Document:

Exhibit 10.4

                               TERM LOAN AGREEMENT

      TERM LOAN AGREEMENT (this "Agreement") dated as of September 23, 2005
among FBO Air, Inc., a Nevada corporation (the "Borrower"), Airborne, Inc., a
New York corporation (the "Guarantor"), and Airport Capital, LLC, a New York
limited liability company (the "Lender").

                              W I T N E S S E T H :

      WHEREAS, the Borrower has requested that the Lender make a loan (the
"Loan") to the Borrower in a single advance on the Closing Date (as hereinafter
defined) in the aggregate principal amount of One Million Five Hundred Thousand
Dollars ($1,500,000), the proceeds of which will be used to finance the
acquisition of all of the capital stock of the Guarantor;

      WHEREAS, in consideration for the Lender making the Loan to the Borrower,
the Guarantor has agreed to guarantee full and prompt payment of all obligations
of the Borrower to the Lender which are incurred by the Borrower pursuant to
this Agreement and the other Credit Documents (as hereinafter defined);

      WHEREAS, in consideration for the Lender making the Loan to the Borrower,
the Guarantor has agreed to secure the payment and performance of all
obligations of the Borrower and the Guarantor under the Credit Documents (the
"Obligations") with the Collateral (as hereinafter defined); and

      WHEREAS, the Lender is willing to make the Loan subject to the terms and
conditions of this Agreement.

      NOW THEREFORE, in consideration of the covenants and promises herein
contained, the parties agree as follows:

                       ARTICLE I: AGREEMENT FOR THE LOAN

      Section 1.1 Loan. Subject to the terms and conditions of this Agreement,
the Lender agrees to make the Loan to the Borrower in a single advance on the
Closing Date (as hereinafter defined) in the principal amount of One Million
Five Hundred Thousand Dollars ($1,500,000), and the Borrower agrees to borrow
the same from the Lender.

                          ARTICLE II: FINANCING TERMS

      Section 2.1 Term. The Loan shall be evidenced by a Promissory Note in the
form of Exhibit A hereto (the "Note") delivered by the Borrower to the Lender in
the aggregate principal amount of the Loan. The term of the Loan shall be from
the Closing Date to the date that is one hundred eighty (180) days from the
Closing Date (the "Initial Maturity Date"), at which time all Obligations shall
be due and payable in full; provided, however, that the Borrower may extend the
term of the Loan until the one (1)-year anniversary of the date hereof (the
"Final Maturity Date") by delivering, prior to the Initial Maturity Date,
written notice to the Lender of its election to extend the term of the Loan
until such date (the period from the Initial Maturity Date until the Final
Maturity Date is referred to herein as the "Extension Period"). The term
"Maturity Date" shall mean the Initial Maturity Date unless and until the term
of the Loans is extended as provided in this Section 2.1 whereupon such term
shall mean the "Final Maturity Date".

                                      E-96
<PAGE>

      Section 2.2 Borrowings. The Lender is hereby authorized and directed by
the Borrower to disburse the Loan to be made by it directly to such account as
the Borrower may direct by written notice delivered to the Lender by Borrower at
least one (1) business day before the Closing Date.

      Section 2.3 Note. On the Closing Date, the Borrower shall execute and
deliver to the Lender the Note, dated as of the Closing Date, in the aggregate
principal amount of the Loan, which shall evidence such Loan.

      Section 2.4 Interest; Rate and Payment. From the date hereof until the
Initial Maturity Date, the principal balance of the Loan outstanding at any time
shall bear interest at a rate per annum equal to 4.25% (the "Initial Loan
Rate"). From the Initial Maturity Date until the expiration of the Extension
Period, the principal balance of the Loan outstanding at any time shall bear
interest at a rate per annum equal to 9.25% (the "Extension Loan Rate"). All
computations of interest shall be made on the basis of year of 365 or 366 days,
as the case may be, and actual days elapsed. The term "Loan Rate" shall mean the
Initial Loan Rate unless and until the term of the Loan is extended as provided
in Section 2.1 whereupon such term shall mean the "Extension Loan Rate".

      Section 2.5 Payments.

      (a) Interest. Interest on the Loan shall be paid in arrears on the last
business day of each calendar month.

      (b) Repayment. The Borrower shall repay the Lender in full on the Maturity
Date the aggregate principal amount of the Loan outstanding on such date,
together with all accrued and unpaid interest thereon.

      (c) Prepayment. The Borrower may, upon at least one (1) business day's
prior written notice to the Lender, at any time or from time to time, (i) prepay
the Note in its entirety, together with any accrued but unpaid interest
outstanding or (ii) partially prepay the Note, together with any accrued but
unpaid interest outstanding on the amount of such principal paid, in each case,
without premium or penalty.

      (c) Manner and Time of Payment. All payments by the Borrower of principal,
interest and fees hereunder shall be made without defense, set off or
counterclaim, and in same day funds and delivered to the Lender not later than
5:00 p.m. (New York City time) on the date due at the address indicated for the
Lender in Section 9.1 hereto for the account of the Lender. Funds received by
the Lender after that time shall be deemed to have been paid by the Borrower on
the next succeeding business day.

                                      E-97
<PAGE>

      (d) Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Loan shall be stated to be due on a day which is not a
business day, the payment shall be made on the next succeeding business day and
such extension of time shall be included in the computation of the payment of
interest hereunder.

      Section 2.6 Interest Rate after Default. Notwithstanding any other
provision of this Agreement, upon the occurrence and during the continuance of
any Event of Default (as hereinafter defined), any amounts due and owing under
this Agreement shall bear interest at a rate equal to 2% per annum above the
Loan Rate.

      Section 2.7 Net Payments. All payments of any kind due to the Lender from
the Borrower pursuant to this Agreement shall be made in the full face amount
thereof, without setoff, counterclaim, or other defense. All such payments will
be free and clear of, and without deduction or withholding for, any present or
future taxes.

      Section 2.8 Evidence of Indebtedness. The Loan and the Borrower's
obligation to repay the Loan with interest in accordance with the terms of this
Agreement shall be evidenced by this Agreement, the records of the Lender and
the Note. The record of the Lender shall be prima facie evidence of the Loan and
accrued interest thereon and of all payments made in respect thereof.

                       ARTICLE III: SECURITY FOR THE LOAN

      Section 3.1 Security Interest. At all times during the term hereof and
until all sums owing pursuant hereto are paid in full, the Obligations shall be
secured as provided in the Guarantor Security Agreement dated as of the Closing
Date of the Guarantor in favor of the Lender in the form of Exhibit B hereto
(the "Security Agreement") with respect to the Collateral. The Security
Agreement, the Code financing statements in connection with the Security
Agreement and any and all other documents executed and delivered by the Borrower
or the Guarantor under which the Lender is granted a lien on assets of the
Guarantor are collectively referred to as "Security Documents". This Agreement,
the Notes, the Security Documents and all other documents executed in connection
herewith or therewith are collectively referred to herein as the "Credit
Documents." It is the express intention of the Borrower and the Guarantor that
the Lender be treated in all respects as a secured lender in any bankruptcy case
or similar insolvency proceeding of the Borrower or the Guarantor and that the
Lender be treated as a secured creditor for all purposes, including without
limitation, under Section 506 of the United States Bankruptcy Code, 11 U.S.C.
Section 101 et seq. (the "Bankruptcy Code"), with a valid Lien (as hereinafter
defined) in all of the Collateral and the proceeds thereof.

          ARTICLE IV: REPRESENTATIONS, WARRANTIES AND INDEMNIFICATIONS

      In order to induce the Lender to enter into this Agreement and to make the
Loan, each of the Borrower and the Guarantor makes the representations,
warranties, and indemnifications hereinafter set forth in this Article IV.

                                      E-98
<PAGE>

      Section 4.1 Indemnity. The Borrower and the Guarantor shall jointly and
severally indemnify the Lender and each of its Affiliates (as defined below) and
any of their respective officers, directors, mangers, employees and
representatives, and hold the Lender and each of its Affiliates and any of their
respective officers, directors, managers, employees and representatives harmless
from any loss, cost or expense whatsoever arising from the breach of any of the
Borrower's or the Guarantor's covenants or other obligations set forth in this
Agreement or any other Credit Document. The Borrower's and the Guarantor's
obligations under this Section 4.1 shall survive the repayment of the Loan and
the Note. "Affiliates" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, a Person (a "Controlled
Entity") shall be deemed to be "controlled by" another Person (a "Controlling
Entity") if the Controlling Entity possesses, directly or indirectly, power to
direct or cause the direction of the management and policies of the Controlled
Entity whether by contract or otherwise. "Person" shall mean any individual,
sole proprietorship, partnership, limited liability partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, entity or government (whether
Federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof), and shall
include such Person's successors and assigns.

      Section 4.2 Status and Authority. Each of the Borrower and the Guarantor
is a corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect on the
financial condition, operations, business, properties, assets or prospects of
the Borrower and the Guarantor taken as a whole. Each of the Borrower and the
Guarantor has the power to execute, deliver and carry out the terms and
provisions of each of the Credit Documents to which the Borrower or the
Guarantor, respectively, is a party and has taken all necessary action to
authorize the execution of the Credit Documents to which the Borrower or such
Guarantor, respectively, is a party. The Credit Documents to which the Borrower
or the Guarantor is a party (a) have been duly executed and delivered by such
party and constitute the legal, valid, and binding obligations of the Borrower
and the Guarantor, enforceable in accordance with their respective terms, except
to the extent that enforcement may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and subject to the application or limitation of
equitable principles by a court of competent jurisdiction and (ii) do not (A)
contravene the charter or bylaws of either of the Borrower or the Guarantor, (B)
violate any law (including, without limitation, the Securities Exchange Act of
1934) or regulation (including, without limitation, Regulations T, U or X of the
Board of Governors of the Federal Reserve System), or any order or decree of any
court or Governmental Authority (as defined below), (C) conflict with or result
in a breach of, or constitute a default under, any material agreement or other
instrument binding on the Borrower or the Guarantor or any of its properties, or
(D) result in or require the creation or imposition of any Lien (as hereinafter
defined) upon any of the property of any of the Borrower or the Guarantor other
than the Liens granted pursuant to this Agreement or the other Credit Documents.
"Governmental Authority" means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

                                      E-99
<PAGE>

      Section 4.3 Receivables. All accounts receivable of the Guarantor
represent valid obligations arising from sales actually made, services actually
performed, or value actually given. Such accounts receivable are subject to no
contest, claim or right of setoff other than returns and credits in the ordinary
course of business consistent with past practice. All accounts receivable are
collectable in full without any set-off within 75-90 days after the Closing
Date.

      Section 4.4 Solvency. On and as of the Closing Date, after giving effect
to the transactions contemplated hereby, (a) the assets of the Borrower will
exceed its debts and liabilities, subordinated, contingent or otherwise and (b)
the Borrower and the Guarantor will be able to pay their respective debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured.

                        ARTICLE V: CONDITIONS TO CLOSING

      In addition to the terms and conditions otherwise contained herein, the
making of the Loan is subject to the satisfaction of the conditions contained in
this Article V. The date on which the conditions are satisfied and the initial
advance of the Loan is made is hereinafter referred to as the "Closing Date".

      Section 5.1 No Default. The Borrower and the Guarantor shall not be in
default of: (a) any Credit Document or (b) any other agreement, loan or
otherwise, between the Borrower or the Guarantor, on the one hand, and the
Lender, on the other hand.

      Section 5.2 Representations and Warranties. The representations and
warranties contained in the Credit Documents shall be true and correct.

