Document:

AGREEMENT AND PLAN OF MERGER

                                      AMONG

                             CARSUNLIMITED.COM, INC.
                                 INNOPUMP, INC.
                             PUMP ACQUISITION CORP.
                                   And Certain
                     PARTICIPATING STOCKHOLDERS (AS DEFINED)

                            Dated as of June 10, 2005

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                          AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER, dated as of June 10, 2005 (this "Agreement"),
is  among  CARSUNLIMITED.COM,   INC.,  a  Nevada  corporation  ("Parent"),  PUMP
ACQUISITION CORP., a Nevada corporation and a wholly-owned  subsidiary of Parent
("Sub"),  INNOPUMP,  INC.  ,  a  Nevada  corporation  (the  "Company")  and  the
stockholders   of  the   Company   listed  on  Exhibit  A  (the   "Participating
Stockholders") (Sub and the Company being hereinafter  collectively  referred to
as the "Constituent Corporations").

                                    RECITALS

         A. The respective Boards of Directors of Parent and Sub and the Company
have approved and declared advisable the merger of the Company with and into Sub
upon the terms and subject to the conditions of this  Agreement (the  "Merger"),
and the  respective  Boards of  Directors of Parent and Sub and the Company have
approved and adopted this Agreement;

         B. The respective Boards of Directors of Parent and of the Company have
determined  that  the  Merger  is in  the  best  interest  of  their  respective
stockholders;

         C. The  Participating  Stockholders  also desire that the Company merge
with Sub; and

         D. For  federal  income tax  purposes,  it is  intended  by the parties
hereto that the Merger shall qualify as a "reorganization" within the meaning of
Section 368(a) of the Code.

         NOW,  THEREFORE,  in  consideration  of the premises,  representations,
warranties and agreements herein contained, the parties agree as follows:

ARTICLE I - THE MERGER

         Section  1.1 The Merger.  Upon the terms and subject to the  conditions
hereof, and in accordance with the Nevada General  Corporation Law (the "NGCL"),
the Company shall be merged with and into Sub at the Effective  Time (as defined
in Section 1.2).  Following the Merger, the separate corporate  existence of the
Sub shall cease and Company  shall  continue as the surviving  corporation  (the
"Surviving  Corporation")  and shall  succeed  to and  assume all the rights and
obligations of the Company in accordance with the NGCL.

         Section 1.2 Effective Time. The Merger shall become  effective when the
certificate of merger (the "Certificate of Merger"), executed in accordance with
the relevant provisions of the NGCL, is filed with the Secretary of State of the
State of Nevada; provided, however, that, upon mutual consent of the Constituent
Corporations,  the  Certificate  of  Merger  may  provide  for a  later  date of
effectiveness  of the Merger not more than  thirty  (30) days after the date the
Certificate of Merger is filed. When used in this Agreement, the term "Effective
Time"  shall  mean  the date and time at which  the  Certificate  of  Merger  is
accepted for filing or such later time established by the Certificate of Merger.
The  filing  of the  Certificate  of  Merger  shall  be made on the  date of the
Closing.

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         Section 1.3 Effects of the  Merger.  The Merger  shall have the effects
set forth in this Agreement and applicable provisions of the NGCL.

         Section 1.4 Charter and By-laws; Directors and Officers.

                  1.4.1 The Certificate of Incorporation of Company shall be the
Certificate  of  Incorporation  of the Surviving  Corporation  until  thereafter
changed or amended as  provided  therein or by  applicable  law.  The By-laws of
Company in effect at the  Effective  Time will be the  By-laws of the  Surviving
Corporation  until  thereafter  changed  or amended  as  provided  therein or by
applicable law.

                  1.4.2  Those  persons  who are the  directors  of the  Company
immediately  prior to the Effective Time shall be the directors of the Surviving
Corporation  immediately  following  the Merger,  and those  persons who are the
officers  of the  Company at the  Effective  Time shall be the  officers  of the
Surviving Corporation immediately following the Merger.

         Section 1.5  Conversion of  Securities.  As of the  Effective  Time, by
virtue of the Merger and without  any action on the part of Sub,  the Company or
the holders of any securities of the Constituent Corporations:

                  1.5.1 Common Stock of Sub. Each issued and  outstanding  share
of common stock,  par value $.01 per share,  of Sub shall be converted  into one
validly  issued,  fully  paid and  nonassessable  share of  common  stock of the
Surviving Corporation Each stock certificate of Sub evidencing ownership of such
shares  shall  continue to evidence  ownership of such shares of common stock of
the Surviving Corporation.

                  1.5.2 Company Common Stock; Merger Consideration;  Issuance of
Parent Series A Preferred Stock. Based on a capital raise of $5,000,000 (to meet
the capital  requirement - see  ss.5.2.7) all of the Company's  Common Stock par
value $0.0001 per share ("Common Stock"), outstanding, or issuable on conversion
of Convertible  Securities of Company, on a fully diluted basis calculated as of
the  Effective  Date shall be  converted  into common stock par value $0.001 per
share, of Parent ("Parent Common Stock") equal to 71% of the total Parent Common
Stock,  on a fully  diluted  basis,  which  will be  outstanding,  issuable,  or
underlying any other obligation  including warrants and options,  on the closing
of the Merger (the "Common Merger  Consideration").  Based on a capital raise of
$10,000,000  all of the  Company's  Common  Stock  par value  $0.0001  per share
("Common  Stock"),   outstanding,  or  issuable  on  conversion  of  Convertible
Securities of Company,  on a fully diluted basis  calculated as of the Effective
Date shall be converted into common stock par value $0.001 per share,  of Parent
("Parent  Common  Stock") equal to 59.6% of the total Parent Common Stock,  on a
fully diluted  basis,  which will be  outstanding,  issuable,  or underlying any
other obligation  including  warrants and options,  on the closing of the Merger
(the "Common Merger  Consideration").  Where funds are raised between $5,000,000
and  $10,000,000,   the  percentages  will  be  appropriately  apportioned.  The
Company's Common Stock to be converted is more fully described in Section 3.4.1.

                  (a)  Whenever  this  Agreement   provides  for  conversion  or
exchange of securities for Parent Common Stock, at the option of Parent,  Parent
Series A Preferred representing such number of shares of Parent Common Stock may
be issued in lieu of the Parent Common Stock. Notwithstanding anything herein to
the  contrary,  fractional  shares of Parent  Series A Preferred  may be issued.

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Where  Parent  Series A Preferred  is so issued,  it shall be deemed part of the
Merger Consideration.

                  (b) To avoid confusion, it is the understanding of the parties
that upon issuance of the Merger Consideration, there will be outstanding Parent
Common Stock (including Parent Series A Preferred  representing shares of Parent
Common Stock)  representing 29% to 40.4% of the issued and outstanding shares of
Parent Common Stock on a fully diluted basis, depending on the amount of capital
raised; and holders of the Company's Common Stock and/or Convertible Securities,
on a fully diluted basis, will hold, or be entitled to hold, Parent Common Stock
(or, at the option of Parent,  shares of Parent Series A Preferred  representing
the number of shares of Parent  Common Stock)  representing  59.6% to 71% of the
issued and  outstanding  shares of Parent Common Stock on a fully diluted basis,
depending on the amount of capital raised.

                           (i) The  parties  acknowledge  that as set  forth  on
Schedule  3.4.1 there are options to purchase  shares of Common Stock of Company
that, upon completion of the transaction contemplated hereby, shall be converted
into warrants to purchase Parent Common Stock.

                  (c)  Wherever in this  Agreement  or the  effectuation  of its
intent,  the context so requires,  references to Parent Common Stock shall refer
to Parent Common Stock and/or Series A Preferred issued in lieu thereof.

                  1.5.3 No  Further  Issuance.  From the date  hereof  until the
Effective Time or other  termination  of this  Agreement in accordance  with its
terms,  there  shall be no changes to the number of shares or class of shares of
Parent  Common  Stock or  Parent  Series A  Preferred  Stock  by  reason  of any
reclassification, recapitalization, split up, combination, exchange of shares or
readjustment,  nor shall there occur a  distribution  of warrants or rights or a
stock  dividend  or stock  split of  Parent  Common  Stock  or  Parent  Series A
Preferred Stock nor shall any additional shares of Parent Common Stock or Parent
Series A Preferred  Stock or  securities  exercisable  for or  convertible  into
Parent  Common  Stock or  Parent  Series A  Preferred  Stock be  authorized  for
issuance  or issued  except as set forth in this  Agreement.  Subject  to Parent
raising $5,000,000,  in order for it to satisfy the capital obligations provided
for herein, pursuant to the terms agreed upon with Company, upon issuance of the
Merger  Consideration,  there will be outstanding Parent Common Stock (including
shares of Parent Common Stock  issuable upon the conversion of the Parent Series
A Preferred  Stock or upon the  conversion or exercise of any other  outstanding
notes,  warrants,  or other  securities of the Parent)  representing  29% of the
issued and  outstanding  shares of Parent  Common Stock on a fully diluted basis
and holders of the Company's  Common Stock and/or  Convertible  Securities  will
hold  shares  of  Parent  Common  Stock  or  Parent  Series  A  Preferred  Stock
convertible  into  Parent  Common  Stock  representing  71%  of the  issued  and
outstanding  shares of Parent Common Stock on a fully diluted  basis.  If Parent
raises the full  $10,000,000  agreed to with Company upon issuance of the Merger
Consideration,  there will be outstanding  Parent Common Stock (including shares
of Parent  Common Stock  issuable  upon the  conversion  of the Parent  Series A
Preferred  Stock or upon the  conversion  or exercise  of any other  outstanding
notes,  warrants,  or other securities of the Parent)  representing 40.4% of the
issued and  outstanding  shares of Parent  Common Stock on a fully diluted basis
and holders of the Company's  Common Stock and/or  Convertible  Securities  will
hold  shares  of  Parent  Common  Stock  or  Parent  Series  A  Preferred  Stock
convertible  into  Parent  Common  Stock  representing  59.6% of the  issued and

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outstanding  shares of Parent Common Stock on a fully diluted basis. Where funds
are  raised  between  $5,000,000  and  $10,000,000,   the  percentages  will  be
appropriately apportioned.

                  1.5.4 Cancellation of Company Common Stock. All such shares of
Common  Stock of  Company,  when so  converted,  shall no longer be deemed to be
outstanding and shall automatically be canceled and retired,  and each holder of
a certificate  representing  any such shares shall cease to have any rights with
respect   thereto,   except  the  right  to  receive  any  dividends  and  other
distributions  in accordance  with Section 1.7,  certificates  representing  the
shares of Parent  Common  Stock into which such  shares are  converted,  and any
cash,  without  interest,  in lieu of fractional  shares to be issued or paid in
consideration  therefor,  upon the surrender of such  certificate  in accordance
with Section 1.6, acknowledging that anything herein to the contrary, fractional
shares of Parent Series A Preferred may be issued.

         Section 1.6 Payment of Merger Consideration.

                  1.6.1  Exchange  Procedures.  At the  Closing,  the  Company's
stockholders  shall  deliver to the Parent  their  certificates  which as of the
Effective   Time   represented   shares  of  Common   Stock  of   Company   (the
"Certificates").  Upon surrender of a Certificate at the Closing,  the holder of
such Certificate shall be entitled to receive,  as provided in Section 1.5.2, in
exchange therefor, the number of shares of Parent Common Stock into which shares
of Common Stock of Company  represented by the  Certificate so surrendered  have
been  converted.  Following  the  Closing,  any  holder  of  a  Certificate  not
surrendered at the Closing may deliver such  Certificate to the Parent,  and the
Parent  shall  issue the Merger  Consideration  to which such holder is entitled
pursuant to Section 1.5.2.

                  1.6.2 Dissenting  Stockholder  Interests.  Notwithstanding the
foregoing,  no  amounts  shall be payable  at or after the  Effective  Time with
respect to any  Dissenting  Shares (as defined in Section 1.12) or any shares of
Common  Stock of Company  with  respect  to which  dissenters'  rights  have not
terminated.  In the  case  of  Dissenting  Shares,  payment  shall  be  made  in
accordance  with Section 1.12 and the NGCL.  In the case of any shares of Common
Stock with respect to which  dissenters'  rights have not  terminated  as of the
Effective Time, if such shares become Dissenting  Shares,  payment shall be made
in accordance with NGCL, and if, instead, the dissenters' rights with respect to
such shares of Common Stock irrevocably  terminate after the Effective Time, the
holders  of  such  shares   shall  be  entitled   only  to  receive  the  Merger
Consideration  upon delivery of the  Certificate(s)  representing such shares of
Common Stock.

                  1.6.3 No Liability.  Notwithstanding  anything to the contrary
in this Sub-section 1.6.3, none of the Parent, the Surviving Corporation nor any
party  hereto  shall be liable to any  holder of  Company  Common  Stock for any
Merger  Consideration  properly  delivered to a public official  pursuant to any
applicable abandoned property, escheat or similar law.

         Section 1.7 Dividends;  Transfer  Taxes;  Withholding.  No dividends or
other  distributions  that are declared on or after the Effective Time on Parent
Common  Stock,  or are payable to the holders of record  thereof on or after the
Effective  Time will be paid to any person  entitled  by reason of the Merger to
receive shares of a Parent Common Stock until such person surrenders the related
Certificate or Certificates, as provided in Section 1.6.1. Subject to the effect
of  applicable  law,  there  shall  be  paid  to  each  record  holder  of a new
certificate  representing  such  Parent  Common  Stock:  (i) at the time of such
surrender or as promptly as practicable thereafter,  the amount of any dividends
or other  distributions  theretofore  paid with  respect to the shares of Parent

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Common  Stock  represented  by such  certificate  and having a record date on or
after the Effective Time and a payment date prior to such surrender; and (ii) at
the  appropriate  payment  date or as promptly as  practicable  thereafter,  the
amount of any  dividends  or other  distributions  payable  with respect to such
shares of Parent Common Stock and having a record date on or after the Effective
Time but prior to such  surrender  and a payment date on or  subsequent  to such
surrender.  In no event shall the person  entitled to receive such  dividends or
other  distributions  be entitled to receive interest on such dividends or other
distributions.

         Section 1.8 No Further Ownership Rights in Company Stock. All shares of
Parent Common Stock issued upon the surrender  for exchange of  Certificates  in
accordance with the terms hereof shall be deemed to have been issued and paid in
full  satisfaction  of  all  rights  pertaining  to  the  Company  Common  Stock
represented by such Certificates.

         Section 1.9 Closing of Company  Transfer  Books. At least five (5) days
prior to the Effective Time, the Company shall deliver to the Parent a certified
list of the holders of record of the Company Common Stock,  and at the Effective
Time the  transfer  books of the  Company  shall be closed  and no  transfer  of
Company Common Stock shall thereafter be made on the records of the Company. If,
after  the  Effective  Time,   Certificates   are  presented  to  the  Surviving
Corporation or the Parent,  such Certificates shall be canceled and exchanged as
provided in this ARTICLE I.

         Section  1.10 Lost  Certificates.  If any  Certificate  shall have been
lost,  stolen or destroyed,  upon the making of an affidavit of that fact by the
person  claiming  such  Certificate  to be lost,  stolen or  destroyed  and,  if
required by Parent,  the posting by such  person of a bond,  in such  reasonable
amount as Parent  may  direct as  indemnity  against  any claim that may be made
against the Parent with  respect to such  Certificate,  the Parent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
to which the holders thereof are entitled  (pursuant to Section 1.5.2),  and any
dividends  or other  distributions  to which the holders  thereof  are  entitled
pursuant to Section 1.7.

         Section 1.11  Further  Assurances.  If at any time after the  Effective
Time the  Surviving  Corporation  shall  consider or be advised  that any deeds,
bills of sale,  assignments  or  assurances  or any  other  acts or  things  are
necessary,  desirable  or proper (a) to vest,  perfect or confirm,  of record or
otherwise,  in the Surviving  Corporation its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either  of the  Constituent  Corporations,  or (b)  otherwise  to carry  out the
purposes of this  Agreement,  the Surviving  Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver,  in
the name and on  behalf  of either  of the  Constituent  Corporations,  all such
deeds,  bills of sale,  assignments and assurances and to do, in the name and on
behalf of either Constituent Corporation,  all such other acts and things as may
be  necessary,  desirable  or proper to vest,  perfect or confirm the  Surviving
Corporation's  right,  title or  interest  in,  to or under  any of the  rights,
privileges,  powers,  franchises,  properties  or  assets  of  such  Constituent
Corporation and otherwise to carry out the purposes of this Agreement.

