Document:

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                                                                   EXHIBIT 10.41

                                PROMISSORY NOTE

$__________                                                  St. Louis, Missouri
                                                               September 6, 2002

         FOR VALUE RECEIVED, Sheffield Pharmaceuticals, Inc. ("Maker") does
hereby promise to pay to the order of _______________ ("Holder"), at such
address or at such other place as may be designated by notice of Holder to
Maker, (i) the principal sum of ______________________________ dollars
($________) on January 1, 2003 (the "Maturity Date"); together with (ii)
interest on any principal amounts outstanding hereunder from the date hereof
until said principal amount is paid in full, payable on the final day when said
principal amount becomes due at an interest rate per annum equal at all times to
seven percent (7.0%) and (iii) a premium amount of
___________________________________ ($__________) (collectively, the "Maturity
Payments"). Interest on this Note shall be computed on a basis of a year of 365
or 366 days, as the case may be, for the actual number of days elapsed
(including the first day but excluding the last day).

         Maker may prepay this Note in whole or in part, with accrued interest
through the date of such prepayment on the amount prepaid.

         On the Maturity Date, at the Company's sole discretion, the Company
shall have the option either (i) to make all Maturity Payments that are due and
owing, or (ii) to repay the aggregate principal amount, all accrued and unpaid
interest thereon, and to issue to the Holder a warrant to purchase __________
shares of Common Stock and be in the form as provided in the attached Exhibit A.

         Maker agrees to pay on demand all reasonable costs and expenses, if any
(including reasonable counsel fees and expenses), incurred by Holder in
connection with the enforcement of this Note.

         If any of the following events shall occur and be continuing:

         (a)      Maker shall fail to make any payment of principal or interest
                  when the same becomes due and payable and such failure shall
                  remain unremedied for three (3) days; or

         (b)      Any proceeding shall be instituted by or against Maker seeking
                  to adjudicate it a bankrupt or insolvent, or seeking
                  protection of its debts under any law relating to bankruptcy
                  or insolvency or relief of debtors, or seeking the entry of an
                  order for relief or the appointment of a receiver, trustee,
                  custodian or other similar official for it or for any
                  substantial part of its property,

         Then, and in any such event, Holder may, by notice to Maker, declare
all outstanding principal and any other obligations of Maker hereunder,
including any interest and premium thereon, to be forthwith due and payable,
whereupon all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest, or further notice of any kind, all of
which are hereby expressly waived by Maker.

         All notices between Maker and Holder under this Note shall be made by
registered mail.

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

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

                                            SHEFFIELD PHARMACEUTICALS, INC.

                                            By
                                              ----------------------------------

                                            Name
                                                --------------------------------

                                            Title
                                                 -------------------------------

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                                                                       EXHIBIT A

         THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED (THE "SECURITIES ACT"), AND THEY MAY NOT BE OFFERED,
         SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i)
         PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS
         BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR
         (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE
         SECURITIES ACT BUT ONLY UPON THE HOLDER HEREOF FIRST HAVING OBTAINED
         THE WRITTEN OPINION OF COUNSEL TO THE CORPORATION, OR OTHER COUNSEL
         REASONABLY ACCEPTABLE TO THE CORPORATION, THAT THE PROPOSED DISPOSITION
         IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS
         WELL AS ANY APPLICABLE "BLUE SKY" OR OTHER STATE SECURITIES LAW.

                          COMMON STOCK PURCHASE WARRANT

               For the Purchase of _______ Shares of Common Stock

                                       of

                         SHEFFIELD PHARMACEUTICALS, INC.

                            (A Delaware Corporation)

1.       Warrant.

                  THIS CERTIFIES THAT, for value received, _________ (the
"Holder"), as registered owner of this Warrant, is entitled during the period
commencing January 1, 2002 and ending at 5:00 p.m., St. Louis, Missouri time, on
December 31, 2005, but not thereafter, to subscribe for, purchase and receive,
in whole or in part, up to ___________ (________) shares of Common Stock, par
value $.01 per share (the "Common Stock"), of Sheffield Pharmaceuticals, Inc., a
Delaware corporation (the "Company") in accordance with the terms hereof.

                  The exercise price (the "Exercise Price") per share of Common
Stock shall be $.60 per share.

2.       Exercise.

                  In order to exercise this Warrant, the exercise form attached
hereto must be duly executed, completed and delivered to the Company, together
with this Warrant and payment of the applicable Exercise Price for the shares of
the Common Stock being purchased. If the rights represented hereby shall not
have been exercised before 5:00 p.m., St. Louis, Missouri time, on December 31,
2005 this Warrant shall become and be void and without further force or effect
and all rights represented hereby shall cease and expire.

3.       Transfer.

                  3.1 General Restrictions. The registered Holder of this
Warrant, by his acceptance hereof, agrees that it shall not sell, transfer or
assign or hypothecate this Warrant without the prior written consent of the
Company. The shares of Common Stock issuable upon exercise of this Warrant shall
be subject to the additional transfer restrictions set forth below.

