Document:

Exhibit
      10.3

     

    PLACEMENT
      AGENT AGREEMENT

     

    Dated
      August 27, 2008

     

    Newbridge
      Securities Corporation

    1451
      West
      Cypress Creek Road, Suite 204

    Fort
      Lauderdale, FL 33309

     

    Gentlemen:

     

    
      	
              1.

            	
              Offering.

            

    

     

    A. China
      Industrial Waste Management, Inc., a Nevada corporation (the “Company”), hereby
      engages Newbridge Securities Corporation (“Newbridge”) as “Placement Agent” to
      act as its exclusive placement agent in connection with the issuance and sale
      by
      the Company (the “Offering”) of up to $3,300,000 of Units, at $60,000 per Unit,
      payable upon subscription, each Unit consisting of 20,000 shares of the
      Company’s restricted common stock, par value $.001 per share (“Common Stock”),
      one three-year Class A Warrant to 10,000 shares of Common Stock at an exercise
      price of $3.50 per share (the “Class A Warrants”) and one three-year Class B
      warrant to purchase 10,000 shares of Common Stock at an exercise price of $4.50
      per share (the “Class B Warrants” (the “Class A Warrants and Class B Warrants
      may be hereinafter collectively referred to as “Warrants” and the Common Stock
      issuable upon exercise of the Warrants may be hereinafter collectively referred
      to herein as the “Warrant Shares”). The Placement Agent is hereby authorized to
      engage, at its option, the services of other broker-dealers who are members
      of
      the Financial Industry Regulatory Authority (“FINRA”) to assist it in soliciting
      subscribers and to remit to such broker-dealers all or a portion of the
      commissions payable to the Placement Agent hereunder as it shall determine,
      to
      the extent permitted by the rules and regulations of FINRA.

     

    The
      Offering is subject to (i) the terms and conditions set forth in the Company’s
      Confidential Term Sheet dated August 21, 2008 (such memorandum with all
      amendments and exhibits thereto (the “Memorandum”). The Offering is also subject
      to a subscription agreement and investor certification, both of which are
      attached as Exhibits to the Memorandum (collectively, the “Subscription
      Agreements”). (The Subscription Agreement and the Memorandum are collectively
      referred to as the “Offering Documents”). The Company shall issue and sell to
      Placement Agent or its designee(s), for nominal consideration, (i) three-year
      warrants (“Placement Agent Warrant”) to purchase Units at the rate of one Unit
      for each ten Units sold in the Offering, at an exercise price equal to 120%
      of
      the offering price of the Units (the “Placement Agent Units”) and (ii) upon the
      Closing of the sale of 45 Units, one (1) Placement Agent Closing Unit
      (“Placement Agent Closing Unit”) consisting of 150,000 shares of Common Stock
      (the “Placement Agent Closing Shares”) and one five-year warrant (the “Placement
      Agent Closing Warrant”) to purchase 300,000 shares of Common Stock (the
“Placement Agent Closing Warrant Shares”) in the following amounts and exercise
      prices: 75,000 with an exercise price of $3.50 per share; 75,000 with an
      exercise price of $4.00 per share; 75,000 with an exercise price of $4.50 per
      share; and 75,000 with an exercise price of $5.00 per share. The Common Stock
      included in the Placement Agent Units, Placement Agent Closing Unit and shares
      underlying the Placement Agent Warrant and Placement Agent Closing Warrant
      Shares are hereinafter sometimes collectively referred to as the Placement
      Agent
      Shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The
      Common Stock, the Warrants, the Warrant Shares, the Placement Agent Shares,
      the
      Placement Agent Warrants, Placement Agent Closing Warrants, the Placement Agent
      Units, and Placement Agent Closing Unit are hereinafter sometimes collectively
      referred to as the “Securities.”

     

    B. The
      Common Stock and Warrants will be offered to investors (“Purchasers”) without
      registration under the Securities Act of 1933, as amended (the “Securities
      Act”). Purchasers of the Common Stock will be granted certain registration
      rights with respect to the Common Stock as more fully set forth in the
      Subscription Agreements. The Units will be offered by the Placement Agent on
      an
“all or none” basis with respect to 34 Units and thereafter, on a “best efforts”
basis until all the Units are sold or the offering period terminates, whichever
      occurs first. The Company reserves the right to increase the size of the
      Offering by an additional 11 Units without notice to subscribers or investors.
      The Company will issue the certificates representing the Common Stock and
      Warrants at one or more closings (the “Closing”) after subscriptions have been
      received and accepted by the Company and when funds from investors have cleared
      the banking system in the normal course of business.

     

    C. The
      Offering shall terminate on September 30, 2008, unless the Company extends
      the
      Offering at its sole discretion up to an additional thirty (30) day period
      without notice to the investors (the “Offering Period”).

     

    
      	
              2.

            	
              Information.

            

    

     

    A. The
      Common Stock and Warrants shall have the terms set forth in and shall be offered
      by the Company by means of the Offering Documents. Payment for the Units shall
      be made by check, money order or wire transfer as more fully described in the
      Subscription Agreement. The minimum purchase by any Purchaser shall be $60,000,
      unless subscriptions for lesser amounts are accepted at the discretion of the
      Company and the Placement Agent. The Placement Agent and the Company agree
      that
      the Units will be offered solely to “accredited investors” within the meaning of
      Rule 501 of Regulation D (“Accredited Investors”) promulgated by the Securities
      and Exchange Commission (the “Commission”) under the Securities Act and Rule 506
      of Regulation D under the Securities Act.

     

    B. All
      funds
      received from subscriptions arranged will be promptly transmitted to the escrow
      account maintained at U.S. Bank National Association and designated as “U.S.
      Bank National Association/China Industrial Waste Management, Inc. - Escrow
      Account.” In the event that a Closing occurs, the funds received in respect of
      the Units closed on will be forwarded to the Company, against delivery of the
      appropriate amount of the Common Stock and Warrants, net of (i) the placement
      agent commission equal to cash in an amount equal to seven percent (7%) of
      the
      gross proceeds of the Units sold in the Offering, (ii) a two percent (2%)
      non-accountable expense allowance, (iii) the Placement Agent Units, and (iv)
      reimbursement for any out-of-pocket costs and expenses paid or to be paid by
      the
      Placement Agent pursuant to the terms of this Agreement.

     

    
      
         

      

      
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    C. Upon
      the
      Closing of the sale of 45 Units, one (1) Placement Agent Closing Unit
      (“Placement Agent Closing Unit”) consisting of 150,000 shares of Common Stock
      (the “Placement Agent Closing Shares”) and one five-year warrant (the “Placement
      Agent Closing Warrant”) to purchase 300,000 shares of Common Stock (the
“Placement Agent Closing Warrant Shares”) in the following amounts and exercise
      prices: 75,000 with an exercise price of $3.50 per share; 75,000 with an
      exercise price of $4.00 per share; 75,000 with an exercise price of $4.50 per
      share; and 75,000 with an exercise price of $5.00 per share. 

     

    D. The
      Company and Placement Agent reserve the right to reject any subscriber, in
      whole
      or in part, in their sole reasonable discretion. Funds received by the Company
      from any subscriber whose subscription is rejected will be returned to such
      subscriber, without deduction therefrom or interest thereon, but no sooner
      than
      such funds have cleared the banking system in the normal course of
      business.

     

    
      	
              3.

            	
              Representations,
                Warranties and Covenants of Placement
                Agent.

            

    

     

    The
      Placement Agent represents, warrants and covenants as follows:

     

    (i) It
      has
      the necessary power to enter into this Agreement and to consummate the
      transactions contemplated hereby.

     

    (ii) The
      execution and delivery by the Placement Agent of this Agreement and the
      consummation of the transactions contemplated herein will not result in any
      violation of, or be in conflict with, or constitute a default under, any
      agreement or instrument to which a Placement Agent is a party or by which a
      Placement Agent or its properties are bound, or any judgment, decree, order
      or,
      to a Placement Agent’s knowledge, any statute, rule or regulation applicable to
      a Placement Agent. This Agreement constitutes the legal, valid and binding
      obligation of the Placement Agent, enforceable against the Placement Agent
      in
      accordance with its terms, except to the extent that (a) the enforceability
      hereof may be limited by bankruptcy, insolvency, reorganization, moratorium
      or
      similar laws from time to time in effect and affecting the rights of creditors
      generally, (b) the enforceability hereof is subject to general principles of
      equity, or (c) the indemnification provisions hereof may be held to be violative
      of public policy.

     

    (iii) The
      Placement Agent will deliver to each Purchaser, prior to any submission by
      such
      person of a written offer relating to the purchase of the Units, a copy of
      the
      Offering Documents, as they may have been most recently amended or supplemented
      by the Company.

     

    (iv) Upon
      receipt of an executed Subscription Agreement, the Placement Agent will promptly
      forward copies of the subscription documents to the Company.

