Document:

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                                                                   EXHIBIT 10.33

                           LOAN AND SECURITY AGREEMENT

         THIS LOAN AND SECURITY AGREEMENT, dated as of September 28, 2001, is
made and entered into by and between SHEFFIELD PHARMACEUTICALS, INC., a Delaware
corporation ("Borrower"), and INPHARZAM INTERNATIONAL, S.A., a Swiss corporation
("Lender").

                              W I T N E S S E T H:
                               -------------------

         WHEREAS, Borrower desires to borrow $2,500,000 from Lender, and Lender
is willing to make such loan to Borrower, on the terms and conditions set forth
herein;

         NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         1.1 DEFINED TERMS. The following terms when used in this Agreement
shall have the following meanings:

         "Agreement" means, on any date, this Loan and Security Agreement as
originally in effect on the hereof and as thereafter from time to time amended,
supplemented or otherwise modified and in effect on such date.

         "Authorized Officer" means Borrower's officers whose signatures and
incumbency shall have been certified to Lender pursuant to Section 4.1(d).

         "Borrower" is defined in the preamble.

         "Business Day" means any day which is neither a Saturday or Sunday nor
a legal holiday on which banks are authorized or required to be closed in New
York, New York, U.S.

         "Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 50% or more of the outstanding shares of voting stock of
Borrower.

         "Collateral" is defined in Section 3.1.

         "Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.

         "Default Rate" means 15% per annum.

         "Disbursement" is defined in Section 2.1.

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         "Dollar" and the sign "$" mean lawful money of the United States.

         "Event of Default" is defined in Section 8.1.

         "Initial Disbursement" is defined in Section 2.1.

         "Instrument" means any contract, agreement, indenture, mortgage,
document or writing (whether by formal agreement, letter, or otherwise) under
which any obligation is evidenced, assumed or undertaken, or any Lien (or right
or interest therein) is granted or perfected.

         "Lender" is defined in the preamble of this Agreement.

         "Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.

         "Loan" is defined in Section 2.1.

         "Loan Document" means this Agreement, the Note and each other
agreement, document or Instrument executed and delivered in connection with this
Agreement, as any and all of the foregoing may be amended, supplemented, amended
and restated, or otherwise modified from time to time in accordance with the
provisions hereof and thereof.

         "Loan Rate" means 2.0% per annum.

         "Note" means the promissory note of Borrower payable to Lender, in the
form of Exhibit A hereto (as such promissory note may be amended, supplemented,
endorsed or otherwise modified from time to time), evidencing the Loan, and any
other promissory notes accepted from time to time in substitution therefor or
renewal thereof.

         "Obligations" means all obligations (monetary or otherwise) of
Borrower, however created, arising, or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due,
which arise out of or in connection with this Agreement, the Note or any other
Loan Document.

         "Organic Document" means Borrower's certificate of incorporation,
bylaws and all stockholder agreements, voting trusts and similar arrangements
applicable to any of its authorized shares of capital stock.

         "Person" means any natural person, corporation, firm, association,
government, governmental agency or any other entity, whether acting in an
individual, fiduciary or other capacity.

         "UCC" shall mean the Uniform Commercial Code as in effect from time to
time and enacted in the State of New York, U.S.

         "United States" or "U.S." means the United States of America.

                                       2

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         1.2 USE OF DEFINED TERMS. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Note and each Loan Document, notice
and other communication delivered from time to time in connection with this
Agreement or any other Loan Document.

         1.3 CROSS-REFERENCES. Unless otherwise specified, references in this
Agreement and in each other Loan Document to any Article are references to such
Article of this Agreement or such other Loan Document, as the case may be.

                                   ARTICLE II

                                      LOAN

         2.1 LOAN. Subject to the terms and conditions hereof, Lender shall make
a term loan (the "Loan") to Borrower. The principal amount of the Loan shall be
Two Million Five Hundred Thousand Dollars ($2,500,000), and shall be disbursed
as follows (each, a "Disbursement"):

                  (a) $1,000,000 upon execution of this Agreement and
fulfillment of all conditions set forth in Article IV hereof (the "Initial
Disbursement");

                  (b) $1,000,000 on January 1, 2002; and

                  (c) $500,000 on April 1, 2002.

         2.2 NOTE. The Loan shall be evidenced by the Note. The Note shall be of
even date herewith, shall bear interest at the rates and be repayable as to
principal and interest in accordance with the terms hereof and as specified in
the Note. In the event of any conflict between the provisions hereof and those
set forth in the Note, the provisions in this Agreement shall control.

         2.3 PREPAYMENTS. Borrower may, at its option, prepay the Loan in whole
at any time or in part from time to time, free of any prepayment penalties or
premiums. All amounts paid by Borrower to Lender shall first be applied to any
outstanding taxes, fees, penalties, charges and assessments due Lender, then to
interest accrued but unpaid and then to principal.

