Document:

STOCK
      PLEDGE AGREEMENT

     

    This
      Stock Pledge Agreement (this “Agreement”)
      is
      dated as of June 22, 2005 by and between Acura Pharmaceuticals, Inc., a New
      York
      corporation (the “Pledgor”),
      and
      Galen Partners III, L.P., a Delaware limited partnership, acting in its capacity
      as agent for the Lenders, as hereinafter defined (the “Agent”),
      for
      the benefit of the Lenders.

     

     

    PRELIMINARY
      STATEMENTS

     

    The
      Pledgor has entered into a Loan Agreement of even date herewith (as the same
      may
      be amended, modified, supplemented or restated from time to time, the
“Loan
      Agreement;”
      terms
      which are capitalized in this Agreement and not otherwise defined shall have
      the
      meanings ascribed to them in the Loan Agreement) with the Lenders party thereto
      (the “Lenders”).
      It is
      a condition precedent to the effectiveness of the Loan Agreement that the
      Pledgor shall have executed this Agreement and made the pledges referred to
      herein in favor of the Agent, for the ratable benefit of the Lenders, as
      contemplated hereby.

     

     

    AGREEMENT

     

    In
      consideration of the premises and to induce the Lenders to enter into the Loan
      Agreement, and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the Pledgor hereby agrees with
      the
      Agent as follows:

     

    ARTICLE
      1

     

    PLEDGE
      OF PLEDGED STOCK

     

    1.1  DEFINITIONS;
      INTERPRETATION OF AGREEMENT

     

    Unless
      the context otherwise requires, all terms not defined herein or in the Loan
      Agreement shall have the meaning set forth in the New York Uniform Commercial
      Code (the “Code”).
      Acceptance of or acquiescence in a course of performance rendered under this
      Agreement shall not be relevant in determining the meaning of this Agreement
      even though the accepting or acquiescing party had knowledge of the nature
      of
      the performance and opportunity for objection.

     

    1.2  PLEDGE
      OF THE PLEDGED STOCK; POWER OF ATTORNEY

     

    (a)  As
      security for the prompt payment and performance when due of the obligations
      now
      or hereafter owing by the Pledgor to the Lenders under the Loan Agreement,
      the
      Notes, the other Transaction Documents and under the agreements, documents
      and
      instruments delivered by the Pledgor pursuant thereto or in connection therewith
      (collectively, the “Obligations”),
      the
      Pledgor hereby pledges to the Agent, for the ratable benefit of the Lenders,
      and
      grants to the Agent, for the ratable benefit of the Lenders, a lien on and
      security interest having priority over any and all other security interests,
      in
      the following (collectively the “Pledged
      Collateral”):
      (i)
      all of the issued and outstanding shares of common stock of Acura Pharmaceutical
      Technologies, Inc. (“APT”),
      and
      Axiom Pharmaceutical Corporation (“Axiom”
      and,
      together with APT, the “Subsidiaries”),
      which
      shares are more particularly described on Schedule
      A
      attached
      hereto (the “Pledged
      Stock”),
      (ii)
      all additional shares of common stock at any time issued to the Pledgor by
      APT
      or Axiom, (iii) the certificates evidencing all Pledged Collateral, (iv) subject
      to Section 1.6 hereof, all dividends, cash, securities, investment property,
      instruments and other property from time to time received, receivable or
      otherwise distributed in respect of or in exchange for any or all of the Pledged
      Stock and such shares and securities, and (v) all proceeds of any and all
      Pledged Collateral (including, without limitation, proceeds constituting any
      property of the types described above). The Pledgor shall deliver to the Agent
      original stock certificates for all of the Pledged Stock, each accompanied
      by an
      undated stock power executed in blank by the Pledgor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  The
      Agent
      shall have no obligation with respect to the Pledged Collateral or any other
      property held or received by it hereunder except to use reasonable care in
      the
      custody thereof. The Agent may hold the Pledged Collateral in the form in which
      it is received by it.

     

    (c)  The
      Pledgor, to the fullest extent permitted by law, hereby constitutes and
      irrevocably appoints the Agent (and any officer or agent of the Agent, with
      full
      power of substitution and revocation) as the Pledgor’s true and lawful
      attorney-in-fact, in the Pledgor’s stead and in the name of the Pledgor or in
      the name of the Agent, to transfer, upon the occurrence and during the
      continuance of an Event of Default or at any time the Agent, based on all the
      facts and circumstances then existing, and in the exercise of its commercially
      reasonable credit judgment, believes, and has so notified the Pledgor in
      writing, that, in connection with the Loan Agreement and the agreements,
      documents and instruments delivered by the Pledgor pursuant thereto or in
      connection therewith, fraud has occurred with respect to the Pledgor or any
      other Person controlling, controlled by, or under common control with the
      Pledgor which has a material adverse effect on the operations or condition
      (financial or otherwise) of the Pledgor and its subsidiaries, taken as a whole
      (a “Fraud”),
      the
      Pledged Collateral on the books of APT and Axiom, as applicable, in whole or
      in
      part, to the name of the Agent or such other Person or Persons as the Agent
      may
      designate and, upon the occurrence and during the continuance of an Event of
      Default or at any time the Agent, based on all the facts and circumstances
      then
      existing, and in the exercise of its commercially reasonable credit judgment,
      believes, and has so notified the Pledgor in writing, that Fraud has occurred,
      to take all such other and further actions as the Pledgor could have taken
      with
      respect to the Pledged Collateral which the Agent in its reasonable judgment
      determines to be necessary or appropriate to accomplish the purposes of this
      Agreement.

     

    (d)  The
      powers of attorney granted pursuant to this Agreement and all authority hereby
      conferred are granted and conferred solely to protect the Agent’s interests in
      the Pledged Collateral and shall not impose any duty upon the attorney-in-fact
      to exercise such powers. Such powers of attorney shall be irrevocable prior
      to
      the payment in full of the Obligations and shall not be terminated prior thereto
      or affected by any act of the Pledgor or other Persons or by operation of law.
      The foregoing power of attorney, being coupled with an interest, is irrevocable
      so long as any Obligation remains outstanding.

     

    (e)  Except
      to
      the extent that the Agent releases its pledge of any of the Pledged Collateral,
      each Person who shall be a transferee of the beneficial ownership of any of
      the
      Pledged Collateral shall be deemed to have irrevocably appointed the Agent,
      with
      full power of substitution and revocation, as such Person’s true and lawful
      attorney-in-fact in such Person’s name and otherwise to do any and all acts
      herein permitted and to exercise any and all powers herein conferred;
provided,
      however,
      that no
      Person shall exercise any such power of attorney unless an Event of Default
      shall have occurred and be continuing, and subject to the terms of the Loan
      Agreement regarding the exercise of remedies upon an Event of Default, or from
      and after such time as such Person has notified the Pledgor in writing that
      based on all the facts and circumstances then existing, and in the exercise
      of
      its commercially reasonable judgment, such Person believes that Fraud has
      occurred.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.3  RIGHTS
      OF PLEDGOR; VOTING

     

    (a)  During
      the term of this Agreement, and so long as the Pledgor has not received a Voting
      Notice (as defined below) from the Agent following (i) the occurrence and during
      the continuance of an Event of Default, and subject to the terms of the Loan
      Agreement regarding the exercise of remedies upon an Event of Default, or (ii)
      from and after such time as the Agent determines that based on all the facts
      and
      circumstances then existing, and in the exercise of its commercially reasonable
      judgment, the Agent believes that Fraud has occurred, the Pledgor shall have
      the
      right to vote any of the Pledged Collateral in all corporate matters except
      those which would contravene this Agreement, the Loan Agreement or any of the
      agreements, documents and instruments delivered by the Pledgor and each
      Subsidiary pursuant thereto unless the Agent consents in writing thereto.

     

    (b)  Upon
      the
      occurrence and during the continuance of an Event of Default, and subject to
      the
      terms of the Loan Agreement regarding the exercise of remedies upon an Event
      of
      Default, or from or from and after such time as the Agent has notified the
      Pledgor in writing that based on all the facts and circumstances then existing,
      and in the exercise of its commercially reasonable judgment, Agent believes
      that
      Fraud has occurred, the Pledgor shall give the Agent at least fifteen (15)
      days’
      prior notice of (i) any meeting of stockholders of any of the Subsidiaries
      or
      any meeting of directors of any of the Subsidiaries convened for any purpose
      and
      (ii) any written consent which the Pledgor proposes to execute as the
      stockholder of any of the Subsidiaries or which any of the representatives
      of
      the Pledgor proposes to execute as a director of any of the Subsidiaries. During
      the continuance of an Event of Default, and subject to the terms of the Loan
      Agreement regarding the exercise of remedies upon an Event of Default, or from
      and after such time as the Agent determines that based on all the facts and
      circumstances then existing, and in the exercise of its commercially reasonable
      judgment, the Agent believes that Fraud has occurred, the Pledgor hereby
      authorizes the Agent to send its agents and representatives to any such meeting
      of stockholders or directors of any of the Subsidiaries that the Agent wishes
      to
      attend, and agrees to take such steps as may be necessary to confirm and
      effectuate such authority, including, without limitation, causing such
      Subsidiary to give reasonable prior written notice to the Agent of the time
      and
      place of any such meeting and the principal actions to be taken
      thereat.

     

    (c)  Notwithstanding
      the occurrence of an Event of Default, and subject to the terms of the Loan
      Agreement regarding the exercise of remedies upon an Event of Default, or the
      determination by the Agent that based on all the facts and circumstances then
      existing, and in the exercise of its commercially reasonable judgment, the
      Agent
      believes that Fraud has occurred, the Pledgor may continue to exercise the
      voting rights of the Pledgor as herein described (and subject to the limitations
      herein) except to the extent that the Agent elects to exercise voting power
      (as
      determined by it in its sole discretion) by providing written notice to the
      Pledgor at any time during the continuance of an Event of Default or from and
      after such time as the Agent has determined that based on all the facts and
      circumstances then existing, and in the exercise of its commercially reasonable
      judgment, the Agent believes that Fraud has occurred (a “Voting
      Notice”),
      whereupon the Agent shall have the exclusive right during the continuance of
      an
      Event of Default or from and after the Agent’s determination of Fraud to
      exercise such rights to the extent specified in such Voting Notice, and the
      Pledgor shall take all such steps as may be necessary to effectuate such rights
      until the Agent notifies the Pledgor in writing of the release of such rights.
      Once any such Event of Default has been cured or waived and such cure or waiver
      is confirmed by the Agent to the Pledgor in writing, any relevant Voting Notice
      shall be deemed to be rescinded.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.4  NO
      RESTRICTIONS ON TRANSFER

     

    The
      Pledgor warrants and represents that except as otherwise provided in the Watson
      Stock Pledge Agreement dated March 29, 2000 executed by the Pledgor to secure
      the Senior Note (the “Watson Stock Pledge Agreement”) there are no restrictions
      on the transfer of the Pledged Stock (except for such restrictions imposed
      by
      operation of law), that there are no options, warrants or rights pertaining
      thereto, and that the Pledgor has the right to transfer the Pledged Stock free
      of any encumbrances and without the consent of the creditors of the Pledgor
      or
      the consent of any of the Subsidiaries or any other Person or any governmental
      agency whatsoever.

