Unassociated Document


    SUPPLY
      AGREEMENT

    
 

    THIS
      SUPPLY AGREEMENT (hereinafter
      "Agreement") is made this 28th
      day of
      June, 2008, by and between InovaChem Inc., a Delaware corporation, with
      headquarters at 3040
      Post
      Oak Blvd, Suite 1110, Houston, Texas 77056, USA (hereinafter
      “InovaChem”),
      and
Polymed
      Therapeutics Inc., a Texas corporation, with
      headquarters
      at 3040
      Post Oak Blvd, Suite 1110, Houston, Texas 77056, USA (hereinafter
“Polymed”).

     

    RECITALS

    


    
      	 	
              A.

            	
              InovaChem
                owns the Intellectual Property (as defined below), which relates
                to the
                manufacture of sucralose.

            


    

    


    
      	 	
              B.

            	
              Polymed
                manufactures food
                and pharmaceutical ingredients for use in products similar to sucralose.
                

            


    

     

    
      	 	
              C.

            	
              InovaChem
                and Polymed desire that Polymed manufacture sucralose exclusivelyfor
                InovaChem on the terms and conditions set forth in this
                Agreement.
                

            


    

     

    AGREEMENT

    


    In
      consideration of the premises, and for other good and valuable consideration,
      the receipt and sufficiency of which hereby are acknowledged, the parties hereby
      agree as follows: 

    


    1. Definitions. In
      this
      Agreement the following terms shall have the following meanings whenever such
      terms are used:

    


    (a) “Cost
      Price” shall mean the cost of manufacturing the Product as set forth on
Schedule
      A
      attached
      hereto. 

     

    (b) “Intellectual
      Property” shall mean any and all patent, patent application and other patent
      right, copyright, trademark, and tradename owned by or licensed to InovaChem,
      its subsidiaries and affiliates, including but not limited to those set forth
      on
Schedule
      B
      attached
      hereto. 

    


    (c) “Product”
      shall mean sucralose and sucralose products manufactured in accordance with
      the
      Intellectual Property.

    


    (d)
       “Regulations”
      shall mean any and all Federal and State laws, including without limitation,
      the
      regulations, policies and guidelines promulgated by the U.S. Food and Drug
      Administration and other applicable regulatory authorities, with respect to
      the
      manufacturing and testing practices for products similar to the
      Product.

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (e)
       “Specifications”
      shall mean the technical specifications for the manufacture of the Product
      as
      set forth on Schedule
      C
      attached
      hereto.

    


    2. Term.
      This
      Agreement shall be effective from the date first set forth above (the “Effective
      Date”). The term of this Agreement shall be for a period of thirty-six (36)
      months from the Effective Date. This Agreement shall automatically renew for
      successive twelve (12) month periods, unless a party provides notice to the
      other party within ninety (90) days prior to the expiration of the term of
      this
      Agreement, as such term may have been extended, that such party does not wish
      to
      extend the term of this Agreement. This Agreement may also be terminated by
      either party upon ninety (90) days prior written notice to the other party.
      

    


    3. Purchase
      Orders; Delivery of Product.
      

    


    (a)  Polymed
      shall manufacture the Product pursuant to the Specifications and in accordance
      with the Intellectual Property, and deliver to InovaChem the Product in such
      quantities as InovaChem may order from time to time pursuant to one or more
      purchase orders (each a “Purchase Order”) in accordance with the terms of this
      Agreement. Each Purchase Order will set forth the Product ordered, the quantity
      of such Product and the Purchase Price for the Product calculated in accordance
      with Schedule
      A.
      The
      delivery date for the Product will be sixty (60) days from the date of the
      Purchase Order. Polymed shall promptly notify InovaChem of any change in the
      lead time. Polymed shall confirm in writing its acceptance of each Purchase
      Order upon receipt of such Purchase Order. Delivery for all Products will be
      F.O.B. ex-factory. InovaChem shall be responsible for all costs associated
      with
      transporting and importing the Product, including, without limitation, freight
      fees, insurance, taxes, customs, duties, licenses, permits and other
      governmental fees required to deliver the Product to the destination of
      InovaChem’s choice. In
      January of each year, InovaChem shall provide a forecast of the quantity of
      Product InovaChem anticipates purchasing during such year. Such forecast shall
      not bind InovaChem to order the forecasted amount during such year.