         Section 1.12  Dissenters'  Rights.  Shares of Company Common Stock that
has not been  voted for  approval  of this  Agreement  or  consented  thereto in
writing and with respect to which a demand for payment and  appraisal  have been
properly  made in  accordance  with the NGCL  ("Dissenting  Shares") will not be
converted into the right to receive the Merger  Consideration  otherwise payable
with respect to such shares of Company  Common  Stock at or after the  Effective

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Time,  but will be  converted  into  the  right to  receive  from the  Surviving
Corporation  such  consideration  as may be determined to be due with respect to
such Dissenting  Shares pursuant to the laws of the State of Nevada. If a holder
of Dissenting  Shares (a "Dissenting  Stockholder")  withdraws his or her demand
for such  payment  and  appraisal  or becomes  ineligible  for such  payment and
appraisal,  then,  as of the Effective  Time or the  occurrence of such event of
withdrawal or  ineligibility,  whichever last occurs,  such holder's  Dissenting
Shares will cease to be Dissenting  Shares and will be converted  into the right
to receive, and will be exchangeable for, the Merger Consideration  payable with
respect to such shares of Common Stock in accordance  with this  Agreement.  The
Company  will give  Parent and Sub prompt  notice of any demand  received by the
Company  from a holder of  Dissenting  Shares for  appraisal of shares of Common
Stock,  and Parent shall have the right to participate in all  negotiations  and
proceedings  with respect to such demand.  The Company agrees that,  except with
the prior written consent of Parent,  or as required under the NGCL, it will not
voluntarily  make any  payment  with  respect to, or settle or offer or agree to
settle,  any such demand for  appraisal.  Each holder of Dissenting  Shares who,
pursuant to the provisions of the NGCL, becomes entitled to payment of the value
of the Dissenting  Shares will receive payment therefor but only after the value
therefor has been agreed upon or finally determined pursuant to such provisions.
Any portion of the Merger  Consideration  that would otherwise have been payable
with respect to  Dissenting  Shares if such Company  shares were not  Dissenting
Shares will be retained by Parent.

         Section 1.13 Closing.  The closing of the transactions  contemplated by
this  Agreement (the  "Closing") and all actions  specified in this Agreement to
occur at the Closing  shall take place at the  offices of  Beckman,  Lieberman &
Barandes,  LLP, at 10:00 a.m.,  local time, on the second Business Day following
the day on which the last of the  conditions  set forth in  ARTICLE V shall have
been  fulfilled or waived (if  permissible),  or at such other time and place as
Parent and the Company shall agree (the "Closing Date").

ARTICLE  II  -   REPRESENTATIONS   AND   WARRANTIES  OF  PARENT  AND  SUB:  Each
representation  and  warranty  set  forth  below  is  qualified  by any  and all
exceptions  and  disclosures  set  forth in the  Parent  SEC  Documents  and the
Schedules to this Agreement.  Subject to the foregoing, Parent and Sub represent
and warrant to the Company as follows:

         Section 2.1 Corporate  Status.  Each of Parent and Sub is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
State of Nevada with full corporate power and authority to carry on its business
as now conducted.

         Section  2.2  Subsidiaries.  The  Parent  has  no  direct  or  indirect
ownership interest in any firm, association, corporation, or business enterprise
other than Carsunlimited.com, Inc. (New York) ("CUNY") and Sub.

         Section 2.3 Authorization of Agreements. Each of Parent and Sub has the
power and  authority to execute and deliver this  Agreement and to carry out its
obligations hereunder. The execution, delivery and performance by each of Parent
and Sub of this Agreement and the consummation of the transactions  contemplated
hereby have been duly authorized by all necessary  corporate  action on the part
of Parent and Sub.  This  Agreement has been duly executed and delivered by each
of Parent and Sub and assuming due execution and delivery by Company constitutes
the legal,  valid and binding  obligation of each of them,  enforceable  against
each of them in accordance with its terms,  except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization and similar laws of

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general  application  relating  to or  affecting  the  rights  and  remedies  of
creditors.

         Section 2.4 Capitalization.

                  2.4.1 The authorized,  issued and outstanding capital stock of
the Parent consists solely of (a) 300,000,000 shares of Parent Common Stock, par
value  $.001 per share,  of which  30,125,000  shares are  currently  issued and
outstanding,  and (b) 100,000,000  shares of Preferred Stock, of which no shares
are currently  issued and  outstanding.  The authorized,  issued and outstanding
capital stock of Sub consists solely of 1,000 shares of common stock,  par value
$.001 per share,  of which 100 shares  are issued and  outstanding  and are held
beneficially and of record by Parent. At closing,  the authorized  capital stock
of the Parent shall  consist of (a)  800,000,000  shares of Parent Common Stock,
par value $.001 per share and (b)  100,000,000  shares of  Preferred  Stock,  of
which no shares will be issued and outstanding.. Except as set forth in Schedule
Section 2.4, there are no rights, subscriptions,  warrants, options, convertible
notes or other  instruments  or  conversion  rights  of any kind  ("Options  and
Convertible  Securities")  authorized or  outstanding  or no binding  agreements
("Purchase  Agreements") to purchase or otherwise acquire from the Parent or Sub
or, to the Parent's  Knowledge,  from any other Person,  any shares of stock, or
securities or obligations of any kind  convertible  into or exchangeable for any
shares of stock,  of any class of the Parent or Sub or any other equity interest
in the Parent or Sub.

                  2.4.2 All of the  outstanding  capital stock of the Parent and
Sub and all Options and  Convertible  Securities of the Parent and Sub set forth
in Schedule 2.4have been duly authorized and are validly issued,  fully paid and
nonassessable.  All  capital  stock of the  Parent and Sub and all  Options  and
Convertible  Securities of the Parent and Sub were issued in compliance with all
applicable  federal  and state  securities  laws.  The  lawful,  registered  and
beneficial owners (and their addresses) of all issued and outstanding  shares of
the Parent Common Stock are reflected in the records of the Transfer Agent,  and
the lawful, registered and beneficial owners (and their addresses) of all issued
and  outstanding  shares of Parent  Series A  Preferred  Stock and the number of
shares held by each and of all Options and Convertible Securities and the number
of shares of Common  Stock or Parent  Series A  Preferred  Stock into which such
Options or Convertible  Securities are  convertible are as indicated on Schedule
2.4 hereto.  There is, to the Parent's  Knowledge,  no proxy,  or any agreement,
arrangement  or  understanding  of any  kind  authorized  or  outstanding  which
restricts,  limits or  otherwise  affects  the right to vote any share of Parent
Common Stock,  Parent Series A Preferred  Stock,  or any Options and Convertible
Securities of Parent.

         Section 2.5 No Conflicts.  The execution,  delivery and  performance of
this  Agreement,  any other  agreement or document  contemplated  herein and the
consummation of all of the transactions  contemplated hereby and thereby: (i) do
not and will not require the consent, waiver, approval, license,  designation or
authorization  of, or  declaration  with,  any  Person or court to which  either
Parent or Sub is subject or any  Governmental  Entity;  and (ii) do not and will
not,  with or  without  the  giving of notice  or the  passage  of time or both,
violate or conflict with or result in a breach or  termination  of any provision
of, or  constitute  a  material  default  under,  or  accelerate  or permit  the
acceleration  of the  performance  required  by the  terms  of, or result in the
creation  of any  mortgage,  security  interest,  claim,  lien,  charge or other
material  encumbrance upon any of the material assets of either of Parent or Sub
pursuant to, or otherwise  give rise to any liability or obligation  under,  the
certificate of incorporation or By-laws of either of Parent or Sub, any material
agreement,  mortgage,  deed of trust,  indenture,  license,  permit or any other

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material  agreement or instrument  or any order,  judgment,  decree,  statute or
regulation  to which  either of  Parent or Sub is a party or by which  either of
Parent or Sub or any of its  assets  may be bound;  and (iii) will not cause the
termination of any such agreement or instrument, or in any way affect or violate
the terms and conditions of, or cause the cancellation, modification, revocation
or suspension of, any rights of either of Parent or Sub,  except with respect to
clauses   (i),   (ii)  and  (iii)   above,   such  breach  or  breaches  of  the
representations  contained therein which  individually or in the aggregate would
not have a Material Adverse Effect upon Parent.

         Section 2.6 Litigation; Compliance with Laws; Permits.

                  2.6.1 Except as disclosed in Schedule  Section 2.6,  there are
no actions,  suits,  proceedings,  arbitrations or  governmental  investigations
pending, or, to the Parent's Knowledge,  threatened against, by or affecting the
Parent nor has any such suit been  pending  within three years prior to the date
hereof. The Parent has not been charged with or received notice of any violation
of any  applicable  federal,  state,  local or foreign  law,  rule,  regulation,
ordinance, order or decree relating to it, or the operation of its business, and
to the  Parent's  Knowledge,  there is no  threatened  claim  of such  violation
(including any investigation) or any basis therefor.

                  2.6.2  To the  Parent's  Knowledge,  except  as set  forth  in
Schedule  Section 2.6,  the Parent has  complied in all respects  with all laws,
rules, regulations,  ordinances, orders, judgments, decrees, writs, injunctions,
building codes, safety, fire and health approvals,  certificates of occupancy or
other governmental  restrictions applicable to them, their assets, employees and
employment practices.

                  2.6.3  To the  Parent's  Knowledge,  except  as set  forth  in
Schedule  Section  2.6,  the  Parent  has all  governmental  licenses,  permits,
approvals  or other  authorizations  required for the conduct of its business as
now  conducted,  all of which are in full  force and effect and all of which are
listed on Schedule  Section 2.6  hereto;  there is no action  pending or, to the
Parent's  Knowledge,   threatened,  to  terminate  any  rights  under  any  such
governmental  licenses,  permits or authorizations;  and, except as disclosed on
Schedule  Section 2.6, at the Effective  Time,  none of such licenses,  permits,
approvals  and  authorizations  will be adversely  affected by the Merger or the
consummation of the other transactions contemplated by this Agreement.

         Section 2.7 Parent  Common Stock.  When issued in accordance  with this
Agreement at the Effective Time, the shares of Parent Common Stock  constituting
the Merger  Consideration will (i) have been duly authorized and validly issued,
be fully  paid and  nonassessable,  and be free and  clear of any tax,  security
interest,  claim,  lien,  pledge  or  encumbrance  whatsoever;  (ii)  be free of
preemptive rights created by statute,  Parent's  Certificate of Incorporation or
By-laws or any agreement to which Parent is a party or by which Parent is bound,
and  (iii) be  issued  in a  transaction  exempt  from  registration  under  the
Securities Act.

         Section 2.8 SEC Documents and  Financial  Statements.  Parent has filed
all reports and documents required to be filed with the SEC under the Securities
Act, the Exchange Act and the related SEC rules thereunder since January 1, 2002
(the  "Parent SEC  Documents").  As of their  respective  dates,  the Parent SEC
Documents  complied as to form in all material respects with the requirements of
the  Securities  Act or the  Exchange  Act,  as the  case  may be,  and,  at the
respective times they were filed, none of the Parent SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required

                                      -9-
<PAGE>

to be stated  therein or necessary to make the statements  therein,  in light of
the circumstances under which they were made, not misleading.

                  2.8.1 The financial statements  (including,  in each case, any
notes thereto) of Parent included in the Parent SEC Documents (i) complied as to
form in all material  respects with applicable  accounting  requirements and the
published  rules  and  regulations  of the SEC with  respect  thereto,  (ii) are
complete  and correct in all  material  respects,  (iii)  fairly  present in all
material  respects the financial  position of Parent as at the respective  dates
thereof and the results of operations  and their cash flows for the periods then
ended (subject,  in the case of unaudited  statements,  to normal year-end audit
adjustments  and to any  other  adjustments  described  therein),  and (iv) were
prepared  in  accordance  with  United  States  generally  accepted   accounting
principles  applied on a consistent basis during the periods involved (except as
may be indicated  therein or in the notes  thereto),  and are in accordance with
the books and records  maintained  by the Parent,  with no material  differences
between such  financial  statements  and the financial  records  maintained  and
accounting  methods applied by the Parent for tax purposes,  except as disclosed
in the notes to such financial statements. Except as disclosed in the Parent SEC
Documents or as required by generally accepted accounting principles, Parent has
not,  since  March 31,  2005,  made any change in the  accounting  practices  or
policies applied in the preparation of financial statements.

         Section 2.9 No Undisclosed Liabilities.  To the Parent's Knowledge, the
Parent has no Liabilities,  except for Liabilities (i) disclosed on the Parent's
balance sheet, dated March 31, 2005, included in the Parent's SEC Documents,  or
(ii) as set forth in Schedule  Section 2.9.  "Liability"  means any liability or
obligation  (whether known or unknown,  whether asserted or unasserted,  whether
absolute or  contingent,  whether  accrued or unaccrued,  whether  liquidated or
unliquidated and whether due or to become due).

         Section 2.10 Taxes.

                  2.10.1 True and  correct  copies of the  Parent's  federal and
state income tax returns for the years ended  December 31, 2003 and December 31,
2004 have been delivered to the Company. All tax returns (including  information
returns)  required by any jurisdiction to have been filed as of the date of this
Agreement  by or with respect to the Parent have been timely  filed,  except for
returns with respect to which extensions have been granted, and each such return
is true,  correct and complete in all material  respects.  Schedule Section 2.10
sets  forth  each  jurisdiction  in which  the  Parent is  required  to file tax
returns.

                  2.10.2  Except  as set forth in  Section  2.10,  all  material
liabilities  of the  Parent  to any  jurisdiction  for  taxes of every  kind and
nature,   including   interest   thereon  and  penalties  with  respect  thereto
(collectively  "Taxes") relating to any period prior to March 31, 2005 have been
timely paid or are accrued and provided for in the Parent  Financial  Statements
as of March 31,  2005.  Any  liability  for Taxes  incurred by the Parent  since
December 31, 2004 was incurred in the ordinary course of business.

                  2.10.3 The Parent is not  required to file any foreign  income
tax returns. The state income tax returns of the Parent have not been audited by
the  appropriate  taxing  authorities  within  the past five (5)  years.  To the
Parent's Knowledge, neither the Internal Revenue Service nor any state, local or
other taxing authority has proposed any additional Taxes,  interest or penalties
with respect to the Parent or any of its  operations  or business;  there are no
pending or, to the Parent's Knowledge, threatened tax claims or assessments; and

                                      -10-
<PAGE>

there are no pending or, to the Parent's Knowledge,  threatened tax examinations
by any taxing authorities.

                  2.10.4 The Parent has not given any  waivers of rights  (which
are currently in effect) under  applicable  statutes of limitations with respect
to the income tax returns for any fiscal year.

         Section 2.11 No Adverse Effects.  Except as disclosed in the Parent SEC
Documents filed with the SEC prior to the date of this Agreement, since December
31, 2004 (i) the business of the Parent has been  conducted only in the ordinary
course,  (ii) there has been no change affecting the Parent that individually or
in the  aggregate  has had a Material  Adverse  Effect on the Parent,  and (iii)
there has been no damage,  destruction  or loss,  or to the Parent's  Knowledge,
other   occurrence  or  development,   whether  or  not  insured,   that  would,
individually or in the aggregate, result in a Material Adverse Effect on Parent,
and Parent has no Knowledge of any  threatened  occurrence or  development  that
would constitute a Material Adverse Effect.

         Section  2.12  Conduct of  Business.  Except as  disclosed  on Schedule
Section  2.12 hereto,  since March 31, 2005,  the Parent has not: (i) created or
incurred any liability  (absolute,  accrued,  contingent  or  otherwise)  except
unsecured  current  liabilities  incurred  in the  ordinary  course of  business
consistent with past practice; (ii) mortgaged,  pledged or subjected to any lien
or  otherwise  encumbered  any of its  assets,  tangible  or  intangible;  (iii)
discharged  or  satisfied  any lien or  encumbrance  or paid any  obligation  or
liability  (absolute,  accrued,  contingent  or  otherwise)  other than  current
liabilities  shown on the Parent  Financial  Statements as at March 31, 2005 and
Taxes and current  liabilities  incurred  since  March 31, 2005 in the  ordinary
course of business or under contracts or agreements entered into in the ordinary
course of  business  (other  than as a result of any  default  or breach  of, or
penalty  under,  any such  contracts or  agreements);  (iv) waived,  released or
compromised  any  claims  or  rights  of  substantial  value  or  lost,  or been
threatened with the loss of, any key employees; (v) entered into any settlement,
compromise or consent with respect to any claim,  proceeding  or  investigation;
(vi) sold,  assigned,  transferred,  leased or otherwise  disposed of any of any
material asset, tangible or intangible,  or canceled any debts or claims except,
in each case,  for fair  consideration  in the  ordinary  course of business (it
being  understood  that the  disposition  of any  asset,  other  than  inventory
consisting of finished products, or cancellation of any debt or claim carried on
the  books at more  than  $20,000  shall be deemed  not to be a  disposition  or
cancellation  in the ordinary  course of business);  (vii)  declared or paid any
dividends,  or made any other  distribution  on or in respect of, or directly or
indirectly purchased,  retired, redeemed or otherwise acquired any shares of its
capital stock,  paid any notes or accounts or paid any amount or transferred any
asset of the Parent (other than intercompany  payables in the ordinary course of
business); (viii) made or become a party to, or become bound by, any contract or
commitment or renewed, extended, amended, modified or terminated any contract or
commitment  which in any one case involved an amount in excess of $20,000 (or in
the aggregate an amount in excess of $50,000 but excluding  therefrom the amount
of Parent Material/Service  Agreements (as defined in Subsection 2.17.1) entered
into in the ordinary course of business);  (ix) issued or sold any shares of its
capital stock; (x) paid or agreed to pay conditionally or otherwise,  any bonus,
extra  compensation,  pension  or  severance  pay  to any  of  its  officers  or
employees,  whether under any existing profit sharing,  pension or other plan or
otherwise, or increased the rate or altered the form of compensation,  including
without limitation salaries,  fees, commission rates,  bonuses,  profit sharing,
incentive,  pension,  retirement or other similar payments, from that being paid
at March 31, 2004 to any of its stockholders,  directors, officers or employees;

                                      -11-
<PAGE>

(xi) entered into any transaction not in the ordinary course of business (except
for transactions  contemplated by this  Agreement);  (xii) made or announced any
change in the form or manner of distribution of any of its products or services;
(xiii)  changed any of its  accounting  methods or principles  used in recording
transactions  on its books or  records  or in  preparing  the  Parent  Financial
Statements;  or (xiv)  entered into any contract or  commitment to do any of the
foregoing.