                                   ARTICLE III

                               SECURITY AGREEMENT

         3.1 SECURITY INTEREST. To secure the prompt payment of the Loan and the
performance of Borrower's other Obligations under this Agreement, Borrower
hereby irrevocably grants to Lender a first and continuing security interest in
the Sublicensed Patent Rights, as that term is defined in the Sublicense and
Development Agreement (the "Sublicense Agreement"), dated June 15, 1998, between
Borrower and Lender, as amended (the "Collateral").

                                       3

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         3.2 TITLE, SUBORDINATION, ETC. Borrower has and shall retain all rights
necessary or appropriate to grant Lender the first security interest and other
rights in the Collateral contained herein free and clear of all liens, claims,
security, interests and other encumbrances, except those created hereby in favor
of Lender and any pre-existing rights of Siemens Aktiengesellschaft Keramik and
Porzellanwerk ("Siemens") as owner of some or all of the Sublicensed Patent
Rights, and Borrower shall warrant and defend its right, title and/or interest
in and to the Collateral, subject to the rights of Lender and/or Siemens,
against the claims and demands of all Persons whomsoever. Without limiting the
generality of the foregoing, Borrower shall not pledge, assign or otherwise
encumber, or permit any Liens or security interests to attach to, any of the
Collateral, nor permit any of the Collateral to be levied upon under any legal
process; provided, however, that Borrower shall:

                  (a) be permitted to sublicense the Collateral, or any part
thereof, to one or more bona fide third parties, provided that such sublicenses
are negotiated at arms-length on commercially reasonable terms. In the event
that such a sublicense is granted, the security interest granted to the Lender
in this Agreement shall for the duration of the sublicense no longer be
applicable to that portion of the Collateral licensed to the third-party, and
Lender shall have a first and continuing security interest in and to the
sublicense and all proceeds of the sublicense received or to be received by the
Borrower (including without limitation all royalty payments and milestone
payments), and in and to any other sublicenses, and the proceeds of any other
sublicenses, granted subsequently with respect to that portion of the
Collateral, such that upon an Event of Default (as defined in Section 8.1 of
this Agreement), Lender shall be entitled to such proceeds, until such time as
all principal and interest amounts due to the Lender under the Note are paid;
and

                  (b) be permitted to incur indebtedness to any bank or
institutional lender which would constitute Senior Indebtedness, as defined
herein, which Senior Indebtedness shall be senior to the payment obligations of
Borrower to Lender hereunder and pursuant to the Note, and in connection with
such Senior Indebtedness Borrower may pledge, assign or permit a security
interest to attach to the Collateral. For purposes of this subsection (b),
Senior Indebtedness shall mean (i) all principal of and interest and other
obligations arising on or with respect to debt of the Borrower to any bank or
other institutional lender, including but not limited to all renewals,
extensions, restructurings and guarantees, from time to time, of the foregoing.

         3.3 TAXES AND LIENS. Borrower shall immediately notify Lender in the
event there ever arises against any of the Collateral any lien, assessment or
tax or other liability, whether or not entitled to priority over Lender's
security interest hereunder. In any such event, whether or not such notice is
given Lender shall (unless such lien, assessment, tax or other liability is the
subject of an appeal by Borrower and an appropriate bond has been posted to stay
the effect of any resulting lien) have the right (but shall be under no
obligation) to pay any tax or other liability of Borrower deemed by Lender in
good faith to affect Lender's interests hereunder. Borrower shall repay to
Lender on demand all sums which Lender shall have paid under this section in
respect of taxes or other liabilities of Borrower, with interest thereon at the
Loan Rate, and Borrower's liability to Lender for such repayment with interest
shall be included in the Obligations. Lender shall be subrogated to the extent
of any such payment by it to all the rights and liens of the lienholder against
Borrower's assets.

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         3.4 LOCATIONS. Borrower agrees to notify Lender promptly in the event
of a change in the location of any place of business or the establishment of any
additional place of business of Borrower.

         3.5 FURTHER ASSURANCES. Borrower shall execute and deliver to Lender
from time to time all such other agreements, instruments and other documents
(including without limitation all requested financing and continuation
statements) and do all such other further acts and things as Lender may
reasonably request in order to further evidence or carry out the intent of this
Agreement or to perfect the liens and security interest created hereby or
intended so to be.

         3.6 POWER OF ATTORNEY. Borrower hereby irrevocably appoints any
officer, employee or agent of Lender as Borrower's true and lawful
attorney-in-fact with power, upon the occurrence of an Event of Default and
failure to cure such Event of Default within a five (5) day period, to (i)
endorse Borrower's name upon any notes, checks, drafts, money orders, or other
instruments of payment that may come into Lender's possession and which
constitute Collateral or proceeds of any Collateral; (ii) sign and endorse
Borrower's name upon any documents of title, invoices, freight or express bills,
assignments, verifications and notices in connection with any of the Collateral,
and any instruments or documents relating thereto or to Borrower's rights
therein; and (iii) execute in Borrower's name and file one or more financing
statements covering the Collateral. Any such attorney of Borrower shall have
full power to do any and all things necessary to be done with respect to the
above transactions as fully and effectually as Borrower might do, and Borrower
hereby ratifies all that said attorney shall lawfully do or cause to be done by
virtue hereof.

