Document:

Employment Agreement O'Conner

     

    EXHIBIT
      10.4

    EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT
      (“Agreement”) is made by and between Trico Marine Services, Inc., a Delaware
      corporation (“Company”), and Robert O’Connor (“Executive”).

     

    W
      I T N E S S E T H:

     

    WHEREAS,
      Company
      is desirous to employ Executive in an executive capacity on the terms and
      conditions, and for the consideration, hereinafter set forth and Executive
      is
      desirous of continuing to be employed by Company on such terms and conditions
      and for such consideration;

     

    NOW,
      THEREFORE,
      for and
      in consideration of the mutual promises, covenants and obligations contained
      herein, Company and Executive agree as follows:

     

    ARTICLE
      1: EMPLOYMENT
      AND DUTIES

     

    1.1 Employment;
      Effective Date.
      Effective as of July 5, 2006 (the “Effective Date”) and continuing for the
      period of time set forth in Article 2 of this Agreement, Executive’s employment
      by Company shall be subject to the terms and conditions of this
      Agreement.

     

    1.2 Positions.
      From
      and after the Effective Date, Company shall employ Executive in the positions
      of
      Senior Vice President of Business and Strategic Development of Company,
      reporting to the President, or in such other positions as the parties mutually
      may agree. 

     

    1.3 Duties
      and Services.
      Executive agrees to serve in the positions referred to in paragraph 1.2 and
      to
      perform diligently and to the best of his abilities the duties and services
      appertaining to such offices, as well as such additional duties and services
      appropriate to such offices which the parties mutually may agree upon from
      time
      to time. Executive’s employment shall also be subject to the policies maintained
      and established by Company that are of general applicability to Company’s
      executive employees, as such policies may be amended from time to
      time.

     

    1.4 Other
      Interests.
      Executive agrees, during the period of his employment by Company, to devote
      substantially all of his business time, energy and best efforts to the business
      and affairs of Company and its affiliates and not to engage, directly or
      indirectly, in any other business or businesses, whether or not similar to
      that
      of Company, except with the consent of the Board of Directors of Company (the
      “Board of Directors”). The foregoing notwithstanding, the parties recognize and
      agree that Executive may engage in other business activities that do not
      conflict with the business and affairs of Company or interfere with Executive’s
      performance of his duties hereunder, which shall be at the sole determination
      of
      the Board of Directors.

     

    1.5 Duty
      of Loyalty.
      Executive acknowledges and agrees that Executive owes a fiduciary duty of
      loyalty to act at all times in the best interests of Company. In keeping with
      such duty, Executive shall make full disclosure to Company of all business
      opportunities pertaining to Company’s business and shall not appropriate for
      Executive’s own benefit business opportunities concerning Company’s
      business.

     

    ARTICLE
      2: TERM
      AND TERMINATION OF EMPLOYMENT

     

    2.1 Term.
      Unless
      sooner terminated pursuant to other provisions hereof, Company agrees to employ
      Executive for the period beginning on the Effective Date and ending on the
      eighteen month anniversary of the Effective Date (the “Initial Expiration
      Date”); provided, however, that beginning
      on the Initial Expiration Date, and on each eighteen month anniversary of the
      Initial Expiration Date thereafter, if this Agreement has not been terminated
      pursuant to paragraph 2.2 or 2.3, then said term of employment shall
      automatically be extended for an additional eighteen month period unless on
      or
      before the date that is 30 days
      prior to the first day of any such extension period either party shall give
      written notice to the other that no such automatic extension shall
      occur.

     

    2.2 Company’s
      Right to Terminate.
      Notwithstanding the provisions of paragraph 2.1, Company shall have the
      right to terminate Executive’s employment under this Agreement at any time for
      any of the following reasons:

     

    (i) upon
      Executive’s death;

     

    (ii) upon
      Executive’s becoming incapacitated by accident, sickness, or other circumstances
      which, in the opinion of a physician selected by Company, renders him mentally
      or physically incapable of performing the duties and services required of him
      hereunder;

     

    (iii) for
      “Cause”, which shall mean Executive (A) has engaged in gross negligence or
      willful misconduct in the performance of the duties required of him hereunder,
      (B) has willfully refused without proper legal reason to perform the duties
      and
      responsibilities required of him hereunder, (C) has materially breached any
      material provision of this Agreement or any material corporate policy maintained
      and established by Company that is of general applicability to Company’s
      executive employees, (D) has willfully engaged in conduct that he knows or
      should know is materially injurious to Company or any of its affiliates, or
      (E)
      has been convicted of, or pleaded no contest to, a crime involving moral
      turpitude or any felony, or (F) has engaged in any act of serious dishonesty
      which adversely affects, or reasonably could in the future adversely affect,
      the
      value, reliability, or performance of Executive in a material manner; provided,
      however, that Executive’s employment may be terminated for Cause only if such
      termination is approved by at least a majority of a quorum (as defined in
      Company’s By-laws) of the members of the Board of Directors after Executive has
      been given written notice by Company of the specific reason for such termination
      and an opportunity for Executive, together with his counsel, to be heard before
      the Board of Directors; or

     

    (iv) for
      any
      other reason whatsoever, in the sole discretion of the Board of
      Directors.

     

    Members
      of the Board of Directors may participate in any hearing that is required
      pursuant to paragraph 2.2(iii) by means of conference telephone or similar
      communications equipment by means of which all persons participating in the
      hearing can hear and speak to each other. 

     

    2.3 Executive’s
      Right to Terminate.
      Notwithstanding the provisions of paragraph 2.1, Executive shall have the
      right to terminate his employment under this Agreement for any of the following
      reasons:

     

    (i) for
“Good
      Reason”, which shall mean, within 60 days of and in connection with or based
      upon (A) a material breach by Company of any material provision of this
      Agreement (provided, however, that a reduction in Executive’s annual base salary
      that is consistent with reductions taken generally by other executives of
      Company shall not be considered a material breach of a material provision of
      this Agreement), (B) a significant reduction in the nature or scope of
      Executive’s duties and responsibilities, (C) the assignment to Executive of
      duties and responsibilities that are materially inconsistent with the positions
      referred to in paragraph 1.2, (D) any requirement that Executive relocate
      to a site more than 50 miles from his present business address, or (E) Executive
      not being offered a comparable position at the “resulting entity” (as defined in
      paragraph 4.1) in connection with a Change in Control. Prior to Executive’s
      termination for Good Reason, Executive must give written notice to Company
      of
      the reason for his termination and the reason must remain uncorrected for 30
      days following such written notice; or

     

    (ii) at
      any
      time for any other reason whatsoever, in the sole discretion of
      Executive.

     

    2.4 Notice
      of Termination.
      If
      Company desires to terminate Executive’s employment hereunder at any time prior
      to expiration of the term of employment as provided in paragraph 2.1, it shall
      do so by giving written notice to Executive that it has elected to terminate
      Executive’s employment hereunder and stating the effective date and reason for
      such termination, provided that no such action shall alter or amend any other
      provisions hereof or rights arising hereunder. If Executive desires to terminate
      his employment hereunder at any time prior to expiration of the term of
      employment as provided in paragraph 2.1, he shall do so by giving a 30-day
      written notice to the Company that he has elected to terminate his employment
      hereunder and stating the effective date and reason for such termination,
      provided that no such action shall alter or amend any other provisions hereof
      or
      rights arising hereunder.