      Section 5.3 Delivery of Documents. The Borrower and the Guarantor shall
have delivered or caused to be delivered to the Lender the following documents:

            (a)   a duly executed copy of this Agreement;

            (b)   a duly executed copy of the Security Document;

            (c)   the Promissory Note to the Lender in the form of Exhibit A
                  attached hereto, duly executed by Borrower in the aggregate
                  principal amount of the Loan to the Borrower;

            (d)   UCC financing statements and such other items as shall be
                  required by the Lender to evidence the perfection of the
                  security interests created under the Security Documents; and

            (e)   all other documents or information as shall be reasonably
                  requested by the Lender.

                                     E-100
<PAGE>

      Section 5.4 Payment of Expenses. The Borrower shall have paid to the
Lender, in accordance with Section 9.7, all of the Lender's costs and expenses
(including fees and disbursements of legal counsel) as to which it shall have
received invoices.

                         ARTICLE VI: NEGATIVE COVENANTS

      Until the principal of and interest on the Loans and all other Obligations
shall have been paid in full, each of the Borrower and the Guarantor covenants
and agrees with the Lender that:

      Section 6.1 Indebtedness; Certain Equity Securities. The Borrower and the
Guarantor will not, without the Lender's consent, create, incur, assume or
permit to exist any Indebtedness, except:

            (a)   Senior Debt;

            (b)   Indebtedness permitted under the Senior Secured Notes;

            (c)   Indebtedness created under the Credit Documents; and

            (d)   Indebtedness existing on the date hereof, and extensions,
                  renewals and replacements of any such Indebtedness that do not
                  increase the outstanding principal amount thereof or accrued
                  interest thereon or result in an earlier maturity date or
                  decreased weighted average life thereof.

      Section 6.2 Liens. The Borrower and the Guarantor will not, without the
Lender's consent, create, incur, assume or permit to exist any Lien (as defined
below) on any property or asset now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:

            (a)   Liens securing the Senior Debt;

            (b)   Liens permitted under the Senior Secured Notes;

            (c)   Liens created under the Credit Documents; and

            (d)   Liens on property or assets of the Borrower and the Guarantor
                  existing on the date hereof, provided, however, that such
                  Liens shall secure only those obligations which they secure on
                  the date hereof;

      "Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.

                                     E-101
<PAGE>

      Section 6.3 Ratio. Anything contained in this Agreement to the contrary
notwithstanding, it is expressly understood and agreed that at all times the
outstanding principal amount of the Loan shall not be more than seventy five
percent (75%) (the "Maximum Percentage") of the amount (as determined by the
Lender in good faith) of the Guarantor's Eligible Accounts. The Borrower agrees
that, if for any reason, in the Lender's reasonable discretion, the outstanding
principal amount of the Loan exceeds the Maximum Percentage of the Eligible
Accounts, the Borrower will, within ten (10) days after written request by the
Lender, repay to the Lender the amount by which the outstanding principal amount
of the Loan exceeds the Maximum Percentage of the Eligible Accounts.

      The Borrower shall deliver to the Lender as frequently as the Lender may
reasonably request and in any event on the last business day of each calendar
month a certificate (the "Certificate") that sets forth as of the last business
day of such month the amount of Eligible Accounts, certified as true and correct
by the President of the Borrower or such other officer as is acceptable to the
Lender.

      Compliance by the Borrower with the Minimum Percentage shall be determined
by the Lender (including the eligibility of Accounts) based on the most recent
Certificate delivered to the Lender and such other information available to the
Lender.

      "Account Debtor" shall mean any Person who is or may become obligated with
respect to, or on account of, an Account.

      "Accounts" shall mean all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by any Person, including: (i) all accounts
receivable, other receivables, book debts and other forms of obligations,
whether arising out of goods sold or services rendered or from any other
transaction (including any such obligations which may be characterized as an
account or contract right under the Code); (ii) all of such Person's rights in,
to and under all purchase orders or receipts for goods or services; (iii) all of
such Person's rights to any goods represented by any of the foregoing (including
unpaid sellers' rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods); (iv) all moneys
due or to become due to such Person under all purchase orders and contracts for
the sale of goods or the performance of services or both by such Person or in
connection with any other transaction (whether or not yet earned by performance
on the part of such Person), including the right to receive the proceeds of said
purchase orders and contracts; and (v) all collateral security and guarantees of
any kind given by any other Person with respect to any of the foregoing.

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

                                     E-102
<PAGE>

      "Eligible Accounts" shall mean as at the date of determination with
respect to the Guarantor, all Accounts of the Guarantor, except any Account: (a)
that does not arise from the sale of goods or services by the Guarantor in the
ordinary course of the Guarantor's business; (b) upon which (i) the Guarantor's
right to receive payment is not absolute or is contingent upon the fulfillment
of any condition whatsoever or (ii) the Guarantor is not able to bring suit or
otherwise enforce its remedies against the Account Debtor through judicial
process; (c) against which any defense, counterclaim or setoff, whether
well-founded or otherwise, is asserted or which is a "contra" Account; (d) that
is not a true and correct statement of a bona fide indebtedness incurred in the
amount of the Account for merchandise sold or services performed and accepted by
the Account Debtor obligated upon such Account; (e) with respect to which an
invoice, acceptable to the Lender in form and substance, has not been sent; (f)
that is not owned by the Guarantor or is subject to any right, claim, or
interest of another Person, other than the Lien in favor of the Lender; (g) that
arises from a sale to, or performance of services for, an employee or Affiliate
of the Guarantor, or an entity which has common officers or directors with the
Guarantor; (h) that is the obligation of an Account Debtor that is the Federal
(or local) government or a political subdivision thereof, unless the Lender has
agreed to the contrary in writing and the Guarantor has complied with the
Federal Assignment of Claims Act of 1940 (or the state equivalent thereof, if
any) with respect to such obligation; (i) that is the obligation of an Account
Debtor located in a foreign country unless such Account is supported by a letter
of credit in which the Lender has a first priority perfected security interest
or credit insurance acceptable to the Lender (and naming the Lender as loss
payee); (j) that is the obligation of an Account Debtor to whom the Guarantor is
or may become liable for goods sold or services rendered by the Account Debtor
to the Guarantor, to the extent of the Guarantor's liability to such Account
Debtor; (k) that arises with respect to goods which are delivered on a
cash-on-delivery basis or placed on consignment, guaranteed sale or other terms
by reason of which the payment by the Account Debtor may be conditional; (l)
that is not paid within 90 days from its invoice date; (m) is an obligation of
an Account Debtor that has suspended business, made a general assignment for the
benefit of creditors, is unable to pay its debts as they become due or as to
which a petition has been filed (voluntary or involuntary) under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors; (n)
that arises from any bill-and-hold or other sale of goods which remain in the
Guarantor's possession or under the Guarantor's control; (o) as to which
Lender's interest therein is not a first priority perfected security interest;
(p) to the extent that such Account exceeds any credit limit established by the
Lender in the Lender's sole discretion; (s) as to which any of the Guarantor's
representations or warranties pertaining to Accounts are untrue; (t) that
represents interest payments, late or finance charges, or service charges owing
to the Guarantor; (u) that are a poor credit; or (v) that is not otherwise
acceptable in the good faith discretion of the Lender, provided, that the Lender
shall have the right to create and adjust eligibility standards and related
reserves from time to time in its good faith credit judgment.

                    ARTICLE VII: EVENTS OF DEFAULT; REMEDIES

      Section 7.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" under this Agreement:

            (a)   default by the Borrower in the payment when due of any
                  principal under the Loan or under the Note;

            (b)   default by the Borrower in the payment when due of any
                  interest accrued under the Loan or under the Note;

                                     E-103
<PAGE>

            (c)   default by the Borrower in the payment of any other amounts
                  payable under this Agreement or default by the Borrower or the
                  Guarantor of any other terms or provisions of this Agreement
                  or any other Credit Document not otherwise referred to in this
                  Section 7.1, and such default shall continue for a period of
                  thirty (30) days after the Borrower or such Guarantor have
                  been notified in writing of such default;

            (d)   any Security Document or any portion thereof granted to the
                  Lender shall cease to be in full force and effect or shall
                  cease to give to the Lender the rights and interests purported
                  to be created thereunder;

            (e)   the Borrower or the Guarantor fails or becomes unable
                  generally to pay its debts as they come due, makes a general
                  assignment of a material portion of its assets for the benefit
                  of creditors, has a compulsory winding up order made against
                  it or resolves to be wound up voluntarily, files a petition in
                  bankruptcy or for relief under any bankruptcy or insolvency
                  law, is adjudicated insolvent or bankrupt, petitions or
                  applies to any tribunal for any receiver of or any trustee for
                  such company or any substantial part of its property,
                  commences any proceeding relating to such company under any
                  reorganization, arrangement, readjustment of debt, dissolution
                  or liquidation law or statute of any jurisdiction whether now
                  or hereafter in effect, or if there is commenced against the
                  Borrower or the Guarantor any such proceeding by any act,
                  indicates its consent to, approval of, or acquiescence in any
                  such proceeding or the appointment of any such receivership or
                  trusteeship;

            (f)   any representation, warranty or statement made by the Borrower
                  or the Guarantor in this Agreement or any other Credit
                  Document or any notice or other document, certificate or
                  statement delivered by the Borrower pursuant or the Guarantor
                  hereto or in connection herewith is or proves to have been
                  incorrect or misleading when made and, in the reasonable
                  opinion of the Lender, the Borrower's or the Guarantor's
                  ability to perform its obligations under any Credit Document
                  is or will be materially and adversely affected as a result
                  thereof; or

            (g)   there shall occur in the reasonable opinion of the Lender any
                  Material Adverse Effect;

then, upon the happening of any of the foregoing Events of Default, the Note and
all amounts under this Agreement shall become and be immediately due and payable
and the Lender shall be entitled to all other remedies available at law. The
Borrower expressly waives any presentment, demand, protest or other notice of
any kind.

                                     E-104
<PAGE>

                             ARTICLE VIII: GUARANTY

      Section 8.1 Guaranty. The Guarantor unconditionally and irrevocably
guarantees to the Lender the due and punctual payment by, and performance of,
the Obligations (including interest accruing on and after the filing of any
petition in bankruptcy or of reorganization of the obligor whether or not post
filing interest is allowed in such proceeding). The Guarantor further agrees
that the Obligations may be increased, extended or renewed, in whole or in part,
without notice or further assent from it (except as may be otherwise required
herein), and it will remain bound upon this Guaranty notwithstanding any
extension or renewal of any Obligation.

      Section 8.2 Waivers. The Guarantor waives presentation to, demand for
payment from and protest to, as the case may be, the Borrower or the Guarantor
and also waives notice of protest for nonpayment, notice of acceleration and
notice of intent to accelerate.

      Section 8.3 No Impairment of Guaranty, etc. The Guarantor's obligations
under the guaranty shall not be affected by the genuineness, validity,
regularity or enforceability of the Obligations, or any instrument evidencing
the Obligations, or by the existence, validity, enforceability, perfection, or
extent of any Lien on or security interest in any Collateral securing the
Obligations or by any other circumstance relating to the Obligations which might
otherwise constitute a defense to this Guaranty.

                      ARTICLE IX: MISCELLANEOUS PROVISIONS

      Section 9.1 Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service against receipt, mailed by certified or registered mail, return receipt
requested, or sent by confirmed telecopy, as follows:

            (a)   if to the Borrower or the Guarantor:

                  FBO Air, Inc
                  101 Hangar Road
                  Wilkes Barre/Scranton International Airport
                  Avoca, Pennsylvania 18641
                  Facsimile No.: (570) 414-1420
                  Attention:  Ronald J. Ricciardi, President

                  With a copy to:

                  Wachtel & Masyr, LLP
                  110 East 59th Street
                  New York, New York 10022
                  Facsimile No.: (212) 371-0320
                  Attention:  Robert W. Berend, Esq.; and

                                     E-105
<PAGE>

            (b)   if to the Lender, to

                  Airport Capital, LLC
                  c/o Wachtel & Masyr, LLP
                  110 East 59th Street New York, New York
                  10022 Facsimile No.: (212) 909-9425
                  Attention:  William B. Wachtel, Esq.