     

    1.5  NO
      TRANSFER OF LIENS; ADDITIONAL SECURITIES

     

    The
      Pledgor agrees that it will not sell, transfer or convey any interest in, or
      suffer or permit any lien or encumbrance to be created upon or with respect
      to,
      any of the Pledged Collateral during the term of this Agreement, except to
      or in
      favor of the Agent, or as agreed to in writing in advance by the Agent in
      accordance with the terms of the Loan Agreement. The Pledgor shall not cause,
      suffer or permit any Subsidiary to issue any common or preferred stock, or
      any
      other equity security or any other instruments convertible into equity
      securities, to any Person, unless the Agent otherwise consents in writing (which
      consent may be withheld in the Agent’s reasonable credit judgment).

     

    1.6  ADJUSTMENTS
      OF CAPITAL STOCK; PAYMENT AND APPLICATION OF DIVIDENDS

     

    Subject
      to the Loan Agreement, in the event that during the term of this Agreement
      any
      stock dividend, reclassification, readjustment or other change is declared
      or
      made in the capital structure of any Subsidiary or if any other or additional
      shares of stock of any Subsidiary are issued to the Pledgor, all new,
      substituted and additional shares or other securities issued by reason of any
      such change or acquisition shall immediately be delivered by the Pledgor to
      the
      Agent and shall be deemed to be part of the Pledged Collateral under the terms
      of this Agreement in the same manner as the shares of capital stock originally
      pledged hereunder. Subject to the Loan Agreement, upon the occurrence and during
      the continuance of an Event of Default and subject to the terms of the Loan
      Agreement regarding the exercise of remedies upon an Event of Default, or from
      and after such time as the Agent determines that based on all the facts and
      circumstances then existing, and in the exercise of its commercially reasonable
      judgment, the Agent believes that Fraud has occurred, all cash dividends
      received by or payable to the Pledgor in respect of the Pledged Collateral,
      including any additional shares of stock or investment property received by
      the
      Pledgor as a result of the Pledgor’s record ownership of the Pledged Stock,
      shall immediately be delivered by the Pledgor to the Agent, to be held by the
      Agent as Pledged Collateral hereunder or to be applied by the Agent against
      the
      Obligations. Upon the occurrence and during the continuance of an Event of
      Default and subject to the terms of the Loan Agreement regarding the exercise
      of
      remedies upon an Event of Default, or from and after such time as the Agent
      determines that based on all the facts and circumstances then existing, and
      in
      the exercise of its commercially reasonable judgment, the Agent believes that
      Fraud has occurred, the Pledgor will not demand and will not be entitled to
      receive, any cash dividends or other income, interest or property in or with
      respect to the Pledged Collateral, and if the Pledgor receives any of the same,
      the Pledgor shall immediately deliver it to the Agent to be held by it and
      applied as provided in the preceding sentence.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.7  WARRANTS
      AND OPTIONS

     

    In
      the
      event that during the term of this Agreement subscription warrants or other
      rights or options shall be issued to the Pledgor in connection with the Pledged
      Collateral, all such stock warrants, rights and options shall forthwith be
      assigned to the Agent by the Pledgor, and such stock warrants, rights and
      options shall be, and, if exercised by the Pledgor, all new stock issued
      pursuant thereto shall be, pledged by the Pledgor to the Agent to be held as,
      and shall be deemed to be part of, the Pledged Collateral under the terms of
      this Agreement in the same manner as the shares of capital stock originally
      pledged hereunder.

     

    1.8  RETURN
      OF PLEDGED COLLATERAL UPON TERMINATION

     

    Upon
      the
      termination of the Loan Agreement and the indefeasible payment in full in cash
      of the Obligations and all other amounts payable under this Agreement, the
      Agent
      shall cause to be transferred or returned to the Pledgor all of the stock
      pledged by the Pledgor herein and any money, property and rights received by
      the
      Agent pursuant hereto, to the extent the Agent has not taken, sold or otherwise
      realized upon the same as permitted hereunder, together with all other documents
      reasonably required by the Pledgor to evidence termination of the pledge
      contemplated hereby.

     

    ARTICLE
      2

     

    EVENTS
      OF DEFAULT; REMEDIES

     

    2.1  RIGHTS
      OF AGENT UPON DEFAULT

     

    Upon
      the
      occurrence and during the continuance of any Event of Default and subject to
      the
      terms of the Loan Agreement regarding the exercise of remedies upon an Event
      of
      Default, or from and after such time as the Agent determines that based on
      all
      the facts and circumstances then existing, and in the exercise of its
      commercially reasonable judgment, the Agent believes that Fraud has occurred,
      the Agent shall have and at any time may exercise with respect to the Pledged
      Collateral, the proceeds thereof, and any other property or money held by the
      Agent hereunder, all rights and remedies available to it under law, including,
      without limitation, those given, allowed or permitted to a secured party by
      or
      under the Code, and all rights and remedies provided for herein and in the
      Loan
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.2  DISPOSITION
      OF PLEDGED STOCK

     

    (a)  Without
      limiting the foregoing, in the event that the Agent elects to sell the Pledged
      Stock (such term including, for purposes of this Section 2.2, the Pledged Stock
      and all other shares of stock or securities at any time forming part of the
      Pledged Collateral), the Agent shall have the power and right in connection
      with
      any such sale, exercisable at its option and in its absolute discretion, to
      sell, assign, and deliver the whole or any part of the Pledged Stock or any
      additions thereto at a private or public sale for cash, on credit or for future
      delivery and at such price as the Agent deems to be satisfactory. Any such
      disposition which shall be made by private sale or other private proceeding
      shall be made upon not less than ten (10) days’ prior written notice to Pledgor
      specifying the date and time at which such disposition is to be made. Notice
      of
      any public sale shall be sufficient if it describes the Pledged Collateral
      to be
      sold in general terms, and is published at least once in The New York Times
      not
      less than ten (10) days prior to the date of sale. If The New York Times is
      not
      then being published, publication may be made in lieu thereof in any newspaper
      then being circulated in the City of New York, New York, as the Agent may elect.
      If any notice of a proposed sale or other disposition of Pledged Collateral
      shall be required by law, such notice shall be deemed reasonable and proper
      if
      mailed, postage prepaid, to the Pledgor at its address set forth in Section
      5.5
      hereof or such other address as the Pledgor may have, in writing, provided
      to
      the Agent. The Agent may, if it deems it reasonable, postpone or adjourn any
      sale of any collateral from time to time by an announcement at the time and
      place of the sale to be so postponed or adjourned without being required to
      give
      a new notice of sale. 

     

    (b)  Because
      federal and state securities laws may restrict the methods of disposition of
      the
      Pledged Stock which are readily available to the Agent, and specifically because
      a public sale thereof may be impossible or impracticable by reason of certain
      restrictions under the Securities Act or under applicable “blue sky” or other
      state securities laws as now or hereafter in effect, the Pledgor agrees that
      the
      Agent may from time to time attempt to sell the Pledged Stock by means of a
      private placement restricting the offering or sale to a limited number of
      prospective purchasers who meet suitability standards the Agent deems
      appropriate and who agree that they are purchasing for their own accounts for
      investment and not with a view to distribution, and the Agent’s acceptance of
      the highest offer obtained therefrom shall be deemed to be a commercially
      reasonable disposition of the Pledged Stock. To the extent permitted by law,
      the
      Agent or its assigns may purchase all or any part of the Pledged Stock and
      any
      purchaser thereof shall thereafter hold the same absolutely free from any right
      or claim of any kind. To the fullest extent permitted by law, the Agent shall
      not be obligated to make any such sale pursuant to notice and may, without
      notice or publication, adjourn any public or private sale by announcement at
      the
      time and place fixed for the sale, and such sale may be held at any time or
      place to which the same may be adjourned. If any of the Pledged Stock is sold
      by
      the Agent upon credit or for future delivery, the Agent shall not be liable
      for
      the failure of the purchaser to pay for same and, in such event, the Agent
      may
      resell such Pledged Stock and the Pledgor shall continue to be liable to the
      Agent for the full amount of the Obligations to the extent the Agent does not
      receive full and final payment in cash therefor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)  Except
      as
      otherwise provided in the Loan Agreement or by applicable law, the Agent shall
      have the sole right to determine the order in which Obligations shall be deemed
      discharged by the application of the proceeds of Pledged Stock or any other
      property or money held hereunder or any amount realized thereon.

     

    ARTICLE
      3

     

    REPRESENTATIONS
      AND WARRANTIES

     

    The
      Pledgor represents and warrants to the Agent that:

     

    3.1  CAPITALIZATION;
      GOOD TITLE

     

    (a)  All
      shares of Pledged Stock are fully paid, duly and properly issued, nonassessable
      and owned by the Pledgor free and clear of any lien or encumbrance of any kind
      whatsoever, excepting those herein granted to the Agent and those granted to
      the
      holders of the Senior Note. The Pledged Stock constitutes all of the outstanding
      securities of any class or kind of all of the Subsidiaries.

     

    (b)  Except
      in
      the case of the liens granted to the holders of the Senior Note, no effective
      financing statement or other instrument similar in effect covering all or any
      part of the Pledged Collateral is on file in any recording office.

     

    3.2  VALID
      SECURITY INTEREST

     

    The
      pledge of the Pledged Collateral pursuant to this Agreement creates a valid
      and
      perfected first-priority security interest, securing the payment of the
      Obligations, and all filings and other actions necessary or desirable to perfect
      and protect such security interest having been duly made or taken.