                                   ARTICLE IV

                           CONDITIONS TO DISBURSEMENTS

         4.1 CONDITIONS TO INITIAL DISBURSEMENT. Lender's obligation hereunder
to advance funds with respect to the Initial Disbursement to Borrower is
conditioned upon Borrower's delivery to Lender of each of the following, in such
form and substance as is satisfactory to Lender in its sole discretion:

                  (a) A duly executed Note and all other Loan Documents as may
be reasonably required by Lender;

                  (b) Evidence satisfactory to Lender that Borrower is organized
and in good standing in the State of Delaware and is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the nature of its business requires such qualification;

                  (c) Copies of Borrower's Organic Documents certified by the
Secretary of Borrower as true and correct as of the date of the execution of
this Agreement by Lender;

                  (d) Certificates of the Secretary of Borrower, dated as of the
date of this Agreement, as to incumbency and signatures of the officers of
Borrower executing this Agreement, any of the other Loan Documents and any other
certificates or other document to be

                                       5

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delivered pursuant hereto or thereto, together with evidence of the incumbency
of such Secretary;

                  (e) Resolutions of Borrower's board of directors, certified by
the Secretary of Borrower, duly adopted and in full force and effect on the date
of this Agreement, authorizing (i) the execution, delivery and performance of
this Agreement and all other Loan Documents, (ii) the borrowings hereunder and
the performance by Borrower of all actions contemplated by this Agreement and
the other Loan Documents, (iii) the granting of the Liens provided for in this
Agreement, and (iv) specific officers to execute and deliver this Agreement, the
other Loan Documents and all other related documents and instruments; and

                  (f) Acknowledgment copies of properly filed UCC financing
statements (Form UCC-l), dated a date reasonably near to the date of the Note,
or such other evidence of filing as may be acceptable to Lender, naming Borrower
as the debtor and Lender as the secured party, or other similar instruments or
documents, filed under the UCC of all jurisdictions as may be necessary or, in
the opinion of Lender, desirable to perfect the security interest of Lender
pursuant to this Agreement.

         4.2 CONDITIONS TO ALL DISBURSEMENTS. Lender's obligation hereunder to
advance funds with respect to the Initial Disbursement and any subsequent
Disbursements, is conditioned upon Borrower's satisfaction of each of the
following conditions precedent upon each such Disbursement:

                  (a) No Event of Default and no event which, upon the lapse of
time or the giving of notice or both, would become an Event of Default shall
have occurred and be continuing;

                  (b) The representations and warranties contained in this
Agreement, the Note and all other Loan Documents shall be true and correct;

                  (c) With respect to the license agreement between Borrower and
Siemens, Borrower shall not agree to any material amendments that affect the
Collateral without the prior approval of Lender, which approval may not be
unreasonably withheld; and

                  (d) Borrower shall have delivered to Lender a certificate
executed by an Authorized Officer of Borrower confirming the statements made in
subsections (a), (b) and (c) above.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

         In order to induce Lender to enter into this Agreement and to make
Disbursements hereunder, Borrower represents and warrants unto Lender as set
forth in this Article V, as of the date hereof and the date of each
Disbursement.

         5.1 ORGANIZATION, ETC. Borrower is a corporation validly organized and
existing and in good standing under the laws of the State of Delaware, is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the nature of

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its business requires such qualification, and has full power and authority and
holds all requisite governmental licenses, permits and other approvals to enter
into and perform its Obligations under each Loan Document, to obtain loans, to
own and hold under lease its property and to conduct its business substantially
as currently conducted by it.

         5.2 DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution, delivery
and performance by Borrower of each Loan Document executed or to be executed by
it is within Borrower's corporate powers, have been duly authorized by all
necessary corporate action and do not:

                  (a) contravene Borrower's Organic Documents;

                  (b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or affecting
Borrower; or

                  (c) result in, or require the creation or imposition of, any
Lien on Borrower's properties.

         5.3 GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body or other Person is required for the due execution, delivery
or performance by Borrower of any Loan Document.

         5.4 VALIDITY, ETC. This Agreement constitutes, and each other Loan
Document executed by Borrower shall, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligation of Borrower enforceable in
accordance with its respective terms.

         5.5 COMPLIANCE WITH APPLICABLE LAWS. Borrower is in compliance with the
requirements of all applicable laws, rules, regulations and orders of all
governmental authorities, a breach of which would materially and adversely
affect Borrower's business, credit, operations, financial condition or
prospects.

         5.6 REGULATIONS U AND X. Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock, and no
proceeds of the Loan will be used for a purpose which violates, or would be
inconsistent with, Federal Reserve Board Regulation U or X.