     

    2.5 Deemed
      Resignations.
      Any
      termination of Executive’s employment shall constitute an automatic resignation
      of Executive as an officer of Company and each affiliate of Company, and an
      automatic resignation of Executive from the Board of Directors (if applicable)
      and from the board of directors of any affiliate of Company and from the board
      of directors or similar governing body of any corporation, limited liability
      company or other entity in which Company or any affiliate holds an equity
      interest and with respect to which board or similar governing body Executive
      serves as Company’s or such affiliate’s designee or other
      representative.

     

    ARTICLE
      3: COMPENSATION
      AND BENEFITS

     

    3.1 Base
      Salary.
      During
      the period of this Agreement, Executive shall receive a minimum annual base
      salary of $275,000. Executive’s annual base salary shall be reviewed by the
      Board of Directors (or a committee thereof) on an annual basis, and, in the
      sole
      discretion of the Board of Directors (or such committee), such annual base
      salary may be increased, but not decreased (except for a decrease that is
      consistent with reductions taken generally by other executives of Company),
      effective as of any date determined by the Board of Directors. Executive’s
      annual base salary shall be paid in equal installments in accordance with
      Company’s standard policy regarding payment of compensation to executives but no
      less frequently than monthly.

     

    3.2 Bonuses.
      Executive shall be eligible to participate in Company’s annual cash incentive
      plan as approved from time to time by the Board of Directors in amounts to
      be
      determined by the Board of Directors (or a duly authorized committee thereof)
      based upon criteria established by the Board of Directors (or such committee,
      if
      any).

     

    3.3 Other
      Perquisites.
      During
      his employment hereunder, Executive shall be afforded the following benefits
      as
      incidences of his employment:

     

    (i) Business
      and Entertainment Expenses
      -
      Subject to Company’s standard policies and procedures with respect to expense
      reimbursement as applied to its executive employees generally, Company shall
      reimburse Executive for, or pay on behalf of Executive, reasonable and
      appropriate expenses incurred by Executive for business related purposes,
      including dues and fees to industry and professional organizations and costs
      of
      entertainment and business development.

     

    (ii) Vacation
      - During
      his employment hereunder, Executive shall be entitled to four weeks of paid
      vacation each calendar year (or such greater amount of vacation as provided
      to
      executives of Company generally) and to all holidays provided to executives
      of
      Company generally; provided, however, that for the period beginning on the
      Effective Date and ending on the last day of the calendar year in which the
      Effective Date occurs, Executive shall be entitled to four weeks of paid
      vacation (or such greater amount of vacation as provided to executives of
      Company generally) reduced by the number of vacation days that Executive has
      already used during such calendar year and prior to the Effective
      Date.

     

    (iii) Equity
      Awards
      -
      Subject to shareholder approval of an increase in the number of shares eligible
      for issuance under the Company’s 2004 Stock Incentive Plan (the “Plan”) at the
      annual meeting of shareholders in 2006 (the “Annual Meeting”), Executive shall
      receive: (A) 10,000 restricted shares of common stock of Company, with
      forfeiture restrictions that will lapse 100% on the third anniversary of the
      date of grant; and (B) options to purchase 10,000 shares of common stock of
      the
      Company, vesting ratably over three years beginning on the first anniversary
      of
      the date of grant. The terms of the restricted stock and option awards shall
      be
      determined by the administrator of the Plan based upon criteria established
      from
      time to time by the administrator, except that the terms of the restricted
      stock
      and option awards must not conflict with the provisions of this Agreement.
      It is
      expressly understood that upon approval of the increase of shares available
      for
      issuance under the Plan at the Annual Meeting, the equity awards described
      in
      this section 3.3(iii)(A) and 3.3(iii)(B) shall be granted as of the date of
      the
      Annual Meeting and subject to no additional approvals by the Company and/or
      the
      Board of Directors of the Company. 

     

    
      	(iv)  	
              Other
                Company Benefits. 

            

    

     

    a.  Executive
      and, to the extent applicable, Executive’s spouse, dependents and beneficiaries,
      shall be allowed to participate in all benefits, plans and programs, including
      improvements or modifications of the same, which are now, or may hereafter
      be,
      available to other executive employees of Company. Such benefits, plans and
      programs shall include, without limitation, any profit sharing plan, thrift
      plan, health insurance or health care plan, life insurance, disability
      insurance, pension plan, supplemental retirement plan, vacation and sick leave
      plan, and the like which may be maintained by Company. Company shall not,
      however, by reason of this paragraph be obligated to institute, maintain, or
      refrain from changing, amending, or discontinuing, any such benefit plan or
      program, so long as such changes are similarly applicable to executive employees
      generally. Notwithstanding the foregoing, Company shall reimburse Executive
      for
      COBRA (as defined in Section 4.1 below) coverage and benefits from the Effective
      Date until such time as Executive and, to the extent applicable, Executive’s
      spouse, dependents and beneficiaries, are eligible to participate in Company’s
      benefits, plans and programs which are now, or may hereafter be, available
      to
      other executive employees of Company.

     

    b.  Company
      shall, at no additional cost to Executive, provide a life insurance policy
      equal
      to three times the Executive’s base salary as set forth in section 3.1
      above.

     

    ARTICLE
      4: EFFECT
      OF TERMINATION AND CHANGE IN CONTROL ON COMPENSATION; ADDITIONAL
      PAYMENTS

     

    4.1 Defined
      Terms.
      For
      purposes of this Article 4, the following terms shall have the meanings
      indicated:

     

    “Change
      in Control” means (i) a merger of Company with another entity, a consolidation
      involving Company, or the sale of all or substantially all of the assets of
      Company to another entity if, in any such case, (A) the holders of equity
      securities of Company immediately prior to such transaction or event do not
      beneficially own immediately after such transaction or event equity securities
      of the resulting entity entitled to 50% or more of the votes then eligible
      to be
      cast in the election of directors generally (or comparable governing body)
      of
      the resulting entity in substantially the same proportions that they owned
      the
      equity securities of Company immediately prior to such transaction or event
      or
      (B) the persons who were members of the Board of Directors immediately prior
      to
      such transaction or event shall not constitute at least a majority of the board
      of directors of the resulting entity immediately after such transaction or
      event, (ii) the dissolution or liquidation of Company, (iii) when any person
      or
      entity, including a “group” as contemplated by Section 13(d)(3) of the
      Securities Exchange Act of 1934, as amended, acquires or gains ownership or
      control (including, without limitation, power to vote) of more than 50% of
      the combined voting power of the outstanding securities of, (A) if Company
      has
      not engaged in a merger or consolidation, Company, or (B) if Company has engaged
      in a merger or consolidation, the resulting entity, or (iv) as a result of
      or in
      connection with a contested election of directors, the persons who were members
      of the Board of Directors immediately before such election shall cease to
      constitute a majority of the Board of Directors. For purposes of the preceding
      sentence, (1) “resulting entity” in the context of a transaction or event that
      is a merger, consolidation or sale of all or substantially all assets shall
      mean
      the surviving entity (or acquiring entity in the case of an asset sale) unless
      the surviving entity (or acquiring entity in the case of an asset sale) is
      a
      subsidiary of another entity and the holders of common stock of Company receive
      capital stock of such other entity in such transaction or event, in which event
      the resulting entity shall be such other entity, and (2) subsequent to the
      consummation of a merger or consolidation that does not constitute a Change
      in
      Control, the term “Company” shall refer to the resulting entity and the term
“Board of Directors” shall refer to the board of directors (or comparable
      governing body) of the resulting entity. 