     

    3.3  CONSENTS

     

    Except
      for the consent of the holders of the Senior Note and the holders of the Series
      A Preferred, no authorization, approval or other action by, and no notice to
      or
      filing with, any governmental authority or regulatory body is required for
      (a)
      the pledge by the Pledgor of the Pledged Collateral pursuant to this Agreement,
      the grant by the Pledgor of the assignment or security interest granted hereby
      or the execution, delivery or performance of this Agreement by the Pledgor,
      (b)
      the perfection of or exercise by the Agent of its rights and remedies provided
      for in this Agreement, or (c) the exercise by the Agent of the voting or other
      rights provided for in this Agreement or the remedies in respect of the Pledged
      Collateral pursuant to this Agreement (except as may be required in connection
      with a judicial foreclosure, if applicable, or the disposition of the Pledged
      Stock by laws affecting the offering and sale of securities
      generally).

     

    3.4  AUTHORIZATION;
      ENFORCEABILITY

     

    The
      Pledgor has full right, power and authority to enter into this Agreement and
      to
      grant the security interest in the Pledged Collateral made hereby, and this
      Agreement constitutes the legal, valid and binding obligation of the Pledgor
      enforceable against the Pledgor in accordance with its terms, except as the
      enforceability thereof may be (a) limited by bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting the enforceability of
      creditors’ rights generally, and (b) subject to general principles of equity
      (regardless of whether such enforceability is considered in a proceeding in
      equity or at law).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.5  NO
      CONFLICT

     

    The
      execution, delivery and performance by the Pledgor of this Agreement will not
      result in any violation, conflict with, or result in a breach of any of the
      terms of, or constitute a default under, any agreements, contracts, court orders
      or consent decrees, the Certificate of Incorporation or the By-laws, as amended,
      of the Pledgor.

     

    ARTICLE
      4

     

    Indemnity
      and Expenses

     

    4.1  INDEMNITY

     

    The
      Pledgor agrees to and hereby indemnifies the Agent and each of the Lenders
      from
      and against any and all Losses arising out of, or in connection with, or
      resulting from this Agreement (including, without limitation, enforcement of
      this Agreement) unless resulting from or arising out of the gross negligence
      or
      willful misconduct of the Agent or such Lender.

     

    4.2  EXPENSES

     

    The
      Pledgor agrees promptly upon the Agent’s or such Lender’s demand to pay or
      reimburse the Agent or such Lender for all reasonable expenses (including,
      without limitation, reasonable fees and disbursements of counsel) incurred
      by
      the Agent or such Lender in connection with (a) any modification or amendment
      to
      or waiver of any provision of this Agreement requested by the Pledgor, (b)
      the
      custody or preservation of the Pledged Collateral, (c) any actual or attempted
      sale or exchange of, or any enforcement, collection, compromise or settlement
      respecting, the Pledged Collateral or any other property or money held hereunder
      or any other action taken by the Agent or such Lender hereunder reasonably
      necessary to enforce its rights, whether directly or as attorney-in-fact
      pursuant to the power of attorney herein conferred, or (d) the failure by the
      Pledgor to perform or observe any of the provisions hereof. All such expenses
      shall be deemed a part of the Obligations for all purposes of this Agreement
      and
      the Agent may apply the Pledged Collateral or any other property or money held
      hereunder to payment of or reimbursement for such expenses after notice and
      demand to the Pledgor.

     

    ARTICLE
      5

     

    MISCELLANEOUS

     

    5.1  AGENT
      MAY PERFORM

     

    If
      the
      Pledgor fails to perform any representation, warranty, covenant or agreement
      required to be performed by it contained herein, the Agent may, but shall not
      be
      obligated to, perform, or cause performance of, such representation, warranty,
      covenant or agreement, and the out-of-pocket expenses of the Agent incurred
      in
      connection therewith shall be payable by the Pledgor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.2  WAIVERS
      AND AMENDMENT

     

    The
      rights and remedies given hereby are in addition to all others however arising,
      but it is not intended that any right or remedy be exercised in any jurisdiction
      in which such exercise would be prohibited by law. No action, failure to act
      or
      knowledge of the Agent shall be deemed to constitute a waiver of any power,
      right or remedy hereunder, nor shall any single or partial exercise thereof
      preclude any further exercise thereof or the exercise of any other power, right
      or remedy. Any right or power of the Agent hereunder in respect of the Pledged
      Collateral and any other property or money held hereunder may at the option
      of
      the Agent be exercised as to all or any part of the same and the term the
“Pledged Collateral” wherever used herein, unless the context clearly requires
      otherwise, shall be deemed to mean (and shall be read as) “the Pledged
      Collateral and any other property or money held hereunder or any part thereof.”
      This Agreement shall not be amended nor shall any right hereunder be deemed
      waived except by a written agreement expressly setting forth the amendment
      or
      waiver and signed by the Agent.

     

    5.3  CONTINUING
      SECURITY INTEREST; ASSIGNMENTS OF SECURED DEBT

     

    This
      Agreement shall create a continuing security interest having priority over
      any
      and all security interests in the Pledged Collateral and shall (a) remain in
      full force and effect, (b) be binding upon the Pledgor, and the Pledgor’s
      successors and assigns, and upon each of the Subsidiaries, and their successors
      and assigns, and (c) inure, together with the rights and remedies of the Agent
      and the Lenders hereunder, to the benefit of the Agent, its successors and
      permitted assigns. Without limiting the generality of the foregoing clause
      (c),
      the Agent may assign or otherwise transfer all or any portion of its rights
      and
      obligations under this Agreement to any other Person, to the extent and in
      the
      manner provided in the Loan Agreement and such other Person shall thereupon
      become vested with all the benefits in respect hereof granted to the Agent
      herein; the Agent shall, however, retain all of its rights and powers with
      respect to any part of the Pledged Collateral not transferred. Any agent or
      nominee of the Agent shall have the benefit of this Agreement as if named herein
      and may exercise all the rights and powers given to the Agent
      hereunder.

     

    5.4  GOVERNING
      LAW; CONSENT TO JURISDICTION

     

    (a)  This
      Agreement and the rights of the parties hereunder shall be governed in all
      respects by the laws of the State of New York wherein the terms of this
      Agreement were negotiated, excluding to the greatest extent permitted by law
      any
      rule of law that would cause the application of the laws of any jurisdiction
      other than the State of New York.

     

    (b)  Each
      of
      the parties hereto hereby irrevocably and unconditionally submits, for itself
      and its property, to the nonexclusive jurisdiction of any New York State court
      or United States Federal court sitting in New York City, and any appellate
      court
      from any thereof, in any action or proceeding arising our of or relating to
      this
      Agreement or any of the other Transaction Documents to which it is a party,
      or
      for recognition or enforcement of any judgment, and each of the parties hereto
      irrevocably and unconditionally agrees that all claims in respect of any such
      action or proceeding may be heard and determined in any such New York State
      court or, to the fullest extent permitted by law, in such United States Federal
      court. Each of the parties hereto agrees that a final judgment in any such
      action or proceeding shall be conclusive and may be enforced in other
      jurisdictions by suit on the right that any party may otherwise have to bring
      any action or proceeding relating to this Agreement or any of the other
      Transaction Documents in the courts of any other jurisdiction. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)  Each
      of
      the parties hereto irrevocably and unconditionally waives, to the fullest extent
      it may legally and effectively do so, any objection that it may now or hereafter
      have to the laying of venue of any suit, action or proceeding arising out of
      or
      in relation to this Agreement or any other Transaction Document to which it
      is a
      party in any such New York State or United States Federal court sitting in
      New
      York City. Each of the parties hereto hereby irrevocably waives, to the fullest
      extent permitted by law, the defense of an inconvenient forum to the maintenance
      of such action or proceeding in any such court.

     

    5.5  NOTICES

     

    All
      notices hereunder shall be in writing (except only as otherwise provided in
      Section 5.2) and shall be conclusively deemed to have been received and shall
      be
      effective (a) on the day on which delivered if delivered personally (including
      delivery by courier or overnight mail providing evidence of delivery), or
      transmitted by telex or telegram or telecopier with transmission confirmed,
      or
      (b) five (5) days after the date on which the same is deposited in the United
      States mail (certified or registered if required under Section 5.4), with
      postage prepaid and properly addressed, and any notice mailed shall be
      addressed:

     

    (a)  in
      the
      case of the Pledgor, to:

     

    Acura
      Pharmaceuticals, Inc.

    616
      N.
      North Court, Suite 120

    Palatine,
      Illinois 60067

    Telecopier
      No.: (847) 705-5399

    

    with
      copies to:

    

    St.
      John
& Wayne

    2
      Penn
      Plaza East

    Newark,
      New Jersey 07105

    Attention:
      John P. Reilly, Esq.

    Telephone
      No.: (973) 491-3600

    Telecopier
      No.: (973) 491-3555

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  in
      the
      case of the Agent, to:

     

    Galen
      Partners III, L.P.

    610
      Fifth
      Avenue, Fifth Floor

    New
      York,
      NY 10020

    Telecopier
      No.: (212) 218-4999

    Attention:
      Bruce F. Wesson

    with
      a
      copies to:

    

    Blank
      Rome, LLP

    Chrysler
      Building

    405
      Lexington Avenue

    New
      York,
      New York 10174

    Attention:
      George N. Abrahams, Esq.

    Telephone
      No.: (212) 885-5207

    Telecopier
      No.: (917) 332-3763

    

    or
      at
      such other address as the party giving such notice shall have been advised
      of in
      writing for such purpose by the party to whom or to which the same is
      directed.

     

    5.6  SEVERABILITY;
      ENTIRE AGREEMENT

     

    (a)  If
      any
      provision of this Agreement shall be invalid, illegal, or unenforceable in
      any
      jurisdiction, the validity, legality or enforceability of any such provision
      in
      any other jurisdiction shall not be affected or impaired, and to the extent
      any
      provision is held invalid, illegal or unenforceable, then such provision shall
      be deemed severable from, and shall in no way affect the validity or
      enforceability of the remaining provisions of this Agreement.

     

    (b)  This
      Agreement, together with the other Transaction Documents, constitutes the entire
      agreement of the Pledgor and replaces any other or prior agreements or
      undertakings, with respect to the subject matter hereof, and there are no other
      agreements or undertakings, oral or written, respecting such subject matter
      which are intended to have any force or effect after the execution
      hereof.

     

    5.7  SUCCESSORS
      AND ASSIGNS; HEADINGS

     

    This
      Agreement shall be binding upon and shall inure to the benefit of the Pledgor
      and the Agent and their respective successors and permitted assigns. Section
      headings used herein are for convenience only and shall not affect the meaning
      or construction of any of the provisions hereof.