                  With a copy to:

                  Mr. Alvin S. Trenk 350 East 79th Street Apartment 38C
                  New York, New York 10021 Facsimile No.: (212)

      Section 9.2 Governing Law. This Agreement and the rights and obligations
of the parties hereunder shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to conflict of law
principles which might indicate the applicability of the laws of any other
State.

      Section 9.3 Severability. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under any applicable law of any jurisdiction,
such provision shall, as to such jurisdiction, be inapplicable and deemed
omitted to the extent so contrary, prohibited, or invalid, without invalidating
the remainder hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.

      Section 9.4 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument, and all signatures need
not appear on any one counterpart.

      Section 9.5 Benefit of Agreement. Except as otherwise provided in Section
2.9, this Agreement shall be binding upon, and shall inure to the benefit of,
and be enforceable by the parties and their respective successors and permitted
assigns; provided, however, that the Borrower and the Guarantor shall not assign
or transfer any interest or delegate any duty hereunder without the prior
written consent of the Lender. The Lender shall have the absolute right to
assign or transfer any interest herein or in the other Credit Documents,
including, without limitation, the right to sell participation interests in the
Loan.

      Section 9.6 Further Documentation. The parties hereto agree that, from
time to time after the Closing Date, the Borrower and the Guarantor shall
execute and deliver to the Lender such further document or documents as the
Lender may reasonably request and which is or are necessary or desirable in
order to confirm or further evidence the respective obligations of the Borrower
and the Guarantor and/or the rights and privileges of the Lender under this
Agreement or the other Credit Documents, or carry out the intent of the parties
under this Agreement or the other Credit Documents.

                                     E-106
<PAGE>

      Section 9.7 Expenses. The Borrower shall, on demand, pay or reimburse the
Lender for all of the Lender's costs and expenses (including fees and
disbursements of legal counsel) incurred, and all payments made, and indemnify
and hold the Lender harmless from and against all losses suffered by the Lender
in connection with, arising out of, or in any way related to (i) the
preparation, execution, delivery and administration of this Agreement and the
other Credit Documents, and protecting, preserving, exercising or enforcing any
of the rights of the Lender under this Agreement or the other Credit Documents,
including without limitation, in connection with any amendments hereto or
thereto and (ii) any claim (whether asserted by the Lender, the Borrower or the
Guarantor or any other Person) and the prosecution or defense thereof, in any
way arising under, related to, or connected with, this Agreement or the other
Credit Documents or the relationship established hereunder; provided, further,
in the event that any suit is brought by either party in connection with this
Section 9.7, the prevailing party shall be entitled to reimbursement for all
reasonable costs incurred, including reasonable attorneys' fees. The Borrower's
and Guarantor' obligations under this Section 9.7 shall survive the repayment of
the Loan and the Note.

      Section 9.8 Waivers; Amendments. Any term, covenant, agreement or
condition of this Agreement or the other Credit Documents may be amended or
waived, and any departure therefrom may be consented to, if, but only if, such
amendment, waiver or consent is in writing and is signed by the Lender and, in
the case of an amendment, by the Borrower and the Guarantor. Unless otherwise
specified in such waiver or consent, a waiver or consent given hereunder shall
be effective only in the specific instance and for the specific purpose for
which given.

      Section 9.9 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Lender, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

      Section 9.10 Set-Off. Upon and after the occurrence of any Event of
Default, each of the Lender and its Affiliates is hereby authorized by the
Borrower and the Guarantor, at any time and from time to time, without notice,
(a) to set off against, and to appropriate and apply to the payment of, the
obligations and liabilities of the Borrower and the Guarantor under this
Agreement and the other Credit Documents (whether matured or unmatured, fixed or
contingent or liquidated or unliquidated) any and all amounts owing by the
Lender or any such Affiliate to the Borrower or the Guarantor (whether payable
in United States Dollars or any other currency, whether matured or unmatured,
and, in the case of deposits, whether general or special, time or demand and
however evidenced) and (b) pending any such action, to the extent necessary, to
hold such amounts as collateral to secure such obligations and liabilities.

      Section 9.11 Limitation of Liability. No claim may be made by the Borrower
or the Guarantor against the Lender or its Affiliates, directors, managers,
officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any breach or wrongful conduct
(whether the claim therefor is based on contract, tort or duty imposed by law)
in connection with, arising out of, or in any way related to, the transactions
contemplated and relationships established by this Agreement or the other Credit
Documents, or any act, omission or event occurring in connection therewith
(unless such claims result from the gross negligence or willful misconduct of
the Lender); and the Borrower and the Guarantor hereby waives, releases and
agrees not to sue upon any such claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.

                                     E-107
<PAGE>

      Section 9.12 Entire Agreement. This Agreement and the other Credit
Documents embody the entire agreement among Borrower, the Guarantor and the
Lender and supersede all prior agreements, representations and understandings,
if any, relating to the subject matter hereof.

      Section 9.13 Currency. The payment obligations of the Borrower and the
Guarantor under this Agreement and the other Credit Documents shall not be
discharged by an amount paid in currency other than United States Dollars,
whether pursuant to a judgment or otherwise. To the extent that the amount so
paid on prompt conversion to United States Dollars and transfer to the specified
place of payment under normal banking procedures does not yield the amount of
United States Dollars in such place due under this Agreement and the other
Credit Documents, the Borrower and the Guarantor shall jointly and severally
indemnify the Lender and each of its Affiliates and any of their respective
officers, directors, managers, employees and representatives and any obligee
against any such shortfall. In the event that any payment, whether pursuant to a
judgment or otherwise, upon conversion and transfer does not result in the
payment of such amount of United States Dollars in the specified place of
payment, the obligee of such payment shall have a claim against the Borrower and
the Guarantor for the additional amount necessary to yield the amount due and
owing under this Agreement and the other Credit Documents and is a separate
cause of action.
                            (Signature Page Follows)

                                     E-108
<PAGE>

      IN WITNESS WHEREOF, the authorized representatives of the parties have
executed this agreement as of the date first written above.

                                 BORROWER:
                                 ---------

                                 FBO AIR, INC.

                                 By:/s/ Ronald J. Ricciardi
                                   --------------------------------------------
                                   Name:  Ronald J. Ricciardi
                                   Title: President and Chief Executive Officer

                                 GUARANTOR:
                                 ----------

                                 AIRBORNE, INC.

                                 By:/s/ Ronald J. Ricciardi
                                   --------------------------------------------
                                   Name:  Ronald J. Ricciardi
                                   Title: Chairman

                                 LENDER:
                                 -------

                                 AIRPORT CAPITAL, LLC

                                 By:/s/ William B. Wachtel
                                   --------------------------------------------
                                   Name:  William B. Wachtel
                                   Title: Manager

                                     E-109
<PAGE>

                                    EXHIBIT A

                                 PROMISSORY NOTE

$1,500,000 (U.S.)                                             New York, New York
                                                              September 23, 2005

      The undersigned, FBO AIR, INC., a Nevada corporation, having its
headquarters at 101 Hangar Road, Wilkes-Barre/Scranton International Airport,
Avoca, Pennsylvania 18641 ("Maker") for value received hereby promises to pay to
the order of Airport Capital, LLC, a New York limited liability company
("Payee"), the principal sum of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
(US$1,500,000) pursuant to the Term Loan Agreement dated as of September 23,
2005 (the "Loan Agreement") among Maker, the Guarantor and Payee, together with
interest thereon, as hereinafter set forth. All payments hereunder shall be made
in currency of the United States of America.

      The principal balance outstanding at any time shall bear interest at the
Loan Rate (as defined in the Loan Agreement). The Loan Rate shall be computed on
a daily basis and interest shall be calculated based on a year of 365 or 366
days, as the case may be, and actual days elapsed.

      The aggregate principal amount hereof, together with all accrued and
unpaid interest hereon, shall be payable in full on the Maturity Date. Borrower
may (i) prepay the Note in its entirety, together with any accrued but unpaid
interest outstanding or (ii) partially prepay the Note, together with any
accrued but unpaid interest outstanding on the amount of such principal paid.
Interest on this Notes shall be paid in arrears on the last business day of each
calendar month.

      This Note is the Note referred to in the Loan Agreement and is entitled to
the benefits of and is secured by the security interest in the Collateral (as
defined in the Loan Agreement).

      Maker shall pay all costs of collection, including, without limitation,
legal expenses and attorneys' fees, paid or incurred by Payee in collecting and
enforcing this Note after the occurrence of a default hereunder.

      If default is made in the punctual payment of principal or interest, or
the transaction fees specified in the Loan Agreement, or if Maker breaches any
provision of the Loan Agreement, and fails to cure such default or breach within
any applicable grace period, this Note shall, at Payee's option, become
immediately due and payable upon Payee having given Maker notice of such
acceleration, and, so long as such default is continuing, shall bear interest at
the rate specified in Section 2.6 of the Loan Agreement.

                                     E-110
<PAGE>

      Except for the notice described in the immediately preceding paragraph,
Maker and every endorser of this Note expressly waive presentment, protest,
demand, notice of dishonor or default, and notice of any kind with respect to
this Note or the performance of the obligations under this Note or any guaranty
of this Note. No renewal or extension of this Note, no release or surrender of
any security for this Note or any guaranty of this Note, no release of any
person primarily or secondarily liable on this Note, including Maker and any
endorser or guarantor, no delay in the enforcement of payment of this Note, and
no delay or omission in exercising any right or power under this Note shall
affect the liability of Maker or any endorser of this Note.

      At any time, any deposit credited by Payee for the account of Maker, and
any indebtedness due from Payee to Maker, may be set off against and applied in
payment of any obligations of Maker hereunder, if due, and such deposits or
other indebtedness may at all times be held and treated as collateral security
for payment of such obligations.

      No delay or omission by Payee in exercising any power or right hereunder
shall impair such right or power or be construed to be a waiver of any default,
nor shall any single or partial exercise of any power or right hereunder
preclude the full exercise thereof or the exercise of any other power or right.
The provisions of this Note may be waived or amended only in a writing signed by
Maker and Payee.

      Every legal holder of this Note shall have and may exercise all of the
rights and powers given to Payee in this Note.

      This Note shall be governed by and construed in accordance with the laws
of the State of New York.

      IN WITNESS WHEREOF, Maker has executed this Promissory Note as of the date
set forth above.

                                 MAKER:

                                 FBO AIR, INC.

                                 By:
                                    --------------------------------------------
                                    Name:  Ronald J. Ricciardi
                                    Title: President and Chief Executive Officer

                                     E-111
<PAGE>

                               [Last Page of Note]

                                           Unpaid     Name of
                           Payments       Principal   Person
                           --------        Balance    Making
Date  Amount of Loan  Principal  Interest  of Note   Notation
----  --------------  ---------  --------  -------   --------

                                     E-112
<PAGE>

                                    EXHIBIT B

                               SECURITY AGREEMENT

      SECURITY AGREEMENT dated as of September 23, 2005 (as amended,
supplemented or otherwise modified, renewed or replaced from time to time, the
"Security Agreement") between AIRBORNE, INC., a New York corporation (the
"Grantor"), and Airport Capital LLC, a New York limited liability company (the
"Secured Party").

                             Introductory Statement

      Reference is hereby made to the Term Loan Agreement dated as of September
23, 2005 among FBO Air, Inc., as Borrower (the "Borrower"), the Grantor and the
Secured Party, as Lender (as the same may be amended, supplemented or otherwise
modified, renewed or replaced from time to time, the "Loan Agreement"). All
terms used but not otherwise defined herein have the meanings assigned to them
in the Loan Agreement.

      To provide security to the Secured Party for the obligations of the
Grantor under the Loan Agreement, the Grantor desires to grant to the Secured
Party a security interest in the Collateral pursuant to the terms hereof.