     

    (v) The
      Placement Agent will not deliver the Offering Documents to any person they
      do
      not reasonably believe to be an Accredited Investor or to any person in a state
      where it does not reasonably believe that the Offering is exempt from the
      applicable state “Blue Sky” laws.

     

    (vi) The
      Placement Agent will not intentionally take any action which it reasonably
      believes would cause the Offering to violate the provisions of the Securities
      Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or the
      respective rules and regulations promulgated thereunder (the “Rules and
      Regulations”).

     

    
      
         

      

      
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    (vii) The
      Placement Agent shall have no obligation to insure that (a) any check, note,
      draft or other means of payment for the Units will be honored, paid or
      enforceable against the subscriber in accordance with its terms; or (b) subject
      to the performance of the Placement Agent’s obligations and the accuracy of the
      Placement Agent’s representations and warranties hereunder, (i) the Offering is
      exempt from the registration requirements of the Securities Act or any
      applicable state “Blue Sky” law; or (ii) any prospective Purchaser is an
      Accredited Investor; provided that Placement Agent will not deliver the Offering
      Documents to any person they do not reasonably believe to be an Accredited
      Investor.

     

    (viii) The
      Placement Agent is a member in good standing of FINRA and is a broker-dealer
      registered as such under the Exchange Act and under the securities laws of
      the
      states in which the Securities will be offered or sold by the Placement Agent,
      unless an exemption for such state registration is available to the Placement
      Agent. The Placement Agent is in compliance with all material rules and
      regulations applicable to the Placement Agent generally and to the Placement
      Agent’s participation in the Offering.

     

    (ix) The
      Placement Agent understands that the foregoing representations and warranties
      shall be deemed material and to have been relied upon by the Company. No
      representation or warranty by the Placement Agent in this Agreement, and no
      written statement contained in any document, certificate or other writing
      delivered by the Placement Agent to the Company contains any untrue statement
      of
      material fact or omits to state any material fact necessary to make the
      statements herein or therein, in light of the circumstances under which they
      were made, not misleading.

     

    
      	
              4.

            	
              Representations
                and Warranties of the Company.

            

    

     

    The
      Company represents and warrants as follows:

     

    (i) The
      execution, delivery and performance by the Company of each of this Agreement,
      the Subscription Agreements, and the Escrow Agreement (as defined below) has
      been duly and validly authorized by the Company and is, or with respect to
      the
      Subscription Agreements, will be, a valid and binding obligation of the Company,
      enforceable in accordance with its respective terms, except to the extent that
      (a) the enforceability hereof or thereof may be limited by bankruptcy,
      insolvency, reorganization, moratorium or similar laws from time to time in
      effect and affecting the rights of creditors generally, (b) the enforceability
      hereof or thereof is subject to general principles of equity; or (c) the
      indemnification provisions hereof or thereof may be held to be violative of
      public policy.

     

    (ii) The
      issuance, sale and delivery by the Company of the Securities have been or will
      be prior to the Closing duly authorized by all requisite corporate action of
      the
      Company. The Warrant Shares, the Placement Agent Shares and the Placement Agent
      Closing Warrant Shares will, prior to the Closing, be duly reserved for issuance
      upon exercise of the Warrants, exercise of the Placement Agent Units and
      exercise of the Placement Agent Closing Warrant, respectively.

     

    
      
         

      

      
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    (iii) All
      issued and outstanding securities of the Company have been duly authorized
      and
      validly issued, fully paid and non-assessable and were issued in compliance
      with
      all applicable federal and state securities laws; the holders thereof have
      no
      rights of rescission or preemptive rights with respect thereto and are not
      subject to personal liability solely by reason of being security holders; and
      none of such securities was issued in violation of the preemptive rights of
      any
      holders of any security of the Company.

     

    (iv) Except
      as
      set forth in the Offering Documents, there are: (i) no outstanding options,
      warrants, rights (including conversion or preemptive rights) or agreements
      pursuant to which the Company is or may become obligated to issue, sell or
      repurchase any securities of the Company; (ii) no restrictions on the transfer
      of the Company’s capital stock imposed by the Company’s Certificate of
      Incorporation or Bylaws or any agreement to which the Company is a party, any
      order of any court or any governmental agency to which the Company is subject
      or
      any statute other than those imposed by relevant state and federal securities
      laws; (iii) no cumulative voting or preemptive rights for any of the Company’s
      capital stock; (iv) no registration rights under the Securities Act with respect
      to the Company’s capital stock; (v) no antidilution adjustment provisions or
      similar rights with respect to the outstanding securities of the Company will
      be
      triggered by the issuance of the Securities; (vi) no voting trusts or
      agreements, shareholders agreements, pledge agreements, buy-sell, rights of
      first offer, negotiation or refusal or proxies or similar arrangements relating
      to any securities of the Company to which the Company is a party; and (vii)
      no
      options or other rights to purchase securities from its shareholders granted
      by
      such shareholders.

     

    (v) The
      Common Stock, Warrant Shares, Placement Agent Shares, Placement Agent Closing
      Shares, Placement Agent Closing Warrant and Placement Agent Closing Warrant
      Shares, when issued in accordance with the terms of the Subscription Agreement,
      Warrants, and the Placement Agent Units and the terms of this Agreement as
      the
      case may be, will be validly issued, fully-paid and non-assessable. The holders
      of the Securities will not be subject to personal liability under the Company’s
      Certificate of Incorporation or Bylaws or, any state law, solely by reason
      of
      being such holders; the Securities are not and will not be subject to the
      preemptive rights of any holder of any security of the Company.

     

    (vi) The
      Company and each subsidiary has good and marketable title to, or valid and
      enforceable leasehold estates in, all items of real and personal property
      necessary to conduct its business (including, without limitation, any real
      or
      personal property stated in the Offering Documents to be owned or leased by
      the
      Company), free and clear of all liens, encumbrances, claims, security interests
      and defects of any nature whatsoever, other than those set forth in the Offering
      Documents and liens for taxes not yet due and payable. All of the leases and
      subleases under which the Company is the lessor or sublessor of properties
      or
      assets or under which the Company holds properties or assets as lessee or
      sublessee are in full force and effect, and the Company is not in default with
      respect to any of the terms or provisions of any of such leases or subleases,
      and no claim has been asserted by anyone adverse to rights of the Company as
      lessor, sublessor, lessee or sublessee under any of the leases or subleases
      mentioned above, or affecting or questioning the right of the Company to
      continued possession of the leased or subleased premises or assets under any
      such lease or sublease.

     

    
      
         

      

      
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    (vii) There
      is
      no litigation or governmental proceeding pending or, to the best of the
      Company’s knowledge, threatened against, or involving the Company, its
      subsidiaries or its properties or business. The Company or its subsidiaries
      is
      not a party to any order, writ, injunction, judgment or decree of any court
      that
      would prevent or adversely affect consummation of the transactions contemplated
      hereby or by the Offering Documents.

     

    (viii) The
      Company has been duly organized and is validly existing as a corporation in
      good
      standing under the laws of the State of Nevada. The Company and its subsidiaries
      have all requisite corporate power and authority, and all material and necessary
      authorizations, approvals, orders, licenses, certificates and permits of and
      from all governmental regulatory officials and bodies (domestic and foreign)
      to
      conduct its businesses (and proposed business), and the Company and its
      subsidiaries are doing business in compliance with all such authorizations,
      approvals, orders, licenses, certificates and permits and all foreign, federal,
      state and local laws, rules and regulations concerning the business in which
      it
      is engaged, except where failure to so comply would not have a material adverse
      effect on the Company taken as a whole (“MAE”). The Company and its subsidiaries
      have all corporate power and authority to enter into this Agreement, the
      Subscription Agreements, the Warrants, the Placement Agent Units, and Escrow
      Agreement and to carry out the provisions and conditions hereof and thereof
      and
      to issue, sell and deliver the Securities. No consents, authorizations,
      approvals, or orders of, or registration, qualification, declaration or filing
      with, any federal, state or local governmental authority on the part of the
      Company is required in connection herewith and therewith or to issue, sell
      and
      deliver the Securities, other than registration or qualification, or taking
      such
      action to secure exemption from such registration or qualification of the
      Securities under applicable state, federal or foreign securities laws, which
      actions have been taken or will be taken prior to the Closing or otherwise
      on a
      timely basis.