                  3.2 Restrictions Imposed by the Securities Act. The Holder by
accepting this Warrant confirms that the Warrants were acquired by the Holder
solely for investment and with no present intention to distribute any Warrants
or securities issuable upon the exercise thereof and that the Holder will
dispose of securities issuable upon the exercise hereof only in compliance with
applicable Federal and state securities laws. The shares of Common Stock
purchased upon exercise of this Warrant shall not be transferred unless and
until (i) the Company has received the opinion of counsel for the Holder that
such shares may be sold pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the "Securities Act"), the availability of
which is established to the reasonable satisfaction of the Company, or (ii) a
registration

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statement relating to such shares has been filed by the Company and declared
effective by the Securities and Exchange Commission.

                  Each certificate for securities purchased upon exercise of
this Warrant shall bear a legend substantially as follows unless such securities
have been registered under the Securities Act:

                  "The securities represented by this certificate have not been
                  registered under the Securities Act of 1933 (the "Act"). The
                  securities may not be offered for sale, sold or otherwise
                  transferred except (i) pursuant to an effective registration
                  statement under the Act or (ii) pursuant to an exemption from
                  registration under the Act in respect of which the Company has
                  received an opinion of counsel satisfactory to the Company to
                  such effect. Copies of the agreement covering both the
                  purchase of the securities and restricting their transfer may
                  be obtained at no cost by written request made by the holder
                  of record of this certificate to the Secretary of the Company
                  at the principal executive offices of the Company."

4. New Warrants to be Issued.

                  4.1 Partial Exercise or Transfer. Subject to the restrictions
in Section 3 hereof, this Warrant may be exercised in whole or in part. In the
event of the exercise hereof in part, upon surrender of this Warrant for
cancellation, together with the duly executed exercise form, the Company shall
cause to be delivered to the Holder without charge a new warrant or new warrants
of like tenor with this Warrant in the name of the Holder evidencing the right
to purchase, in the aggregate, the remaining number of underlying shares of
Common Stock purchasable hereunder after giving effect to any such partial
exercise.

                  4.2 Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and of an indemnification in favor of the Company, reasonably satisfactory to
it, the Company shall execute and deliver a new warrant of like tenor and date.
Any such new warrants executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute an additional contractual obligation
on the part of the Company.

5. Reservation. The Company shall at all times reserve and keep available out of
its authorized shares of Common Stock, solely for the purpose of issuance upon
exercise of the Warrant, such number of authorized but unissued shares of Common
Stock, free from preemptive rights, as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrant and
payment of the applicable Exercise Price therefor, all shares of Common Stock
shall be duly and validly issued, fully paid and nonassessable and not subject
to preemptive rights of any stockholder. The Company further covenants and
agrees that upon exercise of this Warrant and payment of the applicable Exercise
Price therefor, all shares of Common Stock shall be duly and validly issued,
fully paid and nonassessable and not subject to preemptive rights of any
stockholder. If the Common Stock is then listed on a national securities
exchange, all shares of Common Stock issued upon exercise of this Warrant shall
also be duly listed thereon.

6. Adjustments. The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment from to time as follows.

                  6.1 Merger, Sale of Assets, Etc. If at any time while this
Warrant, or any portion thereof, is outstanding and unexpired there shall be (i)
a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is the surviving entity but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash, or
otherwise, or (iii) a sale or transfer of the Company's properties and assets
as, or substantially as, an entirety to any other person, then as a part of such
reorganization, merger, consolidation, sale or transfer lawful provision shall
be made so that the holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified herein and
payment of the Exercise Price then in effect, the number of shares of stock or
other securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 6. The foregoing provisions of this Section 6 shall similarly
apply to successive reorganization, consolidations, mergers, sales and transfers
and to the stock or securities of any other corporation that are at the time
receivable upon the exercise of this Warrant. If the per-share consideration
payable to the holder hereof for shares in connection with any such transaction
is in a form other than cash or marketable securities, then the value of such
consideration shall be determined in good faith by the Company's Board of
Directors. In all events, appropriate adjustment (as determined in good faith by
the

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Company's Board of Directors) shall be made in the application of the provisions
of this Warrant with respect to the rights and interests of the Holder after the
transaction, to the end that the provisions of this Warrant shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this Warrant.

                  6.2 Reclassification, Etc. If the Company, at any time while
this Warrant, or any portion thereof, remains outstanding and unexpired by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 6.

                  6.3 Split Subdivision or Combination of Shares. If the Company
at any time while this Warrant, or any portion thereof, remains outstanding and
unexpired shall split, subdivide or combine the securities as to which purchase
rights under this Warrant exist, into a different number of securities of the
same class, the Exercise Price for such securities shall be proportionately
decreased in the case of a split or subdivision or proportionately increased in
the case of a combination.

                  6.4 Adjustments for Dividends in Stock or Other Securities or
Property. If while this Warrant, or any portion hereof, remains outstanding and
unexpired the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible stockholders of the Company, shall have
become entitled to receive, without payment thereof, other or additional stock
or other securities or property (other than cash) of the Company by way of
dividend, then and in each case, this Warrant shall represent the right to
acquire, in addition to the number of shares of the security receivable upon
exercise of this Warrant, and without payment of additional consideration
thereof, the amount of such other or additional stock or other securities or
property (other than cash) of the Company that such holder would hold on the
date of such exercise had it been the holder of record of the security
receivable upon exercise of this Warrant on the date hereof and had thereafter,
during the period the date hereof to and including the date of such exercise,
retained such shares and/or other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by the provisions of this Section 6.