         Section  2.13 Title to and  Condition  of Assets.  The Parent has valid
title to the personal  property  set forth on Schedule  Section  2.13,  free and
clear of all  Encumbrances,  except for the  Encumbrances  set forth in Schedule
Section  2.13.  Such assets are (i)  sufficient  and  adequate for the Parent to
carry on its business as presently  conducted;  and (ii) are in reasonably  good
condition and repair, normal wear and tear excepted.

         Section  2.14 Real  Property.  Parent  neither owns nor leases any real
property.

         Section 2.15 Environmental Compliance.  The Parent has at all times had
and now has all environmental approvals,  consents, licenses, permits and orders
required to conduct the  businesses in which it has been or is now engaged.  The
Parent has at all times been and is now in compliance  in all material  respects
with all applicable  Environmental Laws. There are no claims,  actions, suits or
proceedings  pending  or,  to the  Parent's  Knowledge,  threatened  against  or
involving  the  Parent,  or  any  assets  of  the  Parent,   under  any  of  the
Environmental  Laws  (whether by reason of any failure to comply with any of the
Environmental Laws or otherwise). No decree, judgment or order of any kind under
any of the Environmental Laws has been entered against the Parent. The Parent is
not and was not a generator or  transporter  of hazardous  waste,  or the owner,
operator,  lessor,  sublessor,  lessee or mortgagee  of a treatment,  storage or
disposal  facility or an  underground  storage  tank, as those terms are defined
under the Resource  Conservation  and Recovery Act, as amended,  or  regulations
promulgated  pursuant  thereto,  or of real  property on which such a treatment,
storage or disposal facility or underground storage tank is or was located or of
any facility at which any Hazardous Substances were treated, stored, recycled or
disposed or are or were  installed  or  incorporated.  There are no other facts,
conditions or situations,  whether now or heretofore  existing,  that could form
the basis for any claim against, or result in any liability of, the Parent under
any of the Environmental Laws.

         Section  2.16  Accounts  Receivable.  Except as set  forth on  Schedule
Section 2.16, all accounts  receivable shown on the March 31, 2005 balance sheet
of the Parent included in the Parent SEC Documents or thereafter acquired by the
Parent have been collected or are current and payable within ninety (90) days of
issuance and are subject to no known counterclaims or setoffs. All such accounts
receivable  have been generated in the ordinary course of business and reflect a
bona fide  obligation  for the  payment  of goods or  services  provided  by the
Parent.

         Section 2.17 Material/Service Agreements; Other Contracts.

                  2.17.1 Reserved.

                  2.17.2  Except as disclosed  in Schedule  2.17.2  hereto,  the
Parent is not a party to or bound by any oral or written contracts,  obligations
or commitments with respect to any of the following:

                                      -12-
<PAGE>

                  (a) contract,  commitment or arrangement involving, in any one
case, $20,000 or more;

                  (b) contract  with a term of, or requiring  performance,  more
than six months from its date;

                  (c) lease or lease purchase agreement,  mortgage,  conditional
sale  or  title  retention  agreement,  indenture,  security  agreement,  credit
agreement,  pledge or option  with  respect to any  property,  real or  personal
(tangible or intangible), in any capacity;

                  (d)  employment  contracts,  undertakings,  understandings  or
arrangements;

                  (e)  contract  or  agreement  with  any  labor  union or other
collective bargaining group;

                  (f) bonus, pension,  savings,  welfare,  profit sharing, stock
option,  phantom  stock,  stock  appreciation  rights,  retirement,  commission,
executive compensation, hospitalization, insurance or similar plan providing for
employee benefits or any other arrangement providing for benefits for any former
or  current  employees  or for the  remuneration,  direct  or  indirect,  of the
directors, officers or employees of the Parent;

                  (g)  note,  loan,  credit  or  financing  agreement  or  other
contract for money borrowed,  and all related security agreements and collateral
documents,  including any agreement for any commitment for future loans,  credit
or financing;

                  (h) guarantees;

                  (i)   contract   or   understanding   regarding   any  capital
expenditures in excess of $20,000;

                  (j)  agency  (sales  or  otherwise),  distribution,  brokerage
(including,   without  limitation,   any  brokerage  or  finder's  agreement  or
arrangement  with  respect  to any  of the  transactions  contemplated  by  this
Agreement) or advertising agreement;

                  (k) contract with investment bankers, accountants,  attorneys,
consultants or other independent  contractors,  including those relating to this
Agreement;

                  (l) shareholder agreement;

                  (m) any contract or understanding with any director or officer
of the Parent (or any family member thereof) or any Affiliate of such persons;

                  (n) contract,  commitment or arrangement  which would restrain
the Parent from engaging or competing in any business;

                  (o)  contract,  commitment  or  arrangement  not  made  in the
ordinary course of business  involving an amount payable per annum of $20,000 or
more or, in the aggregate, $100,000; and

                                      -13-
<PAGE>

                  (p)  license  (other than  shrink  wrap  licenses  relating to
generally available software), franchise or royalty agreement.

                  2.17.3 The  Parent  has  delivered  or made  available  to the
Company  correct and complete  copies of all of the  contracts,  agreements  and
other documents  listed in Schedules 2.17.1 and 2.17.2 hereto and all amendments
thereto and any waivers  currently in effect granted  thereunder (the "Scheduled
Parent  Contracts").  Except as specifically  set forth on Schedules  2.17.1 and
2.17.2, the Merger and the consummation of the other  transactions  contemplated
by this  Agreement  are not a violation  of or grounds for the  modification  or
cancellation of any of the Scheduled  Parent  Contracts or for the imposition of
any penalty or security interests thereunder. No unresolved disputes are pending
or,  to the  Parent's  Knowledge,  threatened  under or in  respect  of any such
Scheduled Parent Contracts.

                  2.17.4  Except as  described  in  Schedules  2.17.1 and 2.17.2
hereto,  all Scheduled  Parent  Contracts are valid and enforceable  against the
Parent and to the Parent's Knowledge against the other party or parties thereto,
as the case may be, in accordance with their respective terms, and there is not,
under any of such  Scheduled  Parent  Contracts,  any  existing  default  by the
Parent,  to the  Parent's  Knowledge,  by any other  party,  or, to the Parent's
Knowledge, any event which with notice, lapse of time, or both, would constitute
a default  and which  would  have a  Material  Adverse  Effect on the  continued
operation of the Parent.

         Section 2.18  Intellectual  Property  Schedule Section 2.18 hereto sets
forth a true  and  complete  list  of all  (i)  trademarks,  service  marks  and
tradenames,  and the federal,  state and foreign  registrations and applications
thereof ("Trademarks"),  (ii) patents and patent applications and extensions and
renewals thereof ("Patent  Rights"),  (iii) registered  copyrights and copyright
applications  and renewals thereof  ("Copyrights"),  and (iv) licenses held with
respect to any trademark,  service mark, trade name,  patent or copyright (other
than shrink-wrap  licenses relating to generally  available  software) ("License
Rights") held by the Parent. All Trademarks, Patent Rights, Copyrights,  License
Rights and Trade Secrets ("Intellectual  Property") of the Parent that are owned
by the Parent are owned free and clear of any and all licenses,  liens,  claims,
security  interests,  charges or other encumbrances or restrictions of any kind,
except as reflected on Schedule Section 2.18, and no licenses for the use of any
of such rights have been granted by the Company to any third parties,  except as
reflected  in Schedule  Section  2.18  attached  hereto.  All of such rights are
valid,  enforceable  and in good  standing  and are  reasonably  sufficient  and
appropriate  for the  conduct of the  business  of the Parent as  currently  and
proposed  to be  conducted.  The  Merger  and  the  consummation  of  the  other
transactions  contemplated  hereby will not  adversely  affect any rights of the
Parent in the Intellectual  Property of the Parent.  To the Parent's  Knowledge,
the operation of the Parent does not infringe in any way on or conflict with any
registered or  unregistered  patent,  trademark,  trade name,  copyright,  trade
secret,  contract,  license or other right, of any person,  and the Company does
not license any such right from others  except as set forth on Schedule  Section
2.18. No claim is pending or, to the knowledge of the Parent,  threatened or has
been made within the past five years,  to the effect that any such  infringement
or  conflict  has  occurred.   No  other  Intellectual   Property,   other  than
Intellectual Property owned or licensed by the Parent, is required by it for its
business as conducted  prior to the date hereof.  The Parent has no knowledge of
any infringement by any third parties upon any of the  Intellectual  Property of
the Parent.

         Section 2.19 NY Spin-off. Schedule Section 2.19 contains a complete and
correct description of those assets of Parent's  wholly-owned  subsidiary,  Cars
Unlimited.com,  Inc., a New York corporation  ("the Operating  Subsidiary"),  if

                                      -14-
<PAGE>

any, which are used in the Parent's current operating business,  as described in
the SEC Reports (such assets other than the Operating  Subsidiary's name, herein
called the "Excluded  Assets"),  and which  Excluded  Assets shall remain in the
ownership of the Operating Subsidiary.

         Section  2.20  Insurance.  Schedule  Section  2.20  hereto  contains  a
complete and correct list of all  insurance  policies  maintained  by the Parent
together with a schedule of required premiums under each such policy. The Parent
has  delivered to the Company  complete and correct  copies of all such policies
together with all riders and amendments thereto. Such policies are in full force
and effect, and all premiums due thereon have been paid. The Parent has complied
in all material  respects with the  provisions of such  policies.  No notice has
been  received  canceling or  threatening  to cancel or refusing to renew any of
such insurance.  Except as set forth in Schedule Section 2.20, the rights of the
insured under such policies will not be terminated or adversely  affected by the
Merger or the consummation of the other transactions  contemplated hereby. There
is currently no basis for any insurance claim by the Parent.  The Parent has not
created any letters of credit or other funding  obligation  with respect to such
policies

         Section 2.21 Customer and Supplier Relationships.  Attached as Schedule
Section  2.21 is a complete  and correct  list of all current  customers  of the
Parent  showing the sales to each for the period ended March 31, 2004 and of all
suppliers  whose sales to the Parent  amounted to more than $200,000 during such
period  showing  the  sales of each  such  supplier.  With  respect  to any such
customer  or  supplier  or group of related  customers  or  suppliers  listed on
Schedule  Section  2.21,  the Parent has no  knowledge  that any such  customer,
supplier or group of related customers or suppliers has terminated or expects to
terminate a material  portion of its normal business with the Parent.  Except as
disclosed in Schedule Section 2.21, no shareholder or director or officer of the
Parent or any of their  immediate  family  members  has any  direct or  indirect
interest, either by way of stock ownership or otherwise, other than ownership of
not more than two (2) percent of the outstanding shares of stock of any business
listed  on any  national  stock  exchange  or  listed  on  Nasdaq,  in any firm,
corporation,  association  or business  enterprise,  which  competes  with, is a
supplier or customer of, or is a  distributor  or sales agent for, or is a party
to any contract with the Parent.

         Section 2.22 Employees.  The Parent has furnished to the Company a true
and complete list setting forth all of the employees and officers of the Parent,
the annual  salary of each and the bonus earned by each such employee or officer
in the Parent's  most recent fiscal year,  together with a description  of their
job designations,  other  compensation , benefits  (including  severance pay and
bonuses),  outstanding loans to officers or employees and all understandings not
in the  ordinary  course  of  business  relating  to  terms  and  conditions  of
employment.  Proper and accurate  amounts have been  withheld by the Parent from
its  employees'  compensation  for all  periods  in  full  compliance  with  tax
withholding  provisions  of  applicable  federal,  state,  local or foreign law.
Proper and accurate federal, state, local and foreign returns have been filed by
the Parent for all periods for which  returns  were due with respect to employee
income tax withholding,  social security and unemployment Taxes, and the amounts
shown thereon to be due and payable have been timely paid.

         Section  2.23  Labor  Relations.  There  has been no  violation  of any
federal, state or local statutes, laws, ordinances,  rules, regulations,  orders
or  directives  with  respect  to  the  employment  of  individuals  by,  or the
employment  practices or work conditions of the Parent or their respective terms

                                      -15-
<PAGE>

and conditions of employment,  wages and hours. The Parent is not engaged in any
unfair labor practice or other unlawful employment practice (including under any
immigration  laws)  and  there are no unfair  labor  practice  charges  or other
employee related  complaints  against the Parent pending or, to the knowledge of
the Parent,  threatened  before the National Labor  Relations  Board,  the Equal
Employment  Opportunity  Commission,  the Occupational  Safety and Health Review
Commission,  the Department of Labor, or any other federal,  state, or local, or
other governmental  authority by or concerning the employees of the Parent..  No
representation  question,  grievance or arbitration  proceedings  arising out of
collective  bargaining  agreements covering employees of the Parent exists or is
pending or, to the Parent's  Knowledge,  threatened  respecting the employees of
the Parent. There is no work stoppage,  strike, slowdown,  lockout, picketing or
other similar labor problem involving persons employed by the Parent pending or,
to the Parent's  Knowledge,  threatened.  There are no labor union  contracts or
collective  bargaining agreements to which the Parent is a party relating to any
employee of the Parent.

         Section 2.24 Benefit Plans.

                  2.24.1 Neither the Parent nor Sub maintains or contributes to,
or has previously  maintained or contributed  to, an "employee  pension  benefit
plan" (as defined in Section 3(2) of ERISA) nor any  "employee  welfare  benefit
plan" (as  defined  in  Section  3(1) of  ERISA).  Neither  the  Parent  nor Sub
currently  contributes to, or has previously  contributed to, any multi-employer
plan (as defined in Section 3(37) of ERISA).

                  2.24.2 Schedule Section 2.24 lists each deferred  compensation
plan, bonus plan,  employee stock purchase plan, stock option plan and any other
Employee Benefit Plan,  agreement,  arrangement or commitment  maintained by the
Parent or Sub with respect to the  compensation  of any of the  employees of the
Parent or Sub.

         Section   2.25   Corporate   Records  The  copy  of  the   articles  of
incorporation and by-laws of the Parent and Sub, as amended to date, included in
Schedule  Section 2.25 are  complete  and  correct,  and the minute books of the
Parent and Sub  correctly  reflect all material  corporate  actions taken at all
meetings of directors (including  committees thereof) and the stockholders.  The
stock  transfer  books and stock  ledgers of the Parent and Sub are complete and
correct and  correctly  reflect all issuances and transfers of the capital stock
of the Parent and Sub.

         Section 2.26 Bank Accounts;  Power of Attorney.  Schedule  Section 2.26
hereto  correctly sets forth: (i) a list of all banks in which the Parent has an
account or safety deposit box, account number, purpose of such account or safety
deposit  box and the names of all  persons  authorized  to draw  thereon or have
access thereto and (ii) the names of all persons holding powers of attorney from
the Parent and a description of the power of attorney.