         5.7 ACCURACY OF INFORMATION. All factual information heretofore or
contemporaneously furnished by or on behalf of Borrower in writing to Lender for
purposes of or in connection with this Agreement or any transaction contemplated
hereby is, and all other such factual information hereafter furnished by or on
behalf of Borrower to Lender shall be, true and accurate in every material
respect on the date as of which such information is dated or certified and as of
the date of execution and delivery of this Agreement by Lender, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.

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                                   ARTICLE VI

                                    COVENANTS

         6.1 AFFIRMATIVE COVENANTS. Borrower agrees with Lender that, until all
Obligations incurred by Borrower in relation to the Loan have been finally paid
and performed in full, Borrower shall perform the obligations set forth in this
Section 6.1.

                  (a) MAINTENANCE OF PROPERTIES. Borrower shall maintain,
preserve, protect and keep its properties in good repair, working order and
condition, and make necessary and proper repairs, renewals and replacements so
that its business carried on in connection therewith may be properly conducted
at all times unless Borrower determines in good faith that the continued
maintenance of any of its properties is no longer economically desirable.
Nothing in this Agreement shall be construed as obligating Borrower to file any
patent or trademark applications, to continue the prosecution of any patent or
trademark application or to maintain any issued patent or registered trademark.

                  (b) BOOKS AND RECORDS. Borrower shall keep books and records
which accurately reflect all of its business affairs and transactions and permit
Lender or any of its representatives, twice a year (a) to visit all of its
offices, (b) to discuss its financial matters with its officers and independent
public accountants (and Borrower hereby authorizes such independent public
accountants to discuss Borrower's financial matters with Lender or its
representatives whether or not any representative of Borrower is present) and
(c) to examine any of its books or other corporate records.

         6.2 NEGATIVE COVENANTS. Borrower agrees with Lender that, until all
Obligations incurred by Borrower in relation to the Loan have been finally paid
and performed in full, Borrower shall perform the obligations set forth in this
Section 6.2.

                  (a) DIVIDENDS. Borrower shall not declare or pay any dividend
or other distribution to its stockholders other than dividends payable in shares
of preferred stock of Borrower.

                  (b) MERGER. Borrower shall not, without prior written consent
of Lender, consolidate with, merge into or with, or sell all or substantially
all of its assets to any other corporation or other entity, unless such
surviving or acquiring entity (i) shall assume the Obligations of Borrower
hereunder and pursuant to the Note or (ii) Borrower or such surviving or
acquiring entity shall pay all sums due under the Note prior to or
contemporaneous with the closing of such consolidation, sale or merger.

                                   ARTICLE VII

                                      TERM

         7.1 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING ARRANGEMENT.
No termination or cancellation (regardless of cause or procedure) of the
financing under this Agreement shall in any way affect or impair the powers,
obligations, duties, rights and liabilities of Borrower or the rights of Lender
relating to any transaction or event occurring prior to such termination. All
undertakings, agreements, covenants, warranties and

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representations contained in this Agreement shall survive such termination or
cancellation and shall continue in full force and effect until such time as all
of the Obligations have been paid in full in accordance with the terms of the
agreements creating such Obligations, at which time the same shall terminate.

                                  ARTICLE VIII

                                EVENTS OF DEFAULT

         8.1 LISTING OF EVENTS OF DEFAULT. Each of the following events or
occurrences described in this Section 8.1 shall constitute an "Event of
Default":

                  (a) Borrower fails to make any payment of principal, interest
or other amount when due under this Agreement, the Note or any other Loan
Document.

                  (b) Borrower fails to observe and perform any of the covenants
or agreements on its part to be observed or performed under this Agreement, the
Note, any other Loan Document or any other agreement between Borrower and
Lender, including without limitation the Sublicense Agreement.

                  (c) Any representation or warranty of Borrower under this
Agreement, the Note or any other Loan Document shall be untrue in any material
respect.

                  (d) Borrower (i) applies for or consents to the appointment of
a receiver, trustee or liquidator of itself or any of its property, (ii) admits
in writing its inability to pay debts as they mature, (iii) makes a general
assignment for the benefit of creditors, (iv) is adjudicated bankrupt or
insolvent, (v) files a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization or an arrangement with creditors or to take
advantage of any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting the material
allegations of a petition filed against it in any proceeding under any such law,
or (vi) takes any action for the purpose of effecting any of the foregoing.

                  (e) Any order, judgment or decree is entered by any court of
competent jurisdiction (i) approving a petition seeking reorganization of
Borrower or all or a substantial part of the assets of Borrower, or (ii)
appointing a receiver, sequester, trustee or liquidator of Borrower or any of
its property, and such order, judgment or decree continues unstayed and in
effect for a period of sixty (60) days or more.

                  (f) The occurrence of any event which would constitute an
event of default under any other Loan Document.