     

    5.8  COUNTERPARTS

     

    This
      Agreement may be executed in any number of counterparts, including by facsimile
      copy, each executed counterpart constituting an original but all counterparts
      together constituting only one instrument.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    5.9  FURTHER
      ASSURANCES

     

    Pledgor
      shall execute, in a proper and timely manner, at or after the date hereof,
      such
      additional documents and instruments as may be reasonably requested by the
      Agent
      in connection with the consummation or confirmation of the transactions
      contemplated by this Agreement.

     

    5.10  NO
      ASSIGNMENT

     

    This
      Agreement may not be assigned by the Pledgor without the prior express written
      consent of the Agent.

     

    5.11  WAIVERS
      OF JURY TRIAL

     

    THE
      PLEDGOR AND, BY ITS ACCEPTANCE HEREOF, THE AGENT HEREBY IRREVOCABLY WAIVE ALL
      RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
      ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY TRANSACTION
      DOCUMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION,
      PERFORMANCE OR ENFORCEMENT THEREOF.

     

    5.12  WAIVERS
      OF CONSEQUENTIAL DAMAGES

     

    NEITHER
      THE PLEDGOR, THE AGENT OR ANY LENDER, NOR ANY EMPLOYEE, AGENT OR ATTORNEY OF
      ANY
      OF THEM, SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL DAMAGES ARISING FROM
      ANY
      BREACH OF CONTRACT, TORT OR OTHER WRONG RELATING TO THIS AGREEMENT OR THE
      ESTABLISHMENT, ADMINISTRATION OR COLLECTION OF THE OBLIGATIONS, EXCEPT FOR
      BAD
      FAITH.

     

    5.13  LIMITATION
      OF LIABILITY

     

    THE
      AGENT
      AND THE LENDERS SHALL NOT HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER SOUNDING
      IN
      TORT, CONTRACT, OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN CONNECTION
      WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS OR RELATIONSHIPS
      CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN
      CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE
      JUDGMENT OR COURT ORDER BINDING ON THE AGENT OR LENDER, AS APPLICABLE, THAT
      THE
      LOSSES WERE THE RESULT OF ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR
      WILLFUL MISCONDUCT.

     

    

    

    [SIGNATURE
      PAGE TO FOLLOW]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF, the Pledgor has caused this Stock Pledge Agreement to be
      executed by its duly authorized officer as of the date first written
      above.

     

    
      	 	 	 
	 	ACURA
              PHARMACEUTICALS, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Andrew
              D. Reddick    
	 	
              
Name:
              Andrew D. Reddick
	 	Title:
              President and Chief Executive Officer

    

    

    Accepted
      and Agreed to:

    

    GALEN
      PARTNERS III, L.P.

    on
      behalf
      of itself and as Agent

    By:
      Claudius, L.L.C, General Partner

    610
      Fifth
      Avenue, 5th
      Fl.

    New
      York,
      New York 10019

    

    

    By:
      /s/
      Srini Coonjeevaram  

    Name:
      Srini Conjeevaram, its General Partner

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      A

    

    

    Designation
      and Number of

    shares
      of
      capital stock owned by Pledgor

    

    

    

    
      	
               

               

              Issuer

            	
               

               

               Certificate
                No.

            	
               

               

              Designation

            	
               

              Number
                of Shares

            
	
               

              Acura
                Pharmaceutical Technologies, Inc.

            	
               

              1

            	
               

              Common
                Stock, $.01 par value

            	
               

              100

            
	
               

              Axiom
                Pharmaceutical Corporation

               

            	
               

              1

               

            	
               

              Common
                Stock, $.01 par value

               

            	
               

              100DISTRIBUTION AND OPERATION SERVICES AGREEMENT

      THIS DISTRIBUTION AND OPERATION SERVICES AGREEMENT, ("Agreement") is made
as of June 21, 2005 (the "Effective Date"), by and among VitroTech Corporation,
a Nevadt 6 0 a corporation ("VitroTech"), VitroCo Incorporated, a Nevada
corporation and wholly-owned subsidiary of VitroTech ("VitroCo") and VitroTech
Product Distributor LLC, a Delaware limited liability company ("Distributor").

                                R E C I T A L S:

      WHEREAS, VitroTech and VitroCo are engaged in the mining, processing and
sale of a family of proprietary amorphous aluminosilicate based products (the
"Products") designed to improve performance and quality of a broad array of
manufacturing applications;

      WHEREAS, VitroTech and VitroCo lack the financial resources to fully
exploit the business opportunities relating to the Products and VitroTech is
presently seeking additional financing to fund those operations; and

      WHEREAS, VitroTech and VitroCo desire to contract certain operations to
Distributor and Distributor is willing to perform such operations on the terms
set forth herein.

      NOW, THEREFORE, in consideration of the premises and the covenants and
obligations of the parties herein contained, the parties hereto hereby agree as
follows:

      1. Grant of Exclusive Rights. VitroTech and VitroCo hereby grant to the
Distributor, during the Term (as defined below) hereof, the exclusive,
royalty-free right to buy, mine, process, sell and distribute the Products on a
worldwide basis, and assume all of VitroTech's and VitroCo's customer accounts
and distributor agreements, including, but not limited to, the right to contact
and solicit any present, former or future customers of VitroTech or VitroCo, all
subject to the existing rights of third parties to distribute Products, as
follows:

            (a) The rights of the Distributor hereunder may not be assigned,
      transferred or sublicensed to any other person, other than to an affiliate
      of the Distributor, without the prior written consent of the other
      parties, which shall not be unreasonably withheld;

            (b) The Distributor is an independent contractor and is not a legal
      representative or agent of VitroTech or VitroCo for any purposes
      whatsoever. The Distributor is not authorized to, and agrees that it will
      not, make any warranties or representations, or assume or create any other
      obligation on behalf of VitroTech or VitroCo except as expressly
      authorized by such party in writing;

            (c) Distributor agrees that it will not sell Product in
      contravention to any agreement between VitroTech or VitroCo and any other
      party effective as of the Effective Date.

<PAGE>

            (d) VitroTech and VitroCo each hereby grant a royalty-free license
      to the Distributor to utilize any and all of its respective trademarks,
      service marks or trade names ("Trademarks"), whether or not registered, in
      connection with promotion, sale and distribution of the Products; and

            (e) Subject to the prior rights and security interests of the
      VitroTech Secured Creditors (as defined below), VitroTech and VitroCo each
      agree to sell, assign, transfer and convey all of the Inventory (defined
      as any mined Product held by or for the benefit of VitroTech or VitroCo
      and set forth on Exhibit A) to the Distributor, and Distributor agrees to
      pay VitroTech and VitroCo the direct cost of their respective Inventory,
      as set forth on Exhibit A, not later than five days following the receipt
      of payment by Distributor from the sale to third party of such Inventory.
      Notwithstanding the foregoing, if on the fifth anniversary of the
      Effective Date any items of Inventory have not been sold and for which
      payment to VitroCo has not been made hereunder, the Distributor shall, on
      that date pay to VitroCo the direct cost of such Inventory items or, at
      the Distributor's sole option, return the same to VitroCo. As of the date
      hereof, Distributor agrees to assume all of the costs and expenses of
      storage, warehousing, shipping and handling such Inventory, which arises
      on or after the date hereof.

      2. Mining and Processing of Products. It is the intention of the parties
to structure this transaction so that the ISO9001 Certificate of Registration
(the "ISO Registration") issued to VitroCo shall be maintained through out the
Term. If the ISO Registration can be transferred to another entity, upon the
Distributor's request, VitroCo agrees to transfer the ISO Registration to the
Distributor or any other entity designated by the Distributor, and VitroCo and
VitroTech covenant and to take any and all reasonable actions to facilitate such
transfer. VitroTech and VitroCo each hereby grant to the Distributor, during the
Term of this Agreement, the right to perform all mining, processing services,
quality control and warranting of Products as shall be reasonably necessary to
mine, process and deliver the Products in their final salable form, and to the
extent the ISO Registration does not permit such mining, processing services,
quality control and warranting of Products ("Restricted Activities") to be
performed by Distributor, but such Restricted Activities can be performed by
VitroTech, then VitroTech shall perform such Restricted Activities to the
maximum amount permitted pursuant to the ISO Registration and to the extent that
the ISO Registration does not permit such Restricted Activities to be performed
by VitroTech, such Restricted Activities shall be performed by VitroCo,
provided, however, VitroTech and VitroCo hereby agree that they shall provide
Distributor with any and all quality control services, warranting of Products
and any other services necessary to preserve the ISO Registration and to ensure
that the Distributor obtains the Products in the format required by the
Distributor. Distributor shall pay all of its own costs generated by mining,
processing services, quality control and warranting of Products and to the
extent VitroCo or VitroTech is performing any Restricted Activities, Distributor
shall reimburse VitroCo or VitroTech, as applicable, for all direct costs of
such Restricted Activities and preserving the ISO Registration, in a manner
consistent with the standards of the ISO Registration.

      VitroTech and VitroCo each hereby grant a royalty-free license to the
Distributor to utilize any and all of its respective proprietary rights,
including any patented procedures or products, intellectual property, techniques
or other trade secrets (the "Proprietary Rights"), whether or not patented,
relating to the mining, processing and use of the Products.

                                       2
<PAGE>

      3. Rights Regarding VitroTech and VitroCo Employees. In conjunction with
the undertakings of the Distributor to assume the responsibility and associated
costs of sales activities relating to the Products of VitroTech and VitroCo, and
to facilitate those undertakings, the parties agree as follows regarding the
employees of VitroTech and VitroCo:

            (a) The Distributor shall have the unlimited right to solicit and
      hire any and all employees of VitroTech and VitroCo ("Employees", and any
      Employees actually hired by the Distributor are referred to herein as
      "Transferred Employees"). VitroTech and VitroCo will enter into a mutual
      release which shall forever release such Transferred Employees from any
      and all covenants, promises, agreements, obligations or liabilities which
      relate in any way to the Transferred Employees' employment with
      Distributor, which release shall be substantially in the form of Exhibit B
      attached hereto. Upon executing the mutual release, the Distributor shall
      pay such Transferred Employee all amounts owing for back wages, salary and
      benefits by VitroTech and VitroCo, provided, however, that Distributor's
      obligation hereunder will be decreased by any compromise reached between
      Distributor and any Transferred Employees.

