Document:

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                                                                   Exhibit 10.34

THIS IS AN IMPORTANT LETTER WHICH SETS OUT THE TERMS AND CONDITIONS OF YOUR
GROUP OVERDRAFT FACILITY. PLEASE NOTE THAT OVERDRAFTS ARE REPAYABLE ON DEMAND.
WE RECOMMEND THAT YOU TAKE INDEPENDENT LEGAL ADVICE IF YOU HAVE ANY DOUBTS
REGARDING THE TERMS AND CONDITIONS OF THE FACILITY.

                                                [NATWEST LOGO]
                                                SLS MANCHESTER
                                                ADDRESS:   11 St James's Square
Date: 2/12/03                                              Manchester
                                                           M2 6FU
                                                TELEPHONE: 0161 242 3943
PRIVATE & CONFIDENTIAL

Drew Scientific Distribution Limited, Company Number 3933012
Drew Scientific Limited, Company Number 1351145
Sowerby Woods Industrial Estate
Park Road
Barrow-in-Furness
Cumbria
LA14 4QR

Dear Sirs

MULTI-CURRENCY OVERDRAFT FACILITY
ACCOUNT HOLDING BRANCH/OFFICE:  Barrow-in-Furness Branch (sorting code 01 00 61)

I write to advise the terms and conditions upon which the Bank is willing to
make available to you a multi-currency overdraft facility for the purpose of
your business.

1.   DEFINITIONS

In this letter the following expressions shall have the following meanings:-

     "BANK" means National Westminster Bank Plc and its successors and assigns;

     "EURO" means the single currency adopted or to be adopted by participating
     member states under the Treaty establishing the European Union;

     "FACILITY" means the multi-currency overdraft facility made available or to
     be made available on the terms and conditions set out in this letter;

     "FACILITY ACCOUNTS" means the Sterling Current Accounts, the Foreign
     Currency Current Account and the Foreign Currency Creditor Account;

     "FACILITY LIMIT" means L360,000;

     "FOREIGN CURRENCY" means any non-Sterling currency (including the euro)
     which is freely convertible into Sterling and readily available in the
     London Interbank Market;

     "FOREIGN CURRENCY CREDITOR ACCOUNT" means the account denominated in United
     States Dollars referenced 140-01-6648738 in name of Drew Scientific Limited
     on which the Facility is made available;

     "FOREIGN CURRENCY CURRENT ACCOUNTS" means:-

     (i)   the current account denominated in euros referenced 550-00-6809375 in
           name of Drew Scientific Limited

     (ii)  the current account denominated in United States Dollars referenced
           140-00-6393713 and in name of Drew Scientific Limited

     on which the Facility is made available;

         National Westminster Bank Plc Registered Number 929027 England
              Registered Office: 135 Bishopsgate, London EC2M 3UR
  Agency agreements exist between members of The Royal Bank of Scotland Group
<PAGE>
     "GROSS LIMIT" means L1,000,000;

     "STERLING" and the sign "L" means the lawful currency of the United
     Kingdom;

     "STERLING CURRENT ACCOUNTS" means the current accounts denominated in
     Sterling on which the Facility is made available, as follows:-

     account number 61023876 in name of Drew Scientific Distribution Limited
     account number 60925701 in name of Drew Scientific Limited

     "UNITED STATES DOLLARS" and "US$" mean the lawful currency of the United
     States of America.

2    CREDITOR ACCOUNTS

2.1  The Foreign Currency Creditor Account should remain in credit at all times
     and the Bank may decline to pay a cheque (or allow any other payment or
     withdrawal) which could result in a cleared debtor balance. If the Bank
     does pay a cheque (or allows any other payment or withdrawal) resulting in
     a cleared debtor balance it will not mean that a borrowing facility has
     been established or that the Bank will agree to pay any other cheque (or
     allow any other payment or withdrawal) which would have the same effect.

3    OVERDRAFT LIMIT(S) AND UTILISATION

3.1  The Facility may be utilised by overdrawing the Facility Accounts, subject
     to clause 2.1, up to the Facility Limit. The Facility Limit must not at any
     time be exceeded.

3.2  In addition, the aggregate of the cleared debtor balances on the Facility
     Accounts must not at any time exceed the Gross Limit.

3.3  For the purpose of calculating utilisation of the Facility:-

     (a)  any cleared credit balances on the Sterling Current Accounts will be
          netted against any cleared debit balances on the Sterling Current
          Accounts; then

     (b)  any credit balances on the Foreign Currency Current Accounts and the
          Foreign Currency Creditor Account will be netted against any debit
          balances on the Foreign Currency Current Accounts in the same Foreign
          Currency; then

     (c)  the Sterling equivalent of the net balances on the Foreign Currency
          Current Accounts and the Foreign Currency Creditor account shall be
          calculated by reference to the prevailing market rate of exchange; and
          then

     (d)  the Sterling equivalent of the net balances on the Foreign Currency
          Current Accounts and the Foreign Currency Creditor Account will be
          netted against (or aggregated with) the net balance on the Sterling
          Current Accounts.

3.4  The Bank may decline to pay a cheque (or allow any other payment or
     withdrawal) from a Facility Account (whether in credit or debit) which
     would result in either the Facility Limit or the Gross Limit being
     exceeded. This may mean that one of you may not be able to draw on a credit
     balance on a Facility Account in your name as a result of a debit balance
     on another Facility Account. It is your responsibility to liaise with each
     other to ensure that these arrangements do not have an adverse effect on
     the operations of each Facility Account.