    


    (b) The
      parties acknowledge that the Product to be manufactured and delivered pursuant
      to the Purchase Orders shall not be sold directly to consumers at this time.
      If
      at any time in the future, Product delivered pursuant to any Purchase Order
      is
      to be sold directly to consumers, InovaChem shall identify that such Product
      is
      for sale to consumers on the Purchase Order and provide the appropriate labeling
      and packaging for such Product that complies in all respects with the
      Regulations.

    


    4.
       Price:
      Payment.
      InovaChem shall purchase the Product from Polymed for the Cost Price plus
      fifteen (15%) percent (the “Purchase Price”). Payment terms shall be net thirty
      (30) days from shipment of the Product by Polymed. Payment will be made by
      bank
      wire transfer pursuant to the wire transfer instructions Polymed provides.
      Polymed
      shall invoice InovaChem for Product on a monthly basis. The invoice shall
      be
      calculated in accordance with Schedule A and shall be subject to Financial
      Audit
      (as defined below) by Inovachem in accordance with this Agreement.
      

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    5. Confidentiality.
      (a) The
      term “Confidential Information” means all products, services, systems,
      technology, designs, devices, processes, plans, ideas, innovations, knowledge,
      know-how, diagrams, directions, specifications, models, formulae, discoveries,
      developments, modifications, data and other information relating to, owned
      or
      used by InovaChem or any parent, subsidiary or affiliate of InovaChem, or to
      any
      business in which InovaChem, or any parent, subsidiary or affiliate of InovaChem
      is engaged or contemplates becoming engaged; all business plans, development
      plans, site plans, architectural and engineering plans, marketing plans,
      marketing strategies, existing and prospective customer lists and information
      of
      InovaChem or any parent, subsidiary or affiliate of InovaChem, or relating
      to
      any business in which InovaChem, or any parent, subsidiary or affiliate of
      InovaChem is engaged or contemplates becoming engaged; all information or data
      supplied by or concerning InovaChem, or any parent, subsidiary or affiliate
      of
      InovaChem, or any client, equity partner, lender or customer of any of the
      foregoing or any business in which any such clients, equity partner, lender
      or
      customers are engaged or contemplate becoming engaged; and all trade secrets
      and
      confidential information belonging to InovaChem or any parent, subsidiary or
      affiliate of InovaChem. In addition, Confidential Information shall include
      all
      Intellectual Property, including without limitation any and all patent, patent
      application, patent right, and all improvements and enhancements thereto (as
      set
      forth on Schedule
      B),
      owned
      or developed by InovaChem, or any parent, subsidiary or affiliate of InovaChem,
      or any employee, contractor, consultant, agent or licensee/licensor of any
      of
      the foregoing. Confidential information shall not belong to or be deemed to
      be
      in the public domain merely as a result of such Confidential Information being
      in the prior possession of Polymed.

    


    (b)
      As a
      consequence of the parties’ relationship with each other, Polymed will receive
      and deal with Confidential Information belonging to InovaChem. Polymed further
      acknowledges that Confidential Information to be received or dealt with by
      it is
      of such a value and nature to InovaChem, and/or protected from disclosure by
      Regulations, as to make it reasonable and necessary for the protection and
      non-disclosure of the Confidential Information to any third party, and that
      InovaChem will be irreparably damaged if Polymed were to disclose any of the
      Confidential Information that it receives or deals with. Polymed acknowledges
      and agrees that all Confidential Information regarding InovaChem or its parents,
      subsidiaries or affiliates which is compiled or obtained by Polymed or furnished
      to it in connection with the parties’ relationship is InovaChem’s exclusive
      property, and that said Confidential Information shall not be disclosed to
      any
      person, firm or entity, any time during or after the term of this Agreement,
      except as required to perform the transaction contemplated by this Agreement.
      Polymed agrees and acknowledges that it shall have no right, title or interest
      in the Confidential Information belonging to InovaChem. Polymed recognizes
      that,
      notwithstanding the provisions of this Agreement, InovaChem may legitimately
      refuse to disclose, or may defer disclosure of, certain Confidential Information
      to the extent that it is not necessary for the purpose of this Agreement. Upon
      demand by InovaChem, and in any event within three (3) days following the
      termination of this Agreement, Polymed will surrender to InovaChem all
      Confidential Information and all other original and facsimile records, documents
      and data in Polymed’s possession or control pertaining to or belonging to
      InovaChem.