            (b) Management of the Distributor and VitroTech will, not later than
      ten calendar days following the date hereof (the "Employee Review Date"),
      review the existing personnel of VitroTech and VitroCo ("Employees"): (i)
      to facilitate Distributor's determination as to which Employees it wishes
      to solicit pursuant to paragraph 3(a) above, (ii) to determine which
      Employees will be reasonably required to carry on the business of
      VitroTech (the "Retained VitroTech Employees"), (iii) to determine which
      Employees will be reasonably required to carry on the business VitroCo
      (the "Retained VitroCo Employees") and (iv) to determine which Employees,
      if any, are not required to support the future operations of the
      Distributor, VitroTech or VitroCo (the "Undesignated Employees"). For
      purposes of this Agreement former employees set forth on Exhibit C shall
      be deemed to be Undesignated Employees. In conjunction therewith,
      representatives of both VitroTech and the Distributor will meet with all
      Employees and evaluate their status, including amounts owing to those
      Employees, on a case-by-case basis and in accordance with applicable
      California law. The parties will negotiate in good faith to determine
      which Employees shall be Retained VitroTech Employees, Retained VitroCo
      Employees and Undesignated Employees.

            (c) Within ten calendar days following the Employee Review Date, the
      Distributor shall (i) pay on behalf of all Employees all employment
      related taxes to the extent due and owing and not previously paid by
      VitroTech and VitroCo to the appropriate governmental authorities and (ii)
      pay all back salary, wages, unreimbursed expenses and other amounts due
      and owing and not previously paid by VitroTech to Retained VitroTech
      Employees; provided, however, that Distributor's obligation hereunder will
      be decreased by any compromise reached between Distributor and any
      Retained VitroTech Employees. In addition, as part of the Basic Overhead
      Costs (as defined below), commencing as of the Effective Date until such
      time as VitroTech is capable of paying the Basic Overhead Costs without
      being Insolvent (as defined below), the Distributor shall reimburse
      VitroTech, for the salary, wages, expenses and other amounts incurred by
      VitroTech for the Retained VitroTech Employees; provided, however, that
      Distributor's obligation hereunder will be decreased by any compromise
      reached between Distributor and any Retained VitroTech Employees (the
      "Current VitroTech Employee Costs"). The reimbursement of such Current
      VitroTech Employee Costs for the Retained VitroTech Employees shall be
      paid as the same become due. For purposes of this Agreement "Insolvent"
      means with respect to VitroTech or VitroCo, as the case may be, that it is
      not capable of paying its bills as they become due in the ordinary course
      of business.

                                       3
<PAGE>

            (d) Within ten calendar days of the entering into a definitive and
      binding Mine Transfer Agreement (as defined below)(the "Mine Transfer
      Date"), the Distributor shall pay all back salary, wages, unreimbursed
      expenses and other amounts to the extent due and owing and not previously
      paid by VitroCo to Retained VitroCo Employees and Undesignated Employees
      through the Mine Transfer Date; provided, however, that Distributor's
      obligation hereunder will be decreased by any compromise reached between
      Distributor and any Retained VitroCo Employees. In addition, as part of
      the Basic Overhead Costs, commencing as of the Mine Transfer Date until
      such time as VitroCo is capable of paying the Basic Overhead Costs without
      being Insolvent, the Distributor shall reimburse VitroCo, for the salary,
      wages, expenses and other amounts incurred by VitroCo for the Retained
      VitroCo Employees (the "Post Mine Transfer Date VitroCo Employee Costs").
      The reimbursement of such Post Mine Transfer Date VitroCo Employee Costs
      for the Retained VitroCo Employees shall be paid as the same become due
      after the Mine Transfer Date. To the extent that there is a disagreement
      between the Distributor, on the one hand, and VitroTech and VitroCo, on
      the other hand, as to whether an Employee shall be a Retained VitroCo
      Employee or an Undesignated Employee, such Employee shall be deemed to be
      an Undesignated Employee for purposes of this Agreement, and the
      Distributor shall only have the obligation to pay or reimburse VitroCo as
      if that Employee is a Undesignated Employee and under no circumstances
      shall costs associated with the ongoing employment of such Employee be
      included within Basic Overhead Costs.

      4. Cooperation Regarding VitroTech and VitroCo Debt. VitroTech, VitroCo
and the Distributor agree to cooperate and use commercially reasonable efforts
to settle, restructure or convert into equity the current indebtedness of
VitroTech and VitroCo and, to that end, agree as follows:

            (a) Management of VitroTech, VitroCo and the Distributor will
      jointly meet and negotiate with existing creditors (including, but not
      limited to, all trade debt, all Employees, all notes bearing contingent
      interest ("Contingent Interest"), all secured debt and all convertible
      debt) of VitroTech and VitroCo ("VitroTech Creditors") in an effort to
      renegotiate the existing indebtedness;

            (b) Subject to applicable limitations of securities laws, for a
      period of six months following the Effective Date (the "Offering Period"),
      the Distributor will make available to all VitroTech Creditors, pro rata,
      the right to invest in the Distributor on terms substantially identical to
      the terms on which the Distributor offers securities to Third Party
      Investors. For purposes hereof, "Third Party Investors" means all persons
      to whom the Distributor offers any of its securities during the six months
      following the Effective Date, other than (i) the members of the
      Distributor as of the Effective Date, and (ii) the VitroTech Secured
      Creditors. In the event that the Distributor offers an ownership interest
      to Third Parties during the Offering Period at varying prices, the terms
      on which the VitroTech Creditors will be permitted to invest in the
      Distributor will be the lowest price of any such offers. Notwithstanding
      the foregoing however, the Distributor may offer the Secured Creditors of
      VitroTech or VitroCo the opportunity to invest in the Distributor on terms
      that are more favorable than the terms being offered to the unsecured
      VitroTech Creditors, and the unsecured VitroTech Creditors shall have no
      right to participate in such opportunity to the extent that they are not
      Secured Creditors of VitroTech or VitroCo;

                                       4
<PAGE>

            (c) All settlements or other agreements with VitroTech Creditors
      pursuant to this paragraph 4 shall be subject to the joint approval of
      VitroTech and the Distributor;

      5. Cooperation Regarding Mines and Hi-Tech. VitroTech, VitroCo and the
Distributor agree to cooperate and use commercially reasonable efforts to
negotiate with representatives of Enviro Investment Group, LLC ("EIG"), Red Rock
Canyon Mineral, LLC ("Red Rock"), Valley Springs Mineral, LLC ("Valley
Springs")(collectively, EIG, Red Rock and Valley Springs are referred to as the
"Mines") and Hi-Tech Environmental Products, LLC ("Hi-Tech") with a view to
obtaining an equitable transfer of the mining properties held by the Mines to
VitroTech or VitroCo and entering into a definitive and binding agreement (the
"Mine Transfer Agreement"), satisfactory to the Distributor, within the
Distributor's sole and absolute discretion, and the adjustment of payment
obligations of VitroTech and VitroCo to the Mines and Hi-Tech.

      6. Other Obligations of Distributor. The Distributor shall:

            (a) Devote its commercially reasonable efforts to the promotion and
      sale of the Products consistent with good business practices and in a
      manner that it reasonably believes will reflect favorably on the Products
      and the goodwill and reputation of VitroTech and VitroCo;

            (b) Comply, in all material respects, with the provisions of all
      applicable laws and the rules and regulations thereunder, and refrain from
      engaging in any illegal business practices whatsoever with respect to the
      promotion and sale of the Products;

            (c) Hold itself out as an independent contractor with respect to
      VitroTech and VitroCo and not present itself as an agent, representative
      or employee of any other party, and prominently display in any advertising
      or signage related to the Products that it is an Authorized Master
      Distributor of VitroTech and VitroCo;

            (d) Not make any warranties, express or implied, by operation of law
      or otherwise, concerning the Products which are in addition to any written
      warranties made by VitroTech and VitroCo;

            (e) Advise VitroTech and VitroCo of complaints relating to the
      Products received in writing;

            (f) Pay for all the Distributor's costs associated with the
      promotion and advertising of the Products;

                                       5
<PAGE>

            (g) Obtain and pay for such licenses, permits and authorizations as
      may be necessary in connection with the Distributor's promotion and sale
      of the Products.

      7. Payment and Funding Obligations. As consideration for the rights
granted to the Distributor hereunder, the parties agree as follows:

            (a) Direct Costs and Basic Overhead Costs.

                  (i) The Distributor shall pay the known fixed Direct Costs (as
            defined below) as the same shall become due and payable.

                  (ii) Until such time as VitroTech and VitroCo can pay their
            own Basic Overhead Costs (as defined below) without being Insolvent,
            the Distributor shall pay the Basic Overhead on a monthly basis on
            the first day of each month.

                  (iii) The Distributor, in its sole and absolute discretion,
            may pay any Direct Costs or Basic Overhead Costs to third parties
            directly on behalf of VitroCo or VitroTech, as applicable, and the
            Distributor shall provide evidence of such payment to VitroCo or
            VitroTech, as applicable.

                  (iv) Set forth on Exhibit D, is the current quarterly budget
            (the "Current Quarter Budget"). During the Term, thirty days prior
            to the beginning of each calendar quarter, VitroCo and VitroTech
            shall cause to be prepared and delivered to Distributor a quarterly
            budget (each, including the Current Quarter Budget, a "Budget") for
            the succeeding quarter. The Distributor shall have fifteen days to
            review the Budget. If the Distributor disputes any items set forth
            in the Budget, the Distributor shall notify VitroCo and VitroTech,
            and the parties shall negotiate in good faith as to whether and what
            amount of such disputed items should be incurred. The final
            determination with respect to disputed items shall be made by the
            Distributor in its sole and absolute discretion. Notwithstanding
            anything to the contrary set forth herein, the Distributor shall
            have no obligation to pay VitroTech or VitroCo any amount in excess
            of the amount set forth in the Budget for such line item unless the
            Distributor consents, which consent shall be in the Distributor's
            sole and absolute discretion, to make such payment.

                  (v) The parties acknowledge and agree that it is the intent of
            the parties to reduce the Direct Costs and Basic Overhead Costs as
            much as reasonably possible without materially adversely affecting
            VitroTech and VitroCo. To the extent that the Distributor can
            reasonably arrange for any Direct Costs or Basic Overhead Costs to
            be obtained at a lower price, VitroCo and/or VitroTech shall utilize
            such arrangement (and Budget shall be amended to reflect such lower
            cost), so long as the operations of VitroCo and VitroTech are not
            materially harmed by such arrangements.