         Section 2.27  Warranties.  Except as described in Schedule Section 2.27
annexed  hereto,  during  the past two (2)  years the  Parent  has not given any
written warranties with respect to any of the Parent's products or services, and
except as set forth in such Schedule  Section 2.27, in the last two (2) years no
claim for breach of any such  written  warranty  or any  implied  warranty  with
respect to such Parent  products or services  has been made,  or to the Parent's
Knowledge,  is  threatened.  Returns  and  repairs in  respect  of the  Parent's
products  for  each of the two (2)  calendar  years  preceding  the date of this
Agreement are listed in Schedule  Section 2.27,  and Schedule  Section 2.27 sets

                                      -16-
<PAGE>

forth all such separate returns and repairs in excess of $25,000 during such two
(2) year  period.  Schedule  Section 2.27 also sets forth a  description  of all
claims for  personal  injury or  property  damage or  similar  claims for Parent
product  liability  or arising from  services  provided by the Parent which have
been made against the Parent during the past two (2) years.

         Section 2.28 Insider Interests. Except as disclosed on Schedule Section
2.28,  no  officer or  director  of the Parent or  Affiliate  of any  officer or
director of the Parent has any agreement  with the Parent or any interest in any
property,  real, personal or mixed, tangible or intangible  (including,  without
limitation,  patents,  patent  applications,  trademarks,  trade  names or other
intellectual  property)  used in or  pertaining to the business of the Parent or
has engaged in a  transaction  with the Parent at any time  during the  Parent's
current fiscal year or three  preceding  fiscal years,  except in each case as a
stockholder or employee.

         Section 2.29 Foreign  Corrupt  Practices  Act. The Parent has not made,
offered  or  agreed  to offer  anything  of value  to any  government  official,
political  party or candidate for government  office nor has it taken any action
which would cause the Parent to be in violation of the Foreign Corrupt Practices
Act of 1977 or any similar law of any foreign jurisdiction or the United States.

         Section 2.30 Reorganization. Neither Parent nor any of its Subsidiaries
has taken any action or failed to take any action which action or failure  would
cause the  Merger  not to qualify  as a  reorganization  within  the  meaning of
Section 368(a) of the Code, and there are, to the knowledge of Parent,  no facts
that would  prevent the Merger from  qualifying as a  reorganization  within the
meaning of Section 368(a) of the Code as of the Effective Time.

         Section  2.31  Operations  of  Sub.  Sub  is  a  direct,   wholly-owned
subsidiary  of Parent,  was formed  solely for the  purpose of  engaging  in the
transactions contemplated hereby and has engaged in no other business activities
prior  to the date  hereof,  and has no  assets  or  Liabilities  as of the date
hereof.

         Section 2.32 Brokers.  Except as set forth in Schedule  Section 2.32 no
broker, investment banker or other person is entitled to any broker's,  finder's
or  other  similar  fee  or  commission  in  connection  with  the  transactions
contemplated by this Agreement based upon  arrangements  made by or on behalf of
Parent or Sub.

ARTICLE III - REPRESENTATIONS  AND WARRANTIES OF THE COMPANY Each representation
and  warranty  set  forth  below  is  qualified  by any and all  exceptions  and
disclosures  set  forth  in the  Schedules  to this  Agreement.  Subject  to the
foregoing,  the  Participating  Stockholders  and  the  Company  represents  and
warrants to Parent and Sub as follows:

         Section 3.1  Organization  and Authority.  The Company is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
State of  Nevada,  with  full  corporate  power  and  authority  to carry on its
business as now being conducted.

         Section  3.2  Subsidiaries.  The  Company  has no  direct  or  indirect
interest or interests by stock ownership in any firm,  association,  corporation
or business enterprise.

                                      -17-
<PAGE>

         Section 3.3 Authorization of Agreements.  The Company has the corporate
power and  authority to execute and deliver this  Agreement and to carry out its
obligations hereunder. The execution, delivery and performance by the Company of
this Agreement and the consummation of the transactions contemplated hereby have
been  duly  authorized  by all  necessary  corporate  action  on the part of the
Company,  other  than the  approval  of the  Merger by the  stockholders  of the
Company,  as  contemplated by Section 4.1. This Agreement has been duly executed
and  delivered by the Company and,  assuming due  execution  and delivery by the
Parent  and  approval  of  the  Merger  by  the  stockholders  of  the  Company,
constitutes the legal, valid and binding  obligation of the Company  enforceable
against the Company in accordance with its terms,  except as such enforceability
may be limited by applicable bankruptcy, insolvency,  reorganization and similar
laws of general application  relating to or affecting the rights and remedies of
creditors,  and subject,  as to enforceability,  to general principles of equity
(regardless  of whether  enforcement  is sought in an action at law or a suit in
equity).

         Section 3.4 Capitalization.

                  3.4.1 The authorized  issued and outstanding  capital stock of
the Company  consists solely of (a) 2,000,000  shares of Common Stock, par value
$.0001 per share,  of which 302,000 shares are currently  issued and outstanding
and (b)  1,000,000  shares of preferred  stock,  par value $.0001 per share,  of
which  302,500  shares of Common  Stock are  currently  issued and  outstanding.
Except as set forth on  Schedule  3.4.1,  there are no Options  and  Convertible
Securities  authorized or outstanding to purchase or otherwise  acquire from the
Company, or, to the Company's Knowledge,  any other Person, any shares of stock,
or securities or obligations of any kind  convertible  into or exchangeable  for
any shares of Common Stock or other class of capital stock of the Company or any
other  equity  interest  in the  Company.  Company  reserves  the right to issue
additional  Options and or Convertible  Securities between the date of execution
of this Agreement and Closing.  Company shall promptly advise Parent of any such
issuance.  As the stock to be issued  in this  transaction  is to be issued on a
fully diluted basis,  no such issuance shall change the percentage  ownership of
Parent that will be held by security holders of Company upon the Closing.

                  3.4.2 All of the  outstanding  shares of capital  stock of the
Company  have  been duly  authorized  and are  validly  issued,  fully  paid and
nonassessable.  All  outstanding  shares of capital  stock of the  Company  were
issued in compliance with all applicable  federal and state securities laws. The
lawful, registered and beneficial owners (and their addresses) of all issued and
outstanding  shares of capital stock are as indicated on Schedule  3.4.2 hereto.
Except as set forth on Schedule 3.4.2, there is, to the Company's Knowledge,  no
proxy, or any agreement,  arrangement or understanding of any kind authorized or
outstanding  which restricts,  limits or otherwise affects the right to vote any
Company capital stock.

         Section 3.5 No Conflicts.  The execution,  delivery and  performance of
this  Agreement,  any other  agreement or document  contemplated  herein and the
consummation of all of the transactions  contemplated hereby and thereby: (i) do
not and will not require the consent, waiver, approval, license,  designation or
authorization  of, or declaration with, any Person or court to which the Company
is subject or any  Governmental  Entity;  and (ii) do not and will not,  with or
without the giving of notice or the passage of time or both, violate or conflict
with or result in a breach or  termination  of any provision of, or constitute a
material  default  under,  or  accelerate  or  permit  the  acceleration  of the

                                      -18-
<PAGE>

performance required by the terms of, or result in the creation of any mortgage,
security interest, claim, lien, charge or other material encumbrance upon any of
the material  assets of the Company  pursuant to, or otherwise  give rise to any
liability or obligation under, the certificate of incorporation or bylaws of the
Company, any material agreement,  mortgage, deed of trust,  indenture,  license,
permit or any other  agreement or  instrument  or any order,  judgment,  decree,
statute or regulation to which the Company or is a party or by which the Company
or any of its assets may be bound;  and (iii) will not cause the  termination of
any such agreement or instrument,  or in any way affect or violate the terms and
conditions of, or cause the cancellation, modification, revocation or suspension
of, any rights of the  Company,  except with  respect to clauses  (i),  (ii) and
(iii) above,  such breach or breaches of the  representations  contained therein
which  individually or in the aggregate would not have a Material Adverse Effect
upon the Company.

         Section 3.6 Financial Statements.

                  3.6.1  Attached  hereto  as  Schedule   Section  3.6  are  the
financial  statements  , for the years ended  December 31, 2003 and 2004 and the
three-month  period  ended  March 31,  2005 of Sea Change  Group LLC, a New York
limited liability company (the "Prior Entity"),  which on May 17, 2005,  granted
to  the  Company  an  exclusive  license  to  use  all  of  the  Prior  Entity's
intellectual  property  and conveyed to the Company all of the other assets used
by  the  Prior  Entity  in  its  business,  subject  to  assumption  of  certain
liabilities  and ongoing payment  obligations of the Prior Entity  (collectively
"Acquired Business").

                  3.6.2  Except as set forth in Schedule  Section  3.6,  for the
relevant  periods the Prior Entity  Financial  Statements:  (1) are complete and
correct in all material  respects;  (2) present fairly in all material  respects
the  financial  position  of the Prior  Entity at such dates and the  results of
operations  and cash flows for the respective  periods ended on such dates,  and
(3) were prepared in accordance with generally accepted  accounting  principles,
consistently  applied during the periods,  and are in accordance  with the books
and records maintained by the Prior Entity with no material  differences between
such Prior Entity Financial  Statements and the financial records maintained and
accounting  methods  applied  by the Prior  Entity for tax  purposes,  except as
disclosed in the notes to the Prior Entity Financial Statements.

         Section 3.7 Litigation; Compliance with Laws; Permits.

                  3.7.1  Except as  disclosed  in  Schedule  Section 3.7 hereto,
there  are  no  actions,  suits,   proceedings,   arbitrations  or  governmental
investigations  pending, or, to the Company's Knowledge,  threatened against, by
or affecting  the Company or the Prior Entity nor has any such suit been pending
within  five years prior to the date  hereof.  Neither the Company nor the Prior
Entity  has  been  charged  with or  received  notice  of any  violation  of any
applicable federal,  state, local or foreign law, rule,  regulation,  ordinance,
order or decree  relating to it, or the  operation of its  business,  and to the
Company's  Knowledge,  there is no threatened claim of such violation (including
any investigation) or any basis therefor.

                  3.7.2  To the  Company's  Knowledge,  except  as set  forth in
Schedule  Section  3.7, the Company and the Prior  Company have  complied in all
respects  with all laws,  rules,  regulations,  ordinances,  orders,  judgments,
decrees, writs, injunctions,  building codes, safety, fire and health approvals,
certificates of occupancy or other governmental restrictions applicable to them,
their assets, employees and employment practices.

                                      -19-
<PAGE>

                  3.7.3  To the  Company's  Knowledge,  except  as set  forth in
Schedule  Section  3.7,  the Company  has all  governmental  licenses,  permits,
approvals  or other  authorizations  required for the conduct of its business as
now  conducted,  all of which are in full  force and effect and all of which are
listed on Schedule  Section 3.7  hereto;  there is no action  pending or, to the
Company's  Knowledge,  threatened,  to  terminate  any  rights  under  any  such
governmental  licenses,  permits or  authorizations;  and except as disclosed on
Schedule  Section 3.7, at the Effective  Time,  none of such licenses,  permits,
approvals  and  authorizations  will be adversely  affected by the Merger or the
consummation of the other transactions contemplated by this Agreement.

         Section 3.8 No Undisclosed Liabilities. To the Company's Knowledge, the
Company has no Liabilities, except for Liabilities set forth on Schedule Section
3.8.

         Section 3.9 Taxes.

                  3.9.1 All tax returns (including information returns) required
by any  jurisdiction  to have been filed as of the date of this  Agreement by or
with  respect to the Company  have been timely  filed,  except for returns  with
respect to which  extensions  have been  granted,  and each such return is true,
correct and complete in all material  respects.  Schedule Section 3.9 sets forth
each jurisdiction in which the Company is required to file tax returns.

                  3.9.2  Except  as set  forth  in  Schedule  Section  3.9,  all
material  liabilities of the Company to any jurisdiction for taxes of every kind
and nature,  including  interest thereon and penalties with respect thereto have
been timely paid by the Company or are accrued and provided for in the Company's
books and  records.  Any  liability  for taxes  incurred by the Company has been
incurred in the ordinary course of business.

                  3.9.3 The Company is not  required to file any foreign  income
tax  returns.  The state income tax returns of the Company have not been audited
by the appropriate taxing authorities.  To the Company's Knowledge,  neither the
Internal  Revenue  Service nor any state,  local or other taxing  authority  has
proposed any additional Taxes, interest or penalties with respect to the Company
or any of its operations or business;  there are no pending or, to the Company's
Knowledge, threatened tax claims or assessments; and there are no pending or, to
the Company's Knowledge, threatened tax examinations by any taxing authorities.

                  3.9.4 The Company  has not given any waivers of rights  (which
are currently In effect) under  applicable  statutes of limitations with respect
to the income tax returns for any fiscal year.

         Section  3.10 No  Adverse  Effects.  Except as  disclosed  on  Schedule
Section  3.10 hereto,  since April 1, 2005,  (i) the business of the Company has
been conducted only in the ordinary  course;  (ii) there has been no change that
individually  or in the  aggregate,  has had a  Material  Adverse  Effect on the
Company;  and (iii)  there has been no  damage,  destruction  or loss or, to the
knowledge  of the  Company,  other  occurrence  or  development,  whether or not
insured against, which, either singly or in the aggregate, constitute a Material
Adverse Effect, and the Company has no knowledge of any threatened occurrence or
development which would constitute a Material Adverse Effect.

                                      -20-
<PAGE>

         Section  3.11  Conduct of  Business  Except as  disclosed  on  Schedule
Section  3.11 hereto,  since April 1, 2005,  the Company has not: (i) created or
incurred any liability  (absolute,  accrued,  contingent  or  otherwise)  except
unsecured  current  liabilities  incurred  in the  ordinary  course of  business
consistent with past practice; (ii) mortgaged,  pledged or subjected to any lien
or  otherwise  encumbered  any of its  assets,  tangible  or  intangible;  (iii)
discharged  or  satisfied  any lien or  encumbrance  or paid any  obligation  or
liability  (absolute,  accrued,  contingent  or  otherwise)  other than  current
liabilities  incurred since April 1, 2005, in the ordinary course of business or
under  contracts or agreements  entered into in the ordinary  course of business
(other than as a result of any default or breach of, or penalty under,  any such
contracts  or  agreements);   and   liabilities   incurred  in  connection  with
incorporation  of the company and  acquisition  of the  Acquired  Business  (iv)
waived,  released or compromised  any claims or rights of  substantial  value or
lost, or been threatened  with the loss of, any key employees;  (v) entered into
any settlement,  compromise or consent with respect to any claim,  proceeding or
investigation; (vi) sold, assigned, transferred, leased or otherwise disposed of
any of any  material  asset,  tangible or  intangible,  or canceled any debts or
claims except,  in each case, for fair  consideration  in the ordinary course of
business (it being  understood  that the  disposition  of any asset,  other than
inventory consisting of finished products,  or cancellation of any debt or claim
carried  on  the  books  at  more  than  $20,000  shall  be  deemed  not to be a
disposition or cancellation in the ordinary course of business);  (vii) declared
or paid any dividends,  or made any other  distribution  on or in respect of, or
directly or indirectly  purchased,  retired,  redeemed or otherwise acquired any
shares of its  capital  stock,  paid any notes or accounts or paid any amount or
transferred  any asset of the Company (other than  intercompany  payables in the
ordinary course of business);  (viii) made or become a party to, or become bound
by, any  contract or  commitment  or  renewed,  extended,  amended,  modified or
terminated  any contract or commitment  which in any one case involved an amount
in excess of $20,000  (or in the  aggregate  an amount in excess of $50,000  but
excluding  therefrom  the  amount of  Company  Material/Service  Agreements  (as
defined in Section  3.16.2)  entered into in the ordinary  course of  business);
(ix)  issued or sold any  shares  of  capital  stock;  (x) paid or agreed to pay
conditionally or otherwise, any bonus, extra compensation,  pension or severance
pay to any of its  officers or  employees,  whether  under any  existing  profit
sharing,  pension or other plan or  otherwise,  or increased the rate or altered
the  form  of  compensation,   including  without  limitation  salaries,   fees,
commission rates, bonuses,  profit sharing,  incentive,  pension,  retirement or
other  similar  payments  from that  being  paid at June 10,  2005 to any of its
stockholders,   directors,   officers  or  employees;   (xi)  entered  into  any
transaction  not in the  ordinary  course of business  (except for  transactions
contemplated by this Agreement);  (xii) made or announced any change in the form
or manner of distribution of any of its products or services; (xiii) changed any
of its accounting  methods or principles  used in recording  transactions on its
books or records or (xiv)  entered into any contract or  commitment to do any of
the foregoing.

         Section 3.12 Title to and  Condition  of Assets.  The Company has valid
title to the personal  property  set forth on Schedule  Section  3.12,  free and
clear of all  Encumbrances,  except for the  Encumbrances  set forth in Schedule
Section  3.12 Such assets are (i)  sufficient  and  adequate  for the Company to
carry on its business as presently  conducted;  and (ii) are in reasonably  good
condition and repair, normal wear and tear excepted.

         Section 3.13 Real Property.  The Company does not own or lease any real
property.