      Accordingly, the parties hereto agree as follows:

      SECTION 1. Definitions. When used in this Security Agreement:

      "Account Debtor" means any Person who is obligated or indebted to the
Grantor with respect to any Account.

      "Accounts" means all accounts, as defined in the UCC, now owned or
hereafter acquired by the Grantor, including, without limitation, all of the
Grantor' rights to payment for goods sold or leased or services performed by the
Grantor, whether now in existence or arising from time to time hereafter,
including without limitation, rights evidenced by an account, note, contract,
security agreement, chattel paper, or other evidence of indebtedness or
security, together with (i) all security pledged, assigned, hypothecated or
granted to or held by the Grantor to secure the forgoing, (ii) all guarantees,
endorsements, and indemnifications on, or of, any of the foregoing, (iii) all
powers of attorney for the execution of any indebtedness or security or other
writing in connection therewith, (iv) all books, records, ledger cards and
invoices relating thereto, (v) all evidences of filing of financing statements
and other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (vi) all credit
information, reports and memoranda relating thereto and (vii) all other writings
in any way related to the foregoing.

      "Applicable Law" shall mean all provisions of statutes, rules, regulations
and orders of the United States, any state thereof or municipality therein or of
any foreign governmental body or of any regulatory agency applicable to the
Person in question, and all orders and decrees of all courts and arbitrators in
proceedings or actions in which the Person in question is a party.

                                     E-113
<PAGE>

      "Borrower" has the meaning given to such term in the Introductory
Statement to this Security Agreement.

      "Collateral" means each of the following types or items of personal
property of the Grantor, whether now owned or hereafter acquired, wherever
located: (i) all Accounts, (ii) all Deposit Accounts, (iii) all monies now or at
any time or times hereafter in the possession or under the control of the
Grantor or the Secured Party, and (iv) all products and Proceeds of the property
described in clauses (i) through (iii) above.

      "Credit Documents" has the meaning given to such term in the Loan
Agreement.

      "Deposit Account" has the meaning given to such term under Article 9 of
the UCC.

      "Event of Default" means the occurrence of an Event of Default (as defined
in the Loan Agreement).

      "Governmental Authority" has the meaning given to such term in the Loan
Agreement.

      "Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any lease in the nature of security,
and the filing of, or agreement to give, any financing statement under the UCC
or the Uniform Commercial Code or other Applicable Law of any jurisdiction).

      "Loan" has the meaning given to such term in the Introductory Statement to
this Security Agreement.

      "Loan Agreement" has the meaning given to such term in the Introductory
Statement to this Security Agreement.

      "Obligations" means all indebtedness, liabilities and other obligations of
the Borrower and the Grantor under the Loan Agreement and the other Credit
Documents, each whether now existing or hereafter arising, direct or indirect,
secured or unsecured, joint or several, absolute or contingent, due or to become
due, acquired outright, conditionally or as collateral security from another,
contractual or tortious, liquidated or unliquidated, arising by operation of law
or otherwise, and of all agreements, documents and instruments evidencing any of
the foregoing or under which any of the foregoing may have been issued, created,
assumed or guaranteed. The term "Obligations" includes, without limitation, the
obligations to pay principal, breakage costs, interest (including, without
limitation, interest accruing after the commencement of any bankruptcy,
insolvency, reorganization, or similar proceedings with regard to the Borrower
or the Grantor, whether or not determined to be an allowed claim in any such
proceeding), charges, costs, expenses and fees including, without limitation,
the disbursements and reasonable fees of counsel to the Secured Party and all
renewals extensions, restructurings, refinancings or refundings thereof in a
nature of a "workout" or otherwise.

                                     E-114
<PAGE>

      "Person" means any natural person, corporation, division of a corporation,
limited liability company, partnership, trust, joint venture, association,
company, estate, unincorporated organization or government or any agency or
political subdivision thereof.

      "Proceeds" has the meaning given to such term under Article 9 of the UCC
and shall include, but not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Collateral, (ii)
any or all payments made or due and payable to the Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral and (iii) any and all other
amounts paid or payable from time to time under or in connection with the
Collateral.

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

      Terms not otherwise defined herein or in the Loan Agreement shall have,
where appropriate, their respective definitions as set forth in the UCC.

      SECTION 2. Grant of Security Interest. As security for the payment and
performance when due of the Obligations, the Grantor hereby grants to the
Secured Party a security interest in, and Lien on, all of its right, title and
interest in and to all of the Collateral.

      SECTION 3. The Secured Party's Rights Exclusive of an Event of Default.
The Grantor hereby agrees to permit representatives of the Secured Party, upon
reasonable notice to such Grantor and during normal business hours, to access
its records in connection with the Collateral at such reasonable times and as
often as may be reasonably requested by the Secured Party. The Secured Party,
from time to time and at its option, may take any other action which the Secured
Party reasonably deems necessary for the maintenance or preservation of any of
the Collateral or its interests therein. The Secured Party shall have the right
to designate any officer, employee or attorney to execute, sign, endorse,
assign, transfer or deliver in the name of the Grantor, or in its name, any
documents or certificates necessary to evidence, perfect and realize upon the
security interest granted herein.

      SECTION 4. The Secured Party's Rights and Remedies Upon an Event of
Default.

                  (a) Collections, etc. Upon the occurrence and during the
      continuance of an Event of Default, the Secured Party may, in its sole
      discretion, in its name, in the name of the Grantor or otherwise, demand,
      sue for, collect or receive any money or property at any time payable or
      receivable on account of or in exchange for, or make any compromise or
      settlement deemed desirable with respect to the Collateral, but shall be
      under no obligation so to do, or the Secured Party may extend the time of
      payment, arrange for payment in installments, or otherwise modify the
      terms of, or release any of the Collateral, without thereby incurring
      responsibility to, or discharging or otherwise affecting any liability of
      the Grantor. The Secured Party will not be required to take any steps to
      preserve any rights against prior parties with rights in or to the
      Collateral. If the Grantor fails to make any payment or to take any action
      required hereunder with respect to the Collateral, the Secured Party may
      make such payments and take all such actions as the Secured Party
      reasonably deems necessary to protect the security interests of the
      Secured Party in the Collateral and/or the value thereof, and the Secured
      Party is hereby authorized (without limiting the general nature of the
      authority hereinabove conferred) to pay, purchase, contest or compromise
      any Liens which in the judgment of the Secured Party appears to be equal
      to, prior to or superior to the security interests of the Secured Party in
      the Collateral and any Liens not expressly permitted by the Loan Agreement
      or this Security Agreement.

                                     E-115
<PAGE>

                  (b) Possession, Sale of Collateral, etc. Upon the occurrence
      and during the continuance of an Event of Default, in addition to any
      rights and remedies the Secured Party may have under Applicable Law, the
      Secured Party shall have all the rights and remedies available to it under
      the UCC, whether or not the UCC applies to the Collateral. The Secured
      Party may take such measures as it may deem necessary or proper for the
      care or protection of the Secured Party's rights and remedies hereunder,
      including the right to sell or cause to be sold, whenever the Secured
      Party shall decide, in one or more sales or parcels, at such prices as the
      Secured Party may deem best, and for cash or on credit or for future
      delivery, without assumption of any credit risk, all or any portion of the
      Collateral, at any broker's board or at a public or private sale, without
      any demand of performance or notice of intention to sell or of the time or
      place of sale (except 10 days' written notice to the Grantor of the time
      and place of any such sale or sales and such other notices as may be
      required by Applicable Law and cannot be waived), and any Person may be
      the purchaser of all or any portion of the Collateral so sold and
      thereafter hold the same absolutely, free (to the fullest extent permitted
      by Applicable Law) from any claim or right of whatever kind, including any
      equity of redemption, of the Grantor, any such demand, notice, claim,
      right or equity being hereby expressly waived and released to the fullest
      extent permitted by Applicable Law. At any sale or sales made pursuant to
      this Section 5(b), the Secured Party may bid for or purchase, free (to the
      fullest extent permitted by Applicable Law) from any claim or right of
      whatever kind, including any equity of redemption, of the Grantor, any
      such demand, notice, claim, right or equity being hereby expressly waived
      and released, any part of or all of the Collateral offered for sale, and
      may make any payment on account thereof by using any claim for moneys then
      due and payable to the Secured Party by the Grantor hereunder as a credit
      against the purchase price. The Secured Party shall in any such sale make
      no representations or warranties with respect to the Collateral or any
      part thereof, and the Secured Party shall not be chargeable with any of
      the obligations or liabilities of the Grantor. The Grantor hereby agrees
      (i) that it will indemnify and hold the Secured Party harmless from and
      against any and all claims with respect to the Collateral asserted before
      the taking control of the relevant Collateral by the Secured Party
      pursuant to this Section 4(b), or arising out of any act of, or omission
      to act on the part of, any Person (other than the Secured Party) prior to
      such taking of actual possession or control by the Secured Party, or
      arising out of any act on the part of the Grantor or their respective
      agents before or after the commencement of such actual possession or
      control by the Secured Party; and (ii) the Secured Party shall have no
      liability or obligation to the Grantor arising out of any such claim
      except for acts of willful misconduct or gross negligence or not taken in
      good faith. In any action hereunder, the Secured Party shall be entitled
      to the appointment of a receiver, without notice, to take possession of
      all or any portion of the Collateral and to exercise such powers as the
      court shall confer upon the receiver. Notwithstanding the foregoing, upon
      the occurrence and during the continuation of an Event of Default, the
      Secured Party shall be entitled to apply, without prior notice to the
      Grantor, except as may be required by Applicable Law, any cash or cash
      items constituting Collateral in the possession of the Secured Party to
      payment of the Obligations then due and payable.

                                     E-116
<PAGE>

                  (c) Notification to Account Debtors. Upon the occurrence and
      during the continuance of an Event of Default, the Secured Party may
      notify any Persons in any way liable on any Accounts to make remittances
      to the Secured Party of all sums due or to become due thereon and to
      collect and enforce payment of all Accounts directly from the Persons
      liable thereon, by legal proceedings or otherwise, and generally exercise
      all of the Grantor' rights and remedies with respect to collection
      thereof.

                  (d) Application of Proceeds. The Grantor further agrees that
      the Secured Party may apply any proceeds from the disposition of any of
      the Collateral first towards payment of any costs, fees and expenses
      accrued but unpaid of the Secured Party included within the Obligations,
      second towards payment of interest on the Loan, and third towards payment
      of principal.

                  (e) Power of Attorney. Upon the occurrence and during the
      continuance of an Event of Default (i) the Grantor does hereby irrevocably
      make, constitute and appoint the Secured Party or any of its officers or
      designees its true and lawful attorney-in-fact with full power in the name
      of the Secured Party or such other Person to endorse any notes, checks,
      drafts, money orders or other evidences of payment relating to the
      Collateral that may come into the possession of the Secured Party, and to
      do any and all other acts necessary or proper to carry out the intent of
      this Security Agreement and the grant of the security interests hereunder,
      and the Grantor hereby ratifies and confirms all acts that the Secured
      Party or its substitute shall properly do by virtue hereof and (ii) the
      Grantor hereby further irrevocably makes, constitutes and appoints the
      Secured Party or any of its officers or designees its true and lawful
      attorney-in-fact in the name of the Secured Party or its name (A) to
      enforce all of its rights under and pursuant to all agreements with
      respect to the Collateral, all for the sole benefit of the Secured Party,
      (B) to enter into and perform such agreements as may be necessary in order
      to carry out the terms, covenants and conditions of this Security
      Agreement that are required to be observed or performed by it, (C) to
      execute such other and further mortgages, pledges and assignments of the
      Collateral, and related instruments or agreements, as the Secured Party
      may reasonably require for the purpose of perfecting, protecting,
      maintaining or enforcing the security interests granted to the Secured
      Party and (D) to do any and all other things necessary or proper to carry
      out the intention of this Security Agreement and the grant of the security
      interests hereunder and the Grantor hereby ratifies and confirms in
      advance all that the Secured Party as such attorney-in-fact or its
      substitute shall properly do by virtue of this power of attorney.