                  (vi) For purposes hereof, "Direct Costs" means costs incurred
            by VitroCo or VitroTech relating to the mining, processing, sale or
            transfer of Products to or for the benefit of the Distributor,
            including but not limited to the mining costs, processing costs,
            freight charges, storage charges, warehouse charges, handling
            charges, payments to the Mines measured based on sales (but no
            greater than 10%), payments to Hi-Tech measured by sales (but no
            greater than 5%), and payments Contingent Interest (measured by
            sales of Product) incurred by VitroTech or VitroCo; provided
            however, to the extent that any Contingent Interest obligation is
            decreased for any reason, then the Distributor is only obligated to
            pay such reduced amount of Contingent Interest.

                                       6
<PAGE>

                  (vii) For purposes hereof, "Basic Overhead Costs" means costs
            incurred by VitroTech to support its essential operations as a
            public reporting company, including, lease payments, utilities,
            taxes (other than taxes based on the income of VitroTech and
            VitroCo), insurance, directors fees, filing fees accounting fees and
            legal fees related to public company reporting, the Current
            VitroTech Employee Costs and Post Mine Transfer Date VitroCo
            Employee Costs, provided, however, that Basic Overhead Costs shall
            not: (i) cumulatively exceed $600,000 in any 12-month period
            ("Overhead Cap"), or (ii) include any Processing Oversight and ISO
            Costs (as defined below) and Trade Debt (as defined below).
            Notwithstanding anything to the contrary set forth herein, the
            Distributor shall have no obligation to pay VitroTech or VitroCo any
            amount in excess of the Overhead Cap, unless the Distributor
            consents, which consent shall be in the Distributor's sole and
            absolute discretion, to make such payment.

            (b) Product Royalty Payment. The Distributor shall pay to VitroCo an
      amount (the "Product Royalty") equal to five percent (5%) of the gross
      sales price of all Products sold by the Distributor, as follows:

                  (i) Product Royalty payments will be due and payable on or
            before the fifteenth day of each month based on gross amounts
            collected by the Distributor from the sale of Products during the
            preceding calendar month;

                  (ii) In the event of any reduction in payments to Hi-Tech,
            which amounts are included in Direct Costs (each such reduction
            being referred to as a "Reduced Direct Cost"), the Product Royalty
            shall be increased by an amount equal to the Reduced Direct Cost.

                  (iii) Notwithstanding the foregoing, no Product Royalty shall
            be payable with respect to the EIG Mine Material XP-VL800-110# Drum,
            which is approximately 13,138 pounds and which is set forth on
            Exhibit A attached hereto.

            (c) Processing Oversight and ISO Payments. The Distributor shall pay
      to, or on behalf of, VitroTech an amount sufficient to cover Processing
      Oversight and ISO Costs of VitroTech, as follows:

                  (i) The Distributor shall pay to VitroTech, or will pay
            directly on behalf of VitroTech, all Processing Oversight and ISO
            Costs as those costs are incurred by VitroTech; and

                                       7
<PAGE>

                  (ii) For purposes hereof, "Processing Oversight and ISO Costs"
            means all costs incurred by VitroTech or VitroCo relating directly
            to maintenance of the ISO Registration, including but not limited to
            all costs of (A) maintaining and renewing the ISO Registration and
            (B) processing oversight required in connection with the ISO
            Registration.

            (d) Trade Creditor Payments. The Distributor shall pay on behalf of
      VitroTech and VitroCo, certain trade creditor payments (to the extent
      VitroTech and VitroCo are legally required to pay), as follows:

                  (i) The Distributor shall, on the Mine Transfer Date, begin
            the process to satisfy all Trade Debt of VitroTech and VitroCo and
            continue until completion;

                  (ii) For purposes hereof, "Trade Debt" means all amounts owing
            with respect to the purchase of goods or services by VitroTech or
            VitroCo in the reasonable course of business, excluding amounts
            owing to the Mines and Hi-Tech.

      All payments pursuant to this Agreement shall be made in United States
dollars (USD).

      8. Equity Interest. Within five days after the date hereof, the
Distributor shall issue to VitroTech a non-diluting twenty-five percent (25%)
equity ownership interest (the "Equity Interest") in the Distributor as follows:

            (a) The Equity Interest shall consist of membership interests of the
      Distributor that will, at all times and notwithstanding any future
      issuances of securities by the Distributor, be entitled to (i) a
      preferential distribution on liquidation equal to twenty-five percent
      (25%) of the liquidation proceeds, if any, of the Distributor and (ii)
      mandatory distribution of twenty-five percent (25%) of the pre-tax net
      income of the Distributor, as measured on a annual basis and payable not
      later than ninety (90) days following the end of each calendar year.

            (b) The holder of the Equity Interest will have a right to appoint
      one member to the board of managers of the Distributor.

            (c) Pre-tax net income of the Distributor shall be calculated in
      accordance with U.S. generally accepted accounting principles.

      9. Right of First Refusal. Before any outstanding equity ownership
interest (an "Offered Interest") in the Distributor may be sold or otherwise
transferred (including transfer by gift or operation of law) by the holder of
such Offered Interest (a "Selling Holder"), VitroTech shall have a right of
first refusal to purchase the Offered Interest on the terms and conditions set
forth in this paragraph (the "Right of First Refusal"), as follows:

            (a) Notice of Proposed Transfer. The Selling Holder shall (i)
      deliver to VitroTech a written notice (the "Notice") stating: (A) the
      Selling Holder's bona fide intention to sell or otherwise transfer such
      Offered Interest; (B) the name of each proposed purchaser or other
      transferee ("Proposed Transferee"); (C) the amount of the securities to be
      transferred to each Proposed Transferee; (D) the bona fide cash price or
      other consideration for which the Selling Holder proposes to transfer the
      Offered Interest (the "Offered Price"); and (E) the material terms and
      conditions of the proposed transfer (the "Offer Terms") and (ii) offer the
      Offered Interest at the Offered Price and on the Offer Terms to VitroTech.

                                       8
<PAGE>

            (b) Exercise of Right of First Refusal. At any time within 30 days
      after receipt of the Notice, VitroTech may, by giving written notice to
      the Selling Holder, elect to purchase all, but not less than all, of the
      Offered Interest proposed to be transferred to any one or more of the
      Proposed Transferees, at the purchase price and on the terms determined in
      accordance with subsection (c) below.

            (c) Purchase Price. The purchase price ("Purchase Price") for the
      Offered Interest purchased by VitroTech under this paragraph shall be the
      Offered Price, and the terms and conditions of the transfer shall be
      identical in all material respects to the Offer Terms (the "Terms"). If
      the Offered Price includes consideration other than cash, the cash
      equivalent value of the non-cash consideration shall be determined by the
      Board of Directors of the Distributor in good faith.

            (d) Payment of Purchase Price. Payment of the Purchase Price shall
      be made in cash (by check or wire transfer) in accordance with the Terms,
      within thirty (30) days after delivery of the written notice by VitroTech
      as set forth in paragraph 9(b).

            (e) Selling Holder's Right to Transfer. If all of the Offered
      Interest proposed in the Notice to be transferred to a given Proposed
      Transferee are not purchased by VitroTech as provided in this paragraph,
      then the Selling Holder may sell or otherwise transfer such Offered
      Interest to that Proposed Transferee at the Offered Price or at a higher
      price and on the Offer Terms, provided that such sale or other transfer is
      consummated within sixty (60) days after the date of the Notice and
      provided further that any such sale or other transfer is affected in
      accordance with any applicable securities laws and the Proposed Transferee
      agrees in writing that the provisions of this paragraph shall continue to
      apply to the Offered Interest in the hands of such Proposed Transferee;
      provided however, that with respect to the Offered Interests held by
      Proposed Transferees, the Right of First Refusal shall be deemed to have
      lapsed and to be of no force or effect on or after the earlier of (i) the
      second anniversary of the Effective Date or (ii) a Public Market
      Transaction. For purposes hereof, a "Public Market Transaction" shall mean
      (A) an underwritten public offering of the equity securities of the
      Distributor offered pursuant to a registration statement filed and
      effective under the Securities Act of 1933, as amended, or (B) a
      transaction by which the Distributor, directly or as a majority owned
      subsidiary, becomes subject to the reporting requirements of the
      Securities Exchange Act of 1934 (a "reverse merger transaction"), provided
      that a reverse merger transaction will only be deemed a Public Market
      Transaction if VitroTech shall consent, in writing, to the reverse merger
      transaction, which consent shall not be unreasonably withheld. If the
      Offered Interest described in the Notice is not transferred to the
      Proposed Transferee within the 60 day period set forth above, a new Notice
      shall be given to VitroTech, and VitroTech shall again be offered the
      Right of First Refusal before any Offered Interest held by the Selling
      Holder may be sold or otherwise transferred.

                                       9
<PAGE>

            (f) Exception for Affiliate Transfers. Anything to the contrary
      contained in this paragraph notwithstanding, the transfer of any or all of
      the Offered Interest to an affiliate of the Selling Holder (including
      limited partners of the Selling Holder) shall be exempt from the
      provisions of this paragraph. In such case, the transferee or other
      recipient shall receive and hold the Offered Interest so transferred
      subject to the provisions of subparagraphs a-e of this paragraph.

            (g) Exception for Initial Transfers. Anything to the contrary
      contained in this paragraph notwithstanding, the transfer of any portion
      of the Offered Interest to any person or persons, up to a maximum of
      twenty-four percent (24%) of the undiluted equity ownership interest of
      the Distributor shall be exempt from the provisions of this paragraph.

            (h) Legends. The Distributor shall mark its records and shall mark
      any certificate or document evidencing ownership interests in the
      Distributor to indicate that such ownership interests are subject to the
      Right of First Refusal as set forth herein.

      10. Representations, Warranties and Covenants of VitroTech and VitroCo.
VitroTech and VitroCo each hereby represent and warrant to Distributor that:

            (a) VitroTech and VitroCo, respectively, is the owner or has the
      valid right to use and to license or sublicense all of its rights to the
      Proprietary Rights and the Trademarks, and VitroTech and VitroCo
      respectively, has the right to grant the licenses it has granted
      hereunder;

            (b) VitroTech and VitroCo hereby represent and warranty to the
      Distributor that the current Gross Margins (as defined below) are set
      forth on Exhibit A. "Gross Margins" means the difference between the base
      cost of the Products (including processing, packaging, royalties payments
      to the Mines and Contingent Interest) and the day to day resale price of
      VitroTech.