     

    “Change
      in Control Benefits” means (i) a lump sum cash payment equal to the sum of:
      (A) 1.5 times Executive’s annual base salary at the rate in effect under
      paragraph 3.1 on the date of termination of Executive’s employment (or, if
      higher, Executive’s annual base salary in effect immediately prior to the Change
      in Control), (B) 1.5 times the higher of (1) Executive’s highest annual bonus
      paid during the three most recent fiscal years or (2) Executive’s Target Bonus
      (as provided in Company’s annual cash incentive plan) for the fiscal year in
      which Executive’s date of termination occurs, and (C) any bonus that
      Executive has earned and accrued as of the date of termination of Executive’s
      employment which relates to periods that have ended on or before such date
      and
      which have not yet been paid to Executive by Company; (ii) all of the
      outstanding stock options, restricted stock awards and other equity based awards
      granted by Company to Executive shall become fully vested and immediately
      exercisable in full on the date of termination of Executive’s employment; and
      (iii) Health Coverage.

     

    “Health
      Coverage” means that if Executive elects to continue coverage for himself or his
      eligible dependents under Company’s group health plans pursuant to the
      Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
      during the eighteen month period commencing on the date of Executive’s
      termination of employment from Company (the “Severance Period”), then throughout
      the Severance Period Company shall promptly reimburse Executive on a monthly
      basis for the difference between the amount Executive pays to effect and
      continue such coverage and the employee contribution amount that active senior
      executive employees pay for the same or similar coverage under Company’s group
      health plans. Further, if after the Severance Period Executive continues his
      COBRA coverage and Executive’s COBRA coverage terminates at any time during the
      eighteen-month period commencing on the day immediately following the last
      day
      of the Severance Period (the “Extended Coverage Period”), then Company shall
      provide Executive (and his eligible dependents) with health benefits
      substantially similar to those provided under its group health plans for active
      employees for the remainder of the Extended Coverage Period at a cost to
      Executive that is no greater than the cost of COBRA coverage; provided, however,
      that Company shall use its reasonable efforts so that such health benefits
      are
      provided to Executive under one or more insurance policies (or such other
      manner) so that reimbursement or payment of benefits to Executive thereunder
      shall not result in taxable income to Executive. Notwithstanding the preceding
      provisions of this paragraph, Company’s obligation to reimburse Executive during
      the Severance Period and to provide health benefits to Executive during the
      Extended Coverage Period shall immediately end if and to the extent Executive
      becomes eligible to receive health plan coverage from a subsequent employer
      (with Executive being obligated hereunder to promptly report such eligibility
      to
      Company).

     

    “Termination
      Benefits” means (i) a lump sum cash payment equal to the sum of: (A) 1.5
      times Executive’s annual base salary at the rate in effect under paragraph 3.1
      on the date of termination of Executive’s employment, (B) 1.5 times the higher
      of (1) Executive’s highest annual bonus paid during the three most recent fiscal
      years or (2) Executive’s Target Bonus (as provided in Company’s annual cash
      incentive plan) for the fiscal year in which Executive’s date of termination
      occurs, and (C) any bonus that Executive has earned and accrued as of the
      date of termination of Executive’s employment which relates to periods that have
      ended on or before such date and which have not yet been paid to Executive
      by
      Company; and (ii) Health Coverage.

     

    4.2 Termination
      By Expiration.
      If
      Executive’s employment hereunder shall terminate upon expiration of the term
      provided in paragraph 2.1 hereof because either party has provided the notice
      contemplated in such paragraph, then all compensation and all benefits to
      Executive hereunder shall continue to be provided until the expiration of such
      term and such compensation and benefits shall terminate contemporaneously with
      termination of his employment.

     

    4.3 Termination
      By Company.
      If
      Executive’s employment hereunder shall be terminated by Company other than
      pursuant to paragraphs 2.2(i), 2.2(ii), or 2.2(iii), then Company will pay
      and
      provide to Executive all compensation and benefits that would otherwise be
      due
      pursuant to this Agreement through the Initial Expiration Date, as extended,
      and; subject to paragraph 4.7 below, if such termination shall be for any reason
      other than those encompassed by paragraphs 2.2(i), 2.2(ii), or 2.2(iii), then
      Company shall provide Executive with the Termination Benefits, except that
      if
      Executive is entitled to the Change in Control Benefits pursuant to paragraph
      4.5 as a result of such termination, then Executive will not receive the
      Termination Benefits provided by Company under this paragraph. Any lump sum
      cash
      payment due to Executive pursuant to the preceding sentence shall be paid to
      Executive within five business days of the date of Executive’s termination of
      employment with Company; provided, however, that if the lump sum cash payment
      would be subject to additional taxes and interest under Section 409A of the
      Internal Revenue Code of 1986, as amended (the “Code”), then payment of the lump
      sum cash payment shall be deferred in whole or part to the extent required
      to
      avoid such additional taxes and interest.

     

    4.4 Termination
      By Executive.
      If
      Executive’s employment hereunder shall be terminated by Executive prior to
      expiration of the term provided in paragraph 2.1, then, upon such termination,
      regardless of the reason therefor, all compensation and benefits to Executive
      hereunder shall terminate contemporaneously with the termination of such
      employment; provided, however, that, subject to paragraph 4.7 below, if such
      termination occurs for Good Reason, then Company shall provide Executive with
      the Termination Benefits, except that if Executive is entitled to the Change
      in
      Control Benefits pursuant to paragraph 4.5 as a result of such termination,
      then
      Executive will not receive the Termination Benefits provided by Company under
      this paragraph. Any lump sum cash payment due to Executive pursuant to this
      paragraph shall be paid to Executive within five business days of the date
      of
      Executive’s termination of employment with Company; provided, however, that if
      the lump sum cash payment would be subject to additional taxes and interest
      under Section 409A of the Code, then payment of the lump sum cash payment shall
      be deferred in whole or part to the extent required to avoid such additional
      taxes and interest.

     

    4.5 Change
      in Control Benefits.
      If
      Executive’s employment is terminated pursuant to paragraph 2.2(iv) or paragraph
      2.3(i) in connection with, based upon, or within 12 months after, a Change
      in
      Control, then Company shall provide Executive with the Change in Control
      Benefits. Any lump sum cash payment due to Executive pursuant to the preceding
      sentence shall be paid to Executive within five business days of the date of
      Executive’s termination of employment with Company; provided, however, that if
      the lump sum cash payment would be subject to additional taxes and interest
      under Section 409A of the Code, then payment of the lump sum cash payment shall
      be deferred in whole or part to the extent required to avoid such additional
      taxes and interest.