                  6.5 Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 6, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based.

7.       Registration Rights.

                  7.1 "Piggy Back" Registration Rights. If the Company shall at
any time or from time to time after the date hereof determine to register any of
its securities with the Commission (other than by means of a registration
statement on a form (e.g., Form F-4, S-4 or S-8 or successor forms) which, by
its terms, could not be used for the sale and distribution of the Common Stock),
the Company shall:

         (a)      promptly give notice thereof to the Holder; and

         (b)      use its best efforts to effect the registration and any
                  qualification of Common Shares issuable upon exercise of this
                  warrant (the "Registrable Securities") requested to be so
                  registered and qualified in writing by the Holder.

                  7.2 Registration Procedures. If and whenever the Company is
required by the provisions of Section 6.1 to effect a registration under the
Securities Act, the Company will at its expense, as expeditiously as possible
prepare and file with the Commission an appropriate registration statement in
accordance with the Securities Act and the rules and regulation of the
Commission with respect to the resale of the Registrable Securities (a
"Registration Statement") and use its best efforts to cause such Registration
Statement to become and remain effective until the earlier of (i) all of the
Registrable Securities covered by such Registration Statement have been sold in
accordance with the intended methods of disposition of the Holder sets forth in
such Registration Statement and (ii) and expiration date of this Warrant, and
the Company shall prepare and file with the Commission such amendments to such
Registration Statement and supplements to the prospectus contained therein as
may be necessary to keep such Registration Statement effective and such
Registration Statement and such prospectus accurate and complete during such
period.

                  7.3 Expenses. The company shall bear all expenses in
connection with any registration under this Section 6, including, without
limitation, all registration and filing fees, printing expenses and fees and
disbursements of the Company's counsel and expense of any audits incident to or
required by any such registration, provided, that the Company shall not, in any

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event, be required to bear the cost of any commissions and compensation paid,
and concessions and discounts allowed to, underwriters, dealers or others
performing similar functions in connection with the sale and distribution of the
Common Stock sold by the Holder.

                  7.4 Indemnification. (a) If Registrable Securities are
included in a Registration Statement, the Company will indemnify the Holder and
the directors, officers, employees, agents, affiliates and control persons
thereof, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on (A) any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or (B) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (C) any violation by the Company of any rule or
regulation promulgated under the Securities Act or applicable state securities
laws and related to action or inaction required of the Company in connection
with any registration, qualification or compliance, and will reimburse the
Holder for any legal and any other expenses reasonable incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage or liability arises out of or is based
on any untrue statement or omission based upon written information furnished to
the Company by the Holder specifically for use therein.

                  (b) If Registrable Securities are included in an Registration
Statement, the Holder will indemnify the Company and the directors, officers,
employees, agents, affiliates and control person thereof, against all claims,
losses, damages and liabilities (or action in respect thereof) arising out of or
based on (A) any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other document (including
any related registration statement, notification or the like) incident to any
such registration, qualification or compliance, or (B) any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (C) any violation by
the Holder of any rule or regulation promulgated under the Securities Act or
applicable state securities laws and relating to action or inaction required of
the Company in connection with any registration, qualification or compliance,
but only to the extent that such claims, losses, damages and liabilities (or
actions in respect thereof) occurs in reliance upon written information provided
to the Company by the Holder for use in connection with a Registration
Statement, and will reimburse the Company for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action.

                  (c) Each party entitled to indemnification under this Section
6.4 (sometimes referred to as the "Indemnified Party") shall give notice to the
party required to provide indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that unless such failure
materially and adversely affects the rights or abilities of the Indemnifying
Party to defend such action, the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 6.4. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability with respect to such claim or
litigation. If any such Indemnified Party shall have reasonably concluded that
there may be one or more legal defenses available to such Indemnified Party that
are different from or additional to those available to the Indemnifying Party,
or that such claim or litigation involves or could have an effect upon matters
beyond the scope of the indemnity agreement provided in this Section 6.4, the
Indemnifying Party shall not have the right to assume the defense of such action
on behalf of such Indemnified Party and such Indemnifying Party shall reimburse
such Indemnified Party for that portion of the fees and expenses of any counsel
retained by the Indemnified Party that is reasonably related to the matters
covered by the indemnity agreement provided in this Section 6.4; provided, that
in no event shall the Indemnifying Party be liable to reimburse the fees or
expenses of more than one counsel retained by Indemnified Parties hereunder in
connection with any claim or litigation resulting from such claim.