            (c) VitroTech and VitroCo hereby acknowledge and agree that: (i) any
      present or former VitroTech or VitroCo executive, officer, employee or
      consultant may be hired by Distributor (the "Employees") and VitroTech and
      VitroCo each will release and hold harmless Employees and Distributor from
      any rights, duties, liabilities or obligations to VitroTech or VitroCo,
      including, but not limited to, any claims that relate to or arise from the
      transfer of propriety or confidential technical, business or customer
      information to Distributor; and (ii) the Distributor may contact and
      solicit all former, present or future customers of VitroTech and VitroCo
      in connection with Distributor's sale of the Products; and

            (d) VitroTech covenants and agrees that it shall cause VitroCo to
      perform all of VitroCo's obligations hereunder.

            (e) VitroCo covenants and agrees that after it has paid its other
      expenses, it shall apply the balance on the Product Royalty, if any, to
      pay for Basic Overhead Costs.

                                       10
<PAGE>

      11. Term and Termination. This Agreement shall be for the "Term"
commencing on the Effective Date and ending on the tenth anniversary of the
Effective Date, unless extended or earlier terminated as provided herein.

            (a) Notwithstanding the foregoing, this Agreement may be earlier
      terminated:

                  (i) At the election of VitroTech, in writing, if: (A) the
            Distributor is dissolved; (B) the Distributor is adjudged bankrupt;
            (C) the Distributor enters into an assignment or other arrangement
            for the benefit of its creditors (and the Distributor shall give
            VitroTech prompt written notice of any of the foregoing) or (D) the
            Distributor fails to satisfy Minimum Sale Requirements. "Minimum
            Sales Requirements" means sales by the Distributor of not less than
            500,000 pounds of Products per calendar year beginning in 2008,
            increasing to 1,000,000 pounds of Products per calendar year
            beginning in 2010.

                  (ii) At the election of the Distributor, in writing, if: (A)
            VitroTech or VitroCo are dissolved; (B) VitroTech or VitroCo are
            adjudged bankrupt; (C) VitroTech or VitroCo enter into an assignment
            or other arrangement for the benefit of its creditors; (and
            VitroTech or VitroCo shall give Distributor prompt written notice of
            any of the foregoing); (D) the ISO Registration is canceled or
            terminated for any reason; or (E) the Mines and Hi-Tech fail to
            enter into an agreement to continue providing Products to the
            Distributor on terms substantially similar to those set forth herein
            in the event of the bankruptcy filing by either VitroTech or
            VitroCo, or (F) VitroTech or VitroCo lose the right to mine Products
            from the Mines under the terms in which they currently possess those
            rights.

            (b) The party electing termination shall give written notice to the
      non-terminating party. The termination shall be effective upon thirty (30)
      days written notice unless the reason for termination is cured within said
      thirty (30) day period.

                  (c) The Distributor shall have a right to extend the Term of
            this Agreement, at its sole election on two separate occasions, each
            such extension being for five years provided that the aggregate
            sales of Products by the Distributor over the five year period
            immediately prior to the extension equal or exceed 8,000,000 pounds
            and provided, further, that the Distributor provides written notice
            to VitroTech, given at least thirty (30) days prior to the end of
            the then current Term, of its intent to extend the Term.

      12. Effect of Termination. Upon termination of this Agreement:

            (a) (i) If termination is by VitroCo, then VitroCo shall have the
      right to purchase any or all Products then in the Distributor's possession
      at the Distributor's actual purchase price, including shipping costs,
      taxes and other fees and costs paid by the Distributor, provided the same
      are in their original unopened containers, and subject to any liens on the
      Products. In the event that VitroCo exercises its right to purchase said
      Products, the Distributor, at its cost, shall return to VitroCo in their
      original, unopened and secure containers, to reach VitroCo without damage,
      all such Products purchased and VitroCo shall pay the Distributor for the
      same, less any then outstanding receivables from the Distributor to
      VitroCo, within thirty (30) days following their receipt. Notwithstanding
      anything to the contrary contained herein, the Distributor shall have the
      right to satisfy all outstanding contracts with its customers that are of
      a term of less than one (1) year.

                                       11
<PAGE>

            (ii) If termination is by Distributor, then all obligations of
      Distributor under this Agreement shall immediately cease.

            (b) VITROTECH AND VITROCO SHALL NOT BE LIABLE TO THE DISTRIBUTOR FOR
      ANY DAMAGES, LOSSES OR EXPENSES RESULTING FROM ANY TERMINATION OR
      EXPIRATION OF THIS AGREEMENT ARISING FROM ANY CLAIMS ASSERTED BY THE
      DISTRIBUTOR WHICH ARE BASED UPON LOSS OF GOODWILL, PROSPECTIVE PROFITS OR
      ANTICIPATED ORDERS, OR ON ACCOUNT OF ANY EXPENDITURES, INVESTMENTS, LEASES
      OR COMMITMENTS MADE BY THE DISTRIBUTOR.

            (c) THE DISTRIBUTOR SHALL NOT BE LIABLE TO VITROTECH OR VITROCO FOR
      ANY DAMAGES, LOSSES OR EXPENSES RESULTING FROM ANY TERMINATION OR
      EXPIRATION OF THIS AGREEMENT ARISING FROM ANY CLAIMS ASSERTED BY VITROTECH
      OR VITROCO WHICH ARE BASED UPON LOSS OF GOODWILL, PROSPECTIVE PROFITS OR
      ANTICIPATED ORDERS, OR ON ACCOUNT OF ANY EXPENDITURES, INVESTMENTS, LEASES
      OR COMMITMENTS MADE BY VITROTECH OR VITROCO.

            (d) The Distributor acknowledges that:

                  (i) VitroTech and VitroCo have not made any representations to
            the Distributor and the Distributor has received no assurances,
            that: (A) its business relationship will continue with VitroTech and
            VitroCo beyond the stated term of this Agreement or its earlier
            termination in accordance with this Agreement; (B) any investment by
            the Distributor in the promotion of the Products will be recovered
            or recouped; or (C) the Distributor shall obtain any anticipated
            amount of profits by virtue of this Agreement; and

                  (ii) Except as expressly provided herein, the Distributor
            shall not have or acquire, by virtue of this Agreement or the
            transactions contemplated hereunder, any proprietary or other rights
            in the Products, VitroTech's and VitroCo's intellectual and
            industrial property or in any goodwill related thereto, whether or
            not created by its efforts.

            (e) No termination of this Agreement shall constitute a waiver by
      any party of any other rights or remedies which it may have against the
      other party, nor shall it constitute a termination of any other
      contractual agreement between the parties hereto, including but not
      limited to the right to receive payment for Products sold to the
      Distributor hereunder. Any action for a breach of any of party's
      obligations under this Agreement or otherwise must be commenced within one
      (1) year after the cause of action has accrued.

                                       12
<PAGE>

            (f) If any party has given any other party notice of its intention
      to terminate this Agreement as provided herein, then during such period
      between the notice of termination and termination of this Agreement, the
      Distributor shall have the right to purchase a reasonable quantity of the
      Products to service expected customer needs. VitroCo shall have no
      obligation to accept any orders, which have not been accepted by VitroCo
      prior to any notice of termination of this Agreement.

      13. Confidentiality. The Distributor acknowledges that all information
supplied to it by VitroTech and VitroCo, other than that in published form for
public distribution or expressly designated by VitroTech or VitroCo as
non-confidential or otherwise known to the Distributor, is confidential and
proprietary to VitroTech or VitroCo (collectively, the "Company Confidential
Information") including, without limitation, identification of its customers,
the price at which they purchase material from VitroCo, the sources and prices
of materials obtained by VitroCo or the technical methods used in the mining,
milling and utilization by the end-user of the Products, except that Distributor
may share such information with potential investors provided that such investors
sign a confidentiality agreement. Subject to applicable law, (including legal
process), the Distributor shall not disclose or provide any Company Confidential
Information to any third party and shall take commercially reasonable measures
to prevent disclosure by its present and future employees, officers, agents,
subsidiaries, dealers or consultants during the term of this Agreement and
thereafter. If the Distributor elects to test the performance of the Products in
any process and or products, the Distributor shall (i) supply to VitroCo all
test results including all data pertaining thereto and representative samples of
test items with and without Products (except to the extent the data contains
confidential or proprietary information unrelated to the Products), and (ii)
refrain from analyzing or testing the Products to determine its structure or
composition, including but not limited to the following testing means: x-ray
diffraction for mineralogy or chemical analysis by any means, in either case for
the purpose of "reverse-engineering" the Products. The results of any such test
shall be deemed Company Confidential Information.

      14. Trademarks.

            (a) VitroTech's and VitroCo's Trademarks may only be used in
      connection with promotion and sale of the Products and may not be used by
      the Distributor for any other purpose or in connection with the sale or
      promotion of any goods, services or Products, which are not provided by
      VitroTech or VitroCo to the Distributor. The Distributor's use of such
      Trademarks shall conform to any requirements reasonably imposed by
      VitroTech.

            (b) Except as expressly provided herein, the Distributor
      acknowledges that it will not acquire any rights, titles, or interests in
      any of VitroTech's or VitroCo's Trademarks.

            (c) The Distributor may adopt, use or register any words, phrases or
      symbols which are identical or similar to any of VitroTech's or VitroCo's
      Trademarks, provided, however, that upon the termination of this
      Agreement, at the written request of VitroTech, the Distributor shall
      assign to VitroTech or VitroCo any trademarks, service marks, trade names
      or similar rights obtained by the Distributor during the term of this
      Agreement which relate to the Products or the Distributor's sale thereof,
      all at no cost to VitroTech or VitroCo.

                                       13
<PAGE>

      15. Products Warranties and Limitation of Remedies. During the Warranty
Period, VitroCo hereby warrants that the Products sold shall conform to
VitroCo's then current published specifications for such Products.

            (a) Provided the Distributor notifies VitroCo, in writing, of any
      nonconformity in any of the Products and returns such Products to VitroCo
      during the Warranty Period, as applicable, VitroCo shall replace such
      non-conforming Products, provided that all of the following conditions are
      met:

                  (i) The Products (and to the extent reasonably available, in
            its original container) is returned to VitroCo, at which time title
            transfers to VitroCo; and

                  (ii) The Products has not been altered, reprocessed, misused,
            abused, damaged by accident, subjected to undue stress, or attempted
            to prepare the Products for use more than one time.

      The cost of returning any defective or non-conforming Products to VitroCo
      and the cost of returning any replaced Products to the Distributor shall
      be borne by VitroCo.