                                      -21-
<PAGE>

         Section 3.14 Environmental Compliance. The Company has at all times had
and now has all environmental approvals,  consents, licenses, permits and orders
required to conduct the  business  in which it has been or is now  engaged.  The
Company has at all times been and is now in compliance in all material  respects
with all applicable  Environmental Laws. There are no claims,  actions, suits or
proceedings  pending  or, to the  Company's  Knowledge,  threatened  against  or
involving  the  Company,  or  any  assets  of  the  Company,  under  any  of the
Environmental  Laws  (whether by reason of any failure to comply with any of the
Environmental Laws or otherwise). No decree, judgment or order of any kind under
any of the Environmental Laws has been entered against the Company.  The Company
is not nor was a generator  or  transporter  of hazardous  waste,  or the owner,
operator,  lessor,  sublessor,  lessee or mortgagee  of a treatment,  storage or
disposal facility or underground  storage tank, as those terms are defined under
the  Resource   Conservation  and  Recovery  Act,  as  amended,  or  regulations
promulgated  pursuant  thereto,  or of real  property on which such a treatment,
storage or disposal facility or underground storage tank is or was located or of
any facility at which any Hazardous Substances were treated, stored, recycled or
disposed or are or were  installed  or  incorporated.  There are no other facts,
conditions or situations,  whether now or heretofore  existing,  that could form
the basis for any claim  against,  or result in any  liability  of, the  Company
under any of the Environmental Laws.

         Section  3.15  Accounts  Receivable.  Except as set  forth on  Schedule
Section 3.15, all accounts receivable  reflected in the books and records of the
Company have been  collected or are current and payable  within ninety (90) days
of issuance  and are  subject to no known  counterclaims  or  setoffs.  All such
accounts  receivable  have been generated in the ordinary course of business and
reflect a bona fide obligation for the payment of goods or services  provided by
the Company.

         Section 3.16 Company Material/Service Agreements; Other Contracts.

                  3.16.1  Schedule  3.16.1 sets forth a complete list of (i) all
bids, applications or proposals submitted by it to provide materials or services
with a  valuation  of  $20,000 or more per annum to any Person and for which the
award, approval or selection is pending ("Company  Material/Service  Bids"), and
(ii) all contracts or agreements for the provision of materials or services with
a  valuation  of $20,000  or more per annum to which the  Company is a party and
which  have  not  yet  been   performed  in  full   ("Company   Material/Service
Agreements").  To the Company's Knowledge,  all of such Company Material/Service
Bids and  Company  Material/Service  Agreements  are  fully  performable  by the
Company in compliance  with their terms. No grounds exist for the termination or
cancellation  for cause of any Company  Material/Service  Agreement by the other
party  thereto.  Schedule  3.16.1 sets forth for each  Company  Material/Service
Agreement:  (i) the customer, (ii) the remaining revenue to be earned, and (iii)
delivery dates.

                  3.16.2 Except as disclosed in Schedule  3.16.2 hereto or other
than as disclosed on Schedule 3.16.1,  the Company is not a party to or bound by
any oral or written contracts, obligations or commitments with respect to any of
the following:

                  (a) contract,  commitment or arrangement involving, in any one
case, $20,000 or more;

                                      -22-
<PAGE>

                  (b) contract  with a term of, or requiring  performance,  more
than six months from its date;

                  (c) lease or lease purchase agreement,  mortgage,  conditional
sale  or  title  retention  agreement,  indenture,  security  agreement,  credit
agreement,  pledge or option  with  respect to any  property,  real or  personal
(tangible or intangible), in any capacity;

                  (d)  employment  contracts,  undertakings,  understandings  or
arrangements;

                  (e)  contract  or  agreement  with  any  labor  union or other
collective bargaining group;

                  (f) bonus, pension,  savings,  welfare,  profit sharing, stock
option,  phantom  stock,  stock  appreciation  rights,  retirement,  commission,
executive compensation, hospitalization, insurance or similar plan providing for
employee benefits or any other arrangement providing for benefits for any former
or  current  employees  or for the  remuneration,  direct  or  indirect,  of the
directors, officers or employees of the Company;

                  (g)  note,  loan,  credit  or  financing  agreement  or  other
contract for money borrowed,  and all related security agreements and collateral
documents,  including any agreement for any commitment for future loans,  credit
or financing;

                  (h) guarantees;

                  (i)   contract   or   understanding   regarding   any  capital
expenditures in excess of $20,000;

                  (j)  agency  (sales  or  otherwise),  distribution,  brokerage
(including,   without  limitation,   any  brokerage  or  finder's  agreement  or
arrangement  with  respect  to any  of the  transactions  contemplated  by  this
Agreement) or advertising agreement;

                  (k) contract with investment bankers, accountants,  attorneys,
consultants or other independent  contractors,  including those relating to this
Agreement;

                  (l) shareholder agreement;

                  (m) any or  contract  or  understanding  with any  director or
officer of the Company (or any family  member  thereof) or any Affiliate of such
persons;

                  (n) contract,  commitment or arrangement  which would restrain
the Company from engaging or competing in any business;

                  (o)  contract,  commitment  or  arrangement  not  made  in the
ordinary course of business  involving an amount payable per annum of $20,000 or
more or, in the aggregate, $100,000; and

                  (p)  license  (other than  shrink  wrap  licenses  relating to
generally available software), franchise or royalty agreement.

                                      -23-
<PAGE>

                  3.16.3 The  Company has  delivered  or made  available  to the
Parent correct and complete copies of all of the contracts, agreements and other
documents  listed  in  Schedules  Sections  3.16.1  and  3.16.2  hereto  and all
amendments  thereto and any waivers currently in effect granted  thereunder (the
"Scheduled  Company  Contracts").  Except as specifically set forth on Schedules
3.16.1 and 3.16.2,  the Merger and the  consummation  of the other  transactions
contemplated  by  this  Agreement  are not a  violation  of or  grounds  for the
modification or cancellation  of any of the Scheduled  Company  Contracts or for
the imposition of any penalty or security  interests  thereunder.  No unresolved
disputes are pending or, to the knowledge of the Company, threatened under or in
respect  of any  such  Scheduled  Company  Contracts.  Except  as  described  in
Schedules 3.16.1 and 3.16.2 hereto, all Scheduled Company Contracts described in
such Schedules 3.16.1 and 3.16.2 are valid and enforceable  against the Company,
as applicable, and to the Company's Knowledge against the other party or parties
thereto,  as the case may be, in accordance  with their  respective  terms,  and
there is not,  under  any of such  Scheduled  Company  Contracts,  any  existing
default by the Company, to the Company's  Knowledge,  by any other party, or, to
the Company's  Knowledge,  any event which with notice,  lapse of time, or both,
would constitute a default and which would have a Material Adverse Effect on the
continued operation of the Company.

         Section 3.17 Intellectual  Property.  Schedule Section 3.17 hereto sets
forth a true and complete list of all (i) Trademarks,  (ii) Patent Rights, (iii)
Copyrights, and (iv) License Rights held by the Company. All Trademarks,  Patent
Rights,  Copyrights,  License  Rights and Trade  Secrets of the Company that are
owned by the  Company are owned free and clear of any and all  licenses,  liens,
claims, security interests, charges or other encumbrances or restrictions of any
kind,  except as reflected on Schedule Section 3.17, and no licenses for the use
of any of such  rights have been  granted by the  Company to any third  parties,
except as reflected in Schedule Section 3.17 attached hereto. All of such rights
are valid,  enforceable  and in good standing and are reasonably  sufficient and
appropriate  for the conduct of the  business of the  Company as  currently  and
proposed  to be  conducted.  The  Merger  and  the  consummation  of  the  other
transactions  contemplated  hereby will not  adversely  affect any rights of the
Company in the Intellectual Property of the Company. To the Company's Knowledge,
the  operation of the Company  does not infringe in any way on or conflict  with
any registered or unregistered patent, trademark,  trade name, copyright,  trade
secret,  contract,  license or other right, of any person,  and the Company does
not license any such right from others  except as set forth on Schedule  Section
3.17. No claim is pending or, to the Company's Knowledge, threatened or has been
made within the past five years,  to the effect  that any such  infringement  or
conflict  has  occurred.  No  other  Intellectual   Property,   other  than  the
Intellectual  Property  owned or licensed by the Company,  is required by it for
its business as conducted prior to the date hereof. The Company has no knowledge
of any infringement by any third parties upon any of the  Intellectual  Property
of the Company.

         Section  3.18  Insurance.  Schedule  Section  3.18  hereto  contains  a
complete and correct list of all  insurance  policies  maintained by the Company
together  with a schedule  of  required  premiums  under each such  policy.  The
Company has  delivered  to the Parent  complete  and correct  copies of all such
policies together with all riders and amendments  thereto.  Such policies are in
full force and effect,  and all premiums due thereon have been paid. The Company
has complied in all material  respects with the provisions of such policies.  No
notice has been received canceling or threatening to cancel or refusing to renew
any of such insurance.  Except as set forth in Schedule Section 3.18, the rights

                                      -24-
<PAGE>

of the insured under such policies will not be terminated or adversely  affected
by the Merger or the consummation of the other transactions contemplated hereby.
There is currently no basis for any insurance claim by the Company.  The Company
has not created any letters of credit or other funding  obligation  with respect
to such policies.

         Section 3.19 Customer and Supplier Relationships.  Attached as Schedule
Section  3.19 is a complete  and correct  list of all current  customers  of the
Company showing the sales to each by the Prior Entity for the period ended March
31, 2005 and of all  suppliers  to the Company  whose sales to the Prior  Entity
amounted to more than $200,000 during such period showing the sales of each such
supplier.  With  respect to any such  customer  or  supplier or group of related
customers  or  suppliers  listed on Schedule  Section  3.19,  the Company has no
knowledge  that any such  customer,  supplier or group of related  customers  or
suppliers  has  terminated  or expects to  terminate  a material  portion of its
normal business with the Company.  Except as disclosed in Schedule Section 3.19,
no shareholder  or director or officer of the Company or any of their  immediate
family  members  has any  direct or  indirect  interest,  either by way of stock
ownership or otherwise, other than ownership of not more than two (2) percent of
the  outstanding  shares of stock of any business  listed on any national  stock
exchange or listed on Nasdaq, in any firm, corporation,  association or business
enterprise,  which  competes  with,  is a  supplier  or  customer  of,  or  is a
distributor or sales agent for, or is a party to any contract with the Company.

         Section 3.20 Employees.  The Company has furnished to Parent a true and
complete  list setting  forth all of the  employers and officers of the Company,
the annual  salary of each and the bonus to be earned by each such  employee  or
officer in the Company's  current  fiscal year,  together with a description  of
their job designations,  other compensation,  benefits (including  severance pay
and bonuses),  outstanding loans to officers or employees and all understandings
not in the  ordinary  course of  business  relating to terms and  conditions  of
employment.  Proper and accurate  amounts have been withheld by the Company from
its  employees'  compensation  for all  periods  in  full  compliance  with  tax
withholding  provisions  of  applicable  federal,  state,  local or foreign law.
Proper and accurate federal, state, local and foreign returns have been filed by
the Company for all periods for which  returns were due with respect to employee
income tax withholding,  social security and unemployment Taxes, and the amounts
shown thereon to be due and payable have been timely paid.

         Section  3.21  Labor  Relations.  There  has been no  violation  of any
federal, state or local statutes, laws, ordinances,  rules, regulations,  orders
or  directives  with  respect  to  the  employment  of  individuals  by,  or the
employment practices or work conditions of the Company or their respective terms
and conditions of employment, wages and hours. The Company is not engaged in any
unfair labor practice or other unlawful employment practice (including under any
immigration  laws)  and  there are no unfair  labor  practice  charges  or other
employee  related  complaints  against the Company  pending or, to the Company's
Knowledge,  threatened  before the National  Labor  Relations  Board,  the Equal
Employment  Opportunity  Commission,  the Occupational  Safety and Health Review
Commission,  the Department of Labor, or any other federal,  state, or local, or
other governmental  authority by or concerning the employees of the Company.  No
representation  question,  grievance or arbitration  proceedings  arising out of
collective  bargaining agreements covering employees of the Company exists or is
pending or, to the knowledge of the Company, threatened respecting the employees
of the Company. There is no work stoppage, strike, slowdown,  lockout, picketing
or other similar labor problem involving persons employed by the Company pending
or, to the  knowledge  of the  Company,  threatened.  There  are no labor  union

                                      -25-
<PAGE>

contracts or  collective  bargaining  agreements to which the Company is a party
relating to any employee of the Company.

         Section 3.22 Benefit Plans.

                  3.22.1 The Company does not maintain or contribute to, and has
not previously  maintained or contributed to, an "employee pension benefit plan"
(as defined in Section 3(2) of ERISA). The Company does not currently contribute
to, and has not previously contributed to, any multiemployer plan (as defined in
Section 3(37) of ERISA).

                  3.22.2 Schedule  Section 3.22.2 sets forth a true and complete
list of each  "employee  welfare  benefit  plan" (as defined in Section  3(1) of
ERISA)  maintained  by the  Company or to which the  Company  contributes  or is
required to  contribute on behalf of officers and employees of the Company (such
employee welfare benefit plans being hereinafter collectively referred to as the
"Company Welfare Benefit  Plans").  With respect to each Company Welfare Benefit
Plan, all contributions or premiums due by the Closing Date have been paid. Each
Company  Welfare  Benefit Plan has been  administered to date in compliance with
the  requirements of ERISA and all other  applicable  laws, and all reports,  if
any, required by any government agency with respect to each Welfare Benefit Plan
have been  timely  filed.  There are no  actions,  suits or claims  (other  than
routine claims for benefits) pending or which could reasonably be expected to be
asserted  against the Company in connection  with any Welfare  Benefit Plan, and
there are no civil or  criminal  actions  pending  or, to the  knowledge  of the
Company, threatened against the Company with respect to any such Welfare Benefit
Plan.

                  3.22.3 Schedule 3.22.3 lists each deferred  compensation plan,
bonus  plan,  employee  stock  purchase  plan,  stock  option plan and any other
Employee Benefit Plan, agreement, arrangement or commitment not required under a
previous subsection to be listed on Schedule 3.22.3 or maintained by the Company
with respect to the compensation of any of the Company's employees.

         Section  3.23   Corporate   Records.   The  copy  of  the  articles  of
incorporation of the Company,  as amended to date,  included in Schedule Section
3.23 is complete  and  correct,  and the minute  books of the Company  correctly
reflect all  material  corporate  actions  taken at all  meetings  of  directors
(including  committees  thereof) and the stockholders.  The stock transfer books
and ledgers of the Company are  complete and correct and  correctly  reflect all
issuances and transfers of the membership interests of the Company.

         Section 3.24 Bank Accounts;  Power of Attorney.  Schedule  Section 3.24
hereto correctly sets forth: (i) a list of all banks in which the Company has an
account or safety deposit box, account number, purpose of such account or safety
deposit  box and the names of all  persons  authorized  to draw  thereon or have
access  thereto;  and (ii) the names of all persons  holding  powers of attorney
from the Company and a description of the power of attorney.

         Section 3.25  Warranties.  Except as described in Schedule Section 3.25
annexed  hereto,  during  the past two (2) years the  Company  has not given any
written  warranties with respect to any of its products or services,  and except
as set forth in such  Schedule  Section 3.25, in the last two (2) years no claim
for breach of any such written  warranty or any implied warranty with respect to
such  products or services  has been made,  or to the  Company's  Knowledge,  is
threatened.

                                      -26-
<PAGE>

         Section 3.26 Insider Interests. Except as disclosed on Schedule Section
3.26,  no officer or  director  of the  Company  or  Affiliate  of an officer or
director of the Company has any  agreement  with the Company or any  interest in
any  property,  real,  personal  or mixed,  tangible or  intangible  (including,
without limitation,  patents,  patent applications,  trademarks,  trade names or
other  intellectual  property)  used in or  pertaining  to the  business  of the
Company or has engaged in a transaction  with the Company at any time during the
Company's  current fiscal year or three preceding  fiscal years,  except in each
case as a stockholder or employee.

         Section 3.27 Foreign  Corrupt  Practices Act. The Company has not made,
offered  or  agreed  to offer  anything  of value  to any  government  official,
political  party or candidate for government  office nor has it taken any action
which  would  cause  the  Company  to be in  violation  of the  Foreign  Corrupt
Practices  Act of 1977 or any  similar law of any  foreign  jurisdiction  or the
United States.

         Section 3.28  Reorganization.  Neither the Company nor the Prior Entity
has taken any action or failed to take any action which action or failure  would
cause the  Merger  not to qualify  as a  reorganization  within  the  meaning of
Section 368(a) of the Code,  and there are, to the knowledge of the Company,  no
facts that would prevent the Merger from qualifying as a  reorganization  within
the meaning of Section 368(a) of the Code as of the Effective Time.