      SECTION 5. Financing Statements, etc. The Grantor hereby authorizes the
Secured Party to file financing statements and any amendments thereto or
continuations thereof and any other appropriate security documents or
instruments, and to give any notices reasonably necessary or desirable to
perfect the Lien and security interests of the Secured Party in the Collateral.

                                     E-117
<PAGE>

      SECTION 6. Further Assurances.

                  (a) The Grantor agrees that it will from time to time, on
      request of the Secured Party and at its own cost and expense: (i) duly and
      promptly execute and deliver, or cause to be duly executed and delivered,
      any and all further instruments as may be appropriate in the reasonable
      judgment of the Secured Party to carry out the provisions and purposes of
      this Security Agreement, including, without limitation, a copyright
      security agreement, a patent and trademark security agreement and account
      control agreements; (ii) duly and promptly execute and deliver, or cause
      to be executed and delivered, such further instruments as may be
      appropriate in the reasonable judgment of the Secured Party, to provide
      the Secured Party with a perfected Lien in the Collateral and any and all
      documents (including, without limitation, the execution, amendment or
      supplementation of any financing statement and continuation statement or
      other statement) for filing under the provisions of the Uniform Commercial
      Code of any jurisdiction and the rules and regulations thereunder, or any
      Applicable Law of the United States or any other jurisdiction which the
      Secured Party may deem reasonably necessary or advisable, and perform or
      cause to be performed such other ministerial acts which are necessary or
      advisable, from time to time, in order to grant and maintain in favor of
      the Secured Party the Lien and security interest in the Collateral
      contemplated hereunder; and (iii) promptly undertake to deliver or cause
      to be delivered to the Secured Party from time to time, such other
      documentation, consents, authorizations and approvals in form and
      substance reasonably satisfactory to the Secured Party, as the Secured
      Party shall deem reasonably necessary or advisable to perfect or maintain
      the Liens of the Secured Party.

                  (b) The Grantor hereby agrees to pay any and all stamp,
      registration, recordation and similar taxes, fees or charges, reasonable
      fees and expenses of the Secured Party's counsel and of any agents
      therefor and to indemnify the Secured Party and its agents against any and
      all liabilities with respect to or resulting from any delay in the payment
      or omission to pay any such taxes, fees or charges, which may be payable
      or determined to be payable in connection with the execution, delivery,
      performance or enforcement of this Security Agreement and any other
      document or instrument executed in connection herewith or the perfection
      of any rights or security interests hereunder.

      SECTION 7. Notices. If any notification of intended disposition of any of
the Collateral or of any other act by the Secured Party is required by law and a
specific time period is not stated therein or herein, such notification given at
least ten (10) days before such disposition or act shall be deemed reasonably
and properly given. Notices and other communications provided for herein shall
be in the manner and at the addresses set forth in, and otherwise in accordance
with, Section 9.1 of the Loan Agreement.

      SECTION 8. Non-Waiver of Rights and Remedies. No delay or failure on the
part of the Secured Party in the exercise of any right or remedy shall operate
as a waiver thereof, no single or partial exercise by the Secured Party of any
right or remedy shall preclude other or further exercises thereof or the
exercise of any other right or remedy and no course of dealing between the
parties shall operate as a waiver of any right or remedy of the Secured Party.
All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law.

                                     E-118
<PAGE>

      SECTION 9. Termination. The security interests granted hereunder shall
terminate when all the Obligations have been fully and indefeasibly paid and
performed. At such time and upon request by the Grantor, and at the sole expense
of the Grantor, the Secured Party shall take all reasonable action and do all
things reasonably necessary, including executing UCC termination statements, to
terminate the security interest granted to it hereunder (without representation
or warranty by the Secured Party of any nature whatsoever and wholly without
recourse to the Secured Parties).

      SECTION 10. Governing Law. This Security Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of New York
applicable to contracts to be fully performed within the State of New York.

      SECTION 11. Severability. This Security Agreement shall be interpreted in
such manner as to be effective and valid under Applicable Law, but if any
provision of this Security Agreement shall be prohibited by or invalidated under
Applicable Law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Security Agreement and the parties hereto
agree to negotiate in good faith a provision to replace the ineffective
provision, such provision to be as similar in effect and intent to the
ineffective provision as permissible.

      SECTION 12. Continuation and Reinstatement. This Security Agreement shall
remain in full force and effect and continue to be effective in the event any
petition is filed by or against any of the Grantor for liquidation or
reorganization, or in the event any of the Grantor becomes insolvent or makes an
assignment for the benefit of creditors or in the event a receiver or trustee is
appointed for all or any significant part of the Grantor's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to
Applicable Law, rescinded or reduced in amount, or must otherwise be restored or
returned by the Secured Party, whether as a "voidable preference," "fraudulent
conveyance," or otherwise, all as though such payment or performance had not
been made. In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or
returned.

      SECTION 13. Amendment. No amendment, modification or waiver of any
provision of this Security Agreement or consent to any departure herefrom shall
be effective, irrespective of any course of dealing, unless the same shall be in
writing and signed by the Secured Party. Unless otherwise specified in such
waiver or consent, a waiver or consent given hereunder shall be effective only
in the specific instance and for the specific purpose for which given.

      SECTION 14. Successors and Assigns. All references herein to any of the
parties to this Security Agreement shall be deemed to include the successors and
assigns of such party; provided, however, that the Grantor may not assign any of
its rights or obligations hereunder without the prior written consent of the
Secured Party, and all covenants, promises and agreements by or on behalf of the
Grantor which are contained herein shall inure to the benefit of the successors
and assigns of the Secured Party.

                                     E-119
<PAGE>

      SECTION 15. Remedies Not Exclusive. The remedies conferred upon or
reserved to the Secured Party in this Security Agreement are intended to be in
addition to, and not in limitation of, any other remedy or remedies available to
the Secured Party. Without limiting the generality of the foregoing, the Secured
Party shall have all rights and remedies of a secured party under Article 9 of
the UCC, the Uniform Commercial Code in effect in any jurisdiction or any other
Applicable Law.

      SECTION 16. Counterparts. This Security Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall
constitute an original for all purposes, but all such counterparts taken
together shall constitute the same instrument.

                                     E-120
<PAGE>

      IN WITNESS WHEREOF, each of the Grantor and the Secured Party have caused
this Security Agreement to be duly executed as of the day and year first above
written.

                                            GRANTOR:
                                            --------

                                            AIRBORNE, INC.

                                            By:
                                               ---------------------------------
                                               Name:  Ronald J. Ricciardi
                                               Title: Chairman

                                            SECURED PARTY:
                                            --------------

                                            AIRPORT CAPITAL, LLC

                                            By:
                                               ---------------------------------
                                               Name:  William B. Wachtel
                                               Title: Manager

                                     E-121AGREEMENT

      THIS AGREEMENT is made and entered into as of this 24th day of February,
2005, by and between Interpharm, Inc., having its principal place of business at
75 Adams Avenue, Hauppauge, New York, 11788 ("Interpharm"), and Tris Pharma,
Inc. having its principal place of business at 2033 Route 130, Suite D, Monmouth
Junction, NJ 08852 ("Tris").

                                    RECITALS

      A. Interpharm is engaged in, among other things, the manufacture and
supply of finished drug products;

      B. Tris is engaged in, among other things, research and product
development of pharmaceutical liquids;

      C. Interpharm and Tris desire to establish a relationship pursuant to
which Tris will transfer technology to Interpharm which it will use to develop
and manufacture pharmaceutical liquids; and

      D. Interpharm and Tris desire to establish a relationship pursuant to
which they will share the profits, if any, relating to pharmaceutical liquid
products.

      In consideration of the foregoing premises, and the mutual covenants and
obligations set forth herein, Interpharm and Tris hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      1.1. "ANDA" shall mean the Abbreviated New Drug Application for a Product
filed with the FDA by Interpharm, and any supplements thereto.

      1.2 "API" shall mean the active pharmaceutical ingredient for a Product.

      1.3 "Commercially Reasonable" shall mean a party's reasonable efforts and
diligence in accordance with its business, legal, medical and scientific
judgment, taking into account the competitiveness of the marketplace, the
proprietary position of a Product, the regulatory structure involved, the
profitability of a Product, and other relevant factors including, without
limitation, technical, legal, scientific or medical factors.

      1.4 "Confidential Information" shall mean, with respect to a party, all
information of any kind whatsoever (including without limitation, data,
compilations, formulae, models, patent disclosures, procedures, processes,
projections, protocols, results of experimentation and testing, specifications,
strategies and techniques), and all tangible and intangible embodiments thereof
of any kind whatsoever (including without limitation, apparatus, compositions,
documents, drawings, machinery, patent applications, records and reports), which
is disclosed by such party to the other party and is marked, identified as or
otherwise acknowledged to be confidential at the time of disclosure to the other
party, including all Product Details and this Agreement. Notwithstanding the
foregoing, Confidential Information of a party shall not include information
which the other party can establish by written documentation (a) to have been
publicly known prior to disclosure of such information by the disclosing party
to the other party, (b) to have become publicly known, without fault on the part
of the other party, subsequent to disclosure of such information by the
disclosing party to the other party, (c) to have been received by the other
party at any time from a source, other than the disclosing party, rightfully
having possession of and the right to disclose such information, (d) to have
been otherwise known by the other party prior to disclosure of such information
by the disclosing party to the other party, or (e) to have been independently
developed by employees or agents of the other party without the use of such
information disclosed by the disclosing party to the other party.

<PAGE>

      1.5 "Direct Labor and Benefits" shall mean that portion of basic wages,
labor and related payroll taxes and employee benefits spent in actual production
of a Product which can be identified with or charged to the Product.

      1.5 "FDA" shall mean the United States Food and Drug Administration, and
any successor agency thereto.

      1.6 "GMP" shall mean current Good Manufacturing Practices promulgated by
the FDA.

      1.7 "Losses" shall mean any liabilities, damages, costs or expenses,
including reasonable attorney's fees, incurred by either party which arise from
any claim, lawsuit or other action by a third party.

      1.8 "Manufacturing Costs" shall mean, with respect to a Product, the
actual cost of manufacturing a Product, including the cost of Materials, Direct
Labor and Benefits, and Manufacturing Overhead, all determined in accordance
with U.S. Generally Accepted Accounting Principles. Manufacturing Costs shall
include, to the extent applicable, the cost to Interpharm of having some portion
or all of the Manufacturing Process performed by a third party. Interpharm shall
provide Tris with quarterly statements of Manufacturing Costs within sixty (60)
days of the end of each calendar quarter.

      1.9 "Materials" means those items that form an integral and direct part of
a Product and are necessary for its production, as well as cartons, labels and
package inserts.

      1.10 "Manufacturing Overhead" shall include all operating expenses
incurred by and in support of the particular manufacturing cost centers,
purchasing department and quality assurance operations, with respect to a
Product, including indirect labor, related payroll taxes, employee benefits,
depreciation, taxes, insurance, rent, repairs and maintenance, supplies,
utilities, and factory administrative expenses. The allocable portion of the
operating expenses shall be determined by taking the total output of a Product
during the applicable period divided by Interpharm's total liquid manufactured
products and multiplying the result by the total amount of liquid products
manufacturing overhead for the applicable period. Manufacturing Overhead shall
exclude selling, general and administrative, research and development, and, to
the extent not included by Interpharm in cost of goods sold, interest expenses
and all debt service payments of Interpharm.