            (b) THE REPLACEMENT OF ANY NON-CONFORMING OR DEFECTIVE PRODUCTS
      ABOVE SHALL CONSTITUTE THE SOLE AND EXCLUSIVE REMEDY OF THE DISTRIBUTOR
      (AND SHALL CONSTITUTE FULFILLMENT OF ALL OBLIGATIONS OF VITROCO HEREUNDER)
      FOR THE BREACH OF ANY WARRANTY BY VITROCO.

            (c) THE FOREGOING PRODUCTS WARRANTIES ARE EXCLUSIVE AND IN LIEU OF
      ALL OTHER WARRANTIES WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED,
      INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS
      FOR A PARTICULAR PURPOSE.

            (d) The Distributor acknowledges that there are no warranties
      implied by custom or usage in the trade between the Distributor and
      VitroTech or VitroCo that have become a part of this transaction.

            (e) VITROCO SHALL NOT BE LIABLE TO THE DISTRIBUTOR FOR ANY LOSS OR
      DAMAGE CAUSED BY DELAY IN FURNISHING THE DISTRIBUTOR WITH ANY PRODUCTS OR
      ANY OTHER PERFORMANCE BY VITROCO UNDER THIS AGREEMENT.

            (f) IN NO EVENT SHALL ANY PARTY HERETO BE LIABLE TO THE OTHER FOR
      ANY SPECIAL, CONSEQUENTIAL OR INDIRECT DAMAGES, HOWEVER CAUSED.

                                       14
<PAGE>

      16. Products Specifications. VitroCo reserves the right to change the
Products' specifications, but not in an adverse manner for the intended use.

      17. All Sales Final. All sales are final and all Products shall be paid
for by Distributor as set forth above in Paragraph 7. Any return of any Products
shall be subject to the prior written approval of VitroCo. Claims that a Product
is not as warranted based upon any defects which are discoverable upon
inspection of the Products and claims for shortages in delivery shall be deemed
waived and released by the Distributor unless made in writing and delivered to
VitroCo within five (5) business days of the Distributor's receipt of the
shipment giving rise to such claim(s), in the case of a purported shortage, and
within one hundred and eighty (180) days, in the case of Products purported
being not as warranted. Failure to so notify VitroCo shall constitute an
irrevocable acceptance of the Products. Any conforming Products returned with
VitroCo's Returned Material Authorization (RMA) to VitroCo must be shipped
prepaid in secure containers to reach VitroCo without damage.

      18. Relationship Among the Parties. Nothing herein contained shall
constitute a partnership between, or a joint venture by, the parties hereto, or
constitute any party the agent of the other. No party shall hold itself out
contrary to the terms of this paragraph, and no party shall become liable by any
representation, act or omission of the other contrary to the provisions hereof.
This Agreement is not for the benefit of any third party and shall not be deemed
to give any right or remedy to any such party whether referred to herein or not.

      19. Broker's Commission. Each party hereto warrants to the other parties
hereto that it has not incurred any obligation by reason of this Agreement or
the transactions contemplated by this Agreement, for a brokerage commission or
finder's fee for which any other party would be liable. Each party hereto
indemnifies and will hold the other parties hereto free and harmless from and
against any damage or expense that such other party may incur by reason of the
untruth as to the warranting party of the foregoing warranty, including expenses
for attorney's fees and court costs. The Distributor may pay sales commissions
or fees in connection with sale of Products, and the other parties shall have no
liability with respect thereto.

      20. Assignment. This Agreement shall be binding upon the parties and their
respective successors and assigns. Notwithstanding the foregoing sentence, no
party shall assign any of its rights or obligations under this Agreement unless
such assignment has received the prior written consent of the other parties,
which consent shall not be unreasonably withheld.

      21. Miscellaneous.

            (a) Applicable Law. This Agreement shall be governed by, construed
      and enforced in accordance with the laws of Delaware.

            (b) Language. The governing language to be used for purposes of the
      interpretation and meaning of this Agreement shall be English.

            (c) Further Assurances. Each of the parties agree that it will,
      without further consideration, execute, acknowledge and deliver such other
      documents and take such other actions as may be reasonably requested by
      the other party in order to consummate the purposes and subject matter
      hereof; provided that such party incurs no additional material financial
      obligation thereby.

                                       15
<PAGE>

            (d) Modification. Only a writing dated on or subsequent to the date
      hereof signed by each of the parties hereto may amend this Agreement.

            (e) Notices. Any notice, request, approval or other communication
      given in connection herewith shall be in writing and shall be deemed
      delivered when actual and personal delivery is effected on the party being
      given notice and when a true copy is given by facsimile to each of the
      parties listed below. If mailed, notice shall be effective three (3)
      business days after the same have been deposited in a United States post
      office with postage prepaid and addressed to the parties as follows,
      together with a facsimile sent to the noticed party on the same day as
      deposited at the post office. If notice is deposited in a post office
      outside the United States, it shall be effective ten (10) days after being
      deposited provided notice is also sent by facsimile. Any party, by notice
      so given, may change its address for any subsequent notice.

      If to VitroTech or VitroCo:

                             VitroTech Corporation
                             5 Hutton Centre Drive, Suite 700
                             Santa Ana, CA 92707
                             Telefacsimile: (714) 708-4701

      If to the Distributor: Jim Lasry
                             c/o Wachtel & Masyr, LLP
                             110 East 59th Street
                             New York, New York 10022
                             Telefacsimile: (212) 909-0320

      With a copy to:        Wachtel & Masyr, LLP
                             110 East 59th Street
                             New York, New York 10022
                             Attn: Howard Kleinhendler
                             Telefacsimile: (212) 909-9417

            (g) JURY TRIAL WAIVERS. TO THE FULLEST EXTENT PERMITTED BY LAW, AND
      AS SEPARATELY BARGAINED-FOR CONSIDERATION, EACH PARTY HEREBY WAIVES ANY
      RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF
      ANY KIND ARISING OUT OF OR RELATING TO ANY OF THE OBLIGATIONS UNDER THIS
      AGREEMENT. EACH PARTY HEREBY EXPRESSLY ACKNOWLEDGES INCLUSION OF THIS JURY
      TRIAL WAIVER.

            (h) Section Headings. The subject headings of the sections of this
      Agreement are for convenience of reference only, and words contained
      therein shall in no way be held to explain, modify, amplify or aid in the
      interpretation, construction or meaning of this Agreement.

                                       16
<PAGE>

            (i) Gender; Number. The masculine, feminine or neuter gender and the
      singular or plural number shall be deemed to include the other whenever
      the context of this Agreement so indicates or requires.

            (j) Severability. Any provision of this Agreement, which may be
      prohibited by law or otherwise held invalid, shall be ineffective only to
      the extent of such prohibition or invalidity and shall not invalidate or
      otherwise render ineffective the remaining provisions of this Agreement.
      No provision of this Agreement shall be interpreted for or against a party
      because such party or its representation drafted the same.

            (k) Counterparts. This Agreement may be executed in any number of
      counterparts, all of which shall constitute one and same agreement, and it
      shall be necessary to produce only one such counterpart in making proof of
      this Agreement. Facsimile copies of signatures shall be deemed originals.

            (l) Waiver. Waiver by either party of any breach of any term or
      condition of this Agreement shall not constitute a waiver of subsequent
      breaches.

            (m) Counting of Days. Business days shall not include legal holidays
      or a Saturday, a Sunday or days on which banking institutions are not
      required to be open.

            (n) Force Majeure. No party hereto shall be liable for failure to
      perform, in whole or in material part, its obligations under this
      Agreement if such failure is caused by any event or condition not existing
      as of the date of this Agreement (unless reasonably foreseeable by such
      party) and not reasonably within the control of the affected party,
      including without limitation, by fire, flood, typhoon, earthquake,
      explosion, strikes, labor troubles or other industrial disturbances,
      unavoidable accidents, war (declared or undeclared), acts of terrorism,
      sabotage, embargoes, blockage, acts of any governmental entities, riots,
      insurrections, or any other cause beyond the control of the parties;
      provided, only, that the affected party promptly notifies the other party
      of the occurrence of the event of force majeure and takes all reasonable
      steps necessary to resume performance of its obligations so interfered
      with.

            (o) Audit Rights. During the term of this Agreement and for 6 months
      thereafter, upon reasonable prior written request and during normal
      business hours, VitroTech shall have the right to audit, at VitroTech's
      sole cost and expense, the Distributor's books and records and
      calculations, and schedules thereto, with respect to all amounts payable
      hereunder. During the term of this Agreement and for 6 months thereafter,
      upon reasonable prior written request and during normal business hours,
      Distributor shall have the right to audit, at Distributor's sole cost and
      expense, Vitrotech's and VitroCo's books and records and calculations, and
      schedules thereto, with respect to all amounts payable by Distributor
      hereunder.

                                       17
<PAGE>

            (p) Financial Statements. Each of VitroTech and the Distributor
      agrees to provide to the other (i) audited financial statements of the
      respective party for each year ending December 31, which financial
      statements shall be provided within seventy days after year-end and (ii)
      unaudited financial statements of the respective party for each of the
      first three calendar quarters of each calendar year, which financial
      statements shall be provided within thirty days after end of each calendar
      quarter. All such financial statements shall include a balance sheet and
      statements of operations, cash flows and changes in equity, all prepared
      in accordance with SEC Regulation S-X.

      22. Acknowledgment. This Agreement, including any exhibits, schedules and
amendments, has been negotiated at arm's length between persons sophisticated
and knowledgeable in the matters dealt with in this Agreement. Experienced and
knowledgeable legal counsel has represented each party. Accordingly, any rule of
law or legal decision that would require interpretation of any ambiguities in
this Agreement against the party that has drafted it is not applicable and is
waived. The provisions of this Agreement shall be interpreted in a reasonable
manner to affect the purposes of the parties and this Agreement.

      23. Definitions. For purposes hereof, the following terms shall have the
means set forth as follows:

            (a) "Warranty Period" means a one hundred eighty (180) day period
      commencing from the date of delivery of the Products to the Distributor.

                            [Signature page follows]

                                       18
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth in the introduction to this Agreement.

VITROTECH CORPORATION                  VITROTECH PRODUCT
                                       DISTRIBUTOR LLC

By: ________________________________   By:__________________________
    Glenn Easterbrook                     Jim Lasry
    Chief Executive Officer               Manager

VITROCO INCORPORATED

By:________________________________
   Chief Executive Officer

                                       19

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