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c)
      In
      the event that Polymed is requested or required (by deposition, interrogatories,
      requests for information or documents in legal, regulatory or administrative
      proceedings, subpoenas, civil investigative demand or similar process), in
      connection with any proceeding, to disclose any Confidential Information
      belonging to InovaChem, Polymed will give InovaChem prompt written notice of
      such request or requirement so that InovaChem may seek an appropriate protective
      order or other remedy and/or waive compliance with the provisions of this
      Agreement, and Polymed will cooperate with InovaChem to obtain such protective
      order or remedy. In the event that such protective order or other remedy is
      not
      obtained or InovaChem waives compliance with the relevant provisions of this
      Agreement, Polymed will furnish only that portion of the Confidential
      Information which, in the opinion of its counsel, is legally required to be
      disclosed and, will use its best efforts to obtain assurances that confidential
      treatment will be accorded to such information.

    


    6. Existing
      Intellectual Property. Polymed
      shall have no rights in and to the Intellectual Property as a result of being
      a
      prior assignee of such Intellectual Property. InovaChem shall retain all right,
      title and interest arising under the United States Patent Act, the United States
      Trademark Act, the United States Copyright Act and all other applicable
      Regulations relating to the Intellectual Property, the Product, and any label,
      trademark or tradename associated therewith (collectively, "InovaChem's
      Intellectual Property"). Neither Polymed nor any third party shall acquire
      any
      right, title or interest in InovaChem's Intellectual Property by virtue of
      this
      Agreement or otherwise, except to the extent expressly provided
      herein.

     

    7. Individually
      Owned Inventions.
      Except
      as the parties may otherwise agree in writing, any Invention (as defined herein)
      which is conceived, reduced to practice, or created by Polymed in the course
      of
      performing its obligations under this Agreement as it relates to the Products
      and Intellectual Property shall be solely owned by InovaChem, whether or not
      InovaChem is the inventing party. Any and all use and exploitation of the
      Invention shall be solely at the discretion of InovaChem. For purposes of this
      Agreement, "Invention" shall mean any invention, innovation, improvement,
      development, discovery, computer program, device, trade secret, method,
      know-how, process, technique or the like, whether or not written or otherwise
      fixed in any form or medium, regardless of the media on which contained and
      whether or not patentable or copyrightable. Polymed shall assign, or cause
      to be
      assigned, to InovaChem
      all
      patent rights and other intellectual property rights covering any Invention.
      

     

    8. Exclusivity.
      Polymed
      shall manufacture the Product exclusively for InovaChem. Polymed shall not
      manufacture, sell or otherwise supply Product or any other sucralose-related
      product to any third party without the prior written consent of
      InovaChem.

    


    9. Specifications:
      Manufacturing process.
      Polymed
      shall manufacture the Product in accordance with the Specifications and the
      manufacturing process of the Intellectual Property. Polymed shall not modify
      or
      deviate from the Specifications or the manufacturing process pursuant to the
      Intellectual Property without the prior written consent of InovaChem.
       Polymed
      shall test, or cause to be tested, each batch of Product manufactured pursuant
      to this Agreement before delivery to InovaChem to ensure the Product conforms
      with the Specifications in all respects. A certificate of analysis for each
      batch of Product will be delivered to InovaChem that sets forth the items tested
      and such test results. Polymed shall send such certificate to InovaChem prior
      to
      or at the time the Product is shipped to InovaChem. Polymed will obtain and
      maintain all permits and licenses required for it to carry out its obligations
      pursuant to this Agreement, and will comply with all applicable Regulations
      in
      connection with manufacturing, handling, storage, distribution, and resale
      of
      any Product delivered to InovaChem. Polymed may use subcontractors
      located
      in the People’s Republic of China
      to
      fulfills its manufacturing obligations under this Agreement; provided, however,
      that Polymed must obtain InovaChem’s prior written consent of any subcontractor
      that Polymed seeks to use to manufacture the Product in accordance with Section
      21. Polymed
      shall
      maintain internal standard operating procedures as to product recalls and the
      treatment of product complaints and inquiries regarding safety, quality or
      efficacy that are in keeping with accepted standards in the United States,
      and
      shall promptly notify InovaChem of any issues associated with the Product of
      which Polymed becomes aware. 