                  (d) If the indemnification provided for in this Section 6.4
shall for any reason be unenforceable by an indemnified party, although
otherwise available in accordance with its terms, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages, liabilities or expenses with respect to which such indemnified party
has claimed indemnification, in such proportion as is appropriate to reflect the
relative fault of the indemnified party on the one hand and the indemnifying
party on the other in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The Company and the Holder agree that it
would not be just and equitable if contribution pursuant hereto were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account such equitable considerations. The amount paid or
payable by an indemnified party as a

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result of the losses, claims, damages, liabilities or expenses referred to
herein shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
against any action or claim which is the subject hereof. No person guilty of
fraudulent misrepresentation shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation.

                  7.5 Information Provided by the Holder. The Holder shall
furnish in writing to the Company such information regarding such person and the
distribution proposed by such person as the Company may request in writing and
as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Section 6.

                  7.6 Prospectuses, etc. The Company will, at its expense,
furnish to the Holder such number of prospectuses, offering circulars and other
documents incident to such registration and related qualification or compliance
as such Holder from time to time may reasonably request.

                  7.7 Underwritten Offerings; Permitted Interruptions; Holdback
Periods. (a) In the event any registration under Section 7.1 is underwritten and
the managing underwriter determines that the inclusion of all Registrable
Securities that are to be included would materially interfere with the
successful completion thereof in the reasonable judgment of such managing
underwriter, then the number of Registrable Securities to be included may be
reduced on the same basis as other selling stockholders in such registration.

                  (b) With respect to any registration pursuant to Section 6.1
hereof, the Company shall have the right at any time on one occasion in respect
of any Registration Statement to delay the filing of such Registration Statement
or to withdraw such Registration Statement (or notify the holders of Registrable
Securities covered by such Registration Statement not to sell such Registrable
Securities pursuant to such Registration Statement) after the filing and the
effective date thereof (each such delay, withdrawal or notice is referred to
herein as a "Permitted Interruption") for a reasonable period of time (not to
exceed ninety (90) days in any such case, which may not thereafter be extended)
if, at such time: (i) the Company is engaged in any active program for the
repurchase of its Common Stock and furnishes a certificate to that effect to the
Holder or (ii) the Board of Directors of the Company shall determine in good
faith that such offering will interfere with a pending or contemplated
financing, merger, acquisition, sale of assets, recapitalization or other
similar corporate action of the Company and the Company furnishes a certificate
to that effect to the Holder. After such Permitted Interruption, the Company
shall use its best efforts to restore such Registration or to effect such
Registration (as the case may be) within thirty (30) days without further
request from the Holder, unless such request has been withdrawn by written
notice of the Holder.

                  (c) The Holder, if, as and when its Registrable Securities are
covered by a Registration Statement filed pursuant to Section 7.1 hereof,
agrees, if and to the extent requested by the managing underwriter or
underwriters, in the case of an underwritten offering (to the extent timely
notified in writing by the managing underwriter or underwriters), not to effect
any public sale or distribution of securities of the Company of any class
included in such Registration Statement, included a sale pursuant to Rule 144
(or any similar rule then in force) under the Securities Act, except as part of
such underwritten registration, during the ten (10) day period prior to, and a
period of up to one hundred twenty (120) days (as determined by the managing
underwriter or underwriters) beginning on, the effective date of any
underwritten offering made pursuant to such Registration Statement.

8.       Certain Notice Requirements.

                  8.1 Holder's Right to Receive Notice. Nothing herein shall be
construed as conferring upon the Holder the right to vote or consent or to
receive notice as a stockholder for the election of directors or any other
matter, or as having any rights whatsoever as a stockholder of the Company prior
to the exercise hereof (including the right to receive dividends). If, however,
at any time prior to the expiration of the Warrant and its exercise, any of the
events described in Section 6 shall occur, then, in one or more of said events,
the Company shall give written notice of such event at least ten (10) days prior
to the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
conversion or exchange of securities or subscription rights, or entitled to vote
on such proposed dissolution, liquidation, winding up, merger, consolidation,
reorganization or sale. Such notice shall specify such record date or the date
of the closing of the transfer books, as the case may be.

                  8.2 Transmittal of Notices. Any notice or other communication
or delivery required or permitted hereunder shall be in writing and shall be
delivered personally or sent by certified mail, postage prepaid, or by a
nationally recognized overnight courier service, and shall be deemed given when
so delivered personally or by overnight courier service, or, if mailed, three
(3) days after the date of deposit in the United States mails, as follows:

                  (i)      if to the Company, to:

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                           Sheffield Pharmaceuticals, Inc.
                           14528 South Outer Forty Road, Suite 205
                           St. Louis, Missouri 63017
                           Attention:  Chief Financial Officer

                  (ii)     if to the Holder, to the address of such Holder as
                           shown on the books of the Company.

Either of the Holder or the Company may change the foregoing address by notice
given pursuant to this Section 8.2.

9.       Miscellaneous.

                  9.1 Purchase for Investment. By his acceptance of this
Warrant, the Holder represents and warrants that the Holder has acquired this
Warrant for the Holder's own account for investment and not with the view to the
distribution thereof, except in accordance with applicable federal and state
securities laws. The Holder represents that he is an "accredited investor" as
such term is defined under Rule 501 of Regulation D promulgated under the
Securities Act. The Holder confirms that he has been advised that the Warrants
have not been, and the shares of Common Stock issuable upon exercise of this
Warrant Shares will not be, registered under the Securities Act and that he has
consulted with and been advised by counsel as to the restrictions on resale to
which this Warrant and such Shares will be subject.