         8.2 REMEDIES UPON DEFAULT. If any Event of Default shall occur for any
reason, whether voluntary or involuntary, Lender may declare all unpaid
Obligations of Borrower hereunder and under the Note and/or any other Loan
Document immediately due and payable, and Obligations which shall be so declared
due and payable shall be and become immediately due and payable, without further
notice, demand or presentment, and Lender may at its option exercise from time
to time any and all rights and remedies available to it under the

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Uniform Commercial Code or otherwise, including the right to collect, assemble,
receipt for, adjust, modify, repair, refurnish or refurbish (but without any
obligation to do so) or foreclose or otherwise realize upon any of the
Collateral and to dispose of any of the Collateral at one or more public or
private sales or other proceedings, and Borrower agrees that Lender or its
nominee may become the purchaser at any such sale or sales. Borrower agrees that
l0 days shall be reasonable prior notice of the date of any public sale or other
disposition of all or any part of the Collateral, or of the date on or after
which any private sale or other disposition of the same may be made. All rights
and remedies granted Lender hereunder or under any other agreement between
Lender and Borrower shall be deemed concurrent and cumulative and not
alternative, and Lender may proceed with any number of remedies at the same time
or at different times until all the Obligations are fully satisfied. The
exercise of any one right or remedy shall not be deemed a waiver or release of
or an election against any other right or remedy. Borrower shall pay to Lender
on demand any and all expenses (including reasonable attorneys' fees and legal
expenses) which may have been incurred by Lender with interest at the Default
Rate (i) in the prosecution or defense of any action growing out of or connected
with the subject matter of this Agreement, the Obligations, the Collateral or
any of Lender's rights therein or thereto; or (ii) in connection with the
custody, preservation, use, operation, preparation for sale or sale of any of
the Collateral, the incurring of all of which are hereby authorized to the
extent Lender deems the same advisable. Borrower's liability to Lender for any
such payment with interest shall be included in the Obligations.

                                   ARTICLE IX

                            MISCELLANEOUS PROVISIONS

         9.1 WAIVERS, AMENDMENTS, ETC. The provisions of this Agreement, the
Note and of each other Loan Document may from time to time be amended, modified
or waived, only if such amendment, modification or waiver is in a writing signed
by Borrower and Lender. No failure or delay on the part of Lender or the holder
of the Note in exercising any power or right under this Agreement or any other
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
Borrower in any case shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by Lender or the holder of the Note
under this Agreement or any other Loan Document shall, except as may be
otherwise stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.

         9.2 NOTICES. All notices and other communications required or permitted
to be given under or in connection with this Agreement, the Note or any other
Loan Document shall be in writing and shall be deemed given if delivered
personally or by facsimile transmission (receipt verified), express courier
service (signature required), telexed, or mailed by registered or certified mail
(return receipt requested), postage prepaid, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice; provided, that notices of a change of address shall be effective only
upon receipt thereof):

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         If to Lender:

                  Inpharzam International, S.A.
                  Via Industria 1
                  6814 Cadempino, Switzerland
                  Attn:  Managing Director
                  Fax: 011-4191966351

                  with copies to:

                  Zambon Group, SPA
                  20091 Bresso
                  Via Lillo del Duca, 10
                  Milan, Italy
                  Attn:  Chairman

                  Spencer W. Franck, Jr., Esq.
                  Saul Ewing LLP
                  1200 Liberty Ridge Drive, Suite 200
                  Wayne, PA  19087-5055
                  Fax: 610 408-4405

         If to Borrower:

                  Sheffield Pharmaceuticals
                  14528 South Outer Forty Road, Suite 205
                  St. Louis, MO  63017-5785
                  Attn:  Chairman
                  Fax:  314-579-9799

                  with a copy to:

                  Adolfo R. Garcia, P.C
                  McDermott, Will & Emery
                  28 State Street
                  Boston, MA 02109-1775
                  Fax: 617-535-3800

         9.3 COSTS. Borrower agrees to pay, and to save Lender harmless from all
liability for, any stamp, documentary or other taxes which may be payable in
connection with the execution or delivery of this Agreement and/or any other
Loan Document, the borrowings hereunder or the issuance of the Note. Borrower
also agrees to reimburse Lender upon demand for all reasonable out-of-pocket
expenses (including attorneys' fees and legal expenses) incurred by Lender in
connection with the enforcement of any Obligations.

         9.4 ASSIGNMENT. Except with the prior written approval of Lender,
Borrower may not assign any of its rights or obligations under this Agreement or
any of the Loan Documents. Lender may assign all of its rights and obligations
under this Agreement or any of

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the Loan Documents to any Person, its successors and assigns. Any attempted
assignment in violation of this Section 9.4 shall be null and void.

         9.5 SURVIVAL. The representations and warranties made by Borrower in
this Agreement and in each other Loan Document shall survive the execution and
delivery of this Agreement and each such other Loan Document.

         9.6 SEVERABILITY. Any provision of this Agreement or any other Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.

         9.7 HEADINGS. The various headings of this Agreement and of each other
Loan Document are inserted for convenience only and shall not affect the meaning
or interpretation of this Agreement or such other Loan Document or any
provisions hereof or thereof.