3.5  If the Bank does pay a cheque (or allows any other payment or withdrawal)
     resulting in either the Facility Limit or the Gross Limit being exceeded it
     will not mean that the relevant limit has changed or that the Bank will
     agree to pay any other cheque (or allow any other payment or withdrawal)
     which would have that effect.

3.6  The Bank may disregard any uncleared credits for the purposes of
     calculating the utilisation of the Facility (and any interest payable) and
     compliance with the Gross Limit. If however the Bank does pay a cheque (or
     allows any other payment or withdrawal) against uncleared credits this does
     not mean that it is bound to do so at other times.

4    PRECONDITIONS

4.1  The Bank will not be obliged to make the Facility available until the
     following conditions have been met:-

     (a)  any security required in terms of Clause 9 of this letter has been
          valued and completed to the Bank's satisfaction; and

     (b)  you have accepted the Facility on the terms and conditions set out in
          this letter by returning the duplicate of this letter with the
          acknowledgement duly signed, within 28 days of the date of this
          letter.

<PAGE>
5    AVAILABILITY

5.1  The Facility is repayable upon demand in accordance with normal banking
     practice.

5.2  Without prejudice to its overall right to call for repayment on demand, it
     is the Bank's present intention that the Facility will be available until
     31st October 2004. The Facility will be reviewed on that date but may be
     extended by mutual agreement.

5.3  The Bank will always give notification of its intention to place a
     restriction on your ability to make drawings on the Facility.

5.4  You may at any time advise us in writing that the Facility is no longer
     required.

6    SET OFF. RETENTION AND APPROPRIATION

6.1  In addition to any other rights to which it may be entitled, including
     rights under any guarantee or security, the Bank may retain, set off or
     appropriate any credit balances (whether current or not yet due) either on
     the Facility Accounts or any other accounts any of you may have with the
     Bank against any debit balances on the Facility Accounts, liabilities of
     any of you under any guarantees granted by any of you in connection with
     the Facility, or any other obligations any of you may owe to the Bank
     whether present, future, actual or contingent.

6.2  The Bank may exercise any of these rights without prior notice both before
     and after demand and in so doing may, where required, convert between
     currencies at the prevailing market rate of exchange.

7    INTEREST

STERLING CURRENT ACCOUNTS

7.1  Interest on the Sterling Current Accounts will be charged by the Bank as
     follows:-

     (a)  on that part of the aggregate of the cleared debtor balances on the
          Sterling Current Accounts equal to the aggregate of the cleared
          creditor balances on the Sterling Current Accounts, at 0% per annum;
          and

     (b)  on that part of the aggregate of the cleared debtor balances on the
          Sterling Current Accounts in excess of the aggregate of the cleared
          creditor balances on the Sterling Current Accounts at 2% per annum
          over the Bank's Sterling Base Rate.

7.2  The Bank's Sterling Base Rate as at 1st December 2003 was 3.75% per annum.
     Changes to the Bank's Sterling Base Rate may be made at any time and with
     immediate effect, such changes being advised by way of press notice.

7.3  Such interest will be calculated both before and after demand, decree or
     judgment on a daily basis and a year of 365 days and debited by the Bank to
     Sterling Current Account number 60925701 quarterly on the final business
     day of March, June, September and December (or such other dates as the Bank
     may advise from time to time).

FOREIGN CURRENCY CURRENT ACCOUNTS

7.4  Interest on any debtor balances on the Foreign Currency Current Accounts
     will be charged at 2% per annum over the Bank's relevant Currency Lending
     Rate. The Bank's Currency Lending Rates are variable and will therefore
     change from time to time.

7.5  Such interest will be calculated separately for each Foreign Currency
     Current Account both before and after demand, judgment or decree on a daily
     basis and a year of 360 days (or such other period as reflects market
     convention in the relevant currency) and shall be debited to the respective
     Foreign Currency Current Accounts quarterly on the first business day of
     March, June, September and December.

8    COSTS

8.1  An arrangement fee of L3600 is payable and will be debited to Sterling
     Current Account 60925701 following receipt by the Bank of your acceptance
     of the terms and conditions of the Facility as set out in this letter or
     following your first utilisation of the Facility, whichever is the earlier.
     You will also be jointly and severally responsible for paying any costs
     incurred by the Bank in connection with the Facility whether as a result of
     any of you breaking the terms of the Facility or not. These costs will
     include (but not be limited to) costs of taking and discharging any
     security; taking steps, including court action, to obtain payment;
     enforcing and/or preserving the Bank's rights under any security held for
     the Facility; tracing any of you if any of you change address without
     notice and communicating with any of you if any of you break the terms of
     the Facility. If such costs remain unpaid then they may be debited by the
     Bank to any of the Facility Accounts.
<PAGE>
9    SECURITY