     

    (ix) The
      Company is not in breach of, or in default under, any term or provision of
      any
      indenture, mortgage, deed of trust, lease, note, loan or credit agreement or
      any
      other agreement or instrument evidencing an obligation for borrowed money,
      or
      any other agreement or instrument to which it is a party or by which it or
      any
      of its properties may be bound except as to breaches or defaults that, in the
      aggregate, would not have a MAE. The Company is not in violation of any
      provision of its charter or Bylaws or in violation of any franchise, license,
      permit, judgment, decree or order, or in violation of any statute, rule or
      regulation, except for the violation of statutes, rules or regulations that
      would not have a MAE. Neither the execution and delivery of this Agreement
      and
      the Subscription Agreements, nor the issuance and sale or delivery of the
      Securities, nor the consummation of any of the transactions contemplated herein
      or in the Subscription Agreements, nor the compliance by the Company with the
      terms and provisions hereof or thereof, has conflicted with or will conflict
      with, or has resulted in or will result in a breach of, any of the terms and
      provisions of, or has constituted or will constitute a default under, or has
      resulted in or will result in the creation or imposition of any lien, charge
      or
      encumbrance upon any property or assets of the Company pursuant to the terms
      of
      any indenture, mortgage, deed of trust, note, loan or credit agreement or any
      other agreement or instrument evidencing an obligation for borrowed money,
      or
      any other agreement or instrument to which the Company may be bound or to which
      any of the property or assets of the Company is subject except where such
      default, lien, charge or encumbrance would not have a MAE; nor will such action
      result in any violation of the provisions of the charter or the Bylaws of the
      Company or, assuming the due performance by the Placement Agent of its
      obligations hereunder, any statute, order, rule or regulation applicable to
      the
      Company of any court or of any foreign, federal, state or other regulatory
      authority or other government body having jurisdiction over the
      Company.

     

    
      
         

      

      
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    (x) Neither
      the Company nor any of its officers, directors, employees or stockholders has
      employed any broker or finder in connection with the transactions contemplated
      by this Agreement other than Placement Agent and there are no claims for
      services in the nature of a finder’s or origination fee with respect to the sale
      of the Securities.

     

    (xi) The
      Company owns or possesses, free and clear of all liens or encumbrances and
      rights thereto or therein by third parties, the requisite licenses or other
      rights to use all trademarks, service marks, copyrights, service names, trade
      names, patents, patent applications and licenses necessary to conduct its
      business (including, without limitation, any such license, patent or rights
      described in the Offering Documents as being owned or possessed by the Company)
      and there is no claim or action by any person pertaining to, or proceeding,
      pending or to the Company’s knowledge, threatened, which challenges the rights
      of the Company with respect to any trademarks, service marks, copyrights,
      service names, trade names, patents, patent applications and licenses used
      in
      the conduct of the Company’s business (including, without limitation, any such
      licenses or rights described in the Offering Documents as being owned or
      possessed by the Company); of the Company’s current products, services or
      processes do not infringe or will not infringe on the patents currently held
      by
      any third party.

     

    (xii) Subject
      to the performance by the Placement Agent of its obligations hereunder, and
      the
      accuracy of the representations and warranties made by the respective investors
      in the Subscription Agreements, the Offering Documents and the offer and sale
      of
      the Securities comply, and will continue to comply, through the Offering Period
      with the requirements of Rule 506 of Regulation D promulgated by the Commission
      pursuant to the Securities Act and any other applicable federal and state laws,
      rules, regulations and executive orders. Neither the Offering Documents nor
      any
      amendment or supplement thereto, nor any other documents prepared by the Company
      in connection with the Offering contain any untrue statement of a material
      fact
      or omit to state any material fact required to be stated therein or necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading. All statements of material facts in the Offering Documents
      are true and correct as of the date of the Offering Documents and will be true
      and correct in all material respects on the date of each Closing except with
      respect to the number of shares of Common Stock outstanding and corresponding
      changes to the Company’s financial condition, which may change between the date
      hereof and the date of each Closing due to the issuance of securities in the
      Offering and the conversion of outstanding securities as described in the
      Offering Documents. If at any time prior to the completion of the Offering
      or
      other termination of this Agreement any event shall occur as a result of which
      it might, in the Company’s opinion, become necessary to amend or supplement the
      Offering Documents so that they do not include any untrue statement of any
      material fact or omit to state any material fact necessary in order to make
      the
      statements therein, in light of the circumstances then existing, not misleading,
      the Company will promptly notify Placement Agent and will supply Placement
      Agent
      with amendments or supplements correcting such statement or
      omission.

     

    
      
         

      

      
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    (xiii) All
      taxes
      which are due and payable from the Company have been paid in full or appropriate
      extensions of such payment have been obtained and the Company does not have
      any
      tax deficiency or claim outstanding assessed or proposed against
      it.

     

    (xiv) The
      Company nor any of its officers, directors, employees or agents, nor any other
      person acting on behalf of the Company has, directly or indirectly, given or
      agreed to give any money, gift or similar benefit to any customer, supplier,
      employee or agent of a customer or supplier, or official or employee of any
      governmental agency or instrumentality of any government (domestic or foreign)
      or any political party or candidate for office (domestic or foreign) or other
      person who is or may be in a position to help or hinder the business of the
      Company (or assist it in connection with any actual or proposed transaction)
      which (A) might subject the Company to any damage or penalty in any civil,
      criminal or governmental litigation or proceeding, or (B) if not given in the
      past, would have had a MAE on the assets, business or operations of the Company
      as reflected in any of the financial statements contained in the Offering
      Documents, or (C) if not continued in the future, would adversely affect the
      assets, business or operations of the Company.

     

    (xv) Intentionally
      Omitted.

     

    (xvi) When
      the
      Common Stock, Warrant Shares, Placement Agent Shares, Placement Agent Closing
      Shares and Placement Agent Closing Warrant Shares shall have been duly delivered
      to the Purchasers and payment shall have been made therefore, the Purchasers
      shall have good and marketable title to the Common Stock, Warrant Shares,
      Placement Agent Shares, Placement Agent Closing Shares and Placement Agent
      Closing Warrant Shares, as the case may be, free and clear of all liens,
      encumbrances and claims whatsoever and the Company shall have paid all taxes,
      if
      any, in respect of the original issuance thereof.

     

    (xvii) The
      Company understands that the foregoing representations and warranties shall
      be
      deemed material and to have been relied upon by Placement Agent. No
      representation or warranty by the Company in this Agreement, and no written
      statement contained in any document, certificate or other writing delivered
      by
      the Company to Placement Agent contains any untrue statement of material fact
      or
      omits to state any material fact necessary to make the statements herein or
      therein, in light of the circumstances under which they were made, not
      misleading.

     

    (xviii) Upon
      receipt of an executed Subscription Agreement, Company will promptly forward
      copies of the subscription documents to Placement Agent.

     

    (xix) Intentionally
      Omitted.

     

    (xx) The
      Company will not take any action which it reasonably believes would cause the
      Offering to violate the provisions of the Securities Act, Exchange Act, or
      the
      Rules and Regulations.

     

    (xxi) The
      Company shall not accept subscriptions from any person who it does not have
      reasonable grounds to believe is an Accredited Investor. 

     

    
      
         

      

      
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    (xxii) As
      of the
      date hereof, the Company has no contractual liability or any other liability,
      whether accrued, contingent, absolute, determined, indeterminable or otherwise
      (“Liabilities”), which was not (i) reflected or reserved against in the
      Company’s financial statements or (ii) incurred in the ordinary course of
      business, consistent with past practice since the date of its inception balance
      sheet.

     

    (xxiii) Since
      its
      inception, except as disclosed in the Offering Documents (including the SEC
      Reports), the Company and its subsidiaries have not incurred any liabilities
      or
      obligations, direct or contingent, not consistent with its past practices,
      or
      entered into any transaction not consistent with its past practices, which
      is
      material to the business of the Company and its subsidiaries, and, since the
      date of the Memorandum, there has not been any change in the capital stock
      of,
      or any incurrence of funded debt by, the Company, or any issuance of options,
      warrants or other rights to purchase the capital stock of the Company, or any
      adverse change or any development involving, so far as the Company can now
      reasonably foresee, a prospective adverse change in the condition (financial
      or
      otherwise), net worth, results of operations, business, key personnel or
      properties which would be material to the business or financial condition of
      the
      Company, and the Company has not become a party to, and neither the business
      nor
      the property of the Company has become the subject of, any material litigation
      whether or not in the ordinary course of business.

     

    (xxiv) Except
      as
      described in the Offering Materials, no person, firm or other business entity
      is
      a party to any agreement, contract or understanding, written or oral entitling
      such party to a right of first refusal with respect to offerings by the
      Company.

     

    
      	
              5.

            	
              Additional
                PRC Representations and Warranties.

            

    

     

    A. All
      material consents, approvals, authorizations or licenses requisite under PRC
      law
      for the due and proper establishment and operation of the Company and the
      subsidiaries have been duly obtained from the relevant PRC governmental
      authorities and are in full force and effect.

     

    B. All
      filings and registrations with the PRC governmental authorities required in
      respect of the Company and the subsidiaries and their operations including,
      without limitation, the registration with the Ministry of Commerce, the State
      Administration of Industry and Commerce, the State Administration for Foreign
      Exchange, tax bureau and customs authorities have been duly completed in
      accordance with the relevant PRC rules and regulations, except where, the
      failure to complete such filings and registrations does not, and would not,
      individually or in the aggregate, have a MAE.