                  9.2 Amendments. All modifications or amendments to this
Warrant shall require the written consent of each party.

                  9.3 Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this Warrant.

                  9.4 Entire Agreement. This Warrant constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersede all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.

                  9.5 Binding Effect. This Warrant shall inure solely to the
benefit of and shall be binding upon, the Holder and the Company and their
permitted assignees, respective successors, legal representatives and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Warrant or
any provisions herein contained.

                  9.6 Governing Law. This Warrant shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without giving effect to conflict of laws.

                  9.7 Waiver, Etc. The failure of the Company or the Holder to
at any time enforce any of the provisions of this Warrant shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Warrant or any provision hereof or the right of the Company or
any Holder to thereafter enforce each and every provision of this Warrant. No
waiver of any breach, noncompliance or nonfulfillment of any of the provisions
of this Warrant shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, noncompliance or
nonfulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, noncompliance or nonfulfillment.

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                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer as of the __th day of _______ 200_.

                                  SHEFFIELD PHARMACEUTICALS, INC.

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

                                  Name:
                                         -------------------------------------

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

AGREED AND ACCEPTED:

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

Name:
     ---------------------------------

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Form to be used to exercise Warrant:

Sheffield Pharmaceuticals, Inc.
14528 South Outer Road, Suite 205
St. Louis, Missouri 63017
Attention:  Chief Financial Officer

Date: ________________, 200__

                  The Undersigned hereby elects irrevocably to exercise the
within Warrant and to purchase __________ shares of Common Stock of Sheffield
Pharmaceuticals, Inc. and hereby makes payment of $_____________ (at the rate of
$______________ per share) in payment of the Exercise Price pursuant thereto.
Please issue the shares as to which this Warrant is exercised in accordance with
the instructions given below.

                                    ------------------------------------------
                                    Signature

                                    ------------------------------------------
                                    Signature Guaranteed

                   INSTRUCTIONS FOR REGISTRATION OF SECURITIES

Name
    ----------------------------------------------------------------------------
                            (Print in Block Letters)

Address
       -------------------------------------------------------------------------

                  NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.

                                       9<PAGE>

EXHIBIT 10.1  AMENDMENT NO. 2 TO CREDIT AGREEMENT.

                       AMENDMENT NO. 2 TO CREDIT AGREEMENT

     This AMENDMENT NO. 2 TO CREDIT AGREEMENT (this "Amendment") is entered into
as of this 1st day of August, 2002, by NAVARRE CORPORATION, a Minnesota
corporation, ("Borrower"), GENERAL ELECTRIC CAPITAL CORPORATION, as agent (the
"Agent") for itself and the Lenders under and as defined in the Credit Agreement
(as hereinafter defined), and the Lenders. Unless otherwise specified herein,
capitalized terms used in this Amendment shall have the meanings ascribed to
them by the Credit Agreement (as hereinafter defined).

                                    RECITALS

     WHEREAS, the Borrower, the Agent and the Lenders have entered into that
certain Credit Agreement, dated as of October 3, 2001 (as amended, supplemented,
restated or otherwise modified from time to time, the "Credit Agreement");

     WHEREAS, the Borrower desires to form a new Subsidiary to be named Encore
Acquisition Corporation in the state of Minnesota ("Encore Acquisition");

     WHEREAS, Encore Acquisition will purchase the assets of Encore Software,
Inc., a California corporation ("Encore Software") pursuant to that certain
Amended and Restated Asset Purchase Agreement dated as of July 10, 2002, between
Borrower, as buyer and Encore Software, as seller (together with any exhibits,
schedules and any other annexes or supplements thereto, as amended, pursuant to
that certain Amendment No. 1 to Amended and Restated Asset Purchase Agreement
dated as of July 31, 2002, (the "Amendment No 1 to Encore Purchase Agreement")
between Borrower and Encore Software (including an assignment by Borrower to
Encore Acquisition), the "Purchase Agreement") for an aggregate purchase price
not to exceed $11,000,000 (the "Purchase Price"), which transaction will be
referred to herein as the "Purchase"; and

     WHEREAS, the Borrower, Agent and the Lenders desire to amend certain
provisions on the Credit Agreement as herein set forth.

     NOW THEREFORE, in consideration of the foregoing recital, mutual agreements
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Agent, and
Lenders hereby agree as follows:

     SECTION 1. AMENDMENTS.

          (a) Section 6.1 of the Credit Agreement is hereby amended and restated
     to read in its entirety as follows:

     "6.1. Mergers, Subsidiaries, Etc. Without the prior written consent of the
Agent (which consent may be provided or withheld in the Agent's sole
discretion), no Credit Party shall directly or indirectly, by operation of law
or otherwise, (a) form or acquire any Subsidiary, or (b) merge with, consolidate
with, acquire all or substantially all of the assets or Stock of, or otherwise
combine with or acquire, any Person; provided, however that (i) the Borrower may

<PAGE>

form Encore Acquisition and (ii) Encore Acquisition may acquire the assets of
Encore Software pursuant to and in accordance with the Encore Purchase
Agreement."