                                       2
<PAGE>

      1.11 "Net Profits" shall mean the gross invoice sales of Product to third
parties, less the following deductions:

            1.11.1 Actual Manufacturing Costs and all costs relating to the
marketing of a Product (in the case of such marketing costs, not to exceed five
percent (5%));

            1.11.2 any statutory or contractual liability for rebates to be paid
to any government entity, including but not limited to, rebates to be paid
pursuant to Medicaid rebate legislation and state and local government rebate
programs;

            1.11.3 cash discounts;

            1.11.4 any adjustments for allowances or credits for returned
Product, damaged Product, commercial rebates, promotional allowances given in
lieu of price adjustments, chargebacks, shelf stock adjustments, trade discounts
or any similar and then customary discounts, credits or adjustments, whether or
not such commercial rebates, or trade discounts are paid directly to the
customer;

            1.11.5 actual freight, shipping and insurance costs incurred by
Interpharm;

            1.11.6 actual bad debts; and

            1.11.7 all costs incurred as the result of any recall, field
correction, market withdrawal, stock recovery, or other similar action with
respect to any Product that is not recovered through insurance or other
third-party claim.

      Sales or transfers of Products to affiliates for ultimate use or resale by
such persons shall be at prices (or deemed prices) that are consistent with
sales made to non-affiliates of the same or a similar business type that make
purchases in similar quantities. Similarly, any discounts, adjustments, rebates
and allowances given to customers who are affiliates shall be consistent with
such adjustments or allowances given to customers who are non-affiliates and are
in the same of similar business and make purchases in similar quantities. In
addition, if Interpharm enters into an agreement with a third party pursuant to
which Interpharm agrees not to market a Product and, in consideration of that
agreement, Interpharm receives rights to one or more other products or other
monetary or non-monetary consideration, the revenues received by Interpharm from
the sales of such other products and the fair market value of any other
consideration shall be included in Interpharm's Net Profits with respect to
which Tris is entitled to royalties hereunder.

      1.12. "Products" shall mean the pharmaceutical immediate release liquid
products developed, manufactured and sold pursuant to this Agreement which are
listed, or are to be listed, on Exhibits A, B and C hereto, as amended from time
to time.

                                       3
<PAGE>

      1.13. "Product Details" shall mean all properties, specifications and
formulations relating to a Product, including specifications and formulations of
the API, and all properties, specifications, formulations and manufacturing
processes for the finished product necessary for a technology transfer of the
Product to Interpharm. Product Details shall also include such advice and
counseling regarding information provided by Tris as may be reasonably required
by Interpharm.

      1.14 "Pro Rata Payments" shall mean the Total Tris Payments, minus an
amount equal to $100,000 times the number of Products and Suspensions for which
Product Details have been delivered under this Agreement, minus the Additional
Suspension Payments (as defined in Section 2.3.1.1.4 below) for any Suspension
for which Product Details have been delivered under this Agreement.

      1.15 "Replacement Products" shall mean the Products that are listed on
Exhibit D by Interpharm from time to time, and as may be amended from time to
time.

      1.16 "Suspensions" shall mean Products in a liquid suspension form which
are designated as such by mutual agreement of the Parties. For the sake of
clarity, all Suspensions are Products.

      1.17. "Territory" shall mean the United States of America and its
territories and possessions.

      1.18 "Total Tris Payments" shall mean the total payments made by
Interpharm to Tris as of a certain date pursuant to this Agreement, other than
the Royalty, as defined in Section 3.1, and pre-approved reimbursement of
expenses by Interpharm to Tris.

                                   ARTICLE II

                                   COOPERATION

      2.1. Cooperation. Upon and subject to the terms and conditions of this
Agreement, Interpharm and Tris shall cooperate with respect to researching,
developing, manufacturing and marketing up to twenty-five (25) Products. The
selection of such Products shall be made by Interpharm but shall be subject to
Tris' consent, which consent shall not be unreasonably withheld.

      2.2 Exclusivity. Tris shall not cooperate with any other person or entity
with respect to the manufacture, supply or distribution of a Product in the
Territory without the prior written consent of Interpharm during the term of
this Agreement. For the avoidance of doubt, Tris may not provide Product Details
for a Product to any person or entity outside the Territory if such person or
entity intends to, or will sell Products in the Territory. Tris shall take
Commercially Reasonable steps to ensure that other parties do not sell Products
in the Territory, including, but not limited to, requiring such other parties to
agree not to do so and taking Commercially Reasonable actions to enforce such
agreements. In the event that Products or Product Details are sold in the
Territory in contravention of this Agreement, Tris hereby agrees that it shall
pay over to Interpharm the greater of all profits earned with respect to such
Products and Product Details or the amount of Interpharm's lost profits as
determined by the amount of Products sold in contravention of this Section.

                                       4
<PAGE>

      2.3. The Parties' Responsibilities.

            2.3.1 Interpharm's Responsibilities. Interpharm shall be responsible
for:

                  2.3.1.1 Making the following payments to Tris. In the event
that Interpharm fails to make any of the following payments, Tris'sole remedy
shall be the commencement of an arbitration in accordance with Section 8.2:

                        2.3.1.1.1 $250,000 to Tris upon execution of this
Agreement (the "Initial Payment");

                        2.3.1.1.2 $250,000 to Tris within thirty (30) days after
delivery of the Product Details for the tenth Product listed on Exhibit A (the
"Second Tranche Initial Payment");

                        2.3.1.1.3 $125,000 to Tris within thirty (30) days after
delivery of the Product Details for the tenth Product listed on Exhibit B (the
"Third Tranche Initial Payment");

                        2.3.1.1.4 $50,000 to Tris upon delivery to Interpharm of
the Product Details for a Product; provided, however, that in the event that
Product Details for seven Suspensions are delivered to Interpharm, Tris shall
receive an additional $30,000 (the "First Additional Suspension Payment") for
each Suspension after the seventh (the "Initial Product Detail Fee");

                        2.3.1.1.5 $25,000 to Tris upon Interpharm's filing of an
ANDA for a Product, for those products requiring an ANDA, and upon Interpharm's
commencement of marketing for a Product which does not require an ANDA;
provided, however, that in the event that Product Details for seven Suspensions
are delivered to Interpharm, Tris shall receive an additional $10,000 (the
"Second Additional Suspension Payment," and together with the First Additional
Suspension Payment, the "Additional Suspension Payments") upon the filing of an
ANDA or commencement of marketing for each Suspension after the seventh (the
"Second Product Detail Fee");

                  2.3.1.2 Selecting the API suppliers (including auditing them)
and providing the APIs and, to the extent available, related substances,
impurities and technical packages/dossiers of the Products (the "Product
Information"), and testing of samples for the microbial samples during
development. In the event that the Product Information is not available, Tris
may elect not to proceed with the affected Product under this Agreement by
giving notice to Interpharm in writing. Upon receipt of notice from Tris,
Interpharm shall have the right (i) not to continue with said Product, thereby
reducing the number of Products referred to in Section 2.1 by one (1) or (ii) to
select a Replacement Product pursuant to the provisions of Section 2.3.3,
including Section 2.3.3.1. Should Interpharm elect to reduce the number of
Products pursuant to clause (i) of this Section 2.3.1.2, it shall have the right
to recover the "Penalty" (as defined in Section 2.3.3.1 below). Any such
recovery will be applied against future payments owed to Tris, whether pursuant
to Section 2.3.1.1 or Section 3.1, as designated by Interpharm, in its sole
discretion.

                                       5
<PAGE>

                  2.3.1.3 Supplying to Tris samples of the branded, and if
generic versions of the branded Product are sold commercially, samples of the
generic, versions of the Products which Tris is requested to develop.

                  2.3.1.4 filing, obtaining approval of, and maintenance of, any
ANDAs for a Product and if required by FDA, conducting the bioequivalence
studies and/or or any supplement to its ANDA for a Product. If any other federal
or foreign government or regulatory submissions or agreements are required to
manufacture a Product in accordance with the ANDAs, Interpharm shall be
responsible for completing such submissions and for payment of associated fees;

                  2.3.1.5 obtaining all applicable regulatory state and local
approvals for the manufacture of Product, for filing all periodic reports and
notifications as required by the regulatory authorities and for instituting and
maintaining such stability and sample retention programs as are required by
applicable law;

                  2.3.1.6 the manufacturing, supply and marketing of a Product
in the event that an ANDA for a Product is necessary and is obtained.
Specifically, Interpharm shall manufacture, fill, package, label and warehouse a
Product in conformity with GMP, the ANDA and all applicable laws and
regulations; provided, however, that if Interpharm determines, in its sole and
absolute discretion, that it no longer wishes to manufacture and supply a
Product (a "Production Cut-off"), it may cease doing so with no penalty
hereunder; in that event, however, Tris shall receive from Interpharm a
non-exclusive license to the Product Details for the affected Product and may
grant a non-exclusive sub-license to the Product (including all dossiers with
respect thereto) which is subject to the Production Cut-off, with all rights to
such Product and Product details continuing to be owned by Interpharm;

                  2.3.1.7 by the earlier of (i) the three hundredth day
following the execution of this Agreement and (ii) the date of submission by
Tris of Product Details for the tenth (10th) Product listed on Exhibit A,
delivery of a definitive list (the "Second Ten Product List") of the second ten
(10) Products for which Interpharm desires Product Details to be provided by
Tris pursuant to this Agreement; upon the consent by Tris to such Products
(which consent shall not be unreasonably withheld), such Products or alternative
Products agreed to between Interpharm and Tris shall be listed on Exhibit B and
incorporated herein (the "Second Ten Products"); and

                  2.3.1.8 by the thirtieth (30) day after delivery of the
Product Details for the last of the Second Ten Products, delivery of a
definitive list of the last five (5) Products for which Product Details are to
be provided by Tris pursuant to this Agreement and which shall be listed on
Exhibit C and incorporated herein (the "Last Five Products"); and

                  2.3.1.9 performing an analysis of all Products to determine
whether a Product will infringe on the intellectual property of another party
(an "IP Analysis"). Interpharm shall perform an IP Analysis within sixty (60)
days of receipt from Tris of the Product Details for a Product. In the event
that Interpharm believes within the sixty (60) day period that a Product, as
formulated in the Product Details, infringes the intellectual property of
another party, it shall provide written notice to Tris. Tris shall thereupon
advise Interpharm as to whether it agrees with Interpharm's position. If (i)
Tris does agree with Interpharm, or (ii) if it does not, but Interpharm, acting
in good faith, remains convinced, after hearing Tris' arguments, that the
Product infringes, the parties shall meet in good faith to decide on a course of
action. In the event that the parties are unable to agree on a reformulation
plan for the Product so as not to infringe on the intellectual property of
another party, Interpharm shall select a Replacement Product with the consent of
Tris, such consent not to be unreasonably withheld. In the event that Interpharm
selects a Replacement Product, all rights to the original Product shall revert
exclusively to Tris.

                                       6
<PAGE>

            2.3.2 Tris's Responsibilities. Tris shall be responsible for:

                  2.3.2.1 providing Product Details for the ten (10) Products
listed on Exhibit A on the dates set forth therein, the first five of which (the
"First Set of Five Products") shall be delivered within six months of the date
that Interpharm provides the API, and to the extent available, Product
Information for the last of the First Set of Five Products pursuant to Section
2.3.1.2 of this Agreement and the next five of which (the "Second set of Five
Products") shall be delivered thereafter within six months following the date
that Interpharm provides the API, and to the extent available, Product
Information for the last of the Second Set of Five Products, in each case,
pursuant to Section 2.3.1.2 of this Agreement. If the terms and conditions of
this Agreement are met with respect to said Products, Tris shall also provide
the Product Details for the Second Ten Products, the first five of which (the
"Third set of Five Products") shall be delivered within six months of Tris'
receipt of the Second Tranche Initial Payment and the next five of which (the
"Fourth Set of Five Products") shall be delivered within the following six
months; provided, however, that Tris shall provide definitive delivery dates for
each of the Second Ten Products within sixty (60) days of receipt from
Interpharm of the Second Ten Products List.

