL CUSTOMERS WHO
SIGN BELOW, EACH OF WHOM SHALL BE JOINTLY AND SEVERALLY LIABLE UNDER THIS LOAN
AGREEMENT.

          The Loan Agreement and all related documents, including (a)
amendments, addenda, consents, waivers and modifications which may be executed
contemporaneously or subsequently herewith, (b) documents received by Lender
from the Customer, and (c) financial statements, certificates and other
information previously or subsequently furnished to Lender, may be reproduced by
Lender by any photographic, photostatic, microfilm, micro-card, miniature
photographic, compact disk reproduction or other similar process and Lender may
destroy any original document so reproduced. Customer agrees, herein waives all
right to object to the admissibility of such reproduction and stipulates that
any such reproduction shall, to the extent permitted by law, be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original itself is in existence and whether or not the
reproduction was made by Lender in the regular course of business) and that any
enlargement, facsimile or further reproduction of the reproduction shall
likewise be admissible in evidence.

          18.  SURVIVAL. Sections 6, 7, 9, 10, 11, 13, 15, 16 and 17 shall
survive and continue in full force and effect without regard to the payment in
full of all Obligations under the Loan Agreement.

          Executed and delivered by duly authorized representatives of the
parties hereto as of the date set forth below.

LENDER:                                                CUSTOMER:

OXFORD VENTURE FINANCE, LLC                            LIPOMED, INC.

By:     /s/  J. Alden Philbrick, IV         By:     /s/  Richard A. Franco
        --------------------------------            ----------------------------

Name:   J. Alden Philbrick, IV              Name:   Richard A. Franco
        --------------------------------            ----------------------------

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

Date:   October 4, 2000                     Date:   October 4, 2000
        --------------------------------            ----------------------------

                                                                 Initial JAP/RAF
                                                                         -------

                                 Page 11 of 13

<PAGE>

                       MASTER LOAN AND SECURITY AGREEMENT

                                   SCHEDULE 1

Trade Names

                                 Page 12 of 13

<PAGE>
                                    SCHEDULE 2

Name Changes; Changes in Chief Executive Office

On or about June 2000, Customer reincorporated in the State of Delaware through
a merger of LipoMed, Inc., a North Carolina Corporation, and LipoMed, Inc, a
Delaware Corporation and wholly owned subsidiary of LipoMed, Inc. (North
Carolina).

Other Liens

Debtor has issued Convertible Promissory Notes dated June 30, 1997, August 20,
1997 and September 26, 1997, respectively, in the aggregate principal amount of
$300,000.00 to each of John W. Otvos, Michael A. Harpold, Charles A. Sanders,
Daniel C. Arnold, Stephen K. Markham and Richard A. Franco (the "Lenders"),
which are secured pursuant to a Security Agreement, dated as of June 30, 1997,
as amended, executed by Debtor. The collateral securing the loans includes
certain equipment, inventory, patent rights, copyrights, licensing rights and
accounts of Debtor. The Lenders have filed UCC financing statements covering
such collateral. Each of the Lenders has agreed to subordinate his rights under
the Note and the Security Agreement to the rights of Lender or its Assignee.

                                                                 Initial JAP/RAF
                                                                         -------

                                  Page 13 of 13

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