     

    C. The
      Company and the subsidiaries have complied with all relevant PRC laws and
      regulations regarding the contribution and payment of its registered share
      capital, the payment schedule of which has been approved by the relevant PRC
      governmental authorities to the extent required. There are no outstanding rights
      of, or commitments made by the Company or any subsidiary to sell any of their
      respective equity interests.

     

    D. Neither
      the Company nor any subsidiary is in receipt of any letter or notice from any
      relevant PRC governmental authority notifying it of the revocation, or otherwise
      questioning the validity, of any licenses or qualifications issued to it or
      any
      subsidy granted to it by any PRC governmental authority for non-compliance
      with
      the terms thereof or with applicable PRC laws, or the need for compliance or
      remedial actions in respect of the activities carried out by the Company or
      such
      subsidiary, except such revocation as does not, and would not, individually
      or
      in the aggregate have a MAE.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    E. The
      Company and the subsidiaries have conducted their respective business activities
      within their permitted scope of business or have otherwise operated their
      respective businesses in compliance with all relevant legal requirements and
      with all requisite licenses and approvals granted by competent PRC governmental
      authorities other than such non-compliance that do not, and would not,
      individually or in the aggregate, have a Material Adverse Effect. As to
      licenses, approvals and government grants and concessions requisite or material
      for the conduct of any part of the Company or any subsidiaries’ business which
      is subject to periodic renewal, neither the Company nor such subsidiary has
      any
      knowledge of any grounds on which such requisite renewals will not be granted
      by
      the relevant PRC governmental authorities.

     

    F. With
      regard to employment and staff or labor, the Company and the subsidiaries have
      complied with all applicable PRC laws and regulations in all material respects,
      including without limitation, laws and regulations pertaining to welfare funds,
      social benefits, medical benefits, insurance, retirement benefits, pensions
      or
      the like, other than such non-compliance that do not, individually or in the
      aggregate, have a MAE.

     

    
      	
              6.

            	
              Certain
                Covenants and Agreements of the
                Company.

            

    

     

    The
      Company covenants and agrees at its expense and without any expense to Placement
      Agent as follows:

     

    A. To
      advise
      Placement Agent of any adverse change in the Company’s financial condition,
      prospects or business or of any development materially affecting the Company
      or
      rendering untrue or misleading any material statement in the Offering Documents
      occurring at any time prior to a Closing as soon as reasonably practicable
      after
      the Company is either informed or becomes aware thereof.

     

    B. To
      apply
      the net proceeds of the Offering substantially as described in the Offering
      Documents.

     

    C. To
      bear
      the costs associated with printing the Offering Documents.

     

    D. To
      comply
      with the terms of the Subscription Agreements, Warrants, Placement Agent
      Warrants, Placement Agent Closing Warrant and Placement Agent
      Units.

     

    E. To
      issue
      to Placement Agent or its designees, at the Closing and upon payment of the
      agreed consideration therefore, Placement Agent Warrants to purchase the
      Placement Agent Units.

     

    F. To
      issue
      to Placement Agent or its designees, at the Closing of the sale of 45 Units,
      the
      Placement Agent Closing Shares and the Placement Agent Closing
      Warrant.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    G. To
      keep
      available out of its authorized and designated Common Stock, solely for the
      purpose of issuance and exercise of the Warrants and Placement Agent Units,
      such
      number of Warrant Shares and Placement Agent Shares.

     

    H. Within
      three (3) days from the date hereof, Placement Agent shall receive a copy of
      a
      duly executed escrow agreement in the form previously delivered to you regarding
      the deposit of funds pending the closing(s) of the Offerings with a bank or
      trust company acceptable to the Placement Agent (the “Escrow
      Agreement”).

     

    I. There
      shall be satisfaction by the Placement Agent, in its sole discretion, with
      their
      ongoing due diligence of the Company.

     

    
      	
              7.

            	
              Indemnification.

            

    

     

    The
      Company agrees to indemnify and hold harmless the Placement Agent, its
      affiliates, the directors, officers and employees of the Placement Agent and
      its
      affiliates and subagents and selected dealers, and each other person or entity,
      if any, controlling the Placement Agent or any of its affiliates (collectively,
      “Indemnified Persons”), from and against, and the Company agrees that no
      Indemnified Person shall have any liability to the Company or its owners,
      parents, affiliates, securityholders or creditors for, any losses, claims,
      damages, liabilities or expenses (including actions, claims or proceedings
      in
      respect thereof (collectively, “Actions”) brought by or against any person,
      including stockholders of the Company, and the cost of any investigation and
      preparation therefore and defense thereof) (collectively, “Losses”) related to
      or arising out of any statements or omissions made in the Offering Documents
      or
      any exhibit thereto or the services, commitment or other obligations undertaken
      or being considered by the Placement Agent in this Agreement in connection
      with
      the sale of the Securities in the Offering (collectively, “Placement Agent’s
      Role”), and claims relating to any finders or origination fees, except that the
      indemnification shall not apply to the Losses of an Indemnified Person that
      are
      determined by a court of competent jurisdiction in a final judgment not subject
      to appeal to have resulted from (A) the breach of any representation, warranty
      or covenant of the Placement Agent contained in this Agreement, or (B) the
      bad
      faith or gross negligence of such Indemnified Person or to Losses arising out
      of
      a claim under this subsection as to an alleged omission from or misstatement
      in,
      the Offering Documents or any exhibit thereto if either (i) at or prior to
      the
      execution of a Subscription Agreement the copy of the Memorandum and exhibits
      were not sent or delivered to the subscriber or (ii) the alleged untrue
      statement was corrected or the omission of a material fact alleged was contained
      in a supplement or amendment to the Memorandum was delivered to the subscriber
      prior to the written acceptance of the subscriber’s Subscription Agreement by
      the Company.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    Promptly
      after receipt by an Indemnified Person (each an “indemnified party”) under this
      Section 6 of notice of the commencement of any action, such indemnified party
      will, if a claim in respect thereof is to be made against any indemnifying
      party
      under this Section 6, notify in writing the indemnifying party of the
      commencement thereof, however, that no delay on the part of the indemnified
      party in notifying the indemnifying party shall relieve the indemnifying party
      from any obligation hereunder unless the indemnifying party is prejudiced by
      such delay. In case any such action is brought against any indemnified party,
      and it notifies an indemnifying party of the commencement thereof, the
      indemnifying party will be entitled to participate therein, and to the extent
      that it may wish, jointly with any other indemnifying party, similarly notified,
      to assume the defense thereof, with counsel who shall be to the reasonable
      satisfaction of such indemnified party, and after notice from the indemnifying
      party to such indemnified party of its election so to assume the defense
      thereof, the indemnifying party will not be liable to such indemnified party
      under this Section 6 for any legal or other expenses subsequently incurred
      by
      such indemnified party in connection with the defense thereof other than
      reasonable costs of investigation; provided, however, that if, in the reasonable
      judgment of the indemnified party, it is advisable for the indemnified party
      to
      be represented by separate counsel, the indemnified party shall have the right
      to employ a single counsel to represent the indemnified parties who may be
      subject to liability arising out of any claim in respect of which indemnity
      may
      be sought by the indemnified parties thereof against the indemnifying party,
      in
      which event the fees and expenses of such separate counsel shall be borne by
      the
      indemnifying party. Any such indemnifying party shall not be liable to any
      such
      indemnified party on account of any settlement of any claim or action effected
      without the consent of such indemnifying party which consent shall not be
      unreasonably withheld.

     

    If
      such
      an indemnity provided for in this Agreement is unavailable or insufficient
      for
      any Indemnified Person with respect to any Losses, then the indemnifying party,
      in lieu of indemnifying such Indemnified Person, will contribute to the amount
      paid or payable by such Indemnified Person as a result of such Losses (i) in
      such proportion as it is appropriate to reflect the relative benefits received
      by the Company on the one hand, and the Placement Agent, on the other hand,
      from
      the Transactions, or (ii) if the allocation provided by (i) above is not
      permitted by applicable law in such proportion as is appropriate to reflect
      not
      only the relative benefits referred to in (i) above, but also the relative
      fault
      on the Company, on the one hand, and of the Placement Agent on the other hand
      in
      connection with statements or omissions that resulted in Losses as well as
      any
      other relevant equitable considerations. The relative benefits received by
      the
      Company on the one hand, and the Placement Agent, on the other hand shall be
      deemed to be in the same proportion as the total proceeds from the Transactions
      (net of sales commissions, but before deducting other expenses) received by
      the
      Company bear to the commissions received by the Placement Agent. The relative
      fault of the Company, on the one hand, and the Placement Agent, on the other
      hand, will be determined with reference to, among other things, whether the
      untrue or alleged untrue statement of material fact or the omission to state
      a
      material fact relates to the information supplied by the Company, on the one
      hand, and the Placement Agent, on the other hand, and their relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      statement or omission.

     

    The
      Company and the Placement Agent agree that it would not be just and equitable
      if
      contribution pursuant to this section were determined by pro rata allocation
      or
      by any other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.