9.1  The Facility will be secured by the following:-

     (a)  the existing available security held by the Bank as follows:-

        (i)    Debentures by, and an Unlimited Inter Company Composite
               Guarantee between, Drew Scientific Distribution Limited, Drew
               Scientific Limited, Drew Scientific Group plc and Counting
               Technology Limited
        (ii)   a Guarantee for L100,000 by Keith Raymond Drew supported by:
               (a)  a Charge of Deposit in respect of monies held with the
                    Bank in account number 61054879
        (iii)  a Guarantee for L10,000 by Andrew Charles Kenney supported by:
               (a)  a Charge of Deposit in respect of monies held with the
                    Bank in account number 61054895
        (iv)   a Guarantee for L10,000 by David Jonathan Blain supported by:
               (a)  a Charge of Deposit in respect of monies held with the
                    Bank in account number 78039525
        (v)    a Guarantee for L100,000 by Michael John Sipple-Asher
        (vi)   a Guarantee for L140,000 by James Conor Maxwell supported by:
               (a)  a Charge of Deposit in respect of monies held with the
                    Bank in account number 61054917
        (vii)  a Guarantee for L50,000 by Christopher John Madden supported by:
               (a)  a Charge of Deposit in respect of monies held with the
                    Bank in account number 61055417

     (b)  new security required by the Bank for the Facility as follows:-
        (i)    a Charge of Deposit in respect of monies held with Coutts & Co
               in account number to be advised in the name of M J Sipple-Asher
               to support the Guarantee detailed in clause 8.1(a)(v)

     (c)  all further available security which the Bank may in future obtain.

9.2  All security will require to be granted in the Bank's preferred form. The
     value of the security will be reviewed regularly and, without prejudice to
     its overriding right to call for repayment on demand, the Bank may seek
     additional security if there is a significant drop in the value of the
     security held.

10   FINANCIAL INFORMATION

10.1 To enable the Bank to monitor the Facility each of you will provide:-

     (a)  as soon as they become available but in any event within 270 days
          after the end of the respective financial year, your audited financial
          statements for that year;

     (b)  as soon as they become available but in any event no later than 30
          days after the end of the accounting period to which they relate, and
          in a format acceptable to the Bank, the monthly management accounts of
          Drew Scientific Group plc incorporating balance sheet and profit and
          loss account;

     (c)  promptly, all notices or other documents sent to your shareholders
          and/or your creditors; and

     (d)  promptly, such further information regarding your financial condition
          and operations as the Bank may reasonably request (including audited
          financial statements where not already supplied).

11   MISCELLANEOUS

11.1 The Bank may debit any of the Facility Accounts in accordance with the
     terms of Clauses 7 and 8 of this letter even if it results in the Facility
     Limit or the Gross Limit being exceeded.

11.2 These terms and conditions will not be affected in any way by any of the
     Facility Accounts being allocated another account number/reference by the
     Bank or being transferred to another branch, office or department of the
     Bank.

11.3 The Bank may change any of these terms and conditions by giving at least 30
     days' written notice to you.

11.4 In the event of the Bank demanding repayment of the Facility in terms of
     Clause 5 of this letter:-

     (a)  subject to Sub-Clause 11.4(c) below, you will require to repay any
          debtor balances on the Foreign Currency Current Accounts in
          immediately available funds of the relevant Foreign Currency (or such
          other funds as my for the time being be customary for the settlement
          of international banking transactions in such Foreign Currency);

     (b)  all payments under the Facility will require to be made without set
          off or counterclaim and free and clear of any deduction, whether of
          present or future taxes, stamp duty or other charges unless you are
          required by law to make such payment subject to any deduction or
          withholding in which case the relevant payment will require to be
          increased to the extent necessary to ensure that the Bank receives a
          sum equal to the sum which it would have received had you not been
          required to make such a deduction or withholding;
<PAGE>
     (c)  the Bank reserves the right, at any time after the serving of demand,
          to convert all or any balances on the Foreign Currency Current
          Accounts and the Foreign Currency Creditor Account (together with any
          accrued interest and unpaid costs, charges, fees and expenses
          denominated in Foreign Currency) to Sterling at the prevailing market
          rate of exchange and pass a corresponding debit against any Sterling
          Current Account.

11.5 Unless otherwise agreed, requests for new Facility Accounts must be
     submitted to the Bank at least 5 business days in advance (in the case of
     Foreign Currency Current Accounts and Foreign Currency Creditor Accounts,
     using the relevant application form required by the Bank).

11.6 The Bank's agreement to the addition/removal of Facility Accounts to/from
     the facility may be subject to these terms and conditions being suitably
     amended to the Bank's satisfaction.

Please indicate acceptance of the above terms and conditions by arranging for
the acknowledgement on the duplicate of this letter to be signed and returned to
me. The Bank will not be obliged to provide the Facility until the
acknowledgement on the duplicate of this letter has been returned duly signed.

The Bank may, at its option, treat any usage of the Facility as acceptance
(without amendment) of the terms and conditions of this letter.

Please do not hesitate to contact me if you require clarification of any of the
above terms and conditions.

Yours faithfully
For and on behalf of
National Westminster Bank Plc

/s/ A. Bruce
------------------------
Andrew Bruce
Senior Corporate Manager

Having decided that the proposed Facility is appropriate and in their interests,
the undernoted signatories hereby accept the Facility on the above terms and
conditions.

For and on behalf of Drew Scientific Distribution Limited

Signature/s                                            Date/s
             ---------------------------------------           -----------------

             ---------------------------------------           -----------------

For and on behalf of Drew Scientific Limited

Signature/s                                            Date/s
             ---------------------------------------           -----------------

             ---------------------------------------           -----------------

1186460/FACorp/KC/NWSLSM<PAGE>
                                                                   Exhibit 10.35

                               SECURITY AGREEMENT

   This Security Agreement (this "Agreement"), dated as of August 31, 2002, is
made by and between Danam Acquisition Corp., a Delaware corporation ("Debtor")
and Synbiotics Corporation, a California corporation (the "Secured Party"), the
holder of a Secured Promissory Note in the original principal amount of
$500,000.00 (the "Note").