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    10. Warranties.
      Polymed
      represents and warrants to and covenants with InovaChem that upon delivery,
      the
      Product shall conform to the Specifications in all respects, and it shall have
      been manufactured in accordance with the Intellectual Property. Polymed
      covenants that the Product will be manufactured in accordance with all
      applicable Regulations, including applicable United States Federal laws and
      regulations, and applicable regulations of the countries where the Product
      may
      be sold or distributed. Polymed covenants that the Product will be fit for
      consumption by humans and animals. EXCEPT
      AS
      EXPRESSLY SET FORTH IN THIS AGREEMENT, POLYMED MAKES NO OTHER WARRANTIES,
      EXPRESSED OR IMPLIED, WITH RESPECT TO PRODUCT, INCLUDING, BUT NOT LIMITED TO,
      WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 

    


    11.
       Audit.
      (a)
      InovaChem shall have the right to visit and audit Polymed’s manufacturing
      facilities to determine compliance with this Agreement and the Regulations,
      and
      that the Product is being manufactured in accordance with the Specifications
      and
      the manufacturing process pursuant to the Intellectual Property. Such audits
      shall be scheduled at mutually agreeable times upon not less than five (5)
      days
      written notice to Polymed, and shall be at InovaChem’s expense. An audit may be
      made upon advance notice of less than five (5) days upon a showing of good
      cause
      as a result of any quality issues of which InovaChem may become
      aware.

    


    (b)
      InovaChem shall have the right to conduct financial audits (hereinafter
“Financial Audit”) from time to time, in its sole discretion, and at its sole
      cost (except as described below) to calculate the Cost Price. Polymed shall
      provide all documents requested by InovaChem, including but not limited to,
      all
      receipts, invoices, and accounting records of the costs comprising the Cost
      Price as set forth in Schedule
      A.
      If such
      Financial Audit reveals that the Cost Price was overstated by more than five
      percent (5%), then Polymed shall bear the cost of the Financial
      Audit.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    12. Non-Conforming
      Product.
      If
      within ninety (90) days after accepting delivery of any Product, InovaChem
      determines that all or any part of such Product was non-conforming upon the
      date
      of delivery, InovaChem may reject such non-conforming Product by giving written
      notice to Polymed. InovaChem shall provide all analysis results with respect
      to
      such non-conforming Product to Polymed. Polymed shall reimburse InovaChem for
      the amount of the Purchase Price and all other costs paid by InovaChem in
      connection with such non-conforming Product, including without limitation all
      freight and shipping charges and all testing costs. Polymed shall
      use
      commercially reasonable efforts to replace non-conforming Product with
      conforming Product
      promptly. In the event that Polymed does not agree that such Product is
      non-conforming, Polymed, at it sole expense, shall have the right to submit
      such
      Product to a third party laboratory, mutually agreed to by the parties, for
      testing. The results of the third party laboratory shall be binding upon the
      parties. If Product is determined by the third party laboratory to be
      conforming, InovaChem shall reimburse Polymed for the cost of testing the
      Product by the third party laboratory.

     

    13. Relationship
      of Parties.
      This
      Agreement shall not constitute or be construed as creating a partnership or
      joint venture between InovaChem and Polymed, and neither party shall be liable
      for any debts or obligations of the other party. Neither party shall in any
      way
      be considered an agent or representative of the other party in any dealings
      with
      any third party, and neither party may act for, nor bind, the other party in
      any
      such dealings.

    


    14. Indemnity.
      (a)
      Polymed shall indemnify, defend and hold harmless InovaChem, and its
      subsidiaries, affiliates, successors and assigns and its and their respective
      shareholders, members, managers, officers, directors, employees, stockholders,
      agents and affiliates from and against any and all damages, claims, losses,
      liabilities and expenses, including, without limitation, legal fees and
      expenses, arising from, through or in any manner related to (i) any breach
      by
      Polymed of its obligations under this Agreement; (ii) any act or omission of
      Polymed or its employees, agents, independent contractors, invitees, or
      licensees in connection with Polymed’s performance under this Agreement, and
      (iii) liability for any premiums, taxes, or contributions of or with respect
      to
      Polymed, and its employees, agents or independent contractors that may be
      assessed against InovaChem.