                  2.3.2.2 providing Product Details for the Last Five Products
listed on Exhibit C within the six months following Tris's receipt of the Third
Tranche Initial Payment;

                  2.3.2.3 providing any and all Product Details in the form that
may be necessary or required to manufacture a Product, market a Product, obtain
an ANDA for a Product, if an ANDA is necessary, for any step necessary in
obtaining an ANDA and as may be reasonably requested by Interpharm;

                  2.3.2.4 payment of all costs for research and development and
developing the Product Details with respect to a Product, other than the costs
of obtaining an ANDA; and

                  2.3.2.5 delivery of the final process and formulation for each
Product within five (5) months of the commencement of development of the Product
and prior to delivery of the Product Details for a Product.

            2.3.3 Replacement Products. With the written consent of Tris, such
consent not to be unreasonably withheld, Interpharm may substitute one of the
Replacement Products for any Products listed on Exhibit A, B or C at any time
prior to Tris commencing formulation for a Product listed on Exhibit A, B or C.

                                       7
<PAGE>

                  2.3.3.1 In the event that Tris withholds consent for more than
two (2) Replacement Products for any one (1) Product, Interpharm shall have the
right not to continue with said Product, thereby reducing the number of Products
referred to in Section 2.1 by one (1). In the even that Interpharm exercises its
rights under this Section 2.3.3., it shall have the right to recover any amounts
paid to Tris under Section 2.3.1.1.4 and 2.3.1.1.5 above, and a pro rata portion
of any payment made to Tris under Section 2.3.1.1.1, 2.3.1.1.2 or Section
2.3.1.1.3 above (the "Penalty"). Any such recovery will be applied against
future payments owed to Tris, whether pursuant to Section 2.3.1.1 or Section
3.1, as designated by Interpharm, in its sole discretion.

                                   ARTICLE III

                     ROYALTIES, EXPENSE RECOVERY AND BREACH

      3.1. Royalties. Upon the commencement of Interpharm's sale of each
Product, under this Agreement, Tris shall be entitled to receive 10% of the Net
Profits for each Product, and an additional 2% of Net Profits for each
Suspension after the seventh Suspension for which Product Details have been
delivered under this Agreement (the "Royalty"). Within ten (10) business days of
the end of each month, Interpharm shall provide to Tris a calculation of the
Royalty based on monies actually collected and received by it (the "Royalty
Statement") along with payment in the amount of the Royalty. In the event that
Interpharm fails to deliver a Royalty Statement for any month, Tris shall
provide a written notice of such non-delivery to Interpharm after which it shall
have an additional five (5) business day to provide the Royalty Statement. With
respect to any breaches or disputes that arise pursuant to this Section, Tris's
sole remedy shall be the commencement of an arbitration pursuant to Section 8.2.

      3.2 Expense Recovery. Interpharm shall be entitled to recover from Tris
the Initial Payment, Second Tranche Initial Payment, the Third Tranche Initial
Payment, all Initial Product Detail Fees and all Second Product Details Fees
paid hereunder (collectively the "Interpharm Recovery") by offsetting the
Royalty as set forth below.

            3.2.1 Offset . During the term of this Agreement, Interpharm may
offset the Interpharm Recovery against the Royalties to be paid hereunder by up
to 33% of the Royalties to be paid at any given time until such time as
Interpharm has offset Royalties in such amount necessary to obtain the full
amount of the Interpharm Recovery.

      3.3 Breach. The following clauses contain provisions for certain breaches
of this Agreement. The parties hereby agree that they shall not constitute an
exclusive list of all possible breaches of this Agreement for which there shall
be a remedy to the aggrieved party.

            3.3.1 Failure of Timely Delivery. With respect to any of the First,
Second, Third, Fourth or Last Set of Five Products (each a "Set of Products"),
in the event that Tris fails to deliver Product Details for any one Product by a
date set forth on Exhibit A, B or C (the "Product Deadline"), Tris shall have an
additional ninety (90) days to deliver the Product Details (the "Cure Period").
In the event that Tris fails to deliver the Product Details by the end of the
Cure Period, Interpharm may, at its option, (i) allow Tris additional time so
that the Product Details may be delivered during the following six-month period
with the Product Details for the next Set of Products or (ii) select a
Replacement Product, in accordance with the provisions of Section 2.3.3.1 above,
and the Product Details for which shall be delivered during the following
six-month period with the Product Details for the next Set of Products. In the
event that Tris fails to deliver the Product Details for more than one (1)
Product in any Set of Products by the Product Deadline, Interpharm may
immediately terminate this Agreement and Tris shall repay the Total Tris
Payments minus the Pro Rata Payments within thirty (30) days of written notice
of such termination (the "Breach Penalty"). In the event that Tris fails to
repay the Total Tris Payments, Interpharm may offset the Royalty as necessary to
recover it, along with interest at a rate equal to the greater of, the prime
rate plus 3%, or 7% (the "Interest Penalty").

                                       8
<PAGE>

            3.3.2 Failure of Stability Testing. With respect to any Set of
Products, in the event that a Product for which Product Details have been
delivered fails stability testing by Interpharm, Tris shall have ninety (90)
days to provide new Product Details, or, at Interpharm's option, Product Details
for a Replacement Product selected by Interpharm. If Tris fails to provide the
new Product Details within the ninety (90) day period, Interpharm may, at its
option, (i) allow Tris additional time so that the Product Details may be
delivered during the following six-month period with the Product Details for the
next Set of Products or (ii) select a Replacement Product, the Product Details
for which shall be delivered during the following six-month period with the
Product Details for the next Set of Products. In the event that more than one
(1) product in a Set of Products fails stability testing, this Agreement shall
terminate and Tris shall pay to Interpharm the Breach Penalty, and, if
applicable, the Interest Penalty.

                  3.3.3 Failure to Market.

                        3.3.3.1 For Products for which a bioequivalency study is
required, in the event that after the later of (i) twelve (12) months of
delivery of the Product Details for a Product, or (ii) July 31, 2006, Interpharm
fails to file an ANDA or fails to market a Product for which no ANDA is
required, and Tris has fully complied with this Agreement with respect to such
Product, Interpharm shall pay to Tris the Second Product Detail Fee for the
Product.

                        3.3.3.2 For Products for which no bioequivalency study
is required, in the event that after the later of (i) six (6) months of delivery
of the Product Details for a Product or (ii) January 31, 2006, Interpharm fails
to file an ANDA or fails to market a Product for which no regulatory approval is
required, and Tris has fully complied with this Agreement with respect to such
Product, Interpharm shall pay to Tris the Second Product Detail Fee for the
Product.

                                   ARTICLE IV

                       FURTHER OBLIGATIONS OF THE PARTIES

      4.1. Regulatory File Maintenance. Interpharm shall be solely responsible
for maintaining the ANDA and all other applicable FDA approvals and
registrations to permit the sale of Product.

      4.2. Facility Qualification. Interpharm shall take all Commercially
Reasonable actions to qualify (and thereafter to maintain qualification of) the
facility (or facilities) at which Interpharm will manufacture Product hereunder,
as required under applicable law.

                                       9
<PAGE>

      4.3. Adverse Reactions; Recall. In the event Interpharm believes it may be
necessary to conduct a recall, field correction, market withdrawal, stock
recovery, or other similar action with respect to a Product (a "Recall"),
Interpharm shall have sole discretion to make all decisions with respect to such
events. Any and all costs related to a Recall shall be borne by Interpharm.

      4.4 Audit Rights Tris shall have the right at any time and from time to
time to nominate a firm of independent certified public accountants to have
access to the financial records of Interpharm relating to Products to verify, at
Tris' expense, Net Profits. In the event that the auditing accountant finds that
Interpharm's calculation of Net Profits, varies from the actual amounts by more
than five percent (5%), Tris shall provide Interpharm with notice of the
variance. Interpharm shall have thirty (30) days from the receipt of such notice
to analyze the variance. At the conclusion of the thirty (30) day period,
Interpharm shall either (i) pay the cost of that audit and any monies owed as a
result of the variance with interest at five percent (5%) per annum on such
amount for the period of time that the variance existed or (ii) provide Tris
written notice of any disagreement with Tris' position (the "Interpharm
Notice"). In the event that Tris disagrees with the Interpharm Notice, then
Tris's sole remedy shall be commencement of an arbitration in accordance with
Section 8.2.

      4.5 Project Management Committee. Promptly after the Parties enter into
this Agreement, they will form a Project Management Committee ("PMC") comprised
of an equal number of representatives of each of Interpharm and Tris. The PMC
shall meet on a quarterly basis or at such other frequency as the PMC agrees to
discuss issues that may arise and make suggestions to the management of Tris and
Interpharm. The PMC shall also discuss the status of each Product through
approvals and marketing for the purpose of keeping each Party, as applicable,
apprised of such status. The Parties hereby agree that the PMC shall have no
power or ability to bind either Party and its role is purely advisory.

                                    ARTICLE V

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

      5.1. Representations and Warranties by each Party. Each Party hereby
represents and warrants to the other party as follows:

            5.1.1 Corporate Existence. Such Party is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated.

            5.1.2 Authorization and Enforcement of Obligations. Such party (a)
has the corporate power and authority and the legal right to enter into this
Agreement and to perform its obligations hereunder, and (b) has taken all
necessary corporate action on its part to authorize the execution and delivery
of this Agreement and the performance of its obligations hereunder. This
Agreement has been duly executed and delivered on behalf of such party, and
constitutes a legal, valid, binding obligation, enforceable against such party
in accordance with its terms.

            5.1.3 No Conflict. The execution and delivery of this Agreement and
the performance of such party's obligations hereunder (a) do not conflict with
or violate any requirement of applicable laws or regulations, and (b) do not
conflict with, or constitute a default under, any material contractual
obligation of such party.

                                       10
<PAGE>

      5.2 Additional Representations, Warranties and Covenants by Tris. Tris
hereby represents, warrants and agrees with Interpharm that all Product Details
provided to, and to be provided to Interpharm, are and will be true and accurate
in all respects and will include use of only pharmaceutically accepted products
listed in the IIG Guide or GRAS (Generally Recognized as Safe) products.

                                   ARTICLE VI

                                OTHER AGREEMENTS

      6.1. Ownership of Intellectual Property Rights. Tris hereby grants to
Interpharm a license to use all technology, discoveries, patent applications,
patents, ANDAs, know-how and inventions relating to a Product or any Product
Details for a Product (the "License"). Interpharm may use or exploit the License
for any purpose whatsoever; provided, however, that to the extent Interpharm
exercises its right to use the License for any Tris patented technology or
process for a product not covered by this Agreement, Interpharm shall pay to
Tris $100,000 at the time that it files an ANDA for the product and Tris shall
have no rights whatsoever therein.receive a royalty of 10% of the Net Profits
for such product, payable in accordance with the provisions of this Agreement,
which shall be subject to the offset provision contained in Section 3.2.1.

                                   ARTICLE VII

                      CONFIDENTIALITY AND PUBLIC DISCLOSURE

      7.1. Confidentiality. Except for literature and information intended for
disclosure to customers, and except as may be required to obtain government
approval to manufacture, sell or use a Product, or as may be required under
applicable federal securities laws, each Party will treat as confidential the
Confidential Information, and will take all necessary precautions to assure the
confidentiality of such information. Each party agrees to return to the other
party upon the expiration or termination of this Agreement all Confidential
Information acquired from such other party, except as to such information it may
be required to retain under applicable law or regulation, and except for one
copy of such information to be retained by such party's legal department or
outside counsel. Neither Party shall, during the period of this Agreement or for
five (5) years thereafter, without the other party's express prior written
consent use or disclose any such Confidential Information for any purpose other
than to carry out its obligations hereunder. Each Party, prior to disclosure of
such Confidential Information to any employee, consultant or advisor shall
ensure that such person is bound in writing to observe the confidentiality
provisions of this Agreement. The obligations of confidentiality shall not apply
to information that the receiving party is required by law or regulation to
disclose, provided however that the receiving party shall so notify the
disclosing party of its intent and cooperate with the disclosing party on
reasonable measures to protect the confidentiality of the information.