                                    RECITALS

   A. Debtor has executed and delivered the Note in the aggregate principal
amount of $500,000.00 and payable to the order of the Secured Party.

   B. In connection with the Note, Debtor desires to grant a security interest
in certain collateral to the Secured Party as set forth herein.

                                    AGREEMENT

   NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:

   SECTION 1 Definitions; Interpretation.

      (a) All capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings assigned to them in the Note.

      (b) As used in this Agreement, the following terms shall have the
following meanings:

         "Collateral" has the meaning set forth in Section 2.

         "Documents" means this Agreement, the Note and all other certificates,
documents, agreements and instruments delivered to the Secured Party under the
Note or in connection with the Obligations.

         "Event of Default" has the meaning set forth in Section 8.

         "Lien" means any mortgage, deed of trust, pledge, security interest,
assignment, deposit arrangement, charge or encumbrance, lien, or other type of
preferential arrangement.

         "Note" has the meaning set forth in the preamble above, as it may be
amended, modified, renewed, extended or replaced from time to time.

         "Obligations" means the indebtedness, liabilities and other obligations
of Debtor to the Secured Party under or in connection with the Note or any of
the other Documents, including, without limitation, all unpaid principal of the
Note, all interest accrued thereon, all fees and all other amounts payable by
Debtor to the Secured Party thereunder or in connection

<PAGE>

therewith, whether now existing or hereafter arising, and whether due or to
become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined.

         "Permitted Lien" means (i) Liens (A) upon or in any property (and
proceeds thereof) acquired or held by Debtor or any of its subsidiaries to
secure the purchase price of such property or indebtedness incurred solely for
the purpose of financing the acquisition of such property, or (B) existing on
such property at the time of its acquisition, provided that the Lien is confined
solely to the property (and proceeds thereof) so acquired and improvements
thereon; (ii) Liens on assets of Persons which become subsidiaries of Debtor
after the date hereof, provided that such Liens existed at the time the
respective Persons became subsidiaries of Debtor and were not created in
anticipation thereof; and (iii) other Liens which arise in the ordinary course
of business and do not materially impair Debtor's ownership or use of the
Collateral or the value thereof.

         "Person" means an individual, corporation, partnership, joint venture,
trust, unincorporated organization, governmental agency or authority, or any
other entity of whatever nature.

         "UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York.

      (c) Where applicable and except as otherwise defined herein, terms used in
this Agreement shall have the meanings assigned to them in the UCC.

      (d) In this Agreement, (i) the meaning of defined terms shall be equally
applicable to both the singular and plural forms of the terms defined; and (ii)
the captions and headings are for convenience of reference only and shall not
affect the construction of this Agreement.

   SECTION 2 Security Interest.

      (a) As security for the payment and performance of the Obligations, Debtor
hereby grants to the Secured Party a security interest in all of Debtor's right,
title and interest in, to and under all of its personal property, wherever
located and whether now existing or owned or hereafter acquired or arising,
including all accounts, chattel paper, commercial tort claims, deposit accounts,
documents, equipment (including all fixtures), general intangibles, instruments,
inventory, investment property, letter-of-credit rights, money and all products,
proceeds and supporting obligations of any and all of the foregoing
(collectively, the "Collateral"). Notwithstanding the foregoing, except for
fixtures (as provided in Section 9-313 of the UCC), such grant of a security
interest shall not extend to, and the term "Collateral" shall not include, any
asset which would be real property under the law of the jurisdiction in which it
is located

      (b) Anything herein to the contrary notwithstanding, (i) Debtor shall
remain liable under any contracts, agreements and other documents included in
the Collateral, to the extent set forth therein, to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not been
executed, (ii) the exercise by the Secured Party of any of the rights hereunder
shall not release Debtor from any of its duties or obligations under such
contracts, agreements and other documents included in the Collateral, and (iii)
the Secured Party

                                      -2-
<PAGE>

shall not have any obligation or liability under any contracts, agreements and
other documents included in the Collateral by reason of this Agreement, nor
shall the Secured Party be obligated to perform any of the obligations or duties
of Debtor thereunder or to take any action to collect or enforce any such
contract, agreement or other document included in the Collateral hereunder.

      (c) This Agreement shall create a continuing security interest in the
Collateral which shall remain in effect until terminated in accordance with
Section 19 hereof.

   SECTION 3 Financing Statements, Etc. Debtor shall execute and deliver to the
Secured Party concurrently with the execution of this Agreement, and Debtor
hereby authorizes the Secured Party to file (with or without Debtor's
signature), at any time and from time to time thereafter, all financing
statements, assignments, amendments, continuation financing statements,
termination statements, account control agreements, and other documents and
instruments, in form reasonably satisfactory to the Secured Party, and take all
other action, as the Secured Party may reasonably request, to perfect and
continue perfected, maintain the priority of or provide notice of the security
interest of the Secured Party in the Collateral and to accomplish the purposes
of this Agreement. Debtor will cooperate with the Secured Party in obtaining
control (as defined in the UCC) of Collateral consisting of deposit accounts,
investment property, letter of credit rights and electronic chatter paper.
Debtor will join with the Secured Party in notifying any third party who has
possession of any Collateral of the Secured Party's security interest therein
and obtaining an acknowledgment from the third party that it is holding the
Collateral for the benefit of the Secured Party. Debtor will not create any
chattel paper without placing a legend on the chattel paper acceptable to the
Secured Party indicating that the Secured Party has a security interest in the
chattel paper.