     

    THE
      PLACEMENT AGENT HEREBY AGREES AND THE COMPANY HEREBY AGREES, ON ITS OWN BEHALF,
      TO WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTER-CLAIM
      OR
      ACTION ARISING OUT OF PLACEMENT AGENT’S ROLE OR THIS PLACEMENT AGENT
      AGREEMENT.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      	
              8.

            	
              Payment
                of Expenses.

            

    

     

    Whether
      or not the Offering is successfully completed, the Company hereby agrees to
      bear
      all of its expenses in connection with the Offering, including, but not limited
      to the following: due diligence, travel, lodging, filing fees, printing and
      duplicating costs, advertisements, postage and mailing expenses with respect
      to
      the transmission of offering material, registrar and transfer agent fees, escrow
      agent fees and expenses, fees of the Company’s counsel and accountants, issue
      and transfer taxes, if any, “Blue Sky” counsel fees and expenses and the legal
      fees and expenses of Placement Agent’s counsel in an amount not to exceed
      $10,000. It is agreed that the Company’s counsel shall perform the required Blue
      Sky legal services.

     

    
      	
              9.

            	
              Conditions
                of the Closing.

            

    

     

    Provided
      the Offering shall have been subscribed for and funds representing such amount
      thereof shall have cleared, each Closing shall be held at the offices of the
      Company or such other place as mutually agreed upon by the parties. The
      obligations of the parties hereunder shall be subject to the continuing accuracy
      of their respective representations and warranties, in all material respects,
      as
      of the date hereof and as of the date of the Closing as if such representations
      and warranties had been made on and as of such Closing; the accuracy on and
      as
      of the date of each Closing of the statements of the officers of the Company
      made pursuant to the provisions hereof; and the performance by the Company
      and
      the Placement Agent, on and as of each Closing, of their respective covenants
      and obligations hereunder.

     

    A. At
      and
      prior to each Closing, (i) there shall have been no material adverse change
      nor
      development involving a prospective change in the financial condition or
      operations except where such change would not have a MAE on the Company from
      the
      latest dates as of which such condition is set forth in the Offering Documents;
      (ii) there shall have been no material transaction, not in the ordinary course
      of business, entered into by the Company which has not been disclosed as having
      taken place or being contemplated in the Offering Documents or to the Placement
      Agent in writing; (iii) the Company shall not be in default under any provision
      of any instrument relating to any outstanding indebtedness, excluding trade
      payables, for which a waiver or extension has not been otherwise received except
      where such default would not have a MAE; (iv) except as set forth in the
      Offering Documents or in the Schedules to this Agreement, the Company shall
      not
      have issued any securities (other than those set forth in the Offering Documents
      or pursuant to the exercise of outstanding warrants or options) or declared
      or
      paid any dividend or made any distribution of its capital stock of any class
      and
      there shall not have been any material adverse change in the indebtedness (long
      or short term) or liabilities or obligations of the Company (contingent or
      otherwise); (v) no material amount of the assets of the Company shall have
      been
      pledged or mortgaged, except with respect to assets in the normal course of
      business and as indicated in the Offering Documents or in the Schedules to
      this
      Agreement; and (v) no action, suit or proceeding, at law or in equity, against
      the Company or affecting any of its properties or businesses shall be pending
      or
      threatened before or by any court or federal or state commission, board or
      other
      administrative agency, domestic or foreign, wherein an unfavorable decision,
      ruling or finding would have a MAE, except as set forth in the Offering
      Documents or in the Schedules of this Agreement.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    B. The
      Offering will become qualified or be exempt from qualification under the
      securities laws of the several states no later than the date of the Closing
      and
      no stop order suspending the sale of the Units shall have been issued, and
      no
      proceedings for that purpose shall have been initiated or
      threatened.

     

    C. At
      each
      Closing, the Company shall have duly executed and delivered the appropriate
      amount of Common Stock and Warrants to the respective holders
      thereof.

     

    D. At
      each
      Closing, the Company shall duly and validly issue the warrant to purchase
      Placement Agent Units in accordance with the terms hereof.

     

    E. Upon
      the
      Closing of the sale of 45 Units, the Company shall duly and validly issue the
      Placement Agent Closing Shares and Placement Agent Closing Warrant.

     

    F. There
      shall be satisfaction by the Placement Agent, in its sole discretion, with
      its
      ongoing due diligence of the Company.

     

    
      	
              10.

            	
              Termination.

            

    

     

    This
      Agreement shall terminate if a Closing does not take place on or before seven
      (7) business days following expiration of the Offering Period. Upon any
      termination of the Offering, all subscription documents and payments for the
      Securities not previously delivered to the Purchasers thereof, shall be returned
      to the respective subscribers, without interest thereon or deduction therefrom,
      and neither party hereto shall have any further obligation to each other, except
      as specifically provided herein.

     

    
      	
              11.

            	
              Miscellaneous.

            

    

     

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

     

    B. Any
      notice required or permitted to be given hereunder shall be given in writing
      and
      shall be deemed effective when deposited in the United States mail, postage
      prepaid, or when received if personally delivered, sent by overnight courier
      or
      faxed, addressed as follows:

     

    To
      Newbridge:

     

    Newbridge
      Securities Corporation

    1451
      West
      Cypress Creek Road, Suite 204

    Fort
      Lauderdale, Florida 33309

    Fax:
      (954) 337-2901

    Attention:
      Douglas Aguililla

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    to
      the
      Company:

     

    China
      Industrial Waste Management, Inc.

    No.
      1
      Huaihe West Road, E-T-D Zone

    Delican
      PR China

    Fax:
      

    Attention:
      Dong, Juijing

     

    or
      to
      such other address of which written notice is given to the others.

     

    C. This
      Agreement shall be governed by and construed in all respects under the laws
      of
      the State of Florida, without reference to its conflict of laws rules or
      principles. Any suit, action, proceeding or litigation arising out of or
      relating to this Agreement shall be brought and prosecuted in any Florida State
      court sitting in the County of Broward, Florida and any Federal court sitting
      in
      the Southern District of the State of Florida. The parties hereby irrevocably
      and unconditionally consent to the jurisdiction of each such court or courts
      located within the State of Florida and to service of process by registered
      or
      certified mail, return receipt requested, or by any other manner provided by
      applicable law, and hereby irrevocably and unconditionally waive any right
      to
      claim that any suit, action, proceeding or litigation so commenced has been
      commenced in an inconvenient forum.

     

    D. This
      Agreement and the other agreements referenced herein contain the entire
      understanding between the parties hereto with respect to the subject Offering
      and may not be modified or amended except by a writing duly signed by the party
      against whom enforcement of the modification or amendment is
      sought.

     

    E. The
      parties acknowledge the continued existence of the Business Advisory Agreement
      between the Company and the Placement Agent (the “Advisory Agreement). The
      Advisory Agreement shall be amended to eliminate Placement Agent’s right to
      receive certain fees referenced thereunder and to extend the term of the
      Advisory Agreement for an additional 90-day period.

     

    F. Certain
      securities held by the Placement Agent and selected dealers engaged by the
      Placement Agent, if any, shall be subject to the “lock up” and transfer
      restrictions attached hereto.

     

    G. If
      any
      provision of this Agreement shall be held to be invalid or unenforceable, such
      invalidity or unenforceability shall not affect any other provision of this
      Agreement.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
 

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first written above.

     

    
      	 	
              CHINA
                INDUSTRIAL WASTE MANAGEMENT, INC.

            
	 	 	 
	 	
              By:

            	
              /s/
                Dong Jinqing

            
	 	
              Name:

            	
              Dong
                Jinqing

            
	 	
              Title:

            	
              President

            

    

     

     

    
      	
              NEWBRIDGE
                SECURITIES CORPORATION

            	 
	 	 	 
	
              By:

            	
               /s/
                Douglas K. Aguililla

            	 
	
              Name:

            	
              Douglas
                K. Aguililla

            	 
	
              Title:

            	
              Managing Director of Investment Banking

            	 

    

    

    
      
         

      