         Section 3.29 Brokers.  Except as set forth on Schedule Section 3.29, no
broker, investment banker or other person, is entitled to any broker's, finder's
or  other  similar  fee  or  commission  in  connection  with  the  transactions
contemplated by this Agreement based upon  arrangements  made by or on behalf of
the Company or its stockholders.

ARTICLE IV - COVENANTS

         Section 4.1 Stockholders Meeting.  Promptly following the execution and
delivery  of this  Agreement,  the  Company  shall  either (i) convene a special
meeting  of the  Company's  stockholders  to vote upon the Merger and the Merger
Agreement or (ii) solicit the written  consent of the Company's  stockholders to
the Merger and the Merger  Agreement,  in each case in accordance with the NGCL.
The  Company  shall  (i)  obtain  from  each of the  Company's  stockholders  in
connection with such meeting information  sufficient to determine whether or not
such stockholder is an accredited investor,  and (ii) furnish to Parent, for its
review and  approval,  copies of all  materials to be furnished to the Company's
stockholders  in  connection  with  such  meeting  prior to the time  that  such
materials  are  furnished  to  the  Company's  stockholders.  The  Participating
Shareholders  shall vote their  shares of Company  Common  Stock in favor of the
Merger and the Merger  Agreement  and shall use their best  efforts to cause the
other Company shareholders to vote in favor of the Merger.

         Section 4.2  Expenses.  The Parent and the Company shall bear their own
respective   expenses  incurred  in  connection  with  this  Agreement  and  the
transaction  contemplated hereby and in connection with all obligations required
to be performed by each of them under this Agreement.

         Section 4.3  Reorganization.  Each party shall use all reasonable  best
efforts to refrain  from taking any action or failing to take any action,  which
action or failure to act would cause,  or would be  reasonably  likely to cause,
the Merger to fail to qualify as a reorganization  within the meaning of Section
368(a) of the Code.  Parent hereby agrees that, for a six-month period following

                                      -27-
<PAGE>

the  Effective  Time,  (i) it  will  cause  the  Surviving  Corporation  to hold
"substantially  all" of the properties of the Company and Sub within the meaning
of Section 368(a) of the Code, and (ii) it will remain in "control"  (within the
meaning of Section 368(c) of the Code) of the corporation  that is the surviving
corporation in the Merger, except for any transfers to a controlled  corporation
in  accordance  with  Section  368(a)(2)(C)  of the Code or Treasury  Regulation
Section 1.368-2(k).

         Section 4.4 Public Announcements.  Neither Parent nor the Company shall
issue any press release with respect to the  transactions  contemplated  by this
Agreement or otherwise issue any written public  statements with respect to such
transactions  without prior consultation with the other party,  except as may be
required by  applicable  law.  Parent and the  Company  agree that they will not
identify any of the  stockholders  of the Company in any press  release  without
their prior written consent.

         Section 4.5  Confidentiality.  Each of the parties covenants and agrees
to keep  confidential any and all material  non-public  information which it has
heretofore obtained or shall hereafter obtain, directly or indirectly,  from the
other party pursuant to this Agreement or otherwise,  and agrees to use the same
only for the purposes of this  Agreement but without  disclosing the same to any
party except as provided below, without the other party's prior written consent;
provided that the terms of this Section shall not extend to any such information
that: (a) is already  publicly known;  (b) has become publicly known without any
fault  of the  disclosing  party  or  anyone  to whom a party  hereto  has  made
disclosure in compliance  with the terms of this Section;  or (c) is required to
be  disclosed  to any  Governmental  Authority  as a result of operation of law,
regulation,  or court order;  provided,  however, that party wishing to make any
disclosure  pursuant to this clause (c) shall have first  given  prompt  written
notice, if permitted, of such requirement to the other party and cooperates with
the other party to restrict such disclosure and/or obtain confidential treatment
thereof. The foregoing notwithstanding,  each of Company and Parent may disclose
such information to its Affiliates and its directors, officers and employees and
representatives or the directors, officers, employees and representatives of any
of its Affiliates that have a need to know such  information;  provided that the
disclosing  party, as the case may be, informs such Persons of the  restrictions
set forth in this  Section  with  respect to such  information  and such Persons
agree to comply with the provisions of this Section.

         Section 4.6 Standstill Agreement.  Except as otherwise provided in this
Agreement,  the  parties  agree  that,  between the date hereof and the first to
occur of (a) the Closing Date and (b) termination of this Agreement, neither the
Company nor the Parent shall,  or shall permit any of its Affiliates to, discuss
or negotiate with any other Person,  or entertain or consider any inquiries,  or
proposals  relating to a possible merger,  acquisition or other transaction such
as an exchange of securities, stock or asset acquisition, consolidation or other
transaction  that would  interfere with the  transactions  contemplated  by this
Agreement,  except upon the receipt of an  unsolicited  offer from a third party
where the  board of  directors  of the party  receiving  such  offer  reasonably
believes,  upon the written advice of counsel, that its fiduciary duties require
it to enter into discussions  with such party.  Each party shall promptly notify
the other of all of the relevant details relating to all inquiries and proposals
which it may receive  relating to any  proposed  disposition  of the business or
assets,  or the  acquisition of its capital stock, or the merger of it or any of
its subsidiaries  with any corporation or other entity other than as provided by
this Agreement.

                                      -28-
<PAGE>

         Section 4.7 Conduct of Business in the Ordinary Course. Both the Parent
and Company shall conduct business only in the ordinary course. From the date of
this  Agreement  through  the Closing  Date or  termination  of this  Agreement,
neither  the  Parent  nor the  Company  shall  take any  action  that would have
required  disclosure under Section 2.12 or Section 3.11,  respectively,  if such
action had been taken prior to the date hereof without the prior written consent
of the other party, which consent shall not be unreasonably withheld.

         Section  4.8   Indemnification   of  Company  Officers  and  Directors;
Directors and Officers Insurance.

                  4.8.1  From  and  after  the  Effective  Time,  the  Surviving
Corporation  shall (i) indemnify and hold harmless all past and present officers
and  directors  of the  Company to the same  extent and in the same  manner such
persons are indemnified as of the date of this Agreement by the Company pursuant
to the NGCL and the Company Articles of Incorporation  and in any agreement with
the Company listed on Schedule Section 4.8 for acts or omissions occurring at or
prior to the Effective Time (including  indemnifying  and holding  harmless such
persons for acts or  omissions  occurring at or prior to the  Effective  Time in
respect of the Merger and the transactions  contemplated  thereby), and (ii) pay
the  expenses  of any such  action,  suit or  proceeding  in  advance of a final
determination thereof to the same extent and in the same manner as such expenses
are to be paid pursuant to the NGCL and the Company  Articles of  Incorporation,
upon  receipt of any written  undertaking  required  under the NGCL to repay any
advanced  expenses  an  indemnitee  may  receive  that  as a  result  of a final
disposition  of such matter he or she was not entitled to receive under the NGCL
or the Company Articles of Incorporation.

                  4.8.2 This  covenant is intended to be for the benefit of, and
shall be enforceable  by, each of the indemnified  parties and their  respective
heirs and legal representatives.

ARTICLE V - CONDITIONS PRECEDENT TO THE MERGER

         Section 5.1 Conditions to Each Party's Obligation to Effect the Merger.
The  respective  obligations of each party to effect the Merger shall be subject
to the  fulfillment  at or  prior  to  the  Closing  of  each  of the  following
conditions:

                  5.1.1  Stockholder  Approval.  This Agreement  shall have been
duly  approved by the vote of a majority of the  stockholders  of the Company in
accordance with applicable law and the Company's Articles of Incorporation,  and
no more than 10% of the Company's  stockholders shall have exercised dissenters'
rights under the NGCL.

                  5.1.2 No Order. No court or other  Governmental  Entity having
jurisdiction  over the  Company,  Parent,  or Sub shall  have  enacted,  issued,
promulgated,  enforced or entered any law, rule,  regulation,  executive  order,
decree, injunction or other order (whether temporary,  preliminary or permanent)
which  is then  in  effect  and  has the  effect  of,  directly  or  indirectly,
restraining,  prohibiting or restricting  the Merger or any of the  transactions
contemplated hereby; provided,  however, that the provisions of this Sub-section
5.1.2  shall  not be  available  to any  party  whose  failure  to  fulfill  its
obligations  pursuant to this  Agreement  shall have been the cause of, or shall
have  resulted  in, the  enforcement  or  entering  into of any such law,  rule,
regulation, executive order, decree, injunction or other order.

                                      -29-
<PAGE>

                  5.1.3 Approvals, Consents or Waivers. Other than the requisite
filing of the  Certificate  of Merger,  all  authorizations,  consents,  orders,
declarations or approvals of, or filings with, or terminations or expirations of
waiting  periods  imposed  by, any  Governmental  Entity,  which the  failure to
obtain,  make or occur  would  have  the  effect  of,  directly  or  indirectly,
restraining,  prohibiting or restricting  the Merger or any of the  transactions
contemplated hereby or would have,  individually or in the aggregate, a Material
Adverse Effect on Parent and the Surviving  Corporation (assuming the Merger had
taken  place),  shall  have been  obtained,  shall  have been made or shall have
occurred.

         Section  5.2  Conditions  to  Obligation  of the  Company to Effect the
Merger.  The  obligation of the Company to effect the Merger shall be subject to
the  fulfillment  or  waiver  at or prior to the  Effective  Time of each of the
following additional conditions:

                  5.2.1 Representations,  Performance,  Etc. The representations
and warranties of each of Parent and Sub contained in ARTICLE II hereof shall be
true at and as of the date hereof and shall be repeated and shall be true at and
as of the  Closing  Date with the same  effect as though  made at and as of such
time.  Each of Parent and Sub shall have duly  performed  and complied  with all
covenants,  agreements and conditions required by this Agreement to be performed
or  complied  with by it prior to or on the  Closing  Date.  Parent  shall  have
delivered  to the Company an  officer's  certificate  signed on behalf of Parent
dated the Closing Date to the effect set forth above in this Section 5.2.1.

                  5.2.2  Opinion of Counsel.  The Company  shall have received a
favorable  opinion,  addressed to the Company and its stockholders and dated the
Closing  Date, of  Richardson & Patel LLP,  counsel for the Parent,  in the form
annexed hereto as Exhibit B.

                  5.2.3 Proceedings and  Documentation.  All corporate and other
proceedings in connection with the transactions  contemplated by this Agreement,
and  all  documents  and  instruments  incident  thereto,  shall  be  reasonably
satisfactory  in  substance  and form to the  Company and its  counsel,  and the
Company and its counsel  shall have  received all such  receipts,  documents and
instruments,  or copies thereof, certified if requested, to which the Company is
entitled and as may be reasonably requested.

                  5.2.4 Material  Adverse  Change.  Since March 31, 2005,  there
shall have been no Material  Adverse Change with respect to Parent.  The Company
shall have  received an officer's  certificate  signed on behalf of Parent dated
the Closing Date to such effect.

                  5.2.5  Litigation.  No suit,  action  or other  proceeding  or
investigation  shall be threatened or pending  before any court or  governmental
agency in which it is sought  to  restrain  or  prohibit  or to obtain  material
damage  or other  material  relief in  connection  with  this  Agreement  or the
consummation  of the  transactions  contemplated  hereby  or which is  likely to
affect  materially the value of the Parent Common Stock or the assets,  business
or condition (financial or otherwise) of the Parent.

                  5.2.6 Sale of Parent Subsidiary.  Prior to the Effective Time,
Parent shall have caused the Operating  Subsidiary to change its corporate  name
to a name not  including the words "Cars  Unlimited.com",  and shall have either
transferred  to  its  stockholders  or  another  third  party  ownership  of the
Operating  Subsidiary and shall have provided to the company copies of documents

                                      -30-
<PAGE>

filed in the State of New York  giving  effect to the name  change or shall have
dissolved the Operating Subsidiary.

                  5.2.7  Financing  Obligation.  Unless  such date is  otherwise
extended  in writing by Company,  no later than July 15 , 2005,  and at Closing,
Parent shall have no less than  $4,000,000  in cash or cash  equivalents  and no
more than $80,000 in liabilities.

                  5.2.8  Good  Standing  Certificates.  The Parent and Sub shall
have delivered to the Company  certificates as of a date not more than three (3)
days prior to the Closing Date  attesting to the good standing of the Parent and
Sub as corporations in their  jurisdiction of  incorporation by the Secretary of
State of such jurisdiction.

         Section 5.3  Conditions to  Obligations of Parent and Sub to Effect the
Merger.  The obligations of Parent and Sub to effect the Merger shall be subject
to the  fulfillment  or waiver at or prior to the Effective  Time of each of the
following additional conditions:

                  5.3.1  Representations,  Performance.  The representations and
warranties  contained  in ARTICLE III hereof shall be true at and as of the date
hereof and shall be  repeated  and shall be true at and as of the  Closing  Date
with the same  effect as though made at and as of the  Closing  Date,  except as
affected by the transactions  contemplated  hereby.  The Company shall have duly
performed and complied with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by it prior to or on the Closing
Date.  The Company shall have  delivered to the Parent an officer's  certificate
signed on behalf of the Company  dated the Closing  Date to the effect set forth
above in this Section 5.3.1.

                  5.3.2 Consents Under Scheduled Parent Contracts.  All required
consents  to the  Merger or any of the other  transactions  contemplated  hereby
under any Scheduled Parent Contracts shall have been obtained.

                  5.3.3 Material Adverse Change. Since the date of the Financial
Statements, there shall have been no Material Adverse Change with respect to the
Company.  Parent and Sub shall have received certificate signed on behalf of the
Company and by the  Participating  Stockholders  dated the Closing  Date to such
effect.

                  5.3.4  Litigation.  No suit,  action  or other  proceeding  or
investigation  shall be threatened or pending  before any court or  governmental
agency in which it is sought  to  restrain  or  prohibit  or to obtain  material
damage  or other  material  relief in  connection  with  this  Agreement  or the
consummation  of the  transactions  contemplated  hereby  or which is  likely to
affect materially the value of the assets,  business or condition  (financial or
otherwise) of the Company.

                  5.3.5  Opinion of Counsel.  The Parent  shall have  received a
favorable  opinion,  addressed  to the Parent  and dated the  Closing  Date,  of
Beckman,   Lieberman  &  Barandes,   LLP,   counsel  for  the  Company  and  the
Participating Stockholders, in the form annexed hereto as Exhibit C.

                  5.3.6 Proceedings and  Documentation.  All corporate and other
proceedings  of  the  Company  and  its  stockholders  in  connection  with  the
transactions  contemplated by this Agreement,  and all documents and instruments
incident to such corporate  proceedings,  shall be satisfactory in substance and

                                      -31-
<PAGE>

form to the Parent and the  Parent's  counsel,  and the Parent and the  Parent's
counsel shall have received all such  receipts,  documents and  instruments,  or
copies thereof,  certified if requested,  to which the Parent is entitled and as
may be reasonably requested.

                  5.3.7  Good  Standing  Certificates.  The  Company  shall have
delivered  to the Parent and Sub  certificates  as of a date not more than three
(3) days prior to the Closing Date attesting to the good standing of the Company
as a corporation in its  jurisdiction of incorporation by the Secretary of State
of such jurisdiction.

                  5.3.8  Dissenting  Stockholders.  Stockholders  owning no more
than ten (10) percent of the outstanding capital stock of the Company shall have
exercised their dissenter's rights under the NGCL.

ARTICLE VI - TERMINATION, AMENDMENT AND WAIVER

         Section 6.1  Termination.  This Agreement may be terminated at any time
prior to the Closing Date:

                  6.1.1 by mutual consent of the parties;

                  6.1.2 by the  Parent by notice to the  Company,  (i) if any of
the  conditions  set forth in Section 5.1 or Section  5.3 hereof  shall not have
been fulfilled by [____________], provided, however, that the right to terminate
this  Agreement  pursuant to this clause (i) shall not be available to Parent if
the  Parent's or Sub's  failure to fulfill any of its  obligations  contained in
this  Agreement  has been the cause of, or resulted  in, the failure of any such
condition  to be  fulfilled on or prior to the  aforesaid  date;  or (ii) if any
material  default  under  or  material  breach  of any  covenant,  agreement  or
condition of this Agreement,  or any misrepresentation or breach of any warranty
contained herein, on the part of the Parent or Sub shall have occurred and shall
not have been cured to the satisfaction of the Company;

                  6.1.3 by the  Company by notice to the  Parent,  (i) if any of
the  conditions  set forth in Section 5.1 or Section  5.2 hereof  shall not have
been  fulfilled  by  [_______________],  provided,  however,  that the  right to
terminate this  Agreement  pursuant to this clause (i) shall not be available to
the Company if the Company's failure to fulfill any of its obligations contained
in this Agreement has been the cause of, or resulted in, the failure of any such
condition  to be  fulfilled on or prior to the  aforesaid  date;  or (ii) if any
material  default under or material breach of any agreement or condition of this
Agreement,  or any misrepresentation or breach of any warranty contained herein,
on the part of the Company  shall have occurred and shall not have been cured to
the satisfaction of the Parent and Sub;

                  6.1.4 by either  the  Company  or Parent and Sub if a court of
competent  jurisdiction or governmental,  regulatory or administrative agency or
commission  shall  have  issued  an  order,  decree or ruling or taken any other
action (an "Order"),  in any case having the effect of permanently  restraining,
enjoining  or  otherwise  prohibiting  the  Merger,  which  Order is  final  and
nonappealable; or

                  6.1.5  by  either  the  Company  or  Parent,  if the  required
approvals of the  stockholders  of the Company  contemplated  by this  Agreement
shall not have been  obtained  by reason of the  failure to obtain the  required
vote of the stockholders.