   SECTION 4 Representations and Warranties. Debtor represents and warrants to
the Secured Party that:

      (a) Debtor is duly organized, validly existing and in good standing under
the law of the jurisdiction of its organization and has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement.

      (b) The execution, delivery and performance by Debtor of this Agreement
have been duly authorized by all necessary action of Debtor, and this Agreement
constitutes the legal, valid and binding obligation of Debtor, enforceable
against Debtor in accordance with its terms.

      (c) No authorization, consent, approval, license, exemption of, or filing
or registration with, any governmental authority or agency, or approval or
consent of any other Person which has not been obtained, is required for the due
execution, delivery or performance by Debtor of this Agreement, except for any
filings necessary to perfect any Liens on any Collateral.

      (d) Debtor's chief executive office and principal place of business (as of
the date of this Agreement) is located at the address set forth in Schedule 1;
Debtor's jurisdiction of organization is set forth in Schedule 1; Debtor's exact
legal name is as set forth in the first

                                      -3-
<PAGE>

paragraph of this Agreement; and all other locations where Debtor conducts
business or Collateral is kept (as of the date of this Agreement) are set forth
in Schedule 1.

      (e) Debtor has rights in or the power to transfer the Collateral, and
Debtor is the sole and complete owner of the Collateral, free from any Lien
other than Permitted Liens.

      (f) No control agreements exist with respect to any Collateral.

   SECTION 5 Covenants. So long as any of the Obligations remain unsatisfied,
Debtor agrees that:

      (a) Debtor shall appear in and defend any action, suit or proceeding which
may affect to a material extent its title to, or right or interest in, or the
Secured Party's right or interest in, the Collateral, and shall do and perform
all reasonable acts that may be necessary and appropriate to maintain, preserve
and protect the Collateral.

      (b) Debtor shall comply in all material respects with all laws,
regulations and ordinances, and all policies of insurance, relating in a
material way to the possession, operation, maintenance and control of the
Collateral.

      (c) Debtor shall give prompt written notice to the Secured Party (and in
any event not later than 30 days following any change described below in this
subsection) of: (i) any change in the location of Debtor's chief executive
office or principal place of business; (ii) any change in the locations set
forth in Schedule 1; (iii) any change in its name; (iv) any changes in its
identity or structure in any manner which might make any financing statement
filed hereunder incorrect or misleading; (v) any change in its registration as
an organization (or any new such registration); or (vi) any change in its
jurisdiction of organization; provided that Debtor shall not locate any
Collateral outside of the United States nor shall Debtor change its jurisdiction
of organization to a jurisdiction outside of the United States.

      (d) Debtor shall carry and maintain in full force and effect, at its own
expense and with financially sound and reputable insurance companies, insurance
with respect to the Collateral in such amounts, with such deductibles and
covering such risks as is customarily carried by companies engaged in the same
or similar businesses and owning similar properties in the localities where
Debtor operates. Upon the request of the Secured Party, Debtor shall furnish to
the Secured Party from time to time with full information as to the insurance
carried by it and, if so requested, copies of all such insurance policies.
Debtor shall also furnish to the Secured Party from time to time upon the
request of Secured Party a certificate of Debtor's insurance broker or other
insurance specialist stating that all premiums then due on the policies relating
to insurance on the Collateral have been paid and that such policies are in full
force and effect.

      (e) Debtor shall keep separate, accurate and complete books and records
with respect to the Collateral, disclosing the Secured Party's security interest
hereunder.

      (f) Debtor shall not surrender or lose possession of, sell, lease, rent,
or otherwise dispose of or transfer any of the Collateral (other than Collateral
subject to a Permitted Lien) or any right or interest therein, except in the
ordinary course of business or unless such Collateral is replaced by comparable
Collateral of similar value; provided that no such

                                      -4-
<PAGE>

disposition or transfer of Collateral consisting of investment property or
instruments shall be permitted while any Event of Default exists.

      (g) Debtor shall keep the Collateral free of all Liens except Permitted
Liens.

      (h) Debtor shall pay and discharge all taxes, fees, assessments and
governmental charges or levies imposed upon it with respect to the Collateral
prior to the date on which penalties attach thereto, except to the extent such
taxes, fees, assessments or governmental charges or levies are being contested
in good faith by appropriate proceedings.

      (i) Debtor shall maintain and preserve its legal existence, its rights to
transact business and all other material rights, franchises and privileges
necessary or desirable in the normal course of its business and operations and
the ownership of the Collateral, except in connection with any transactions
expressly permitted by the Note or any other Document.

      (j) Upon the request of the Secured Party, Debtor shall (except with
respect to Collateral subject to a Permitted Lien) (i) immediately deliver to
the Secured Party, or an agent designated by it, appropriately endorsed or
accompanied by appropriate instruments of transfer or assignment, all documents
and instruments, all certificated securities with respect to any investment
property, all letters of credit and all accounts and other rights to payment at
any time evidenced by promissory notes, trade acceptances or other instruments,
(ii) cause any securities intermediaries to show on their books that the Secured
Party are the entitlement holders with respect to any investment property,
and/or obtain account control agreements in favor of the Secured Party from such
securities intermediaries, in form and substance satisfactory to the Secured
Party, with respect to any investment property, as requested by the Secured
Party, and (iii) provide such notice, obtain such acknowledgments and take all
such other action, with respect to any chattel paper, documents and letter-of
credit rights, as the Secured Party shall reasonably specify.