      
        16Option and License Agreement

 EXHIBIT 10.1 
 Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as **. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission. 
 OPTION AND LICENSE AGREEMENT 
 THIS AGREEMENT (the “Agreement”) is made and is effective the 10th day of June, 1998 (the “Effective Date”) by and between: 
 Adolor Corporation, a Delaware corporation having its principal place of business at 371 Phoenixville Pike, Malvern, Pennsylvania 19355
(“ADOLOR”) and Roberts Laboratories Inc., a New Jersey corporation, having its principal place of business at 4 Industrial Way West, Eatontown, New Jersey 07724 (“ROBERTS”). 
 RECITALS 
 1. ADOLOR is engaged in the development and
marketing of therapeutic products utilizing opiate receptor-mediated pathways. 
 2. ROBERTS has acquired from Eli Lilly and Company (“Lilly”), in
an agreement dated November 5, 1996 (the “Lilly License”), an exclusive, world-wide license to make, have made, use or sell (+)-[2(S)-[4(R)-(3-hydroxyphenyl)- 3(R),4-dimethyl-1-piperidinyl]methyl]-1-oxo-3-phenylpropyl]amino]-acetic
acid and all pharmaceutically acceptable salts and solvates thereof (the “Compound”), with the right to sublicense, which Lilly License and its Appendices A and B are appended hereto as Exhibit A. 
 3. An Investigational new Drug Application (“IND”), made to the United States Food and Drug Administration (“FDA”), was initiated for the Compound,
but currently there is no activity pursuant to this Application. 
 4. As ADOLOR believes the Compound may provide the basis for a therapeutic product
utilizing opiate receptor-mediated pathways, ADOLOR desires to obtain and ROBERTS desires to provide an exclusive, world-wide license including (a) a “Phase A” during which ADOLOR will seek to establish the therapeutic index of the
Compound, and (b), provided the therapeutic index is satisfactory to ADOLOR at its sole discretion, a “Phase B” during which ADOLOR will pursue development and commercialization of the Compound. 
 5. Assuming ADOLOR proceeds to Phase B, ADOLOR further desires to seek to convert the license to an assignment of the Lilly License to ADOLOR subject to the same duties
as between ADOLOR and ROBERTS as are set forth below, and ROBERTS desires to deliver such assignment to ADOLOR and to exert best efforts to obtain for ADOLOR the required permission from Lilly, though in the absence of such an assignment the license
provided herein shall be maintained. 

 NOW THEREFORE, in consideration of the mutual covenants and obligations hereinafter set forth the parties agree to be
legally bound as follows: 
 ARTICLE I - DEFINITIONS 
 Section 1.1. “Affiliate,” “Compound,” “End User,” “Lilly Intellectual Property Rights,” “Net Sales” and “Product” shall have the meanings,
respectively, set forth in the Lilly License. 
 Section 1.2. “First Commercial Sale” shall mean the first time sales
are made of Product by ADOLOR to an unrelated third party on a country by country basis. 
 Section 1.3. “Lilly
Know-How” shall have the meaning set forth for “Know- How” in the Lilly License. 
 Section 1.4. “NDA”
shall mean an application filed with the FDA for the approval of the manufacturing, marketing or importation of a therapeutic product for use in humans. The references below to “similar filing” shall encompass, for example, Product License
Applications (“PLAs”) and Pre-Marketing Applications (“PMAs”). 
 Section 1.5. “Technical
Information” shall mean Technology which is owned, discovered or developed by or licensed to ROBERTS which is embodied or employed in the composition, manufacture or use of the Compound or Product, or components, reagents, parts or elements
thereof. “ADOLOR Technical Information” shall mean Technology which is owned, discovered or developed by ADOLOR which is embodied or employed in the composition, manufacture or use of the Compound or Product, or components, reagents, parts
or elements thereof. 
 Section 1.6. “Technology” shall mean know-how, protocols, processes, instruments, machines,
materials, compositions, tests procedures, manufacturing procedures, techniques, formulations, methodologies and data, inventions, observations and information, related to the Compound or the Product. 
 ARTICLE II - LICENSE 
 Pursuant to the Lilly Intellectual Property
Rights or any ROBERTS Technical Information, ROBERTS grants ADOLOR an exclusive, world-wide license to make, have made, use, sell or import Product pursuant to the Lilly Intellectual Property Rights or any other ROBERTS Technical Information. The
term of the license shall be either the term of Phase A or, if ADOLOR elects to proceed with Phase B, the sum of the terms of Phase A and Phase B. 
 The
rights acquired hereunder shall include all rights licensed to ROBERTS pursuant to the Lilly License. 

 ARTICLE III - PHASE A 
 Section 3.1. - Phase A Consideration 
 In consideration for Phase A, ADOLOR shall deliver to ROBERTS a
non-refundable payment of $300,000 on the Effective Date. 
 Section 3.2. - Phase A Term 
 The term of Phase A shall be from the Effective date until the earlier of (a) the date on which ADOLOR delivers to ROBERTS notice of ADOLOR’s completing studies
sufficient to establish the therapeutic index of the Compound and of whether ADOLOR intends to initiate Phase B and (b) July 31, 1999. The parties acknowledge that there are areas of risk to ADOLOR’s ability to meet this timetable
including: 
  

	 	•	 	 the risk that the pharmaceutical composition of the Compound or Product provided by ROBERTS be insufficient in quality or quantity to conduct the studies necessary
to establish the therapeutic index; and 

  

	 	•	 	 the risk that the FDA will suspend or place on hold any activity pursuant to the IND for the Compound. 

 The parties further acknowledge that the above exemplified risks, should they become realities, would provide cause for the July 31, 1999 term expiration date to be
extended. Should an event outside of ADOLOR’s control give rise to a reasonable basis to extend the July 31, 1999 term expiration date, meaning that it is reasonable to expect that ADOLOR acting with commercially reasonable diligence shall
not have completed studies to establish the therapeutic index of the Compound by July 31, 1999, an extension of time will be provided to enable ADOLOR to complete the studies and the parties shall negotiate in good faith and arrive at a
reasonable period of extension. 
 Section 3.3. - ADOLOR’s Phase A Duties 
 In addition to any other duties imposed by this Agreement, during the term of Phase A, ADOLOR shall use commercially reasonable efforts to conduct
studies, including Phase I clinical studies, to establish the therapeutic index of the Compound. All costs associated therewith shall be borne by ADOLOR. While the Phase A is in effect, ADOLOR agrees to undertake the obligations incumbent on ROBERTS
under the Lilly License, with the exception of the milestone payments set forth in Section 3.01 of the Lilly License and the costs associated with prosecuting or maintaining patents under the Lilly Intellectual Property Rights, which shall
continue to be borne by ROBERTS. 

 Section 3.4. - ROBERTS’ Phase A Duties 
 In addition to any other duties imposed by this Agreement, ROBERTS shall: 
 (a) provide ADOLOR its stocks of the Compound, in the amount ROBERTS possesses in whatever condition that such Compound may be as of the Effective Date; and 
 (b) during the term of Phase A, refrain from discussing, negotiating or agreeing to, with a third party, a license or assignment of rights in the
Compound, or its use, manufacture, sale or import. 
 ARTICLE IV - PHASE B 
 Section 4.1. - Term and Contingency 
 The term of Phase B begins on the last day of Phase A through to the end of the term defined in Section 8.01 of the Lilly License. Entrance into Phase B is contingent on ADOLOR delivering to ROBERTS during the term of Phase A notice of
ADOLOR’s intent to proceed with Phase B. 
 Section 4.2. - Phase B Consideration 
 Subject to the foregoing, in consideration for Phase B, ADOLOR shall pay ROBERTS: 
  

	 	•	 	 $300,000 payable within five (5) business days of the expiration of Phase A; 

  

	 	•	 	 $500,000 payable within five (5) business days of the filing of a first application for a NDA or similar filing in the United States, Canada, Japan or the
European Community that seeks permission to market a Product; 

  

	 	•	 	 $900,000 payable within five (5) business days of receiving notice of acceptance of a first NDA or similar filing in the United States, Canada, Japan or the
European Community that seeks permission to market a Product; and 

  

	 	•	 	 a royalty equal to **% of Net Sales. 

 ADOLOR shall
pay Lilly, on behalf of ROBERTS, $500,000 upon acceptance of a first NDA or similar filing in the United States, Canada, Japan or the European Community that seeks permission to market a Product, in accordance with Section 3.01(v) the Lilly
License. ADOLOR agrees to pay Lilly, on behalf of ROBERTS, a royalty equal to ** % of Net Sales in accordance with the Lilly License. For any payment made on behalf of ROBERTS, ADOLOR shall deliver proof of such payment to ROBERTS. 
  

	**=	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

 Section 4.3. - ADOLOR’s Phase B Duties 
 While Phase B is in effect, ADOLOR agrees to undertake the obligations incumbent on ROBERTS under the Lilly License and accruing during Phase B, with the exception of the
execution milestone payment set forth in Section 3.01(a)(i) of the Lilly License. Except for costs associated with Robert’s duties under this Agreement, all costs associated with developing and commercializing the Compound or Product shall
be borne by ADOLOR. 
 ARTICLE V - SUBLICENSES OF THIS AGREEMENT 
 (a) ADOLOR shall have the right to grant sublicenses hereunder consistent with the terms of the Lilly License, provided, however, that should ADOLOR grant a sublicense hereunder within seventy-five
(75) days of the Effective Date, ROBERTS shall receive 25% of any payments made to ADOLOR in consideration of such sublicense. 
 (b)
Should ADOLOR decide to actively seek to sublicense marketing rights in the Compound or seriously consider a good faith offer by a third party to sublicense such marketing rights, ADOLOR shall notify ROBERTS of its intention to seriously seek to
sublicense the marketing rights and shall provide ROBERTS with an opportunity to negotiate in good faith for a sublicense to the marketing rights. However, nothing herein shall imply that ROBERTS has a right of priority or preference in such
negotiations, or imply any restraints whatsoever on ADOLOR’s business judgment as to partners in marketing the Compound. 
 ARTICLE VI - TECHNOLOGY
TRANSFER 
 Section 6.1. - From ROBERTS to ADOLOR 
 Following execution and payment under Section 3.1 ROBERTS shall deliver to ADOLOR copies of the Lilly Know-how, ROBERTS Technical Information, and
its inventory of Compound and intermediates for the production of Compound. 
 Section 6.2. - From ADOLOR to ROBERTS 

(a) Should ADOLOR establish the therapeutic index of the Compound but nonetheless decline to initiate Phase B, ADOLOR shall deliver to ROBERTS copies
of ADOLOR data on the therapeutic index of the Compound and any other ADOLOR data on the therapeutic efficacy of the Compound as well as any dosage forms containing the Compound. 