     

    4.6 Additional
      Payments by Company.
      Notwithstanding anything to the contrary in this Agreement, in the event that
      any payment or distribution by Company to or for the benefit of Executive,
      whether paid or payable or distributed or distributable pursuant to the terms
      of
      this Agreement or otherwise (a “Payment”), would be subject to the excise tax
      imposed by Section 4999 of the Code, or any interest or penalties with respect
      to such excise tax (such excise tax, together with any such interest or
      penalties, are hereinafter collectively referred to as the “Excise Tax”),
      Company shall pay to Executive an additional payment (a “Gross-up Payment”) in
      an amount such that after payment by Executive of all taxes (including any
      interest or penalties imposed with respect to such taxes), including any Excise
      Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up
      Payment equal to the Excise Tax imposed upon the Payments. Company and Executive
      shall make an initial determination as to whether a Gross-up Payment is required
      and the amount of any such Gross-up Payment. Executive shall notify Company
      in
      writing of any claim by the Internal Revenue Service which, if successful,
      would
      require Company to make a Gross-up Payment (or a Gross-up Payment in excess
      of
      that, if any, initially determined by Company and Executive) within 10 days
      of
      the receipt of such claim. Company shall notify Executive in writing at least
      10
      days prior to the due date of any response required with respect to such claim
      if it plans to contest the claim. If Company decides to contest such claim,
      Executive shall cooperate fully with Company in such action; provided, however,
      Company shall bear and pay directly or indirectly all costs and expenses
      (including additional interest and penalties) incurred in connection with such
      action and shall indemnify and hold Executive harmless, on an after-tax basis,
      for any Excise Tax or income tax, including interest and penalties with respect
      thereto, imposed as a result of Company’s action. If, as a result of Company’s
      action with respect to a claim, Executive receives a refund of any amount paid
      by Company with respect to such claim, Executive shall promptly pay such refund
      to Company. If Company fails to timely notify Executive whether it will contest
      such claim or Company determines not to contest such claim, then Company shall
      immediately pay to Executive the portion of such claim, if any, which it has
      not
      previously paid to Executive. In addition, Company may use reasonable tax
      planning options to mitigate the effects of the Excise Tax and Executive agrees
      to cooperate fully with Company in using all available tax planning options
      to
      mitigate the effects of the Excise Tax; provided, however, Company shall bear
      and pay directly or indirectly all costs and expenses (including additional
      interest and penalties) incurred in connection with using such tax planning
      options and shall indemnify and hold Executive harmless, on an after-tax basis,
      for any Excise Tax or income tax, including interest and penalties with respect
      thereto, imposed as a result of Company’s use of such tax planning
      options.

     

    4.7 Release
      and Full Settlement.
      Anything
      to the contrary herein notwithstanding, as a condition to the receipt of
      Termination Benefits under paragraph 4.3 or 4.4 hereof, Executive shall first
      execute a release, in the form established by the Board of Directors, releasing
      the Board of Directors, Company, and Company’s parent corporation, subsidiaries,
      affiliates, and their respective shareholders, partners, officers, directors,
      employees, attorneys and agents from any and all claims and from any and all
      causes of action of any kind or character including, but not limited to, all
      claims or causes of action arising out of Executive’s employment with Company or
      its affiliates or the termination of such employment, but excluding all claims
      to vested benefits and payments Executive may have under any compensation or
      benefit plan, program or arrangement, including this Agreement. The performance
      of Company’s obligations hereunder and the receipt of any benefits provided
      under paragraphs 4.3 and 4.4 shall constitute full settlement of all such claims
      and causes of action.

     

    4.8 No
      Duty to Mitigate Losses.
      Executive shall have no duty to find new employment following the termination
      of
      his employment under circumstances which require Company to pay any amount
      to
      Executive pursuant to this Article 4. Except to the extent Executive becomes
      eligible to receive health plan coverage from a subsequent employer as provided
      in paragraph 4.1 with respect to Health Coverage, any salary or remuneration
      received by Executive from a third party for the providing of personal services
      (whether by employment or by functioning as an independent contractor) following
      the termination of his employment under circumstances pursuant to which this
      Article 4 apply shall not reduce Company’s obligation to make a payment to
      Executive (or the amount of such payment) pursuant to the terms of this Article
      4.

     

    4.9 Liquidated
      Damages.
      In
      light of the difficulties in estimating the damages for an early termination
      of
      Executive’s employment under this Agreement, Company and Executive hereby agree
      that the payments, if any, to be received by Executive pursuant to this Article
      4 shall be received by Executive as liquidated damages.

     

    4.10 Other
      Benefits.
      This
      Agreement governs the rights and obligations of Executive and Company with
      respect to Executive’s base salary and certain perquisites of employment. Except
      as expressly provided herein, Executive’s rights and obligations both during the
      term of his employment and thereafter with respect to stock options, restricted
      stock, incentive and deferred compensation, life insurance policies insuring
      the
      life of Executive, and other benefits under the plans and programs maintained
      by
      Company shall be governed by the separate agreements, plans and other documents
      and instruments governing such matters.

     

    ARTICLE
      5: OWNERSHIP
      AND PROTECTION OF INFORMATION; COPYRIGHTS

     

    5.1 Disclosure
      to Executive.
      Executive
      acknowledges that Company has and will in the course of his employment disclose
      to Executive, or place Executive in a position to have access to or develop,
      trade secrets or confidential information of Company and its affiliates; and/or
      shall entrust Executive with business opportunities of Company and its
      affiliates; and/or shall place Executive in a position to develop business
      good
      will on behalf of Company and its affiliates.

     

    5.2 Property
      of Company. All
      information, ideas, concepts, improvements, discoveries, and inventions, whether
      patentable or not, which are conceived, made, developed or acquired by
      Executive, individually or in conjunction with others, during Executive’s
      employment by Company (whether during business hours or otherwise and whether
      on
      Company’s premises or otherwise) which relate to the business, products or
      services of Company or its affiliates shall be disclosed to Company and are
      and
      shall be the sole and exclusive property of Company and its affiliates.
      Moreover, all documents, drawings, memoranda, notes, records, files,
      correspondence, manuals, models, specifications, computer programs, E-mail,
      voice mail, electronic databases, maps and all other writings or materials
      of
      any type embodying any of such information, ideas, concepts, improvements,
      discoveries, and inventions are and shall be the sole and exclusive property
      of
      Company and its affiliates. Upon Executive’s termination of employment for any
      reason, Executive shall deliver the same, and all copies thereof, to
      Company.