    


    (b)
      InovaChem shall indemnify, defend and hold harmless Polymed and its affiliates,
      successors and assigns and its and their respective shareholders, officers,
      directors, employees, stockholders, agents and affiliates from against any
      and
      all damages, claims, losses, liabilities and expenses, including, without
      limitation, legal fees and expenses, arising from, through or in any manner
      related to (i) any breach by InovaChem of its obligations under this Agreement;
      (ii) any
      liability arising out of or resulting from any Product that
      complies with the Specifications and was manufactured pursuant to the
      Intellectual Property unless such liability also results from a breach by
      Polymed of its obligations under this Agreement; (iii) any
      liability arising out of or resulting from InovaChem’s compliance or
      noncompliance with any Regulation;
      and (iv)
      liability for any premiums, taxes, or contributions of or with respect to
      InovaChem, and its employees, agents or independent contractors that may be
      assessed against Polymed.

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    15.
      Limitation
      of Liability.
      To the
      extent permitted under applicable Regulations and except for a breach of Section
      5, neither party shall be liable to the other party for any special,
      consequential, exemplary or incidental damages, arising from any claim relating
      to this Agreement, whether such claim is based on contract, tort (including
      negligence) or otherwise, even if it has been advised of the possibility or
      likelihood such damages. Notwithstanding the foregoing, nothing in this section
      shall limit either party’s right to indemnification for claims by third parties
      seeking any special, consequential, exemplary or incidental
      damages.

    


    16. Insurance
      Policies. InovaChem
      shall procure all insurance policies in connection with the Product, including
      without limitation a policy covering claims for product liability. Polymed
      shall
      be named as an additional insured on any product liability insurance policy
      procured by InovaChem with respect to the Product.

    


    17. Notices.
      All
      notices, requests, consents and other communications required or permitted
      under
      this Agreement shall be in writing and shall be deemed to have been properly
      given (a) upon delivery, if delivered in person or by facsimile transmission
      with receipt acknowledged by the recipient thereof, (b) one business day after
      having been deposited for overnight delivery with any reputable overnight
      courier service, or (c) three business days after having been deposited in
      any
      post office or mail depository regularly maintained by the U.S. Postal Service
      and sent by registered or certified mail, postage prepaid, return receipt
      requested, addressed as follows:

     

    

      
        	
                If
                  to InovaChem:

              	
                3040
                  Post Oak Blvd, Suite 1110,

                Houston,
                  Texas 77056, USA

              
	 	
                Attention:
                  Henry Toh

              
	 	 
	
                If
                  to Polymed:

              	
                3040
                  Post Oak Blvd, Suite 1110,

                Houston,
                  Texas 77056, USA

              
	 	
                Attention:
                  William W. Zuo, PhD.

              


      

    

    


    Any
      party
      hereto may change the address to which communications or copies are to be sent
      to such party by giving notice of such change of address in conformity with
      the
      provisions of this Section for the giving of notice. 

    


    18. No
      Waiver.
      The
      failure of either party to this Agreement to insist on the performance of any
      of
      the terms and conditions of this Agreement, or the waiver of any breach of
      any
      of the terms and conditions of this Agreement, shall not be construed as a
      continuing waiver or as a waiver of any other terms and conditions, but such
      terms and conditions shall continue and remain in full force and effect as
      if no
      forbearance or waiver had occurred.

    


    19.
       Governing
      Law; Jurisdiction.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Texas without giving effect to its conflicts of laws principles. Each
      party hereby irrevocably submits to the exclusive jurisdiction of the courts
      of
      the State of Texas and the United States District Court for the State of Texas,
      for the purpose of any action or proceeding arising out of or relating to this
      Agreement and each party hereby irrevocably agrees that all claims in respect
      of
      such action or proceeding may be heard and determined exclusively in any Texas
      state or federal court. Each party agrees that a final judgment in any action
      or
      proceeding shall be conclusive and may be enforced in other jurisdictions by
      suit on the judgment in any other matter provided by law.

     

    
      
        
        

      

      
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    20. Partial
      Invalidity.
      If any
      one or more of the provisions contained in this Agreement shall, for any reason,
      be held to be invalid, illegal or unenforceable in any respect, this Agreement
      shall be reformed to eliminate such invalid, illegal or unenforceable provisions
      and this Agreement shall be construed in an enforceable manner that best
      achieves the parties’ intent in entering into this Agreement.