   SECTION 6 Collection of Accounts. Until the Secured Party exercise its rights
hereunder to collect the accounts and other rights to payment, Debtor shall
endeavor in the first instance diligently to collect all amounts due or to
become due on or with respect to the accounts and other rights to payment. At
the request of the Secured Party, upon the occurrence and during the continuance
of any Event of Default, all remittances received by Debtor (other than with
respect to Collateral subject to a Permitted Lien) shall be held in trust for
the Secured Party and, in accordance with the Secured Party's instructions,
remitted to the Secured Party or deposited into account(s) of the Secured Party
in the form received (with any necessary endorsements or instruments of
assignment or transfer). At the request of the Secured Party, upon and after the
occurrence of any Event of Default, the Secured Party shall be entitled to
(other than with respect to Collateral subject to a Permitted Lien) receive all
distributions and payments of any nature with respect to any investment property
or instruments, and all such distributions or payments received by the Debtor
shall be held in trust for the Secured Party and, in accordance with the Secured
Party's instructions, remitted to the Secured Party or deposited into account(s)
with the Secured Party in the form received (with any necessary endorsements or
instruments of assignment or transfer). Following the occurrence of an Event of
Default any such distributions and payments with respect to any investment
property held in any securities account (other than with respect to Collateral
subject to a Permitted Lien) shall be held and retained in such

                                      -5-
<PAGE>

securities account, in each case as part of the Collateral hereunder.
Additionally, the Secured Party shall have the right (other than with respect to
Collateral subject to a Permitted Lien), upon the occurrence of an Event of
Default, following prior written notice to the Debtor, to vote and to give
consents, ratifications and waivers with respect to any investment property and
instruments, and to exercise all rights of conversion, exchange, subscription or
any other rights, privileges or options pertaining thereto, as if the Secured
Party were the absolute owner thereof; provided that the Secured Party shall
have no duty to exercise any of the foregoing rights afforded to it and shall
not be responsible to the Debtor or any other Person for any failure to do so or
delay in doing so.

   SECTION 7 Authorization; Secured Party Appointed Attorney-in-Fact. The
Secured Party shall have the right to, in the name of Debtor, or in the name of
the Secured Party or otherwise, upon notice to but without the requirement of
assent by Debtor, and Debtor hereby constitutes and appoints the Secured Party
(and any of the Secured Party's officers, employees or agents designated by the
Secured Party) as Debtor's true and lawful attorney-in-fact, with full power and
authority to: (i) sign and file any of the financing statements and other
documents and instruments which must be executed or filed to perfect or continue
perfected, maintain the priority of or provide notice of the Secured Party's
security interest in the Collateral (including any notices to or agreements with
any securities intermediary); (ii) assert, adjust, sue for, compromise or
release any claims under any policies of insurance; (iii) give notices of
control, default or exclusivity (or similar notices) under any account control
agreement or similar agreement with respect to exercising control over deposit
accounts or securities accounts; and (iv) execute any and all such other
documents and instruments, and do any and all acts and things for and on behalf
of Debtor, which the Secured Party may deem reasonably necessary or advisable to
maintain, protect, realize upon and preserve the Collateral and the Secured
Party's security interest therein and to accomplish the purposes of this
Agreement. The Secured Party agrees that, except upon and during the continuance
of an Event of Default, it shall not exercise the power of attorney, or any
rights granted to the Secured Party, pursuant to clauses (ii), (iii) and (iv).
The foregoing power of attorney is coupled with an interest and irrevocable so
long as the Obligations have not been paid and performed in full. Debtor hereby
ratifies, to the extent permitted by law, all that the Secured Party shall
lawfully and in good faith do or cause to be done by virtue of and in compliance
with this Section 7.

   SECTION 8 Events of Default. Any of the following events which shall occur
and be continuing shall constitute an "Event of Default":

      (a) Debtor shall fail to pay when due any amount of principal of or
interest on the Note or other amount payable hereunder or under the Note or any
other Document or in respect of the Obligations.

      (b) Any representation or warranty by Debtor in this Agreement shall prove
to have been incorrect in any material respect when made or deemed made.

      (c) Debtor shall fail to perform or observe in any material respect any
other term, covenant or agreement contained in this Agreement, the Note or any
other Document on its part to be performed or observed and any such failure
shall remain unremedied for a period of 45 days from the occurrence thereof.

                                      -6-
<PAGE>

      (d) An order of relief under any bankruptcy, reorganization or insolvency
laws has been entered against Debtor by a court having jurisdiction or Debtor
admits in writing its inability to pay its debts generally as they become due,
files a petition for relief under any bankruptcy, reorganization or insolvency
laws, consents to the filing of a bankruptcy proceeding against it or the
appointment of a receiver for itself or for all or substantially all of its
property, or a petition in bankruptcy is filed against it or it makes an
assignment for the benefit of its creditors.

      (e) Debtor shall (i) liquidate, wind up or dissolve (or suffer any
liquidation, wind-up or dissolution), except to the extent expressly permitted
by the Note, (ii) suspend its operations other than in the ordinary course of
business, or (iii) take any action to authorize any of the actions or events set
forth above in this subsection (e).

      (f) Any levy upon, seizure or attachment of any of the Collateral which
shall not have been rescinded or withdrawn.