         9.8 EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This Agreement may
be executed by the parties hereto in several counterparts, each of which shall
be deemed to be an original and all of which shall constitute together but one
and the same agreement.

         9.9 GOVERNING LAW; ENTIRE AGREEMENT. This Agreement, the Note and each
other Loan Document shall each be deemed to be a contract made under and
governed by the internal laws of the State of New York, U.S. without giving
effect to it principles of conflicts of law. This Agreement, the Note and the
other Loan Documents constitute the entire understanding among the parties
hereto with respect to the subject matter hereof and supersede any prior
agreements, written or oral, with respect thereto. The parties hereto
specifically agree to waive all rights to rely on or enforce any oral statements
made prior to or subsequent to the execution of this Agreement.

         9.10 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.

         9.11 JURISDICTION. Each party hereby consent that it shall be subject
to jurisdiction in the State of New York, U.S. in any legal proceeding or
equitable action that relates in any way to this Agreement, the Note or any
other Loan Document, and further consents to venue for any such proceeding or
action in the state courts of the State of New York and/or the United States
District Court for the Southern District of New York.

         [The remainder of this page has been intentionally left blank]

                                       12

<PAGE>

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

[CORPORATE SEAL]

                                            SHEFFIELD PHARMACEUTICALS, INC.

Attest:

By:                                         By /s/ Thomas M. Fitzgerald
    ---------------------------------       ------------------------------------
Name:                                       Name:  Thomas M. Fitzgerald
      -------------------------------       Title: Chairman
Title:
       ------------------------------

[CORPORATE SEAL]

                                            INPHARZAM INTERNATIONAL, S.A.

Attest:

By:                                         By /s/ Roberto Rettani
    ---------------------------------       ------------------------------------
Name:                                       Name:  Roberto Rettani
      -------------------------------       Title: Vice President
Title:
       ------------------------------

                                       13<PAGE>

                                                                   EXHIBIT 10.34

                                 PROMISSORY NOTE

$2,500,000                                            New York, New York, U.S.A.
                                                          September 28, 2001

          FOR VALUE RECEIVED, SHEFFIELD PHARMACEUTICALS, INC., a Delaware
corporation (the "Payor"), intending to be legally bound hereby, promises to pay
to the order of INPHARZAM INTERNATIONAL, S.A., a Swiss corporation ("Payee"), at
such place as Payee may designate from time to time in writing, the principal
sum of Two Million Five Hundred Thousand Dollars ($2,500,000), in lawful money
of the United States, together with interest thereon from the date hereof at the
rates hereinafter provided, and both payable as hereinafter provided.

     1.   PURPOSE OF NOTE. This Promissory Note ("Note") is made and delivered
by Payor in favor of Payee pursuant to that certain Loan and Security Agreement
between Payor and Payee of even date herewith (the "Loan Agreement"). All
capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Loan Agreement.

     2.   INTEREST RATE. Interest on the unpaid principal amount of this Note
shall accrue from the date hereof at a rate equal to 2% per annum (the "Interest
Rate"); provided, however, that from and after the occurrence of any Event of
Default and failure to cure such Event of Default within a five (5) day period,
the rate of interest on this Note shall automatically increase to 15% for so
long as such Event of Default continues. Notwithstanding anything to the
contrary herein, the liability of Payor for payment of interest shall not exceed
the maximum amount permitted by law, and if any payment by Payor includes
interest in excess of such maximum amount, Payee shall apply such excess to the
reduction of principal or, if none is due, such excess shall be refunded to
Payor. Interest shall be computed on the basis of a 360-day year.

     3.   PAYMENTS OF PRINCIPAL AND INTEREST. One-third of the principal balance
under this Note, together with interest, shall be payable by Payor to Payee upon
Payor's execution of a written agreement with one or more third parties to
develop, co-promote and/or sell Licensed Products, as such term is defined in
that certain Sublicense and Development Agreement, dated June 15, 1998, between
Payor and Payee, as amended, in North America. Notwithstanding the foregoing,
all unpaid principal and accrued interest shall be due and payable by Payor to
Payee, subject to the terms of Section 4, upon the earlier of (a) December 31,
2005, or (b) Approval of the second of the Licensed Products to be Approved. For
purposes of subsection (b) hereof, "Approval" shall mean approval for marketing
by any health agency or regulating authority in and throughout the world
authorized to grant marketing approval for the Licensed Products.