 (b) Should ADOLOR fail to establish the therapeutic index and should ADOLOR not dispute that the term of
Phase A, taking into consideration any extensions thereto under Section 3.2, has expired, then ADOLOR shall deliver to ROBERTS copies of ADOLOR data on the therapeutic index of the Compound and any other ADOLOR data on the therapeutic efficacy
of the Compound as well as any dosage forms containing the Compound. 
 (c) All such materials delivered to ROBERTS pursuant to this
Section 6.2 shall thus become the sole and exclusive property of ROBERTS. 
 ARTICLE VII - REPORTS, RECORDS, PAYMENTS 
 Section 7.1. - Quarterly Reports 
 (a) ADOLOR shall give ROBERTS prompt written notice of-the first acceptance of a NDA or similar filing in the United States, Canada, Japan or the European Community that seeks permission to market a Product. 
 (b) Within forty five (45) days after the end of each calendar quarter following the First Commercial Sale in any country, whether or not a royalty
payment is due for that period, ADOLOR shall provide ROBERTS with a written statement with respect to such period, specifying the gross sales, the calculation of Net Sales and Net Sales of Product during the period, and the amount of royalty due, if
any, together with the payment of royalties due. 
 Section 7.2. - Records 
 (a) ADOLOR shall keep complete and accurate records pertaining to the manufacture, use and sale of Product appropriate to determine royalties payable
under Section 4.2 of this Agreement. 
 (b) At the request and expense of ROBERTS, an independent certified public accountant, selected
by ROBERTS and reasonably approved by ADOLOR, shall have access limited to once per calendar year, at ADOLOR’s principal place of business during ordinary business hours, to such records maintained by ADOLOR as may be necessary to: 

(i) determine, with respect to any of the two (2) preceding years the correctness of any report or payment made under this
Agreement, or 
 (ii) obtain information with respect to any of the two (2) preceding years as to the royalty payable in
the case of ADOLOR’s failure to report or pay such royalty pursuant to this Agreement. 

 (c) If deemed necessary or desirable in the sole opinion of the accountant, the accountant shall at
ROBERTS’ expense be permitted to consult with and obtain the assistance of consultants selected by the accountant and reasonably acceptable to ADOLOR. Neither the accountant nor the selected consultants shall disclose to ROBERTS or any third
pasties any information relating to the business of ADOLOR other than information relating solely to the accuracy of the reports and payments under this Agreement. 
 Section 7.3. - Payment of Royalty 
 (a) ADOLOR shall pay the royalty due under Section 4.2
for sales of Product in each calendar quarter within forty five (45) days after the end of such calendar quarter. 
 (b) All royalty due
hereunder shall be paid in same day United States funds. 
 (c) Any sum required under the laws of any governmental authority to be withheld
by ADOLOR from payment of royalties for the account of ROBERTS under Section 4.2 shall be promptly paid by ADOLOR for and on behalf of ROBERTS to the appropriate tax or other governmental authorities and ADOLOR shall furnish ROBERTS with copies
of official tax receipts or other appropriate evidence issued by the appropriate tax or other governmental authorities. 
 (d) Should an audit under Section 7.2(b) identify a delinquency in royalties due. ADOLOR
shall pay, in addition to such delinquent amount, liquidated damages of 1 1/2% of the delinquency per month of the delinquency.
Should such delinquency in any year exceed five percent (5%), ADOLOR shall pay for the audit fees and expenses incurred by ROBERTS. 
 ARTICLE VIII
- CONFIDENTIALITY 
 Section 8.1. - Nondisclosure and Nonuse 
 (a) ROBERTS and ADOLOR shall each retain in confidence information obtained from the other under this Agreement and shall not disclose such information to
any third party except: 
 (i) consultants and Affiliates who are obligated to maintain it in confidence pursuant to written
agreements which incorporate the terms of this Article VIII. 
 (ii) as necessary to obtain approval from a governmental
agency in order to market the Product; or 
 (iii) as otherwise may be required by law, regulation or judicial order, and
shall not use such information for any purposes other than those contemplated by this Agreement. Each party shall take all reasonable precautions to safeguard the confidentially of the information. 

 Section 8.2. - Exceptions 
 The obligations of nondisclosure and nonuse of this Article VIII shall not apply to information which: 
 (a)
is known to the receiving party, as evidenced by written records maintained by the receiving party, or to the public, or is in the public domain, prior to its disclosure under this Agreement; 
 (b) is hereafter lawfully disclosed to the receiving party by a third party not- under an obligation of confidence to the other party; 
 (c) subsequently enters the public domain or becomes known to the public by some means other than a breach of this Agreement; 
 (d) is required by law to be disclosed; or 
 (e) becomes the property of the property of the disclosing party pursuant to this Agreement. 
 Section 8.3. - Purpose of
Article 
 Each party acknowledges that the restrictions contained in this Article VIII are necessary and reasonable to protect the legitimate interests
of the parties and a violation of this Article by a party may result in irreparable harm to the other party. 
 Section 8.4. - Term

 The provisions of this Article VIII shall survive the expiration or termination of this Agreement and continue for five (5) years thereafter.

 Section 8.5. - Merger 
 Upon
execution, all confidential information relating to the Compound disclosed under any previous confidentially agreements between ROBERTS and ADOLOR shall be governed by this Agreement instead of such prior agreement. 
 ARTICLE IX - INVENTIONS AND PATENTS 
 Section 9.1.
- Patents 
 (a) While licensed under Phase B, ADOLOR shall make the payments for prosecuting and maintaining patent applications set
forth in Section 4.03 of the Lilly License. 

 (b) While ADOLOR is licensed under Phase B, should Lilly elect, in any country, to not prosecute or
maintain an application or not to maintain or defend an issued patent, ADOLOR shall be given timely notice and shall have the right to direct that such prosecution, maintenance or defense be conducted at ADOLOR’s expense. If (1) ADOLOR declines
to undertake such expense, (2) the application or patent at issue is the only Lilly patent or Application covering the Compound, its synthesis, use or formulation in the given country, and (3) such prosecution, maintenance or defense is
conducted at ROBERTS’ expense, the license granted by this Agreement shall no longer apply with respect to such county. 
 (c) While
ADOLOR is licensed under Phase B, Lilly may, pursuant to Section 4.03 of the Lilly License, send notice to ROBERTS of a cost associated with prosecuting, maintaining or defending an application or patent in a given country, a copy of which
notice shall be timely forwarded to ADOLOR. If ADOLOR elects not to pay such costs, ROBERTS may on its own account, without compensation from ADOLOR, undertake the costs payable to Lilly. If (1) ADOLOR elects not to pay such costs, (2) the
application or patent at issue is the only Lilly patent or application covering the Compound, its synthesis, use or formulation in the country, and (3) the costs payable to Lilly for such prosecution, maintenance or defense are undertaken by
ROBERTS, the license granted by this Agreement shall no longer apply with respect to such county. 
 (d) An official of ADOLOR designated by
ADOLOR shall receive copies from ROBERTS of all significant correspondence to and from the U.S. Patent and Trademark Office or other, foreign patent administrative body relating to Licensed Patents. 
 (e) ROBERTS shall consult with ADOLOR on any matters arising under Section 4.06 of the Lilly License (regarding reexamination, reissue other
proceedings relating to granted patents), and ROBERTS shall provide no Consent under that Section 4.06 without the prior consent of ADOLOR. 
 Section 9.2. - Third-Party Infringement 
 (a) If either ADOLOR or ROBERTS learns of an infringement or threatened
infringement of Lilly Intellectual Property Rights or ADOLOR or ROBERTS Technical Information wherein the infringement or threatened infringement involves a third party’s manufacture, or sale of Compound or Product, the party who so learns
shall notify the other party within a reasonable time. 

 (b) While ADOLOR is licensed under Phase B, ADOLOR shall have the rights allocated to ROBERTS in
Section 4.05 of the Lilly License to participate in actions to terminate an infringement of Lilly Intellectual Property Rights. ROBERTS will execute (and cause its Affiliates to execute) all documents necessary to effect this provision. While
ADOLOR is licensed under Phase B, ADOLOR shall have the same rights to participate in actions to terminate an infringement of ROBERTS Technical Information as ROBERTS has with respect to Lilly Intellectual Property Rights under the Lilly License.