      (g) Any loss, theft or substantial damage to, or destruction of, any
material portion of the Collateral (unless within 30 days after the occurrence
of any such event, Debtor furnishes to the Secured Party evidence reasonably
satisfactory to the Secured Party that the amount of any such loss, theft,
damage to or destruction of the Collateral is fully insured under policies
naming the Secured Party (or with respect to Collateral subject to a Permitted
Lien, the lienholder thereof) as an additional named insured or loss payee).

   SECTION 9 Remedies.

      (a) Upon the occurrence and continuance of any Event of Default, the
Secured Party may declare any of the Obligations to be immediately due and
payable and shall have, in addition to all other rights and remedies granted to
it in this Agreement, the Note or any other Document, all rights and remedies of
the Secured Party under the UCC and other applicable laws. Without limiting the
generality of the foregoing, (i) the Secured Party may peaceably and without
notice enter any premises of Debtor, take possession of any the Collateral,
remove or dispose of all or part of the Collateral on any premises of the Debtor
or elsewhere, or, in the case of equipment, render it nonfunctional, and
otherwise collect, receive, appropriate and realize upon all or any part of the
Collateral, and demand, give receipt for, settle, renew, extend, exchange,
compromise, adjust, or sue for all or any part of the Collateral, as the Secured
Party may determine; (ii) the Secured Party may require the Debtor to assemble
all or any part of the Collateral and make it available to the Secured Party at
any place and time designated by the Secured Party; (iii) the Secured Party may
secure the appointment of a receiver of the Collateral or any part thereof (to
the extent and in the manner provided by applicable law); (iv) the Secured Party
may sell, resell, lease, use, assign, license, sublicense, transfer or otherwise
dispose of any or all of the Collateral in its then condition or following any
commercially reasonable preparation or processing (utilizing in connection
therewith any of Debtor's assets, without charge or liability to the Secured
Party therefor) at public or private sale, by one or more contracts, in one or
more parcels, at the same or different times, for cash or credit, or for future
delivery without assumption of any credit risk, all as the Secured Party deems
advisable; provided, however, that Debtor shall be credited with the net
proceeds of sale only when such proceeds are finally collected by the Secured
Party. The Secured Party shall have the right upon

                                      -7-
<PAGE>

any such public sale, and, to the extent permitted by law, upon any such private
sale, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption, which right or equity of redemption Debtor hereby
releases, to the extent permitted by law. The Secured Party shall give Debtor
such notice of any private or public sales as may be required by the UCC or
other applicable law.

      (b) For the purpose of enabling the Secured Party to exercise its rights
and remedies under this Section 9 or otherwise in connection with this
Agreement, Debtor hereby grants to the Secured Party an irrevocable,
non-exclusive and assignable license (exercisable without payment or royalty or
other compensation to Debtor) to use, license or sublicense any intellectual
property Collateral.

      (c) The Secured Party shall not have any obligation to clean up or
otherwise prepare the Collateral for sale. The Secured Party has not obligation
to attempt to satisfy the Obligations by collecting them from any other Person
liable for them, and the Secured Party may release, modify or waive any
Collateral provided by any other Person to secure any of the Obligations, all
without affecting the Secured Party's rights against Debtor. Debtor waives any
right it may have to require the Secured Party to pursue any third Person for
any of the Obligations. The Secured Party may comply with any applicable state
or federal law requirements in connection with a disposition of the Collateral
and compliance will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral. The Secured Party may sell the
Collateral without giving any warranties as to the Collateral. The Secured Party
may specifically disclaim any warranties of title or the like. This procedure
will not be considered adversely to affect the commercial reasonableness of any
sale of the Collateral. If the Secured Party sells any of the Collateral upon
credit, Debtor will be credited only with payments actually made by the
purchaser, received by the Secured Party and applied to the indebtedness of the
purchaser. In the event the purchaser fails to pay for the Collateral, the
Secured Party may resell the Collateral and Debtor shall be credited with the
proceeds of the sale.

      (d) To the extent Debtor uses the proceeds of any of the Obligations to
purchase Collateral, Debtor's repayment of the Obligations shall apply on a
"first-in, first-out" basis so that the portion of the Obligations used to
purchase a particular item of Collateral shall be paid in the chronological
order the Debtor purchased the Collateral.

      (e) The cash proceeds actually received from the sale or other disposition
or collection of Collateral, and any other amounts received in respect of the
Collateral the application of which is not otherwise provided for herein, shall
be applied first, to the payment of the reasonable costs and expenses of the
Secured Party in exercising or enforcing its rights hereunder and in collecting
or attempting to collect any of the Collateral, and to the payment of all other
amounts payable to the Secured Party pursuant to Section 13 hereof; and second,
to the payment of the Obligations. Any surplus thereof which exists after
payment and performance in full of the Obligations shall be promptly paid over
to Debtor or otherwise disposed of in accordance with the UCC or other
applicable law. Debtor shall remain liable to the Secured Party for any
deficiency which exists after any sale or other disposition or collection of
Collateral.

                                      -8-
<PAGE>

   SECTION 10 Certain Waivers. Debtor waives, to the fullest extent permitted by
law, (i) any right of redemption with respect to the Collateral, whether before
or after sale hereunder, and all rights, if any, of marshalling of the
Collateral or other collateral or security for the Obligations; (ii) any right
to require the Secured Party (A) to proceed against any Person, (B) to exhaust
any other collateral or security for any of the Obligations, or (C) to make or
give any presentments, demands for performance, notices of nonperformance,
protests, notices of protests or notices of dishonor in connection with any of
the Collateral; and (iii) all claims, damages, and demands against the Secured
Party arising out of the repossession, retention, sale or application of the
proceeds of any sale of the Collateral, other than claims for violations of law
and willful misconduct.