          (b) Section 6.2 of the Credit Agreement is hereby amended and restated
     to read in its entirety as follows:

     "6.2. Investments; Loans and Advances. No Credit Party shall make or permit
to exist any investment in, or make, accrue or permit to exist loans or advances
of money to, any Person, through the direct or indirect lending of money,
holding of securities or otherwise, except that: (a) Borrower may hold
investments comprised of notes payable, or stock or other securities issued by
Account Debtors to Borrower pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary course of business,
so long as the aggregate amount of such Accounts so settled by Borrower does not
exceed $500,000; (b) each Credit Party may maintain its existing investments in
its Subsidiaries as of the Closing Date; (c) Borrower may maintain Eligible
Certificate of Deposits; (d) so long as no Default or Event of Default has
occurred and is continuing and there is no outstanding Revolving Loan balance,
Borrower may make investments, subject to Control Letters in favor of Agent for
the benefit of Lenders or otherwise subject to a perfected security interest in
favor of Agent for the benefit of Lenders, in (i) marketable direct obligations
issued or unconditionally guaranteed by the United States of America or any
agency thereof maturing within one year from the date of acquisition thereof,
(ii) commercial paper maturing no more than one year from the date of creation
thereof and currently having the highest rating obtainable from either Standard
& Poor's Ratings Group or Moody's Investors Service, Inc., (iii) certificates of
deposit maturing no more than one year from the date of creation thereof issued
by commercial banks incorporated under the laws of the United States of America,
each having combined capital, surplus and undivided profits of not less than
$300,000,000 and having a senior unsecured rating of "A" or better by a
nationally recognized rating agency (an "A Rated Bank"), (iv) time deposits
maturing no more than 30 days from the date of creation thereof with A Rated
Banks and (v) mutual funds that invest solely in one or more of the investments
described in clauses (i) through (iv) above; (e) advances to Vendors described
in Part A of Disclosure Schedule 6.2; (f) advances to Vendors as long as the
aggregate outstanding amount of advances to Vendors permitted solely pursuant to
Section 6.2(e) and this Section 6.2(f) does not exceed $7,278,000 at any time
(provided, however, that the amount set forth in this Section 6.2(e) shall be
reduced from time to time by the amount of advances to Vendors permitted by
Section 6.2(e) and/or Section 6.2(f) which have been, or should be in accordance
with Borrower's policies, written off as uncollectible); (g) advances to Vendors
described in Part B of Disclosure Schedule 6.2; (h) advances by a Credit Party
to its employees expressly permitted by Section 6.4(b) hereof; (i) on or about
July 31, 2002, Borrower may make an investment through a loan in Encore
Acquisition in an aggregate amount not to exceed $6,000,000, (j) Borrower may
make loans to Encore Acquisition in an aggregate outstanding principal amount
not to exceed, at any time, the lesser of (i) $5,000,000 and (ii) an amount
equivalent to the book value of the Accounts and Inventory of Encore Acquisition
at such time, as long as there is at least one 30 day consecutive period between
April 1 and June 30 of each year when the outstanding balance of such loans is
zero and (k) other investments not exceeding $100,000 in the aggregate at any
time outstanding."

          (c) Section 6.3 of the Credit Agreement is hereby amended and restated
     to read in its entirety as follows:

<PAGE>

     "6.3. Indebtedness.

     (a) No Credit Party shall create, incur, assume or permit to exist any
Indebtedness, except (without duplication) (i) Indebtedness secured by purchase
money security interests and Capital Leases permitted in Section 6.7(c), (ii)
the Loans and the other Obligations, (iii) unfunded pension fund and other
employee benefit plan obligations and liabilities to the extent they are
permitted to remain unfunded under applicable law, (iv) existing Indebtedness
described in Disclosure Schedule (6.3) and refinancings thereof or amendments or
modifications thereof that do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to extend the
same) and that are otherwise on terms and conditions no less favorable to any
Credit Party, Agent or any Lender, as determined by Agent, than the terms of the
Indebtedness being refinanced, amended or modified, (v) Indebtedness permitted
pursuant to Section 6.2(j) hereof and (vi) Indebtedness of Encore Acquisition to
the Borrower in an aggregate amount not to exceed $7,200,000, Indebtedness of
Borrower to Encore Software incurred pursuant to Section 5 of the Amendment No.
1 to Encore Purchase Agreement in an aggregate principal amount not to exceed
$1,150,000, and Indebtedness incurred by Encore Acquisition under the Comerica
Loan Agreement; provided that, no Credit Party (other than Encore Acquisition)
shall guarantee, grant liens on its assets (including, without limitation, the
equity interests in Encore Acquisition) to secure, or otherwise be directly or
indirectly liable for any such Indebtedness or related obligations.