                                      -32-
<PAGE>

         Section 6.2 Effect of Termination.  In the event of termination of this
Agreement  by either  Parent or the Company,  as provided in Section  6.1,  this
Agreement shall forthwith become void and there shall be no liability  hereunder
on the  part  of the  Company,  Parent,  Sub or  their  respective  officers  or
directors  (except  for Section 4.2 and  Section  4.5,  which shall  survive the
termination); provided, however, that nothing contained in this Section 6.2shall
relieve any party hereto from any liability  for any breach of a  representation
or warranty  contained in this Agreement or the breach of any covenant contained
in this Agreement.

         Section 6.3  Amendment.  This  Agreement  may be amended by the parties
hereto, by or pursuant to action taken by their respective Board of Directors at
any time before or after  approval of the matters  presented in connection  with
the Merger by the stockholders of the Company,  subject to the provisions of the
NGCL.  This  Agreement  may not be amended  except by an  instrument  in writing
signed on behalf of each of the parties hereto.

         Section  6.4  Waiver.  At any time  prior to the  Effective  Time,  the
parties  hereto  may (i)  extend  the  time  for the  performance  of any of the
obligations  or  other  acts  of  the  other  parties  hereto,  (ii)  waive  any
inaccuracies in the  representations  and warranties  contained herein or in any
document  delivered  pursuant hereto and (iii) waive  compliance with any of the
agreements  or  conditions  contained  herein  which may legally be waived.  Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an  instrument  in  writing  signed on behalf of such
party.  No delay on the part of any party hereto in exercising any right,  power
or privilege  hereunder shall operate as a waiver thereof,  nor shall any waiver
on the part of any  party  hereto of any  right,  power or  privilege  hereunder
operate as a waiver of any other right, power or privilege hereunder,  nor shall
any  single or  partial  exercise  of any right,  power or  privilege  hereunder
preclude  any other or further  exercise  thereof or the  exercise  of any other
right, power or privilege hereunder.  Unless otherwise provided,  the rights and
remedies  herein  provided are cumulative and are not exclusive of any rights or
remedies which the parties  hereto may otherwise  have at law or in equity.  The
failure of any party to this  Agreement  to assert any of its rights  under this
Agreement or otherwise shall not constitute a waiver of those rights.

ARTICLE VII - SURVIVAL OF REPRESENTATIONS & WARRANTIES

         Section  7.1  Survival of  Representations  and  Warranties.  Except as
expressly provided in this Agreement, all representations and warranties made by
the Company  hereunder or pursuant hereto or in connection with the transactions
contemplated  hereby  shall not  terminate,  but shall  survive  the Closing and
continue  in effect  until the one (1) year  anniversary  of the  Closing  Date;
provided,  that any such  representation  or  warranty as to which a claim shall
have been asserted  during such survival  period shall  continue in effect until
such time as such claim shall have been resolved or settled.

         Section 7.2 Survival of Covenants and  Agreements.  Except as expressly
provided in this  Agreement,  all covenants  and  agreements  made  hereunder or
pursuant hereto or in connection with the transactions contemplated hereby shall
not terminate but shall survive the Closing.

                                      -33-
<PAGE>

ARTICLE VIII - GENERAL PROVISIONS

         Section 8.1  Notices.  All notices and other  communications  hereunder
shall be in writing and shall be deemed given when delivered personally, one day
after  being  delivered  to an  overnight  courier  or when  telecopied  (with a
confirmatory  copy sent by  overnight  courier) to the parties at the  following
addresses  (or at such other  address for a party as shall be  specified by like
notice):

     If to Parent or Sub, to:

                           Richardson & Patel
                           10900 Wilshire Boulevard, Suite 500
                           Los Angeles, California  90024
                           Attn:  Ryan S. Hong, Esq.
                           Fax:  (310) 208-1154

     If to the Company, to:

                           Beckman, Lieberman &  Barandes, LLP
                           116 John Street, Suite 1313
                           New York, NY 10038
                           Attn: Robert Barandes, Esq.
                           Fax: 212-608-9687

     If to the Participating Stockholders, to:

                           Beckman, Lieberman &  Barandes, LLP
                           116 John Street, Suite 1313
                           New York, NY 10038
                           Attn: Robert Barandes, Esq.
                           Fax: 212-608-9687

         Section 8.2 Interpretation.  When a reference is made in this Agreement
to a Section,  such  reference  shall be to a Section of this  Agreement  unless
otherwise  indicated.  The table of  contents  and  headings  contained  in this
Agreement  are for  reference  purposes only and shall not affect in any way the
meaning or  interpretation  of this  Agreement.  Whenever  the words  "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."

         Section  8.3   Counterparts.   This   Agreement   may  be  executed  in
counterparts,  all of which shall be considered one and the same agreement,  and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.

         Section  8.4  Entire  Agreement;  No  Third-Party  Beneficiaries.  This
Agreement  constitutes  the entire  agreement of the parties and  supersede  all
prior  agreements and  understandings,  both written and oral, among the parties
with respect to the subject  matter  hereof.  This  Agreement is not intended to
confer  upon any person  other than the  parties  hereto any rights or  remedies
hereunder.

                                      -34-
<PAGE>

         Section 8.5  Governing  Law. This  Agreement  shall be governed by, and
construed in accordance  with, the laws of the State of New York,  regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

         Section 8.6  Assignment.  Neither this Agreement nor any of the rights,
interests  or  obligations  hereunder  shall be  assigned  by any of the parties
hereto  (whether by operation  of law or  otherwise)  without the prior  written
consent of the other parties.  Subject to the preceding sentence, this Agreement
will be binding upon,  inure to the benefit of and be enforceable by the parties
and their respective successors or assigns.

         Section  8.7  Severability.  If any  term or  other  provision  of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy,  all other terms,  conditions and provisions of this Agreement
shall  nevertheless  remain in full force and effect so long as the economic and
legal substance of the transactions  contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid,  illegal or incapable of being enforced, the parties
shall  negotiate  in good  faith to modify  this  Agreement  so as to effect the
original  intent of the parties as closely as possible in a mutually  acceptable
manner in order that the  transactions  contemplated  by this  Agreement  may be
consummated as originally contemplated to the fullest extent possible.

         Section 8.8  Performance  by Sub.  Parent hereby agrees to cause Sub to
comply with its obligations  hereunder and to cause Sub to consummate the Merger
as  contemplated  herein and whenever  this  Agreement  requires Sub to take any
action,  such requirement shall be deemed to include an undertaking of Parent to
cause Sub to take such action.

         Section 8.9 Defined Terms.  As used herein,  the following  terms shall
have the following  meanings (which meanings shall be equally  applicable to the
singular and plural forms of the terms so defined):

                  8.9.1 Affiliate: with respect to any Person, any Person which,
directly or indirectly,  controls,  is controlled by, or is under common control
with, such Person. The term "control" (including,  with correlative meaning, the
terms  "controlled by" and "under common control with"), as used with respect to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the  management  and policies of such Person,  whether
through the ownership of voting securities, by contract or otherwise.

                  8.9.2  Business  Day:  means  any day other  than a  Saturday,
Sunday,  Federal  holiday or day on which banks in New York City are required or
permitted by law to be closed.

                  8.9.3 Code:  the Internal  Revenue  Code of 1986,  as amended,
together with the U.S. Treasury rulings and regulations promulgated thereunder.

                  8.9.4 Company's Knowledge:  means the current actual knowledge
of the  officers of the Company,  after  reasonable  investigation  of the facts
relevant thereto.

                  8.9.5  Employee   Benefit  Plan:   any  pension,   retirement,
profit-sharing,  deferred compensation,  bonus or other incentive plan, or other
employee benefit program, arrangement,  agreement or understanding,  or medical,
vision,  dental or other health plan, or life  insurance or disability  plan, or
any other employee benefit plan,  including,  without limitation,  any "employee

                                      -35-
<PAGE>

benefit  plan"  as  defined  in  Section  3(3) of ERISA  to  which  the  Company
contributes  or is a party or is bound or under which it may have  liability and
which employees or former employees of the Company (or their  beneficiaries) are
eligible to participate or derive a benefit.

                  8.9.6  Environmental  Laws  means  each and  every  applicable
federal,  state, local and foreign law, statute,  ordinance,  regulation,  rule,
judicial  or  administrative   order  or  decree,   permit  license,   approval,
authorization  or similar  requirement of each and every federal,  and pertinent
state, local and foreign  governmental  agency or other governmental  authority,
pertaining  to the  protection  of human  health and  safety or the  environment
including,   without  limitation,   the  Comprehensive   Environmental  Response
Compensation  and Liability Act (CERCLA),  42 U.S.C.  9601 et seq., the Resource
Conservation  and  Recovery  Act  (RCRA),  42  U.S.C.  6901 et seq.,  the  Toxic
Substances  Control  Act (TSCA),  15 U.S.C.  2601 et seq.,  the Water  Pollution
Control Act (FWPCA),  33 U.S.C.  1251 et seq., and the  Occupational  Safety and
Health Act (OSHA), 42 U.S.C. 655. .

                  8.9.7 ERISA:  the Employee  Retirement  Income Security Act of
1974, as amended.

                  8.9.8  Exchange Act: the  Securities  Exchange Act of 1934, as
amended.

                  8.9.9 Governmental Entity: means any domestic (federal,  state
and local),  foreign or  supranational  court,  commission,  governmental  body,
regulatory agency, authority or tribunal.

                  8.9.10  Hazardous  Substance:  means any substance,  compound,
chemical or element  which is (i) defined as a  hazardous  substance,  hazardous
material,  toxic substance,  hazardous waste, pollutant or contaminant under any
Environmental Law, or (ii) a petroleum  hydrocarbon,  including crude oil or any
fraction  thereof,  (iii) hazardous,  toxic,  corrosive,  flammable,  explosive,
infectious,  radioactive,  carcinogenic  or a  reproductive  toxicant,  or  (iv)
regulated   pursuant  to  any   Environmental   Laws  and  shall  also   include
asbestos-containing  materials and manufactured  products  containing  Hazardous
Substances.

                  8.9.11  Material  Adverse Change or Material  Adverse  Effect:
when  used with  respect  to any  Person,  any  change  or effect  that is or is
reasonably  likely  (as far as can be  foreseen  at the  time) to be  materially
adverse to the business, operations,  properties, assets, liabilities,  employee
relationships,  customer  or  supplier  relationships,  earnings  or  results of
operations,  or the business prospects and condition (financial or otherwise) of
such  Person  and its  subsidiaries,  if any,  taken as a whole  other  than (i)
changes or effects which are or result from occurrences  relating to the economy
in general or such Person's industry in general and not specifically relating to
such Person or (ii) adverse changes, events or effects set forth or described in
the Parent's  annual report on Form 10-KSB for the period  ending,  December 31,
2004 or subsequently filed SEC Documents.

                  8.9.12 OTCBB means the Over-the-Counter Bulletin Board.

                  8.9.13 Parent's Knowledge:  means the current actual knowledge
of the officers of Parent after  reasonable  investigation of the facts relevant
thereto.

                                      -36-
<PAGE>

                  8.9.14 Parent Series A Preferred means the convertible  Series
A Preferred Stock of Parent,  par value $0.001 per share, to be issued by Parent
in connection  with the Merger on the terms and  conditions set forth in Section
1.5.2.

                  8.9.15  Person:   any  natural  person,   firm,   partnership,
association, corporation, trust, public body or Governmental Entity.

                  8.9.16 Securities Act: the Securities Act of 1933, as amended.

                  8.9.17 Subsidiary: means any corporation, partnership, limited
liability  company,  joint  venture  or other  legal  entity of which  Parent or
Company,  as the case may be (either alone or through or together with any other
Subsidiary),  owns or controls,  directly or indirectly,  fifty percent (50%) or
more of the stock or other equity  interests  the holders of which are generally
entitled to vote for the election of the board of  directors or other  governing
body of such corporation,  partnership, limited liability company, joint venture
or other legal entity.

                  8.9.18 Trade Secret:  means information,  including a formula,
pattern,  compilation,  program device, method, technique, or process, that: (i)
derives  independent  economic value from not being  generally known to, and not
being  readily  ascertainable  by,  proper means by other Persons who can obtain
economic value by its disclosure or use, and (ii) is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy.

                    Balance of Page Intentionally left Blank
                             Signature Pages Follow

                                      -37-
<PAGE>

         IN WITNESS  WHEREOF,  Parent,  Sub and the  Company  have  caused  this
Agreement  to be  signed  by their  respective  officers  and the  Participating
Stockholders have signed in their individual capacities,  duly authorized all as
of the date first written above.

CARSUNLIMITED.COM, INC.                       PUMP ACQUISITION CORP.

/s/ Daniel Myers                              /s/ Daniel Myers
-----------------------------------------     ----------------------------------
Authorized Signator                           Authorized Signator
Name: Daniel Myers                            Name: Daniel Myers
Title: Chairman & CEO                         Title: President

INNOPUMP, INC.

/s/ Geoffrey Donaldson
-----------------------------------------
Authorized Signator
Name: Geoffrey Donaldson
Title: CEO

PARTICIPATING STOCKHOLDERS

/s/ Geoffrey Donaldson                        /s/ Paul Block
-----------------------------------------     ----------------------------------
Geoffrey Donaldson                            Paul Block

/s/ Matthew Harriton
-----------------------------------------
Matthew Harriton

                                      -38-
<PAGE>

                                    EXHIBITS

A.   Participating Stockholders

B.   Opinion of Counsel to Parent and Sub

C.   Opinion of Counsel to Company and Participating Stockholders

                                       i
<PAGE>

                                    EXHIBIT A

                           PARTICIPATING STOCKHOLDERS

Geoffrey Donaldson

Paul Block

Matthew Harriton

                                       ii
<PAGE>

EXHIBIT B

                               OPINION OF COUNSEL

                                      iii
<PAGE>

                                    EXHIBIT C

                               OPINION OF COUNSEL

                                       iv
<PAGE>

                                TABLE OF CONTENTS

ARTICLE I        THE MERGER....................................................2

   SECTION 1.1   THE MERGER....................................................2
   SECTION 1.2   EFFECTIVE TIME................................................2
   SECTION 1.3   EFFECTS OF THE MERGER.........................................3
   SECTION 1.4   CHARTER AND BY-LAWS; DIRECTORS AND OFFICERS...................3
   SECTION 1.5   CONVERSION OF SECURITIES......................................3
   SECTION 1.6   PAYMENT OF MERGER CONSIDERATION...............................5
   SECTION 1.7   DIVIDENDS; TRANSFER TAXES; WITHHOLDING........................5
   SECTION 1.8   NO FURTHER OWNERSHIP RIGHTS IN COMPANY STOCK..................6
   SECTION 1.9   CLOSING OF COMPANY TRANSFER BOOKS.............................6
   SECTION 1.10  LOST CERTIFICATES.............................................6
   SECTION 1.11  FURTHER ASSURANCES............................................6
   SECTION 1.12  DISSENTERS' RIGHTS............................................6
   SECTION 1.13  CLOSING.......................................................7