    


    21. Assignment;
      Binding Effect.
      Neither
      party may assign its rights or obligations, in whole or in part, hereunder
      without the prior written consent of the other party. Polymed may not
      subcontract any of its manufacturing obligations hereunder without the prior
      written consent of InovaChem. Any attempt to assign this Agreement without
      the
      prior written consent of the other party shall be void. If InovaChem permits
      Polymed to delegate certain of its obligations hereunder, at a minimum, Polymed
      (a) shall remain obligated to InovaChem under this Agreement; (b) shall be
      liable for the performance of its subcontractor; (c) shall indemnify InovaChem
      for any claims against InovaChem, and/or its subsidiaries, affiliates,
      successors and assigns, and their respective shareholders, members, managers,
      officers, directors, employees, stockholders, agents and affiliates, as a result
      of the acts or omissions of its subcontractor; and (d) shall assure that
      InovaChem has the right to inspect the facilities of the subcontractor (similar
      to the inspection rights provided hereunder), which facilities may be located
      in
      China. The terms of this Agreement shall be binding on and inure to the benefit
      of the parties and their respective permitted successors and permitted assigns.
      

    


    22. 
      Modification Of Agreement.
      Any
      modification of this Agreement shall be in writing signed by both parties
      hereto.

    


    23. Survival
      Of Rights.
      The
      termination of this Agreement for any reason shall be without prejudice to,
      and
      shall not affect, the right of each party to recover from the other party any
      and all damages to which such party may be entitled. In addition, any
      termination of this Agreement shall not release the parties from liabilities
      and
      obligations accrued as of the date thereof. Notwithstanding anything to the
      contrary that may be contained herein, in the event of the termination or
      expiration of this Agreement, the idemnification and confidentiality obligations
      contained herein shall survive such termination or expiration.

    


    24. Force
      Majeure.
      The
      parties shall not be liable for the failure or delay in performing any
      obligation under this Agreement if and to the extent such failure or delay
      is
      due to causes beyond the reasonable control of the affected party, including
      a)
      acts of God, b) weather, fire or explosion, c) war, invasion, riot or other
      civil unrest; d) changes in governmental laws, orders, restrictions, actions,
      embargoes or blockages, e) national or regional emergency, f) injunctions,
      strikes, lockouts, labor trouble or other industrial disturbances, g) shortage
      of adequate fuel, power, materials or transportation facilities, or h) or any
      other event which is beyond the reasonable control of the affected party,
      provided that the party affected shall promptly notify the other as soon as
      practicable, in writing, and in all events within ten (10) business days of
      the
      force majeure condition, and shall be required to use its best efforts to
      eliminate, cure or overcome any such causes and to resume performance of its
      obligations as soon as possible.

    


    
      
        
        

      

      
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    25. Entire
      Agreement.
      This
      Agreement embodies the entire agreement between the parties with respect to
      the
      subject matter expressed herein and supersedes all prior agreements, whether
      written or oral.

    


    26. Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall constitute but one
      and
      the same instrument.

    


    The
      parties hereto have caused this Agreement to be executed on the date first
      written above. 

     

    
      	InovaChem Inc.	 	 	Polymed
              Therapeutics Inc.
	 	 	 	 
	By:
              /s/ Henry
              Toh	 	 	By:
              /s/ William W. Zuo
	
              

              Printed:
                Henry
                Toh

              Title:
                Executive Vice President

            	 	 	
              
Printed:
              William W. Zuo, PhD.
Title:
              President


    

    
 

    
      
        
        

      

      
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    SCHEDULE
      A

    


    CALCULATION
      OF PRICE TO BE CHARGED BY POLYMED TO INOVACHEM

    


    Definitions:

    


    
      	·  	
              Direct
                costs - labor, mechanical materials, packaging, raw materials (sugar,
                solvents, chemicals - to be identified), and
                transportation.

            


    

    
      	·  	
              Indirect
                costs - utilities (water, electricity, steam, waste disposal)
                -
                at the actual cost billed to Polymed and its affiliates with an allocation
                to Product to be agreed upon by both parties based upon use of the
                applicable facilities to manufacture Product versus use for other
                purposes.

            


    

    
      	·  	
              Overhead
                - Equipment depreciation, insurance, property taxes, and salaries
                (not
                included in direct labor) with
                an allocation to Product to be agreed upon by both parties based
                upon the
                overhead applicable to manufacture Product versus use for other
                purposes.

            


    

    


    Cost
      Price:

    


    The
      Cost
      Price shall be the sum of all costs for the manufacture of Product, which
      include direct costs, indirect costs, overhead and any other costs directly
      attributable to manufacture of Product.