     (b) No Credit Party shall, directly or indirectly, voluntarily purchase,
redeem, defease or prepay any principal of, premium, if any, interest or other
amount payable in respect of any Indebtedness, other than (i) the Obligations;
(ii) Indebtedness secured by a Permitted Encumbrance if the asset securing such
Indebtedness has been sold or otherwise disposed of in accordance with Sections
6.8(b) or (c); (iii) Indebtedness permitted by Section 6.3(a)(iv) upon any
refinancing thereof in accordance with Section 6.3(a)(iv); and (iv) other
Indebtedness not in excess of $250,000; and (v) as otherwise permitted in
Section 6.14."

     (d) Section 6.7 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:

     "6.7 Liens

     No Credit Party shall create, incur, assume or permit to exist any Lien on
or with respect to its Accounts or any of its other properties or assets
(whether now owned or hereafter acquired) except for (a) Permitted Encumbrances;
(b) Liens in existence on the date hereof and summarized on Disclosure Schedule
(6.7) securing Indebtedness described on Disclosure Schedule (6.3) and permitted
refinancings, extensions and renewals thereof, including extensions or renewals
of any such Liens; provided that the principal amount so secured is not
increased and the Lien does not attach to any other property; and (c) (i) Liens
created after the date hereof by conditional sale or other title retention
agreements (including Capital Leases) or in connection with purchase money
Indebtedness with respect to Equipment and Fixtures acquired by any Credit Party
in the ordinary course of business, involving the incurrence of an aggregate
amount of purchase money Indebtedness and Capital Lease Obligations of not more
than $250,000 outstanding at any one time for all such Liens (provided that such
Liens attach only to the assets subject to such purchase money debt and such
Indebtedness is incurred within 20 days following

<PAGE>

such purchase and does not exceed 100% of the purchase price of the subject
assets) and (ii) Liens in favor of Comerica Bank solely to secure Indebtedness
permitted pursuant to Section 6.3(vi) hereof. In addition, no Credit Party shall
become a party to any agreement, note, indenture or instrument, or take any
other action, that would prohibit the creation of a Lien on any of its
properties or other assets in favor of Agent, on behalf of itself and Lenders,
as additional collateral for the Obligations, except operating leases, Capital
Leases or Licenses which prohibit Liens upon the assets that are subject
thereto."

     (e) All references to "Bankers Trust Company" in the Credit Agreement are
hereby deleted and "Deutsche Bank Trust Company Americas" is inserted in place
thereof.

     (f) The following terms are hereby added to Annex A of the Credit
Agreement:

     "Comerica Bank" means Comerica Bank-California, a California corporation.

     "Comerica Loan Agreement" means that certain Loan and Security Agreement
dated as of August 2, 2002 between Encore Acquisition and Comerica
Bank-California (as amended, restated or otherwise modified from time to time).

     "Encore Acquisition" means Encore Acquisition Corporation, a Minnesota
corporation and a Subsidiary of Borrower.

     "Encore Purchase Agreement" that certain Amended and Restated Asset
Purchase Agreement dated as of July 10, 2002, between Borrower, as buyer and
Encore Software, as seller for a purchase price in an amount not to exceed
$11,000,000 (together with any exhibits, schedules and any other annexes or
supplements thereto, as amended, pursuant to that certain Amendment No. 1 to
Amended and Restated Asset Purchase Agreement dated as of July 31, 2002, (the
"Amendment No. 1 to Encore Purchase Agreement") between Borrower and Encore
Software (including an assignment by Borrower to Encore Acquisition).

     "Encore Software" means Encore Software, Inc., a California corporation.

     (g) Annex G of the Credit Agreement is hereby amended by inserting new
subsections (c) and (d) immediately after subsection (b) thereof which will read
as follows:

     "(c) Minimum Encore Acquisition EBITDA. Encore Acquisition shall have,

          (i) for the Fiscal Quarter ending on or before December 31, 2002, at
     the end of such Fiscal Quarter, EBITDA plus interest income for the 3-month
     period then ended of not less than $0;

          (ii) for the Fiscal Quarter ending on or before March 31, 2003, at the
     end of such Fiscal Quarter, EBITDA plus interest income for the 6-month
     period then ended of not less than $1,000,000;

          (iii) for the Fiscal Quarter ending on or before June 30, 2003, at the
     end of such Fiscal Quarter, EBITDA plus interest income for the 9-month
     period then ended of not less than $750,000; and

          (iv) for the Fiscal Quarter ending on or before September 30, 2003 and
     for each Fiscal Quarter thereafter, at the end of such Fiscal Quarter,
     EBITDA plus interest income for the 12-month period then ended of not less
     than $1,000,000."

<PAGE>

     "(d) Minimum Fixed Charge Coverage Ratio. Borrowers and their Subsidiaries
shall have on a consolidated basis, for the Fiscal Quarter ending on or before
September 30, 2003 and for each Fiscal Quarter thereafter, at the end of each
such Fiscal Quarter, for the 12-month period then ended, a ratio of (A) EBITDA
plus interest income received during such period to (B) the sum of (i) the
aggregate of all Interest Expense paid or accrued during such period, plus (ii)
scheduled payments of principal with respect to Indebtedness during such period,
plus (iii) Capital Expenditures during such period, plus (iv) income taxes paid
in cash during such period, of not less than 1.2:1."