     

    5.3 Patent
      and Copyright Assignment.
      Executive agrees to assign and transfer to Company or its designee, without
      any
      separate remuneration or compensation, his entire right, title and interest
      in
      and to all Inventions and Works in the Field (as hereinafter defined), together
      with all United States and foreign rights with respect thereto, and at Company’s
      expenses to execute and deliver all appropriate patent and copyright
      applications for securing United States and foreign patents and copyrights
      on
      such Inventions and Works in the Field, and to perform all lawful acts,
      including giving testimony and executing and delivering all such instruments,
      that may be necessary or proper to vest all such Inventions and Works in the
      Field and patents and copyrights with respect thereto in Company, and to assist
      Company in the prosecution or defense of any interference which may be declared
      involving any of said patent applications or patents or copyright applications
      or copyrights. For purposes of this Agreement the words “Inventions and Works in
      the Field” shall include any discovery, process, design, development,
      improvement, application, technique, program or invention, whether patentable
      or
      copyrightable or not and whether reduced to practice or not, conceived or made
      by Executive, individually or jointly with others (whether on or off Company’s
      premises or during or after normal working hours) while employed by Company;
      provided, however, that no discovery, process, design, development, improvement,
      application, technique, program or invention reduced to practice or conceived
      by
      Executive off Company’s premises and after normal working hours or during hours
      when Executive is not performing services for Company, shall be deemed to be
      included in the term “Inventions and Works in the Field” unless directly or
      indirectly related to the business then being conducted by Company or its
      affiliates or any business which Company or its affiliates is then actively
      exploring.

     

    5.4 No
      Unauthorized Use or Disclosure. Executive
      acknowledges that the business of Company and its affiliates is highly
      competitive and that their strategies, methods, books, records, and documents,
      their technical information concerning their products, equipment, services,
      and
      processes, procurement procedures and pricing techniques, the names of and
      other
      information (such as credit and financial data) concerning their customers
      and
      business affiliates, all comprise confidential business information and trade
      secrets which are valuable, special, and unique assets which Company and its
      affiliates use in their business to obtain a competitive advantage over their
      competitors. Executive further acknowledges that protection of such confidential
      business information and trade secrets against unauthorized disclosure and
      use
      is of critical importance to Company and its affiliates in maintaining their
      competitive position. Executive hereby agrees that Executive will not, at any
      time during or after Executive’s employment by Company, make any unauthorized
      disclosure of any confidential business information or trade secrets of Company
      and its affiliates, or make any use thereof, except in the carrying out of
      Executive’s employment responsibilities hereunder. Company and its affiliates
      shall be third party beneficiaries of Executive’s obligations under this
      paragraph. As a result of Executive’s employment by Company, Executive may also
      from time to time have access to, or knowledge of, confidential business
      information or trade secrets of third parties, such as customers, suppliers,
      partners, joint venturers, and the like, of Company and its affiliates.
      Executive also agrees to preserve and protect the confidentiality of such third
      party confidential information and trade secrets to the same extent, and on
      the
      same basis, as the confidential business information and trade secrets of
      Company and its affiliates. These obligations of confidence apply irrespective
      of whether the information has been reduced to a tangible medium of expression
      (e.g.,
      is only
      maintained in the minds of Company’s employees) and, if it has been reduced to a
      tangible medium, irrespective of the form or medium in which the information
      is
      embodied (e.g.,
      documents, drawings, memoranda, notes, records, files, correspondence, manuals,
      models, specifications, computer programs, E-mail, voice mail, electronic
      databases, maps and all other writings or materials of any type).

     

    5.5 Assistance
      by Executive.
      Both
      during the period of Executive’s employment by Company and thereafter, Executive
      shall assist Company and its affiliates and their respective nominees, at any
      time, in the protection of Company’s and its affiliates’ worldwide rights,
      titles, and interests in and to information, ideas, concepts, improvements,
      discoveries, and inventions, and their copyrighted works, including without
      limitation, the execution of all formal assignment documents requested by
      Company and its affiliates or their respective nominees and the execution of
      all
      lawful oaths and applications for applications for patents and registration
      of
      copyright in the United States and foreign countries.

     

    5.6 Remedies.
      Executive acknowledges that money damages would not be sufficient remedy for
      any
      breach of this Article 5 by Executive, and Company shall be entitled to
enforce
      the provisions of this Article 5 by terminating any payments then owing to
      Executive under this Agreement and/or to specific performance and injunctive
      relief as remedies for such breach or any threatened breach. Such remedies
      shall
      not be deemed the exclusive remedies for a breach of this Article 5, but shall
      be in addition to all remedies available at law or in equity to Company and
      its
      affiliates, including the recovery of damages from Executive and Executive’s
      agents involved in such breach and remedies available to Company and its
      affiliates pursuant to other agreements with Executive.

     

    ARTICLE
      6: NON-COMPETITION
      OBLIGATIONS

     

    6.1 Non-competition
      Obligations.
      As part
      of the consideration for the compensation and benefits to be paid to Executive
      hereunder; to protect the trade secrets and confidential information of Company
      and its affiliates that have been or will in the future be disclosed or
      entrusted to Executive, the business good will of Company and its affiliates
      that has been and will in the future be developed in Executive, or the business
      opportunities that have been and will in the future be disclosed or entrusted
      to
      Executive by Company and its affiliates; and as an additional incentive for
      Company to enter into this Agreement, Company and Executive agree to the
      provisions of this Article 6. Executive agrees that during the period of
      Executive’s non-competition obligations hereunder, Executive shall not, directly
      or indirectly for Executive or for others, in any geographic area or market
      where Company or its affiliates are conducting any business as of the date
      of
      termination of the employment relationship or have during the previous 12 months
      conducted any business:

    

    
      	 	
              (i)

            	
              engage
                in any offshore supply vessel business serving the oil and gas industry
                that is competitive with the business conducted by Company or its
                affiliates;

            

    

    

    
      	 	
              (ii)

            	
              render
                any advice or services to, or otherwise assist, any other person,
                association, or entity who is engaged, directly or indirectly, with
                any
                offshore supply vessel business serving the oil and gas industry
                that is
                competitive with the business conducted by Company or its
                affiliates;

            

    

    

    
      	 	
              (iii)

            	
              induce
                any employee of Company or its affiliates to terminate his or her
                employment with Company or its affiliates, or hire or assist in the
                hiring
                of any such employee by any person, association, or entity not affiliated
                with Company;

            

    

    

    
      	 	
              (iv)

            	
              request
                or cause any customer of Company or its affiliates to terminate any
                business relationship with Company or its
                affiliates.

            

    

    

    These
      non-competition obligations shall apply during the period that Executive is
      employed by Company and shall continue until the first anniversary of the
      termination of Executive’s employment. Executive understands that the foregoing
      restrictions may limit Executive’s ability to engage in certain businesses
      anywhere in the world during the period provided for above, but acknowledges
      that Executive will receive sufficiently high remuneration and other benefits
      under this Agreement to justify such restriction.

    

    6.2 Enforcement
      and Remedies.
      Executive acknowledges that money damages would not be sufficient remedy for
      any
      breach of this Article 6 by Executive, and Company shall be entitled to enforce
      the provisions of this Article 6 by terminating any payments then owing to
      Executive under this Agreement and/or to specific performance and injunctive
      relief as remedies for such breach or any threatened breach. Such remedies
      shall
      not be deemed the exclusive remedies for a breach of this Article 6, but shall
      be in addition to all remedies available at law or in equity to Company,
      including, without limitation, the recovery of damages from Executive and
      Executive’s agents involved in such breach and remedies available to Company
      pursuant to other agreements with Executive.