ARTICLE II       REPRESENTATIONS AND WARRANTIES................................7

   SECTION 2.1   CORPORATE STATUS..............................................7
   SECTION 2.2   SUBSIDIDARIES.................................................7
   SECTION 2.3   AUTHORIZATION OF AGREEMENTS...................................7
   SECTION 2.4   CAPITALIZATION................................................8
   SECTION 2.5   NO CONFLICTS..................................................8
   SECTION 2.6   LITIGATION....................................................9
   SECTION 2.7   PARENT COMMON STOCK...........................................9
   SECTION 2.8   SEC DOCUMENTS AND OTHER REPORTS...............................9
   SECTION 2.9   NO UNDISCLOSED LIABILITIES...................................10
   SECTION 2.10  TAXES........................................................10
   SECTION 2.11  NO ADVERSE EFFECTS...........................................11
   SECTION 2.12  CONDUCT OF BUSINESS..........................................11
   SECTION 2.13  TITLE TO AND CONDITION OF ASSETS.............................12
   SECTION 2.14  REAL PROPERTY................................................12
   SECTION 2.15  ENVIRONMENTAL COMPLIANCE.....................................12
   SECTION 2.16  ACCOUNTS RECEIVABLE..........................................12
   SECTION 2.17  MATERIAL/SERVICE AGREEMENTS; OTHER CONTRACTS.................12
   SECTION 2.18  INTELLECTUAL PROPERTY........................................14
   SECTION 2.19  NY SPIN OFF..................................................14
   SECTION 2.20  INSURANCE....................................................15
   SECTION 2.21  CUSTOMER AND SUPPLIER RELATIONSHIPS..........................15
   SECTION 2.22  EMPLOYEES....................................................15
   SECTION 2.23  LABOR RELATIONS..............................................15
   SECTION 2.24  BENEFIT PLANS................................................16
   SECTION 2.25  CORPORATE RECORDS............................................16
   SECTION 2.26  BANK ACCOUNTS; POWER OF ATTORNEY.............................16

                                        a
<PAGE>

   SECTION 2.27  WARRANTIES...................................................16
   SECTION 2.28  INSIDER INTERESTS............................................17
   SECTION 2.29  FOREIGN CORRUPT PRACTICES ACT................................17
   SECTION 2.30  REORGANIZATION...............................................17
   SECTION 2.31  OPERATIONS OF SUB............................................17
   SECTION 2.32  BROKERS......................................................17

ARTICLE III      REPRESENTATIONS AND WARRANTIES OF THE COMPANY................17

   SECTION 3.1   ORGANIZATION AND AUTHORITY...................................17
   SECTION 3.2   SUBSIDIARIES.................................................17
   SECTION 3.3   AUTHORIZATION OF AGREEMENTS..................................18
   SECTION 3.4   CAPITALIZATION...............................................18
   SECTION 3.5   NO CONFLICTS.................................................18
   SECTION 3.6   FINANCIAL STATEMENTS.........................................19
   SECTION 3.7   LITIGATION; COMPLIANCE WITH LAWS; PERMITS....................19
   SECTION 3.8   NO UNDISCLOSED LIABILITIES...................................20
   SECTION 3.9   TAXES........................................................20
   SECTION 3.10  NO ADVERSE EFFECTS...........................................20
   SECTION 3.11  CONDUCT OF BUSINESS..........................................21
   SECTION 3.12  TITLE TO AND CONDITION OF ASSETS.............................21
   SECTION 3.13  REAL PROPERTY................................................21
   SECTION 3.14  ENVIRONMENTAL COMPLIANCE.....................................22
   SECTION 3.15  ACCOUNTS RECEIVABLE..........................................22
   SECTION 3.16  MATERIAL/SERVICE AGREEMENTS; OTHER CONTRACTS.................22
   SECTION 3.17  INTELLECTUAL PROPERTY........................................24
   SECTION 3.18  INSURANCE....................................................24
   SECTION 3.19  CUSTOMER AND SUPPLIER RELATIONSHIPS..........................25
   SECTION 3.20  EMPLOYEES....................................................25
   SECTION 3.21  LABOR RELATIONS..............................................25
   SECTION 3.22  BENEFIT PLANS................................................26
   SECTION 3.23  CORPORATE RECORDS............................................26
   SECTION 3.24  BANK ACCOUNTS; POWER OF ATTORNEY.............................26
   SECTION 3.25  WARRANTIES...................................................26
   SECTION 3.26  INSIDER INTERESTS............................................27
   SECTION 3.27  FOREIGN CORRUPT PRACTICES ACT................................27
   SECTION 3.28  REORGANIZATION...............................................27
   SECTION 3.29  BROKERS......................................................27

ARTICLE IV       COVENANTS....................................................27

   SECTION 4.1   STOCKHOLDER'S MEETINGS.......................................27
   SECTION 4.2   EXPENSES.....................................................27
   SECTION 4.3   REORGANIZATION...............................................27
   SECTION 4.4   PUBLIC ANNOUNCEMENTS.........................................28
   SECTION 4.5   CONFIDENTIALITY..............................................28
   SECTION 4.6   STANDSTILL AGREEMENT.........................................28
   SECTION 4.7   CONDUCT OF BUSINESS IN THE ORDINARY COURSE...................29
   SECTION 4.8   INDEMNIFICATION; DIRECTORS AND OFFICERS INSURANCE............29

                                       b
<PAGE>

ARTICLE V        CONDITIONS PRECEDENT TO THE MERGER...........................29

   SECTION 5.1   CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER...29
   SECTION 5.2   CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE MERGER 30
   SECTION 5.3   CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO EFFECT THE
                 MERGER.......................................................31

ARTICLE VI       TERMINATION, AMENDMENT AND WAIVER............................32

   SECTION 6.1   TERMINATION..................................................32
   SECTION 6.2   EFFECT OF TERMINATION........................................33
   SECTION 6.3   AMENDMENT....................................................33
   SECTION 6.4   WAIVER.......................................................33

ARTICLE VII      SURVIVAL OF REPRESENTATIONS & WARRANTIES.....................33

   SECTION 7.1   SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................33
   SECTION 7.2   SURVIVAL OF COVENANTS AND AGREEMENTS.........................33

ARTICLE VIII     GENERAL PROVISIONS...........................................33

   SECTION 8.1   NOTICES......................................................34
   SECTION 8.2   INTERPRETATION...............................................34
   SECTION 8.3   COUNTERPARTS.................................................34
   SECTION 8.4   ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES...............34
   SECTION 8.5   GOVERNING LAW................................................35
   SECTION 8.6   ASSIGNMENT...................................................35
   SECTION 8.7   SEVERABILITY.................................................35
   SECTION 8.8   PERFORMANCE BY SUB...........................................35
   SECTION 8.9   DEFINED TERMS................................................35

                                       cExhibit 10.05

                             TECHNOLOGY FINANCE INC

                               February, 9th, 2004

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

         Re:      Credit Facility

Gentlemen:

TECHNOLOGY FINANCE INC ("TECHNOLOGY FINANCE INC") is pleased to make available
to BIOACCELERATE, Inc. (the "Company") a senior, secured credit facility (the
"Credit Facility"), pursuant to which TECHNOLOGY FINANCE INC shall provide the
Company one or more loans (each, a "Tranche") in the aggregate principal amount
of up to Seven Million Five Hundred Thousand Dollars ($7,500,000) dollars (the
"Maximum Funded Amount"), subject to the terms and conditions as hereinafter
provided in this letter agreement (this "Letter Agreement").

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

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

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

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

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

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

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

<PAGE>

         Technology Finance Inc have the right to convert any part of the drawn
down facility into equity at the price of the company's last financing of $1 per
share at Technology Finance Inc's request..

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

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

                                       Very truly yours,

                                       TECHNOLOGY FINANCE INC

                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

Accepted and agreed as of the
date first appearing above

BIOACCELERATE, INC.

By:
   -----------------------------------------
    Name:
    Title:

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

                               BIOACCELERATE, INC.

                            Senior Secured Grid Note

Up to $7,500,000                                              February 9th, 2004

      FOR VALUE RECEIVED, BIOACCELERATE, Inc., a Delaware corporation (the
"Company"), with its principal executive office 712 Fifth Avenue, New York, NY,
10019, promises to pay to the order of Technology Finance Inc, a BVI Corporation
with offices at Suite F8, International Commercial Centre, Casemates, Main Road,
Gibraltar (together with any permitted registered assigns, the "Payee") the
principal sum of $7,500,000 or, if less, the aggregate unpaid principal amount
of all Tranches made to the Company by Payee (the "Principal Amount") pursuant
to the letter agreement, dated as of even date herewith, between the Company and
the Payee (the "Letter Agreement"), on the Maturity Date. Capitalized terms
used, and not defined, herein shall have the meanings ascribed thereto in the
Letter Agreement.

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

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

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

<PAGE>

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

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

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

                                       2
<PAGE>

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

      1. Computation of Interest.

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

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

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

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

      3. Covenants of Company.

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

                                       3
<PAGE>

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

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

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

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

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

                                       4
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       5
<PAGE>

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

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

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

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

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

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

                                       6
<PAGE>

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

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

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

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

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

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

                                       7
<PAGE>

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

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

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

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

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

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

                                       8
<PAGE>

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

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

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

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

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

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

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

                                       9
<PAGE>

      4. Events of Default.

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

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

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

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

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

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

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

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

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

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

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

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

                                       10
<PAGE>

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

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

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

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

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

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

                                       11
<PAGE>

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

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

                                       12
<PAGE>

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

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

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

                                       13
<PAGE>

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

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

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

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

                                       14
<PAGE>

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

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

            M. ERISA. Each Pension Plan is in compliance with the Employee
Retirement Income Security Act of 1974, as amended from time to time, and the
rules and regulations issued thereunder, as from time to time in effect
("ERISA") and the Code, where applicable, in all material respects and no ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other ERISA Events for which liability is reasonably expected to occur,
is reasonably expected to result in a Material Adverse Effect. As used in this
Note, "Pension Plan" means, at any date of determination, any employee pension
benefit plan, the funding of which (under Section 302 of ERISA or Section 412 of
the Code) are, or at any time within the six years immediately preceding such
date, were in whole or in part, the responsibility of the Company or any of its
Subsidiaries, or any person or entity which is a member of any group of
organizations within the meaning of Section 414(b) or (c) of the Code (or,
solely for the purposes of potential liability under Section 302(c)(11) of
ERISA, and Section 412(n) of the Code, Sections 414(m) or (o) of the Code) which
the Company or any of its Subsidiaries is a member (each, an "ERISA Affiliate").
As used in this Note, "ERISA Event" means (i) a "reportable event", as defined
in Section 4043 of ERISA with respect to a Pension Plan (other than an event for
which the 30-day notice period is waived), (ii) the existence with respect to
any Pension Plan of an "accumulated funding deficiency" (as defined in Section
412 of the Code or Section 302 of ERISA), whether or not waived; (iii) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Pension Plan; (iv) the incurrence by the Company or its Subsidiaries or any
ERISA Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Pension Plan; (v) the receipt by the Company or any of its
Subsidiaries or any ERISA Affiliate from the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA (or any
governmental authority succeeding to the functions thereof) or a plan
administrator of any notice relating to an intention to terminate any Pension
Plan or Pension Plans or to appoint a trustee to administer any Pension Plan;
(vi) the incurrence by the Company or any of its Subsidiaries or any ERISA
Affiliate of any liability with respect to the withdrawal or partial withdrawal
from any Pension Plan or Multiemployer Plan (as defined in Section 4003(a)(3) of
ERISA); or (vii) the receipt by the Company or any of its Subsidiaries or ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability (as
defined in Part I of Subtitle E of Title IV of ERISA) or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

                                       15
<PAGE>

      N. Authorization; No Violation.

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

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

      6. Miscellaneous.

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

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

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

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

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

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

                                       16
<PAGE>

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

                                       BIOACCELERATE, INC.

                                       By:
                                            ------------------------------------
                                            Name:
                                            Title:

                               SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Agreement") is dated as of February 9th, 2004, by
BIOACCELERATE, INC., a Delaware corporation (the "Grantor"), in favor of
Technology Finance Inc, a BVI, corporation (the "Lender").

                                    Recitals

WHEREAS, pursuant to that certain letter agreement (the "Letter Agreement") of
even date herewith between the Grantor and Lender, Lender has made available a
senior, secured credit facility in the aggregate principal amount of up to Seven
Million Five Hundred Thousand Dollars ($7,500,000);

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

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

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

      1. Definitions.

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

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

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

<PAGE>

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

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

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

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

"UCC" means the Uniform Commercial Code as the same may from time to time be in
effect in the State of New York; provided, however, in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of Lender's security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, the term "UCC" shall mean the Uniform Commercial Code (including the
Articles thereof) as in effect at such time in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions. In
addition, the following terms shall have the meanings set forth for such terms
in the UCC: "Account," "Account Debtor," "Chattel Paper" (including tangible and
electronic chattel paper), "Commercial Tort Claims," "Commodity Account,"
"Deposit Account," "Documents," "Equipment," "Fixtures," "Fixture Filing,"
"General Intangible" (including, without limitation, Payment Intangibles,
Copyrights, Patents, Trademarks, designs, drawings, technical information,
marketing plans, customer lists, trade secrets, proprietary or confidential
information, inventions (whether or not patentable), procedures, know-how,
models and data), "Instrument," "Intellectual Property," "Inventory" (including
all goods held for sale or lease or to be furnished under a contract of service,
and including returns and repossessions), "Investment Property" (including
Securities, Securities Accounts and Securities entitlements), "Letter-of-Credit
Right" (whether or not the letter of credit is evidenced by a writing), "Payment
Intangibles," "Proceeds," "Promissory Notes," "Securities," "Securities
Account," "Securities Entitlement" and "Supporting Obligations." Each of the
foregoing terms shall include all of such items now owned, or hereafter
acquired, by Grantor.

                                       2
<PAGE>

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

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

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

      b.    All Chattel Paper of Grantor;

      c.    All Contracts of Grantor;

      d.    All Deposit Accounts of Grantor;

      e.    All Documents of Grantor;

      f.    All Equipment of Grantor;

      g.    All Fixtures of Grantor;

      h.    All General Intangibles of Grantor;

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

      j.    All Inventory of Grantor;

      k.    All Investment Property of Grantor;

                                       3
<PAGE>

      l.    All Letter-of Credit Rights of Grantor;

      m.    All Supporting Obligations of Grantor;

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

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

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

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

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

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

4.    Rights of Lender; Collection of Accounts.

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

                                       4
<PAGE>

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

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

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

                                        5
<PAGE>

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

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

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

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

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

6.    As to the Collateral.

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

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

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

                                       6
<PAGE>

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

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

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

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

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

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

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

                                       7
<PAGE>

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

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

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

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

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

8.    Further Assurances. Grantor agrees, at any time and from time to time, at
      the expense of Grantor, and upon request of the Lender, to promptly
      execute and deliver all further instruments and documents, and take all
      further action, that may be necessary or desirable, in order to perfect
      and protect any security interest granted or purported to be granted
      hereby or to enable the Lender to exercise and enforce Lender's rights and
      remedies hereunder with respect to any Collateral, including, without
      limitation, (i) delivering and causing to be filed any financing or
      continuation statements (including "in lieu" continuation statements)
      under the UCC with respect to the security interests granted hereby, (ii)
      obtaining "control" by or on behalf of Lender of any Investment Property,
      Deposit Accounts, Letter-of-Credit Rights or Electronic Chatter Paper
      (with reference to applicable provisions of the UCC with respect to
      "control" for such items of Collateral), (iii) placing the interest of the
      Lender as lien holders on the certificate of title (or similar evidence of
      ownership) of any Equipment constituting Collateral owned by Grantor which
      is covered by a certificate of title (or similar evidence of ownership),
      (iv) filing or cooperating with the Lender in filing any forms or other
      documents required to be recorded with the United States Patent and
      Trademark Office, United States Copyright Office, or any actions, filings,
      recordings or registrations in any foreign jurisdiction or under any
      international treaty, required to secure or protect Lender's interest in
      the Collateral, (v) transferring Collateral to the possession of the
      Lender (if a security interest in such Collateral can only be perfected by
      possession), (vi) executing and delivering or causing to be delivered
      written notice to insurers of Lender's security interest in, or claim in
      or under, any policy of insurance (including unearned premiums), and (vii)
      using its best efforts to obtain acknowledgements from bailees having
      possession of any Collateral and waivers of liens from landlords and
      mortgagees of any location where any of the Collateral may from time to
      time be stored or located. If Grantor executes and delivers any document
      or instrument pursuant to this Section 8, such document or instrument
      shall be in form and substance reasonably satisfactory to the Lender and a
      copy thereof shall be provided by Grantor to the Lender; and if Grantor
      takes any other action pursuant to this Section 8, such action shall be
      taken with the prior written consent of the Lender and notice thereof
      shall be given by Grantor to the Lender.

                                       8
<PAGE>

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

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

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

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

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

                                       9
<PAGE>

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

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

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

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

      b.    If any Event of Default shall have occurred:

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

                                       10
<PAGE>

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

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

                                       11
<PAGE>

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

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

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

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

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

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

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

                                       12
<PAGE>

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

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

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

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

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

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

                                       13
<PAGE>

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

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

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

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

                                       14
<PAGE>

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

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

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

                                       15
<PAGE>

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

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

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

                                       16
<PAGE>

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

                                       BIOACCELERATE, INC.

                                       By:
                                          --------------------------------------
                                            Name:
                                            Title:

                                       TECHNOLOGY FINANCE INC

                                       By:
                                          --------------------------------------
                                       Name:
                                       Title:

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