     4.   SUBORDINATION.

          a.   PAYMENT, SENIOR INDEBTEDNESS. Notwithstanding the foregoing or
anything else to the contrary contained herein, each of Payee, for itself, its
successors and assigns, and Payor covenants and agrees, and each successor
holder of this Note by such holder's acceptance hereof likewise covenants and
agrees, that, notwithstanding any provision

<PAGE>

of this Note to the contrary, the payment of the principal of and interest on
this Note shall be subordinated in right of payment, to the extent and in the
manner hereinafter set forth, to the prior payment in full of any Senior
Indebtedness as defined in the Loan Agreement. The provisions of this Section 4
shall constitute a continuing representation to all persons who, in reliance
upon such provisions, become the holders of or continue to hold the Senior
Indebtedness, and such provisions are made for the benefit of the holder of the
Senior Indebtedness, and such holder is hereby made obligee hereunder the same
as if its name was written herein as such, and it may proceed to enforce such
provisions against Payor or against the Payee without the necessity of joining
Payor as a party.

          b.   PAYMENT OF THE SENIOR INDEBTEDNESS. In the event of any
insolvency or bankruptcy proceedings, or any receivership, liquidation,
reorganization or other similar proceedings in connection therewith, relative to
Payor or to its property, or, in the event of any proceedings for voluntary
liquidation, dissolution or other winding up of Payor, distribution or
marshalling of its assets or any composition with creditors of Payor, whether or
not involving insolvency or bankruptcy, the Senior Indebtedness shall be paid in
full before any payment or distribution of any character, whether in cash,
securities or other property, shall be made on account of this Note; and any
such payment or distribution shall be paid or delivered directly to the holder
of the Senior Indebtedness (or its duly authorized representative), until the
Senior Indebtedness shall have been paid in full, and every holder of this Note
by becoming a holder hereof shall have designated and appointed the holder of
the Senior Indebtedness (and its duly authorized representative) as his, her or
its agent and attorney-in-fact to demand, sue for, collect and receive such
Senior Indebtedness holder's ratable share of all such payments and
distributions and to file any necessary proof of claim therefor and to take all
such other action (including the right to vote such Senior Indebtedness holder's
ratable share of this Note), in the name of the Holder of this Note or
otherwise, as such Senior Indebtedness holder (or its duly authorized
representative) may determine to be necessary or appropriate for the enforcement
of this Section 4. Payee and each successor holder of this Note, by his, her, or
its acceptance hereof, agrees to execute, at the request of Payor, a separate
agreement with any holder of the Senior Indebtedness on or substantially on the
terms set forth in this Section 4, and to take all such other action as such
holder of the Senior Indebtedness (or its duly authorized) representative may
request in writing in order to enable such holder of Senior Indebtedness to
enforce all claims upon or in respect of such holder's ratable share of this
Note. Nothing contained in this Section 4 or elsewhere in this Note is intended
to or shall impair, as between Payor and its creditors other than the holder of
the Senior Indebtedness, the obligation of Payor, which is unconditional and
absolute, to pay to Payee the principal of and interest on the Note as and when
the same shall become due and payable in accordance with the terms hereof, or to
affect the relative rights of Payee under this Note and creditors of Payee other
than the holder of the Senior Indebtedness, or to benefit any other creditors of
Payor other than the holder of the Senior Indebtedness, nor shall anything
herein or therein prevent Payee from accepting any payment with respect to this
Note or exercising all remedies otherwise permitted by applicable law upon
default under this Note, subject to the rights, if any, under this Section 4 of
the holder of the Senior Indebtedness in respect of cash, property or securities
of Payor.

          c.   NO PAYMENT ON NOTE UNDER CERTAIN CONDITIONS. In the event that
any default occurs in the payment of the principal of or interest on the Senior
Indebtedness (whether as a result of acceleration thereof by the holder of such
Senior Indebtedness or otherwise) and

                                       2
<PAGE>

during the continuance of such default for a period (the "Standstill Period") up
to one hundred and eighty (180) days and thereafter, if judicial or arbitral
proceedings shall have been instituted with respect to such defaulted payment
and shall be diligently pursued, or (if a shorter period) until such payment has
been made or such default has been cured or waived in writing by such holder of
the Senior Indebtedness, then and during the continuance of such event no
payment of principal or interest on this Note shall be made by Payor or accepted
by any holder of this Note who has received notice from Payor or from a holder
of the Senior Indebtedness of such event. Notwithstanding the foregoing the
maximum amount of time that the holder of this Note may be subject to a
Standstill Period in any period of 360 days shall be 180 days plus such period
of time as the holder of Senior Indebtedness shall have commenced and be
diligently pursuing a judicial or arbitral proceeding with respect to such
defaulted payment.

          d.   PAYMENTS HELD IN TRUST. In case any payment or distribution shall
be paid or delivered to any holder of this Note before the Senior Indebtedness
shall have been paid in full, despite or in violation or contravention of the
express terms of this Section 4, such payment or distribution shall be held in
trust for and paid and delivered ratably to the holders of the Senior
Indebtedness (or its duly authorized representative), until the Senior
Indebtedness shall have been paid in full.