    

    6.3 Reformation.
      It is
      expressly understood and agreed that Company and Executive consider the
      restrictions contained in this Article 6 to be reasonable and necessary to
      protect the proprietary information of Company and its affiliates. Nevertheless,
      if any of the aforesaid restrictions are found by a court having jurisdiction
      to
      be unreasonable, or overly broad as to geographic area or time, or otherwise
      unenforceable, the parties intend for the restrictions therein set forth to
      be
      modified by such courts so as to be reasonable and enforceable and, as so
      modified by the court, to be fully enforced.

     

    ARTICLE
      7: MISCELLANEOUS

     

    7.1 Notices.
      For
      purposes of this Agreement, notices and all other communications provided for
      herein shall be in writing and shall be deemed to have been duly given when
      personally delivered or when mailed by United States registered or certified
      mail, return receipt requested, postage prepaid, addressed as
      follows:

     

    If
      to Company to:  Trico
      Marine Services, Inc.

    2401
      Fountainview, Suite 920

    Houston,
      Texas 77057

    Attention:
      Chairman of the Board of Directors

     

    If
      to Executive to:  Robert
      O’Connor

    2401
      Fountainview, Suite 920

    Houston,
      Texas 77057

     

    or
      to
      such other address as either party may furnish to the other in writing in
      accordance herewith, except that notices or changes of address shall be
      effective only upon receipt.

     

    7.2 Applicable
      Law.
      This
      Agreement is entered into under, and shall be governed for all purposes by,
      the
      laws of the State of Texas.

     

    7.3 No
      Waiver.
      No
      failure by either party hereto at any time to give notice of any breach by
      the
      other party of, or to require compliance with, any condition or provision of
      this Agreement shall be deemed a waiver of similar or dissimilar provisions
      or
      conditions at the same or at any prior or subsequent time.

     

    7.4 Severability.
      If a
      court of competent jurisdiction determines that any provision of this Agreement
      is invalid or unenforceable, then the invalidity or unenforceability of that
      provision shall not affect the validity or enforceability of any other provision
      of this Agreement, and all other provisions shall remain in full force and
      effect.

     

    7.5 Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which together will constitute one and
      the
      same Agreement.

     

    7.6 Withholding
      of Taxes and Other Employee Deductions.
      Company
      may withhold from any benefits and payments made pursuant to this Agreement
      all
      federal, state, city and other taxes as may be required pursuant to any law
      or
      governmental regulation or ruling and all other normal employee deductions
      made
      with respect to Company’s employees generally.

     

    7.7 Headings.
      The
      paragraph headings have been inserted for purposes of convenience and shall
      not
      be used for interpretive purposes.

     

    7.8 Gender
      and Plurals.
      Wherever the context so requires, the masculine gender includes the feminine
      or
      neuter, and the singular number includes the plural and conversely.

     

    7.9 Affiliate.
      As used
      in this Agreement, the term “affiliate” shall mean any entity which owns or
      controls, is owned or controlled by, or is under common ownership or control
      with, Company.

     

    7.10 Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of Company and any
      successor of Company, by merger or otherwise. Except as provided in the
      preceding sentence, this Agreement, and the rights and obligations of the
      parties hereunder, are personal and neither this Agreement, nor any right,
      benefit, or obligation of either party hereto, shall be subject to voluntary
      or
      involuntary assignment, alienation or transfer, whether by operation of law
      or
      otherwise, without the prior written consent of the other party.

     

    7.11 Term.
      This
      Agreement has a term co-extensive with the term of employment provided in
      paragraph 2.1. Termination shall not affect any right or obligation of any
      party
      which is accrued or vested prior to such termination.

     

    7.12 Entire
      Agreement.
      Except
      as provided in (i) the written benefit plans and programs referenced in
      paragraph 3.3(iv) (and any agreements between Company and Executive that have
      been executed under such plans and programs) and (ii) any signed written
      agreement contemporaneously or hereafter executed by Company and Executive,
      this
      Agreement constitutes the entire agreement of the parties with regard to the
      subject matter hereof, and contains all the covenants, promises,
      representations, warranties and agreements between the parties with respect
      to
      employment of Executive by Company. Without limiting the scope of the preceding
      sentence, all understandings and agreements preceding the date of execution
      of
      this Agreement and relating to the subject matter hereof (other than the
      agreements described in clause (i) of the preceding sentence) are hereby null
      and void and of no further force and effect. Any modification of this Agreement
      will be effective only if it is in writing and signed by the party to be
      charged.

     

    

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement on the 5th day of July, 2006, to
      be
      effective as of the Effective Date.

     

    TRICO
      MARINE SERVICES, INC.

    

    By:
      /s/ Trevor Turbidy

     Name: Trevor
      Turbidy

     Title: President
      and Chief Executive Officer

    “COMPANY”

    

    /s/
      Robert V. O'Connor

     Robert
      V. O’Connor

      “EXECUTIVE”sec document

                                                                     Exhibit 4.3

                              ASSIGNMENT AGREEMENT

     This  ASSIGNMENT  AGREEMENT made this 29th day of June, 2006 by and between
CORNELL CAPITAL PARTNERS,  LP, a Delaware limited  partnership with an office at
101 Hudson Street,  Suite 3700,  Jersey City, New Jersey 07302 (the "ASSIGNOR"),
CEPTOR  CORPORATION,  a Delaware  corporation  (the  "COMPANY") and THE LONGVIEW
FUND, LP organized and existing  under the laws of California  with an office at
600 Montgomery Street, 44th Floor San Francisco,  CA 94111  ("LONGVIEW"),  ALPHA
CAPITAL   AKTIENGESELLSCHAFT   organized   and   existing   under  the  laws  of
Liechtenstein with an office at Pradafant 7 9490 Furstentums Vaduz, Lichtenstein
("ALPHA"),  Ellis International  Ltd.,  organized and existing under the laws of
Panama with an office at 53rd Street  Urbanizacion  Obarrio  Swiss  Tower,  16th
Floor, Panama,  Republic of Panama ("ELLIS") and Momona Capital Corp., organized
and existing  under the laws of the State of New York with an office at 3 Martha
Road, Monsey, New York ("MOMONA") (collectively, the "ASSIGNEES"):

                                   WITNESSETH

     WHEREAS,  CEPTOR CORPORATION  (herein the "COMPANY") issued to the Assignor
on December 9, 2005, a Convertible  Debenture  (herein referred to as "DEBENTURE
NO. 1") in an amount of ONE  MILLION  DOLLARS  ($1,000,000.00),  of which  SEVEN
HUNDRED  THOUSAND  DOLLARS  ($700,000.00)  remains unpaid and  unconverted,  and
accruing interest at the rate of eight percent (8%) per annum; and issued to the
Assignor on December 28, 2005, a Convertible  Debenture  (herein  referred to as
"DEBENTURE NO. 2") in an amount of ONE MILLION DOLLARS ($1,000,000.00), of which
the full amount remains  unpaid and  unconverted,  and accruing  interest at the
rate of eight percent (8%) per annum.