    


    Calculation
      of the Cost Price shall be determined as follows:

    
      	1.  	
              Actual
                direct costs plus

            


    

    
      	2.  	
              Allocation
                of indirect costs using agreed upon percentages
                plus

            


    

    
      	3.  	
              Allocation
                of overhead using agreed upon
                percentages

            


    

    


    Purchase
      Price: 

    


    Total
      of
      Cost Price plus fifteen (15%) percent. Should
      the Purchase Price calculated in accordance with this Schedule be greater than
      the global market price of the Product, both parties shall negotiate and adjust
      the Purchase Price accordingly, to a mutually agreeable price to both
      parties.

    


    
      
        
        

      

      
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    SCHEDULE
      B

    


    INTELLECTUAL
      PROPERTY

    


    
      	1.  	
              U.S.
                Patents Applications. 

            


    

    
      	 	Application
              No. 11/898,652 - Novel Process for preparing sucrose
              6-ester


    

    
      	 	
              Application
                No. 11/806,810 - Novel Chlorination process for preparing
                sucralose

            


    

    
      	 	
              Application
                No. 12/003,850 - CIP of 11/806,810

            


    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      C

    


    SPECIFICATIONS

    


    SUCRALOSE
      (Product)

    


    The
      Product shall be manufactured to meet either of the following specifications,
      as
      stated in the certificate of analysis, and these criteria, unless otherwise
      agreed to between the parties, shall be InovaChem’s criteria for determining
      whether to accept Product:

    


    Specification
      I:

    United
      States Pharmacopeia, 30th
      Revision (Assay), 29th
      Revision (karl fisher), 28th
      Revision (Residue on Ignition)

    


    Sucralose
      contains not less than 98.0 percent and not more than 102.0 percent of
      C12H19Cl3O8,
      calculated on the anhydrous basis.

    Identification— 

    A:
      Infrared
      Absorption [Missing Graphic Reference]197K[Missing
      Graphic Reference].

    B:
      The
      retention time of the principal peak in the chromatogram of the Assay
      preparation
      corresponds to that in the chromatogram of the Standard
      preparation,
      as
      obtained in the Assay.

    C:
      The
      RF
      value of
      the principal spot in the chromatogram of the Test
      solution
      corresponds to that of Standard
      solution 1,
      as
      obtained in the test for Related
      compounds.

    Specific
      rotation [Missing Graphic Reference]781S[Missing
      Graphic Reference]:
      between
      +84.0[Missing Graphic Reference]
      and
      +87.5[Missing Graphic Reference],
      determined at 20[Missing Graphic Reference].
      

    Test
      solution:
      10 mg
      per mL, in water.

    Water,
      Method
      I [Missing Graphic Reference]921[Missing
      Graphic Reference]:
      not more
      than 2.0%.

    Residue
      on ignition [Missing Graphic Reference]281[Missing
      Graphic Reference]:
      not more
      than 0.7%.

    Heavy
      metals, Method
      II [Missing Graphic Reference]231[Missing
      Graphic Reference]:
      0.001%.

    Limit
      of hydrolysis products (0.1%).

    Limit
      of methanol—
      not more
      than 0.1% of methanol is found.

    Related
      compounds—
      (0.5%).

    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Specification
      II:

    Food
      Chemical Code, 5th
      Edition

    


    Identification

    A.
      The
      infrared absorption spectrum of a potassium bromide dispersion of the sample
      exhibits relative maxima at the same wavelengths as those of a similar
      preparation of Sucralose Standard for analytical use.1

    B.
      The
      retention time of the major peak (excluding the solvent peak) in the liquid
      chromatogram of the Sample
      Preparation is
      the
      same as that of the Standard
      Preparation obtained
      in the Assay
      (below).

    C.
      The Rf
      value of the major spot in the thin-layer chromatogram of the Test
      Preparation is
      the
      same as that of the Standard
      Preparation obtained
      in the test for Related
      Substances (below).

    Assay
      Not
      less
      than 98.0% and not more than 102.0% of C12H19Cl3O8, calculated on the anhydrous
      basis.

    Hydrolysis
      Products Passes
      test.

    Lead
      Not
      more
      than 1 mg/kg.

    Methanol
      Not
      more
      than 0.1%.

    Optical
      (Specific) Rotation [_]D
      20°:
      Between +84.0° and +87.5°, calculated on the anhydrous basis.

    Related
      Substances Passes
      test.

    Residue
      on Ignition Not
      more
      than 0.7%.

    Water
      Not
      more
      than 2.0%.

     

    
      
        
        

      

      
        13