     SECTION 2 EFFECTIVENESS. The effectiveness of this Amendment is subject to
the satisfaction of the following conditions precedent:

     (a) this Amendment shall have been duly executed and delivered by Borrower,
Agent and each Lender;

     (b) the Agent shall have received evidence that the Purchase has been
consummated in accordance with the terms of the Purchase Agreement and related
documentation;

     (c) the Agent shall have received a certified copy of each of the Purchase
Agreement and that certain Settlement Agreement and General Release dated as of
August 2, 2002 by and among Comerica Bank-California, Encore Software and Encore
Acquisition, each of which shall be in form and substance satisfactory to Agent;

     (d) the Agent shall have received a certified copy of the order (the
"Order") entered by the Bankruptcy Court authorizing the terms and conditions of
the Purchase Agreement and the Purchase (which Order shall provide that Encore
Acquisition should obtain the assets of Encore which are the subject of the
Purchase free and clear of any and all liens, interests and encumbrances in
accordance with 11 U.S.C. Section 363(f)), and such Order shall be in form and
substance satisfactory to Agent;

     (e) the Borrower shall have paid to the Agent an amendment fee of $37,500;

     (f) the Agent shall have received a certified copy of the Comerica Loan
Agreement and related documents (collectively, the "Comerica Documents"), and
the Comerica Documents shall be in form and substance satisfactory to Agent;

     (g) Agent shall have received (i) copies of the UCC, tax and judgment lien
searches conducted in respect of Encore Acquisition, in form and substance
satisfactory to Agent and (ii) an officer's certificate with respect to Encore
Acquisition, in form and substance satisfactory to Agent, attaching articles of
incorporation, by-laws, a good standing and an incumbency certificate; provided
that the Borrower hereby covenants and agrees that Borrower will deliver to
Agent a copy of the board resolutions in respect of the Encore Acquisition, in
form and substance satisfactory to Agent, within seven (7) days following the
date hereof;

     (h) the Agent shall have received a duly executed original of the opinion
of Winthrop & Weinstine, P.A., in form and substance satisfactory to Agent and
its counsel, with respect to the due authorization, execution, delivery and
performance by each Credit Party signatory hereto of this Amendment or the other
Loan Documents executed in connection herewith and the enforceability of the
Credit Agreement as amended hereby and the Loan Documents executed in connection
herewith; and

     (i) the Agent shall have received executed copies of all Loan Documents
required by

<PAGE>

the Agent in connection with this Amendment, including, without limitation, (i)
a guaranty by Encore Acquisition in favor of Agent, (ii) a security agreement
between Encore Acquisition and Agent, and (iii) a pledge agreement executed by
the Borrower in favor of Agent pledging all of the Stock of Encore Acquisition
to Agent (along with the share certificates representing such Stock and stock
powers for each such share certificate).

     SECTION 3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent and
each Lender to enter into this Amendment, the Borrower hereby represents and
warrants to the Agent and each Lender, which representations and warranties
shall survive the execution and delivery of this Amendment, that:

     (a) all of the representations and warranties contained in the Credit
Agreement and in each Loan Document are true and correct as of the date hereof
after giving effect to this Amendment; and

     (b) the execution, delivery and performance by the Borrower of this
Amendment has been duly authorized by all necessary corporate action required on
its part and this Amendment is the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms, except
as its enforceability may be affected by the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors generally.

     SECTION 4. REFERENCE TO AND EFFECT UPON THE CREDIT AGREEMENT.

     (a) Except as specifically set forth above, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.

     (b) The amendments and limited waivers set forth herein are effective
solely for the purposes set forth herein and shall be limited precisely as
written, and shall not be deemed to (i) be a consent to any amendment, waiver or
modification of any other term or condition of the Credit Agreement or any other
Loan Document, (ii) operate as a waiver or otherwise prejudice any right, power
or remedy that the Agent or the Lenders may now have or may have in the future
under or in connection with the Credit Agreement or any other Loan Document or
(iii) constitute a waiver of any provision of the Credit Agreement or any Loan
Document, except as specifically set forth herein. Upon the effectiveness of
this Amendment, each reference in the Credit Agreement to "this Agreement",
"herein", "hereof" and words of like import and each reference in the Credit
Agreement and the Loan Documents to the Credit Agreement shall mean the Credit
Agreement as amended hereby. This Amendment shall be construed in connection
with and as part of the Credit Agreement.

     SECTION 5. COSTS AND EXPENSES. As provided in Section 11.3 of the Credit
Agreement, the Borrower agrees to reimburse Agent for all fees, costs, and
expenses, including the reasonable fees, costs, and expenses of counsel or other
advisors for advice, assistance, or other representation in connection with this
Amendment.

     SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS.

     SECTION 7. HEADINGS. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute part of this
Amendment for any other purposes.

<PAGE>

     SECTION 8. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed an original, but
all such counterparts shall constitute one and the same instrument.

                            (signature page follows)

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment No. 2 to Credit Agreement as of the date first written above.

                                            BORROWER:

                                            NAVARRE CORPORATION

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

                                            GENERAL ELECTRIC CAPITAL
                                            CORPORATION, AS AGENT AND LENDER

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

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