 (c) With respect to an action involving Lilly, the parties shall endeavor to have recoveries allocated in proportion to reasonable costs
incurred by the parties. With respect to actions not involving Lilly, recoveries shall be so allocated. 
 ARTICLE X - EXPIRATION AND TERMINATION 

 Section 10.1. - Expiration 
 Unless
terminated earlier under other provisions of this Agreement will expire at the end of the term set forth Section 8.01 of the Lilly License. 
 Section 10.2. - Surviving Rights 
 The provisions of 10.3 (Termination) and 12.5 (Governing Law) and Article VIII (CONFIDENTIALITY) of
this Agreement shall survive the expiration or termination of this Agreement. 
 Section 10.3. - Termination 
 (a) ADOLOR may terminate this agreement with respect to Phase A by delivering notice of such termination to ROBERTS at least thirty (30) days prior to the
effective date of such termination. 
 (b) Either party may terminate this Agreement upon (60) days prior written notice in the event of
the other party’s breach of any other material provision of this Agreement, if such default or breath is not remedied within sixty (60) days from the date of such notice. 
 (c) Any failure to terminate shall not be construed as a waiver by the aggrieved party of its right to terminate for future defaults or breaches.

 (d) Upon termination of this Agreement, each party shall upon the request of the other party return all books, records, documents and data
which it shall have received from the other party pursuant to this Agreement. 

 (e) Termination of this Agreement by either party shall not prejudice the right of ROBERTS to recover any
royalty or other payments due at the time of termination or which become due after termination based upon rights vested prior to termination and shall not prejudice any cause of action or claim of ROBERTS or ADOLOR accruing under this Agreement.

 (f) ADOLOR shall not make, have made, use or sell the Compound or Product following termination of this Agreement, except that if
termination occurs during Phase B ADOLOR may sell such stocks of the Compound or Product as it shall have on hand at the time of termination. This provision shall not exempt ADOLOR from the duty to pay royalty at the rates and times provided under
this Agreement. 
 (g) ROBERTS shall not terminate this Agreement during Phase A and any term extensions pursuant to Section 3.2,
provided that ADOLOR is proceeding in good faith to seek to establish the therapeutic index of the Compound. 
 ARTICLE XI - REPRESENTATIONS, WARRANTIES,
COVENANTS 
 (a) ROBERTS represents and warrants that it is not in breach of the Lilly License and that it has the right to grant the
licenses provided this Agreement. 
 (b) ROBERTS represents and warrants that it shall not take any action or refrain from any action so as
to give Lilly cause to terminate the Lilly License. 
 (c) ROBERTS represents and warrants that it has undertaken no action, and that it
knows of no action or other change of circumstances, that has diminished the value of the Lilly Intellectual Property Rights relative to the Lilly Intellectual Property Rights as they existed, or as ROBERTS understood them, on the fifth
(5th) day of November, 1996, when the Lilly License was executed. 
 (d) ROBERTS shall use best efforts to obtain from Lilly permission
to assign the Lilly License to ADOLOR, and, on obtaining such permission and receiving notice from ADOLOR of ADOLOR’s intent to initiate Phase B, shall assign the Lilly License to ADOLOR subject to the same duties as between ROBERTS and ADOLOR
as set forth in this Agreement. Accordingly, this Agreement shall be, with respect to Phase B, converted to an agreement to assign. 
 (e)
ROBERTS shall make available to ADOLOR personnel reasonably appropriate to help ADOLOR understand and implement the Lilly Know- how and the ROBERTS Technical Information. Such personnel shall include Phil Lange and shall be made available on
ADOLOR’s request for a period not to exceed five (5) working days. 

 ARTICLE XII - MISCELLANEOUS PROVISIONS 
 Section 12.1. - Entire Understanding 
 This
Agreement sets forth the entire understanding between ROBERTS and ADOLOR pertaining to its subject matter and supersedes and replaces all prior oral or written agreements between ROBERTS and ADOLOR pertaining to such subject matter. 
 Section 12.2. - Amendment 
 This Agreement may
not be amended, supplemented or otherwise modified except by an instrument in writing signed by both parties. 
 Section 12.3. -
Assignment 
 Neither party may assign this Agreement without the prior written approval of the other party except in connection with the sale or merger
of the entire business or in connection with an assignment to an Affiliate. Such approval shall not unreasonably be withheld. Notwithstanding such approval, the assigning party shall be responsible to the party jointly or severally, with the
assignee for any obligations under this Agreement. 
 Section 12.4. - Waiver 
 No provision of this Agreement shall be waived by any act, omission or knowledge of a party or its agents or employees, except by an instrument in writing expressly
waving such provision and signed by the waiving party. 
 Section 12.5. - Governing Law 
 The Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Pennsylvania, exclusive of its conflict of laws provisions, and the
parties consent to the jurisdiction and to venue at, a court within the District of the United States Federal Courts in which the defendant shall be found. 
 Section 12.6. - Restriction of Distribution of this Agreement 
 This Agreement shall not be distributed to
persons other than those personnel of ROBERTS and ADOLOR who shall have a need to know its contents and to those whose knowledge of its contents will facilitate performance of the obligations of the parties under this Agreement, except as may be
required by law, regulation or judicial order. 
 Section 12.7. - Publicity 
 Notwithstanding the provisions of Section 12.6, either party may publicly announce the existence of this Agreement and the nonfinancial terms contained herein,
provided such announcement is consented to by Lilly. The parties shall consult with each other prior to any press release or other public disclosure. 

 Section 12.8. - Consents Not Unreasonably Withheld or Delayed 
 Whenever a provision is made in this Agreement for either party to secure the consent, approval or acceptance of the other, such consent, approval or acceptance shall not
unreasonably be withheld or delayed. 
 Section 12.9. - Construction 
 The captions appearing in this Agreement are for reference purposes only and shall not be considered for the purpose of interpreting or construing this Agreement. The
plural shall be substituted for singular numbers in any place in which the context may require such substitution. 
 Section 12.10. -
Invalidity of Particular Provisions 
 If any provision of this Agreement is invalid or unenforceable by reason of any rule of law, administrative order
or judicial decision, all other provisions of this Agreement shall remain in full force and effect. 
 Section 12.11. - Notices 

 Any notice or report required or permitted hereunder shall be given in writing by personal delivery or by registered or certified mail, return receipt
requested, postage prepaid, and, if sent by mail, shall be effective upon delivery to the following addresses: 
 ROBERTS
LABORATORIES INC. 
 4 Industrial Way West 
 Eatontown, New Jersey 07724 
 ATTN: A.A. Rascio, Vice President 
 ADOLOR CORPORATION 
 371 Phoenixville Pike 
 Malvern, Pennsylvania 19355 
 ATTN: President 
 or such other address as a party may designate by prior written notice to the other party. 
 Section 12.12. - Payment Method 
 All payments by ADOLOR to ROBERTS under this Agreement shall be by wire transfer of same day funds to
ROBERTS’ bank account. ROBERTS shall supply ADOLOR with the bank, routing and account information needed for such a wire transfer. 
 Section 12.13. - Late Payments 
 All payments due ROBERTS under this Agreement which are received later than the due date, shall be
subject to an additional payment of one and one-half percent (1.5%) per month or portion thereof as liquidated damages for payments received later than the due date. 

 Section 12.14. - Currency 
 All references to currency and payments shall be in U.S. dollars. 
 Section 12.15. - Force Majeure

 Each party hereto shall be relieved of its obligations hereunder to the extent that fulfillment of such obligations shall be prevented by acts of war,
labor difficulties, riot, fire, flood, hurricane, wind storm, acts of defaults of common carriers, governmental laws, act or regulations (including withdrawal or suspension of governmental approval of sale of Product), shortages of materials or any
other occurrence beyond the control of the party affected thereby. 
 (Any Remainder of this page beyond this line is intentionally left
blank.) 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate by their duly authorized
representatives. 
  

			
	ADOLOR CORPORATION
		
	By:	 	/s/ John J. Farrar

			
	Title:	 	President and Chief Executive Officer
	Date:	 	June 8, 1998

  

			
	ROBERTS LABORATORIES INC.
		
	By:	 	/s/ Anthony A. Rascio

			
	Title:	 	VP
	Date:	 	6/10/98

  
 In order to induce Adolor Corporation
to execute this Agreement, Robert Pharmaceutical Corporation, the parent company of Robert Laboratories Inc., hereby unconditionally guarantees the due payment and performance of all obligations of Roberts Laboratories Inc. contained in this
Agreement. 
  

			
	ROBERTS PHARMACEUTICAL CORPORATION
		
	By:	 	/s/ Anthony A. Rascio

			
	Title:	 	VP
	Date:	 	6/10/98

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