ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this Agreement), dated as of January 13, 2004, is made by and among SPARHAWK LABORATORIES, INC., a Missouri corporation (Sparhawk or Buyer), POLYDEX PHARMACEUTICALS LIMITED, a Bahamian corporation (Polydex), CHEMDEX, INC., a Kansas corporation (Chemdex), and VETERINARY LABORATORIES, INC., a Kansas corporation (Vet Labs).  Polydex, Chemdex and Vet Labs are collectively referred to herein as Sellers.

RECITALS

A.                                   Sparhawk and Vet Labs are the only general partners or other equity holders of that certain Kansas general partnership known as the Veterinary Laboratories, Inc. Sparhawk Laboratories, Inc. Joint Venture (the Joint Venture).

B.                                     Sparhawk, Polydex, Chemdex, Vet Labs and two shareholder of Sparhawk, E. Bert Hughes (Hughes) and John Bascom (Bascom), are parties to that certain litigation in the County of Johnson, State of Kansas, Case No. 02CV07426, captioned Sparhawk Laboratories, Inc. v. Veterinary Laboratories, Inc., et al., (the Joint Venture Litigation).

C.                                     Sparhawk, Hughes, Bascom and Sellers now desire to resolve and settle their differences without resorting to time-consuming and costly litigation through the sale of substantially all of the assets of Vet Labs, including, but not limited to, its ownership interest in the Joint Venture, to Sparhawk, on the terms and conditions set forth herein.

D.                                    Vet Labs is a wholly-owned subsidiary of Chemdex, and Chemdex is a wholly-owned subsidiary of Polydex, and each of Chemdex and Polydex will derive significant benefit from the consummation of the transactions contemplated hereby.

AGREEMENT

ACCORDINGLY, in consideration of the premises, the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I PURCHASE OF ASSETS

Section 1.1.                                   Sale of Assets.

(a)                                  Subject to the terms and conditions of this Agreement, at the Closing (as hereinafter defined), Vet Labs shall sell, assign, convey, transfer and deliver to the Buyer, and the Buyer shall purchase and acquire from Vet Labs, free and clear of all liens, claims and encumbrances, except for liens, claims and encumbrances (i) created to secure the current indebtedness of the Joint Venture to Commerce Bank, N.A., or (ii) arising out of the business or operations of the Joint Venture (collectively, the Permitted

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Liens), all of Vet Labs right, title, and interest in and to all of Vet Labs real and personal property and assets, tangible and intangible, of every kind and description, wherever located, which are owned by Vet Labs as of November 6, 2003 or acquired thereafter, other than the Excluded Assets (as defined below), including, without limitation, the following:

(1)                                  all of Vet Labs ownership interest as a general partner in the Joint Venture (including, but not limited to, all of Vet Labs indirect ownership interest in the assets of the Joint Venture);

(2)                                  all accounts receivable of Vet Labs;

(3)                                  all inventories;

(4)                                  all equipment and other tangible personal property, including without limitation those items described in Schedule 1.1(a)(4) hereto;

(5)                                  all contracts;

(6)                                  all transferable NADAs, ANADAs, JINADs that are owned directly by Vet Labs, all transferable NADAs, ANADAs and JINADs that are sponsored by Vet Labs on behalf of the Joint Venture and all other transferable governmental authorizations, approvals and licenses and pending applications, approvals and licenses, including without limitation those listed in Schedule 1.1(a)(6) hereto as transferable (the Governmental Authorizations); excluding, however, those authorizations, approvals and licenses that, by law, cannot be assigned or transferred by Vet Labs, which are listed in Schedule 1-1(a)(6) hereto as nontransferable (the Nontransferable Licenses);

(7)                                  that certain real property owned by Vet Labs located in the County of Johnson, State of Kansas, commonly known as 12340 Santa Fe Trail Drive, Lenexa, KS 66215 (the Real Estate), the legal description of which is set forth in Schedule 1.1(a)(7) hereto.

(8)                                  all data and records related to the operations of Vet Labs and the Joint Venture, including client and customer lists and records, referral sources, research and development reports and records, production reports and records, service and warranty records, equipment logs, operating guides and manuals, financial and accounting records, creative materials, advertising materials, promotional materials, studies, reports, correspondence and other similar documents and records and, copies of all personnel records;

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(9)                                  all intangible rights and property of Vet Labs, including trademarks, patents, and other intellectual property rights, the trademark and tradenames Veterinary Laboratories, Inc. and Vet Labs, and the local telephone number 913-888-7500 (including all associated rollover numbers), the toll free telephone number 800-255-6368, the facsimile telephone number 913-888-6741, and the internet domain name registration for Sparhawk-VetLabs.com;

(10)                            all insurance benefits (net of any deductibles and co-payments) that are assignable to the Buyer, including rights and proceeds, arising from or relating to the Assets or the Assumed Liabilities (as defined below) prior to the Closing Date (as defined below);

(11)                            all warranty and other claims of Vet Labs against third parties relating to the Assets, whether choate or inchoate, known or unknown, contingent or noncontingent; and

(12)                            all rights of Vet Labs relating to deposits and prepaid expenses, claims for refunds and rights to offset in respect thereof.

All of the property and assets to be transferred to Buyer hereunder are herein referred to collectively as the Assets.  Except for the NADAs, ANADAs and JINADs that are sponsored by Vet Labs, on behalf of the Joint Venture, which are being transferred from Vet Labs to Sparhawk, the defined term Assets shall be deemed to refer to assets directly owned by Vet Labs, not the assets owned by the Joint Venture.  One half of the assets of the Joint Venture, which are indirectly owned by Vet Labs by virtue of its ownership of a general partner interest in the Joint Venture, will be effectively transferred to Buyer through the sale of Vet Labs interest in the Joint Venture, as described in item 1 above.

(b)                                 The Assets being purchased by Sparhawk do not include:

(1)                                  the rights of Vet Labs pursuant to or under this Agreement and the other agreements Vet Labs is required to deliver to the Buyer pursuant to the terms hereof;

(2)                                  any rights of Vet Labs in connection with the Polydex website;

(3)                                  any refunds or claims for refunds of Vet Labs with respect to any federal, state or local income and other taxes, and all tax returns and related work papers, records and documents of Vet Labs related thereto;

(4)                                  except as provided in Section 1(a)(9) above, all telephone numbers, telecopy numbers and e-mail addresses of Vet Labs;

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