      7.2. Public Disclosure. Except for such disclosure as is deemed necessary,
in the reasonable judgment of a Party, to comply with applicable laws, no
announcement, news release, public statement, publication, or presentation
relating to the existence of this Agreement, the subject matter hereof, or
either Party's performance hereunder will be made without the other Party's
prior written approval, which approval shall not be unreasonably withheld. The
Parties agree that they will use reasonable efforts to coordinate the initial
announcement or press release relating to the existence of this Agreement so
that such initial announcement or press release by each is made
contemporaneously.

                                       11
<PAGE>

                                  ARTICLE VIII

                      TERM; ARBITRATION OF CERTAIN DISPUTES

      8.1. Term. Unless sooner terminated as provided in this Agreement, in the
event that Interpharm obtains an ANDA for any Products, the term of this
Agreement shall be for the same term that the last remaining ANDA for a Product
that is valid and in effect.

      8.2 Arbitration Procedure. The Parties hereby agree that only Sections
2.3.1.1, 3.1 and 4.4 of this Agreement shall be subject to arbitration. Any
arbitration shall be conducted in accordance with the following provisions:

            8.2.1 Any Party seeking to commence an arbitration hereunder shall
send a written notice providing the facts underlying the potential arbitration
to the other Party. The Parties shall then make a good faith effort to settle
the dispute. In the event that the dispute is not settled within thirty (30)
days of delivery of the notice, the Party that delivered the notice may commence
an arbitration hereunder;

            8.2.2 Arbitrations shall be conducted in accordance with the
Commercial Rules of the American Arbitration Association ("AAA") by three
arbitrators at a AAA facility in New York City;

            8.2.3 The costs of the arbitration and of the Parties in conducted
the arbitration, including reasonable attorneys' fees, shall be borne by the
losing Party;

            8.2.4 Upon and after the submission of any dispute to arbitration,
the Parties shall continue to exercise their remaining respective rights, and
fulfill their remaining respective obligations under this Agreement;

            8.2.5 Any arbitration award rendered in accordance with the
provisions of this Section 8.2 shall be final and binding upon the concerned
Parties, and the Parties further agree that such award may be enforced by any
court having jurisdiction over the Party against which the award has been
rendered or the assets of such Party wherever the same may be located. The
arbitrators shall be instructed that any such arbitration shall be completed and
an arbitration award issued within three (3) months following the commencement
thereof.

            8.2.6 Liquidated Damages. In the event that Interpharm fails to pay
a final arbitration award in favor of Tris within thirty (30) days of the
rendering of the final award, Interpharm shall pay to Tris liquidated damages of
$20,000 in addition to the award. The Parties acknowledge and agree that the
sums payable hereunder are liquidated damages and not penalties. The parties
further acknowledge that (i) the amount of loss or damages likely to be incurred
by Tris is incapable or is difficult to precisely estimate, (ii) the amounts
specified bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred by Tris in the event
that a final arbitration award is not paid promptly, and (iii) the Parties are
sophisticated business parties and have been represented by sophisticated and
able legal counsel and negotiated this Agreement at arm's length.

                                       12
<PAGE>

                                   ARTICLE IX

                                 INDEMNIFICATION

      9.1 Indemnification.

            9.1.1 Tris Indemnification. Tris agrees to indemnify, defend and
hold Interpharm harmless from and against any Losses resulting from or arising
out of the execution by Tris of this Agreement, the performance or breach by
Tris of its representations, warranties, covenants or obligations under this
Agreement, failure by Tris to take any action required to be taken by it (and
not by Interpharm) hereunder, at law or otherwise, or its negligence or willful
misconduct in the performance of its obligations hereunder.

            9.1.2 Interpharm Indemnification. Interpharm agrees to indemnify,
defend and hold Tris harmless from and against any Losses resulting from or
arising out of (i) Interpharm's breach of its representations, warranties,
covenants or obligations under this Agreement, (ii) any act of Interpharm or
failure by Interpharm to take any action required to be taken by it (and not by
Tris) hereunder, at law or otherwise, (iii) infringement on the intellectual
property of a third party, or, subject to Tris's performance of Section 5.2,
(iv) any injuries caused by (a) the manufacture, storage, packaging, handling,
marketing or distribution of a Product, or (b) the failure to warn of the risks
associated with a Product.

            9.1.3 A Party seeking indemnification ("Indemnified Party") shall
notify, in writing, the other party ("Indemnifying Party") within fifteen (15)
days from the assertion of any claim or discovery of any fact upon which the
Indemnified Party intends to base a claim for indemnification. An Indemnified
Party's failure to so notify the Indemnifying Party shall not, however, relieve
such Indemnifying Party from any liability under this Agreement to the
Indemnified Party with respect to such claim except to the extent that such
Indemnifying Party is actually denied, during the period of delay in notice, the
opportunity to remedy or otherwise mitigate the event or activity(ies) giving
rise to the claim for indemnification and thereby suffers or otherwise incurs
additional liquidated or other readily quantifiable damages as a result of such
failure. The Indemnifying Party, while reserving the right to contest its
obligations to indemnify hereunder, shall be responsible for the defense of any
claim, demand, lawsuit or other proceeding in connection with which the
Indemnified Party claims indemnification hereunder. The Indemnified Party shall
have the right at its own expense to participate jointly with the Indemnifying
Party in the defense of any such claim, demand, lawsuit or other proceeding, but
with respect to any issue involved in such claim, demand, lawsuit or other
proceeding with respect to which the Indemnifying Party has acknowledged its
obligation to indemnify the Indemnified party hereunder, the Indemnifying Party
shall have the right to select counsel, settle, try or otherwise dispose of or
handle such claim, demand, lawsuit or other proceeding on such terms as the
Indemnifying Party shall deem appropriate, subject to any reasonable objection
of the Indemnified Party.

                                       13
<PAGE>

                                    ARTICLE X

                                  MISCELLANEOUS

      10.1. Independent Contractor. It is understood that each Party is acting
as an independent contractor for its own account and this Agreement does not
establish a joint venture, agency, partnership or employer/employee relationship
between the Parties. Neither Party shall have authority to conclude contracts or
otherwise to act for or bind the other Party in any manner.

      10.2. Notices. All notices or other communications given pursuant hereto
by one party hereto to the other party shall be in writing and deemed given (a)
when delivered by messenger, (b) when sent by telecopier, (with receipt
confirmed), (c) when received by the addressee, if sent by Express Mail, Federal
Express or other express delivery service (receipt requested), or (d) five days
after being mailed in the U.S., first-class postage prepaid, registered or
certified, in each case to the appropriate addresses and telecopier numbers set
forth below (or to such other addresses and telecopier numbers as a party may
designate as to itself by notice to the other party):

      If to Tris, to it at:

      Tris Pharma, Inc.
      2033 Route 130, Suite D, Monmouth Junction, NJ 08852

      Attention: Ketan Mehta

      Phone: 732-940-2800; Fax: 732-940-2855

      If to Interpharm, to it at:
      Interpharm, Inc.
      75 Adams Avenue
      Hauppauge, New York, 11788
      Attention: Mr. Bob Sutaria
      Facsimile: (631) 952-9587

      with a copy to:

      Guzov Ofsink Flink, LLC
      600 Madison Avenue, 22nd Floor
      New York, New York  10022
      Facsimile: (212) 688-7273

                                       14
<PAGE>

      10.3. Assignment. Neither Party shall, without the prior written consent
of the other Party having been obtained, assign or transfer this Agreement to
any person or entity, in whole or in part, provided that, each Party may assign
or transfer this Agreement to any affiliate or to any successor by merger of
such Party, or upon a sale of all or substantially all of such Parties assets,
provided that such assigning Party shall remain liable for its obligations
hereunder. All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the Parties hereto and
their respective successors and assigns.

      10.4. Severability. If any portion of this Agreement is held invalid by a
court of competent jurisdiction, such portion shall be deemed to be of no force
and effect and the Agreement shall be construed as if such portion had not been
included herein, provided however, if the deletion of such provision materially
impairs the commercial value of this Agreement to either party, the Parties
shall attempt to renegotiate such provision in good faith.

      10.5. Entire Agreement. This Agreement attached hereto contain the sole
and entire agreement and understanding of the parties hereto and their
respective affiliates and representatives related to the subject matter hereof
and supersede all oral or written agreements concerning the subject matter made
prior to the date of this Agreement.

      10.6. Amendment; Waiver. This Agreement cannot be amended, changed,
modified or supplemented orally, and no amendment, change, modification or
supplement of this Agreement shall be recognized nor have any effect, unless the
writing in which it is set forth is signed by Interpharm and Tris, nor shall any
waiver of any of the provisions of this Agreement be effective unless in writing
and signed by the party to be charged therewith. The failure of either Party to
enforce, at any time, or for any period of time, any provision hereof or the
failure of either Party to exercise any option herein shall not be construed as
a waiver of such provision or option and shall in no way affect that party's
right to enforce such provision or exercise such option. No waiver of any
provision hereof shall be deemed to be, or shall constitute, a waiver of any
other provision, or with respect to any succeeding breach of the same provision.

      10.7. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, as though made and to be
fully performed therein without regard to conflicts of laws principles thereof.

      10.8. Force Majeure.

            10.8.1 The obligations of the either Party hereunder shall be
suspended during the time and to the extent that such Party is prevented from
complying therewith due to any event or circumstances beyond the control and
without the fault or negligence of that Party so affected (which circumstance is
hereinafter referred to as "Force Majeure") including but not limited to
accidents, perils of navigation, floods, fire, storms, earthquakes, lockouts,
explosion, hostilities, war (whether declared or undeclared), civil
disturbances, order or acts of any government, whether de jure or de facto or
any official purporting to act under authority of any such government,
illegality arising from domestic or foreign laws or regulations, insurrections,
quarantine or custom restrictions, strikes, lockouts, or other labor difficulty
at the parties, or acts of God or other similar events beyond the reasonable
control of Interpharm or Tris resulting in hindrance of the performance by
either Party of its respective obligations hereunder.

                                       15
<PAGE>

            10.8.2 As soon as possible after being affected by a Force Majeure
circumstance, the Party so affected shall furnish to the other party all
particulars of the Force Majeure and the manner in which its performance is
thereby prevented or delayed. The Party whose obligations hereunder have been
suspended shall promptly and diligently pursue appropriate action to enable it
to lift the Force Majeure situation, except that party shall not be obligated to
settle any strike, lockout or other labor difficulty on terms contrary to its
wishes. In the event that a Force Majeure circumstance is not resolved within
ninety (90) days the other Party may immediately terminate this Agreement.

      10.9. Singular and Plural Forms. The use herein of the singular form shall
also denote the plural form, and the use herein of the plural form shall denote
the singular form, as in each case the context may require.

      10.10 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not constitute a part hereof or define,
limit or otherwise affect the meaning of any of the terms or provisions hereof.

      10.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which, when
taken together, shall constitute one and the same instrument.

      10.12 Arbitration. Only disputes arising under Sections 2.3.1.1, 3.1 and
4.4 of this Agreement shall be arbitrable. The Parties hereby agree that any
other dispute arising under this Agreement shall not be submitted for
arbitration and shall not be arbitrable.

      IN WITNESS WHEREOF, the parties have caused this Manufacturing and Supply
Agreement to be executed by their respective duly authorized officers as of the
date first above written.

                                       INTERPHARM, INC.

                                       By:  /s/ Bob Sutaria
                                           -------------------------------------
                                           Bob Sutaria, President

                                       TRIS PHARMA, INC.

                                       By:  /s/ Katan Mehta
                                           -------------------------------------
                                           Ketan Mehta, CEO and President

                                       16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]