     WHEREAS,  the Assignor desires to assign the unpaid and unconverted amounts
of both  Debenture No. 1 and Debenture  No. 2  (collectively  referred to as the
"DEBENTURES") to the Assignees in the respective amounts set forth on Schedule A
attached  hereto,  or the aggregate  sum of ONE MILLION  SEVEN HUNDRED  THOUSAND
DOLLARS  ($1,700,000.00)  of such  Debentures  to  Assignees  as well as and all
rights and benefits conferred therein, and the Assignees desire to purchase such
portion of the  Debentures  in the  respective  amounts  set forth on Schedule A
attached  hereto and all  rights  and  benefits  conferred  therein  for a total
purchase price of ONE MILLION NINE HUNDRED FOURTEEN  THOUSAND ONE HUNDRED EIGHTY
THOUSAND DOLLARS AND EIGHTY TWO CENTS ($1,914,180.82) (the "PURCHASE PRICE"), of
which ONE MILLION  EIGHT HUNDRED  THIRTY-SIX  THOUSAND  DOLLARS  ($1,836,000.00)
(representing  One Million Seven Hundred  Thousand Dollars  {$1,700,000}  plus a
premium of eight  percent {8%},  or the sum of One Hundred  Thirty-Six  Thousand
Dollars  {$136,000})  is being  paid in  consideration  for the  principal,  and
SEVENTY-EIGHT   THOUSAND  ONE  HUNDRED  EIGHTY  DOLLARS  AND  EIGHTY  TWO  CENTS
($78,,180.82) is being paid in consideration for accrued interest; and

     WHEREAS,  the Company,  in  consideration  of the  Assignor's  agreement to
assign such unpaid and  unconverted  amounts of the Debentures to the Assignees,
has  agreed  to issue  to the  Assignor  a  Warrant  to  purchase  five  million
(5,000,000)  shares of the Company's  common stock at a price of $0.25 per share
(the  "WARRANT").  The Warrant shall be issued to the Assignor upon execution of
this  Assignment,  and  deemed  earned  at such  time as the  Purchase  Price is
received by the Assignor.

     NOW, THEREFORE, for and in consideration of the Purchase Price and Warrant,
receipt of which is hereby  acknowledged,  and in further  consideration  of the
mutual covenants hereinafter set forth, the parties hereby agree as follows:

     1.   Assignor does hereby assign, transfer and set over to Assignees, their
successors and assigns, all of its rights, benefits conferred, title, interests,
and obligations  pursuant to the Debentures,  including  Interest  accrued there
under, and the Transaction Documents,  as this term is defined in the Securities
Purchase  Agreement  dated  December 9, 2005 by and between the Assignor and the
Company (the  "SECURITIES  PURCHASE  AGREEMENT"),  including  but not limited to
ability  to  collected   Liquidated   Damages,  as  defined  in  the  Investor's
Registration Rights Agreement dated December 9, 2005 by and between the Assignor
and the Company (the "INVESTOR'S REGISTRATION RIGHTS AGREEMENT");

     2.   Assignor warrants, represents and covenants that:

          (a) the copies of the Debentures  attached hereto are true and correct
copies of the original Debentures;

          (b) the  Assignor is the sole and  absolute  owner of the  Debentures,
free of all claims, encumbrances and security interests of every nature;

          (c)  the  Assignor  has  not   heretofore   assigned  or  pledged  the
Debentures, or any interest therein;

          (d) Liquidated  Damages have not accrued or are due and outstanding as
of the date hereof.

          (d) the Assignor  shall,  simultaneously  upon receipt of the Purchase
Price, file appropriate UCC-3 amendments (the "UCC-3"), a copy of which shall be
provided  to the  Assignees  prior  to  filing,  to the  filed  UCC-1  Financing
Statement filed with Delaware  Department of State on December 12, 2205 File No.
53836906 (the "UCC-1") to transfer its security interest to the Assignees.

     3. The Company warrants, represents and covenants that:

          (a) the  representations  and warranties set forth in the  Transaction
Documents  are true and correct in all material  respects as of the date hereof,
except as same may have been amended,  updated or  supplemented in the documents
filed with and referred to in the Company's  Form 8-k filed on June 7, 2006. The
Company has performed,  satisfied and complied in all material respects with the
obligations  and  covenants,   agreements  and  conditions  of  the  Transaction
Documents.

          (b) that the Debentures and the obligations  there under and under the
Transaction  Documents  are in full  force  and  effect  and that no  Events  of
Default, as this term is defined in the Debentures, currently exist.

          (c) contemporaneously with the execution of this Agreement the Company
shall  reissue to the  Assignees  the  Debentures  in the  respective  names and
amounts  outlined  in  Schedule  A  attached  hereto as well as  re-execute  the
Irrevocable  Transfer Agent  Instructions  dated December 9, 2005 by and between
the Assignor and the Company (the "IRREVOCABLE  TRANSFER AGENT INSTRUCTIONS") or
such  other  Transaction  Documents  as  may  be  reasonably  requested  by  the
Assignees.

          (d) upon the assignment contemplated herein but in no event later than
July  10,  2006  ,  the  Company  shall  file  a  post-effective   amendment  to
Registration  Statement No. 333-130746  currently on file with the United States
Securities and Exchange Commission (the "REGISTRATION  STATEMENT") and any other
such  documents as may be required or  reasonably  requested by the Assignees in
order to indicate that Assignees are the new selling  shareholders of the shares
issuable upon conversion of the Debentures  which shall cause such  Registration
Statement to remain effective and current for the public sale of the registrable
securities.

          (e)  the  maximum  conversion  price  of the  Debentures,  subject  to
adjustment as stated therein, as of the date of this Assignment is Fifteen Cents
($0.15).

     4.   The Assignees  hereby assume all rights,  benefits  conferred,  title,
interests, and obligations, representations,  warranties, and covenants pursuant
to the Debentures and the Transaction Documents;

     5.   The  Company  hereby   acknowledges  and  consents  to  the  Assignees
assumption of all rights, benefits conferred, title, interests, and obligations,
representations,  warranties,  and covenants  pursuant to the Debentures and the
Transaction  Documents  including  but not  limited to  registration  rights and
indemnification rights, and the Company will comply with the covenants set forth
therein and perform its obligations thereunder.

     6.   The Company and the Assignees agree that the following language in the
Convertible  Debentures  shall be deleted in its entirety and except as provided
herein all of the terms and conditions  contained  herein shall remain unchanged
and in full force and effect.  All provisions in the Convertible  Debentures and
any  amendments,  schedules or exhibits  thereto in conflict  with this deletion
shall be and hereby are changed to conform to this amendment.