   SECTION 11 Notices. All notices or other communications hereunder shall be in
writing (including by facsimile transmission or by email) and mailed, sent or
delivered to the respective parties hereto at or to their respective addresses
or facsimile numbers set forth below their names on the signature pages hereof,
or at or to such other address or facsimile number as shall be designated by any
party in a written notice to the other parties hereto. All such notices and
other communications shall be deemed to be delivered when a record (within the
meaning of the UCC) has been (i) delivered by hand; (ii) sent by mail upon the
earlier of the date of receipt or five business days after deposit in the mail,
first class (or air mail as to communications sent to or from the United States)
or (iii) sent by facsimile transmission.

   SECTION 12 No Waiver; Cumulative Remedies. No failure on the part of the
Secured Party to exercise, and no delay in exercising, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to the Secured Party.

   SECTION 13 Costs and Expenses.

      (a) Debtor agrees to pay on demand. All reasonable costs and expenses of
the Secured Party, and the reasonable fees and disbursements of the Secured
Party, in connection with the enforcement or attempted enforcement of, and
preservation of any rights or interests under, this Agreement and the Note,
including in any out-of-court workout or other refinancing or restructuring or
in any bankruptcy case, and the protection, sale or collection of, or other
realization upon, any of the Collateral, including all expenses of taking,
collecting, holding, sorting, handling, preparing for sale, selling, or the
like, and other such expenses of sales and collections of Collateral, in
addition to, and not limited by, this subsection (a)(i).

      (b) Any amounts payable to the Secured Party under this Section 13 or
otherwise under this Agreement if not paid upon demand shall bear interest from
the date of such demand until paid in full, at the rate of interest set forth in
the Note.

   SECTION 14 Binding Effect. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by Debtor, the Secured Party and their respective
successors and assigns and shall bind any Person who becomes bound as a debtor
to this Agreement. Debtor

                                      -9-
<PAGE>

may not assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder without the prior express written consent of the
Secured Party. Any such purported assignment, transfer, hypothecation or other
conveyance by Debtor without the prior express written consent of the Secured
Party shall be null and void and of no force or effect. Debtor acknowledges and
agrees that in connection with an assignment of, or grant of a participation in,
the Obligations the Secured Party may assign, or grant participations in, all or
a portion of its rights and obligations hereunder. Upon any assignment of the
Secured Party's rights hereunder, such assignee shall have, to the extent of
such assignment, all rights of the Secured Party hereunder. Debtor agrees that,
upon any such assignment, such assignee may enforce directly, without joinder of
the Secured Party, the rights of the Secured Party set forth in this Agreement.
Any such assignee shall be entitled to enforce the Secured Party's rights and
remedies under this Agreement to the same extent as if it were the original
secured party named herein.

   SECTION 15 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York, except as required by
mandatory provisions of law and to the extent the validity or perfection of the
security interests hereunder, or the remedies hereunder, in respect of any
Collateral are governed by the law of a jurisdiction other than New York.

   SECTION 16 Entire Agreement; Amendment. This Agreement together with the Note
contains the entire agreement of the parties with respect to the subject matter
hereof and shall not be amended except by the written agreement of the parties.

   SECTION 17 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If, however, any provision of this Agreement
shall be prohibited by or invalid under any such law or regulation in any
jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform
to the minimum requirements of such law or regulation, or, if for any reason it
is not deemed so modified, it shall be ineffective and invalid only to the
extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement, or the validity or effectiveness of such provision
in any other jurisdiction.

   SECTION 18 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.

   SECTION 19 Termination. Upon payment and performance in full of all
Obligations, the security interest created under this Agreement shall terminate
and the Secured Party shall promptly execute and deliver to Debtor such
documents and instruments reasonably requested by Debtor as shall be necessary
to evidence termination of all security interests given by Debtor to the Secured
Party hereunder.

   SECTION 20 Conflicts. In the event of any conflict or inconsistency between
this Agreement or the Note, the terms of this Agreement shall control.

                                      -10-
<PAGE>

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                      -11-
<PAGE>

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

                                         DEBTOR:

                                         DANAM ACQUISITION CORP.

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

                                         c/o Drew Scientific Group PLC
                                         Park Road, Barrow In Furness
                                         Cumbria LA14 4QR
                                         United Kingdom
                                         Attn: Michael J. Sipple-Asher
                                         Fax: 011 44 1229 432096

                                         SECURED PARTY:

                                         SYNBIOTICS CORPORATION

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

                                         Its:
                                              -------------------------------

                                         11011 Via Frontera
                                         San Diego, CA 92127
                                         Attn: Michael K. Green
                                         Fax: (858) 451-5719

                     [SIGNATURE PAGE TO SECURITY AGREEMENT]

<PAGE>

                                   SCHEDULE 1
                            to the Security Agreement

1.    JURISDICTION OF ORGANIZATION

                Delaware

2.    CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF BUSINESS

                178 Christian Street
                Oxford, Connecticut 06478

                [OTHERS, IF ANY, TO BE PROVIDED BY DREW]

3.    OTHER LOCATIONS WHERE DEBTOR CONDUCTS BUSINESS OR COLLATERAL IS KEPT

                [TO BE PROVIDED BY DREW]

                                  Schedule 2-1

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