          e.   SUBROGATION. Subject to the payment in full of the Senior
Indebtedness and until this Note shall be paid in full, Payee shall be
subrogated to the rights of the holders of the Senior Indebtedness (to the
extent of payments or distributions previously made to such holder of the Senior
Indebtedness pursuant to the provisions of subsections (a) and (c) of this
Section 4) to receive payments or distributions of assets of Payor applicable to
the Senior Indebtedness. No such payments or distributions applicable to the
Senior Indebtedness shall, as between Payor and its creditors, other than the
holder of the Senior Indebtedness, be deemed to be a payment by the Payor; and
for the purposes of such subrogation, no payments or distributions to the holder
of the Senior Indebtedness to which Payee would be entitled except for the
provisions of this Section 4 shall, as between Payor and its creditors, other
than the holder of the Senior Indebtedness, be deemed to be a payment by Payor
to or on account of the Senior Indebtedness.

          f.   SURVIVAL OF RIGHTS. The right of any present or future holder of
the Senior Indebtedness to enforce subordination of this Note pursuant to the
provisions of this Section 4 shall not at any time be prejudiced or impaired by
any act or failure to act on the part of Payor or any such holder of the Senior
Indebtedness, including, without limitation, any forbearance, waiver, consent,
compromise, amendment, extension, renewal or by noncompliance by Payor with the
terms of such subordination regardless of any knowledge thereof the holder may
have or otherwise be charged with.

          g.   AMENDMENT OR WAIVER. The provisions of this Section 4 may not be
amended or waived in any manner which is detrimental to the Senior Indebtedness
without the consent of the holder of such Senior Indebtedness.

     5.   PREPAYMENT. Payor, at its option, may prepay the principal amount and
accrued interest hereunder at any time in whole or in part without premium or
penalty. All amounts paid by Payor to Payee shall first be applied to any
outstanding taxes, fees, penalties, charges and assessments due Payee, then to
interest accrued but unpaid and then to principal.

                                       3
<PAGE>

     6.   EVENTS OF DEFAULT; REMEDIES. This Note is subject to the "Events of
Default" provisions and remedies (including without limitation acceleration
provisions) in the Loan Agreement, which are incorporated herein in their
entirety.

     7.   WAIVER. Payor, for itself, its successors and assigns, hereby waives
presentment, demand, notice of nonpayment, protest, notice of protest or other
notice of dishonor, and any and all other notices in connection with any default
in the payment of, or any enforcement of the payment of, all amounts due
hereunder. To the extent permitted by law, Payor waives the right to and stay of
execution and the benefit of all exemption laws now or hereafter in effect.

     8.   COSTS AND EXPENSES. Following the occurrence of any Event of Default,
Payor shall pay upon demand all reasonable costs and expenses (including all
reasonable amounts paid to attorneys, accountants, and other advisors employed
by Payee), incurred by Payee in the exercise of any of its rights, remedies or
powers under this Note with respect to such Event of Default, and any amount
thereof not paid promptly following demand therefor shall be added to the
principal sum hereunder and shall bear interest at the Default Rate from the
date of such demand until paid in full.

     9.   MISCELLANEOUS.

          a.   WAIVERS, AMENDMENTS, ETC. The provisions of this Note may from
time to time be amended, modified or waived, only if such amendment,
modification or waiver is in a writing signed by Payor and Payee. No failure or
delay on the part of Payee or the holder of this Note in exercising any power or
right under this Note shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on Payor in any case shall entitle it to any notice or demand in similar
or other circumstances. No waiver or approval by Payee or the holder of this
Note under this Note shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.

          b.   NOTICES. All notices and other communications required or
permitted to be given under or in connection with this Note shall be given in
accordance with the notice provisions in Section 9.2 of the Loan Agreement.

          c.   ASSIGNMENT. Except with the prior written approval of Payee which
consent may not be unreasonably withheld, Payor may not assign any of its rights
or obligations under this Note. Payee may assign any of its rights and
obligations under this Note to any Person, its successors and assigns. Any
attempted assignment in violation of this Section 8.c. shall be null and void.

          d.   SEVERABILITY. Any provision of this Note which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Note or
affecting the validity or enforceability of such provision in any other
jurisdiction.

                                       4
<PAGE>

          e.   HEADINGS. The various headings of this Note are inserted for
convenience only and shall not affect the meaning or interpretation of this Note
or any provisions hereof.

          f.   GOVERNING LAW. This Note shall be governed by the internal laws
of the State of New York without giving effect to it principles of conflicts of
law.

          g.   SUCCESSORS AND ASSIGNS. This Note shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

          h.   JURISDICTION. Payor hereby consents to jurisdiction in the State
of New York in any legal proceeding or equitable action that relates in any way
to this Note, and further consents to venue for any such proceeding or action in
the state courts of the State of New York and/or the United States District
Court for the Southern District of New York.

                            [Signature Page Follows]

                                       5
<PAGE>

          IN WITNESS WHEREOF, Payor has executed this Note as of the day and
year first above written.

                                          PAYOR:

[CORPORATE SEAL]

Attest:                                   SHEFFIELD PHARMACEUTICALS, INC.

By:                                       By:  /s/ Thomas M. Fitzgerald
    ---------------------------------         ----------------------------------

Its:                                      Its:     Chairman
     --------------------------------          ---------------------------------

                                       6

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