        RIGHT OF  REDEMPTION.  The  Obligor at its option  shall have the right,
        with three (3) business  days advance  written  notice (the  "REDEMPTION
        NOTICE"),  to redeem a portion  or all  amounts  outstanding  under this
        Debenture  prior to the Maturity  Date.  If the Closing Bid Price of the
        Obligor's  Common Stock, as reported by Bloomberg,  LP, is less than the
        Fixed Price at the time of the Redemption  Notice, the Obligor shall pay
        an amount equal to the principal amount being redeemed plus a redemption
        premium  equal to  eight  percent  (8%) of the  principal  amount  being
        redeemed  ("REDEMPTION  PREMIUM"),  and accrued interest,  (collectively
        referred to as the "REDEMPTION AMOUNT").

        In the event the  Closing  Bid Price of the  Obligor's  Common  Stock is
        above the Fixed Price at the time of a Redemption Notice the Obligor can
        redeem fifty percent (50%) of the principal  amounts  outstanding  under
        this Debenture at the Redemption  Amount and the remaining fifty percent
        (50%) at the  greater of (i) the  Redemption  Amount and (ii) the market
        value of this  Debenture's  underlying  common  stock on an as converted
        basis  utilizing the Closing Bid Price of the Company's  Common Stock on
        the day of the Redemption Notice.

        The Obligor  shall  deliver to the Holder the  Redemption  Amount on the
        third (3rd) business day after the Redemption Notice.

        Notwithstanding the foregoing, in the event that the Obligor has elected
        to redeem a portion of the  outstanding  principal  amount  and  accrued
        interest  under this  Debenture the Holder shall be permitted to convert
        all or any portion of this Debenture  during such three (3) business day
        period.

        In the event the  Obligor  exercises  a  redemption  of either  all or a
        portion of the outstanding  principal  amounts plus accrued interest due
        and  outstanding  under this  debenture as outlined  herein,  the Holder
        shall receive a warrant to purchase twenty five thousand (25,000) shares
        of the  Company's  Common Stock for every One Hundred  Thousand  Dollars
        ($100,000)  redeemed,  pro rata.  (the  "WARRANT")  The Warrant shall be
        exercisable  on a "cash basis" and have an exercise price of one hundred
        five  percent  (105%) of the Closing Bid Price of the  Obligor's  Common
        Stock on the Closing Date, as quoted by  Bloomberg,  LP, per share.  The
        Warrant shall have  "piggy-back"  registration  rights and shall survive
        for three (3) years from the Closing Date.

     7.   Notices hereunder shall be given in writing by certified or registered
mail, return receipt  requested,  addressed to such addresses as the parties may
designate.

     8.   This  assignment  is binding  upon the  successors  and assigns of the
parties hereto.

     9.   This  assignment  shall be effective  upon  Assignor's  receipt of the
Purchase  Price and  Warrant.  This  assignment  and  acceptance  of same may be
executed in one or more counterparts, each of which shall be deemed an original,
but  all of  which  together  shall  constitute  one and  the  same  instrument.
Confirmation  of  execution  by telex or by  telecopy  or telefax of a facsimile
signature page shall be binding upon that party so confirming.

     10.  This Agreement may be executed in identical counterparts, all of which
shall be considered one and the same  agreement and shall become  effective when
counterparts have been signed by each party and delivered to the other party. In
the event any signature page is delivered by facsimile  transmission,  the party
using  such  means of  delivery  shall  cause an  additional  original  executed

signature  pages to be  physically  delivered to the other party within five (5)
days of the execution and delivery hereof, though failure to deliver such copies
shall not affect the validity of this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

         IN WITNESS WHEREOF, the Assignor has executed this Assignment Agreement
on the day and year first above written.

                                      THE ASSIGNOR:

                                      CORNELL CAPITAL PARTNERS, LP
                                      By:   Yorkville Advisors LLC
                                      Its:  General Partner

                                      By:  /s/ Mark A. Angelo
                                          -----------------------------
                                      Name: Mark A. Angelo
                                      Its:  President & Portfolio Manager

                            ACCEPTANCE OF ASSIGNMENT

         The  undersigned,  being  the  Assignees  set  forth  above,  do hereby
acknowledge and accept the foregoing Assignment on this 29th day of June, 2006.

                                      ASSIGNEES:

                                      THE LONGVIEW FUND, LP
                                      By: Viking Asset Management LLC
                                          Its:  Investment Manager

                                      By: /s/ S. Michael Rudolph
                                          -----------------------------
                                      Name: S. Michael Rudolph
                                      Its:  Chief Financial Officer

                                      ALPHA CAPITAL AKTIENGESELLSCHAFT

                                      By:
                                          -----------------------------
                                      Name:
                                      Its:

                                      ELLIS INTERNATIONAL LTD.

                                      By:
                                          -----------------------------
                                      Name:
                                      Its:

                                      MOMONA CAPITAL CORP.

                                      By:
                                          -----------------------------
                                      Name:
                                      Its:

                              CONSENT TO ASSIGNMENT

         The undersigned, being the Company set forth above, does hereby consent
to  the  foregoing  Assignment  and  by  its  signature  below  acknowledges  it
obligation  thereunder,  including the obligation to issue the Warrant,  on this
29th day of June, 2006.

                                      CEPTOR CORPORATION

                                      By: /s/ Donald W. Fallon
                                          -----------------------------
                                      Name: Donald W. Fallon
                                      Its:  Senior Vice President,
                                            Finance and Administration,
                                            Chief Financial Officer

                                                             EXHIBIT "A"

                                                         SCHEDULE OF BUYERS

                                               Address/Facsimile            Amount of               Purchase
    Name                                        Number of Buyer            Subscription              Price
    ----                                        ---------------           -------------    ----------------------------

The Longview Fund, LP                600 Montgomery Street, 44th Floor     $   700,000     $794,290.41        (Includes
                                                                                           Interest of $38,290.41 and a
                                                                                           Redemption     Premium    of
                                                                                           $56,,000)

                                                                           $   400,000     $447,956.16        (Includes
                                                                                           Interest of $15,956.16 and a
                                                                                           Redemption     Premium    of
                                                                                           $32,000)

                                     San  Francisco,  CA  94111
                                     Fax: (415) 981-5301

Alpha Capital Aktiengesellschaft     Pradafant 7                           $   300,000     $335,967.12        (Includes
                                                                                           Interest of $ 11,967.12  and
                                                                                           a   Redemption   Premium  of
                                                                                           $24,000)

                                     9490   Furstentums
                                     Vaduz,   Lichtenstein   Fax:
                                     011-42-32323196

Ellis International Ltd.             c/o SDC Capital                       $   200,000     $223,978.08        (Includes
                                                                                           Interest of $7,978.08  and a
                                                                                           Redemption     Premium    of
                                                                                           $16,000)
                                     20 East Sunrise Highway Suite
                                     302
                                     Valley Stream, NY 11581
                                     Fax: (516) 887-8990

Momona Capital Corp.                 3 Martha Road                         $   100,000     $111,989.04        (Includes
                                                                                           Interest of $3,989.04  and a
                                                                                           Redemption     Premium    of
                                                                                           $8,000)

                                     Monsey,   New  York
                                     Fax: (212) 586-8244

* INTEREST IS CALCULATED THROUGH JUNE 28, 2006

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