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                STRATEGIC ALLIANCE AND PROJECT VENTURE AGREEMENT

This STRATEGIC  ALLIANCE AND PROJECT VENTURE  AGREEMENT (the  "Agreement") is by
and between MR3 Systems, Inc., a Delaware corporation with its corporate address
at 435 Brannan Street, Suite 200, San Francisco, California, 94107, (hereinafter
referred to as "MR3"),  and  Purolite  Company,  a Delaware  corporation  with a
corporate  address at 150 Monument  Road,  Bala Cynwyd,  PA 19004,  (hereinafter
referred to as "PUROLITE").

                                    RECITALS

WHEREAS, MR3, is a publicly traded company,  whose proprietary  technologies and
intellectual property associated with the extraction,  separation, recovery, and
purification of precious and base metals are applied in commercial operations in
vertical  markets  involving,  but not limited to, ore  deposits,  ore tailings,
hazardous waste, oil and geothermal  fluids,  groundwater and soil  contaminated
with metals; and

WHEREAS,  PUROLITE is a leading global  manufacturer  of resins for  separation,
ion-exchange, and industrial remediation applications; and

WHEREAS,  MR3 provides unique  technologies for the extraction and separation of
metals applied to remediation and mining; and

WHEREAS,  PUROLITE  and MR3 are  positioned  to develop next  generation  unique
solutions  for  remediation  and  mining  markets,  tailored  for the  selective
separation, capture, and recovery of metals; and

WHEREAS,  PUROLITE and MR3 are positioned to market  globally the application of
newly developed resins and turn-key systems for selective metal extraction; and

WHEREAS,  MR3 and PUROLITE,  (collectively  the "Parties")  herein desire to set
forth  in  writing  the  terms  and  conditions  of  their   understandings  and
agreements.

NOW  THEREFORE,  in  consideration  of the  foregoing,  of the  mutual  promises
contained herein and for other good and valuable consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  Parties  hereby  agree as
follows:

1.    DEFINITIONS.

Capitalized  terms used in this  Agreement,  including  those in  Recitals,  are
defined throughout the Agreement. Terms not defined therein shall be given their
plain English meaning; provided, however, that those terms, acronyms and phrases
known in the international trade and business  development  industry,  which are
not defined,  shall be interpreted in accordance with their  generally  accepted
industry meaning.

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2.    INTENT AND PURPOSE OF STRATEGIC ALLIANCE AND PROJECT VENTURE

      2.1.  INTENT AND PURPOSE.  This  Agreement  signifies  the formation of an
            exclusive venture between MR3 and PUROLITE to develop new and unique
            products and processing  solutions for the extraction and separation
            of selenium and perchlorate. The research, development,  bench-scale
            testing, pilot-scale validation, and commercialization of the unique
            products and processing solutions are to be performed jointly,  with
            ownership  of  the  resulting  intellectual  property  to be  shared
            equally by PUROLITE and MR3. The  commercialization  strategy is two
            fold: (i) to market,  sell, and distribute  large  quantities of the
            unique products  (resins)  developed under the venture,  and (ii) to
            apply the unique products  through the turn-key  systems in projects
            already established and penetrated. Pursuant to the foregoing, it is
            the current  intent of the  Parties to  undertake  projects  for the
            development  and  integration  of the first products as specified in
            Section 3 below, as well as any subsequent products agreed to by the
            Parties (the "Projects") and added as an addendum to this agreement.

      2.2.  PROJECT PLANS. It is further understood and agreed that each Project
            undertaken  pursuant  to  this  Agreement  will  be  subject  to the
            execution and delivery by the Parties of a separate project plan for
            each Project  undertaken  (each, a "Project  Plan").  When executed,
            each Project Plan will be attached to and  incorporated by reference
            into this  Agreement,  and the terms and  conditions  of the Project
            Plan shall control to the extent consistent with the terms contained
            herein.  The Parties  agree that each  Project  Plan will set forth,
            among  other  things as the  Parties  shall  deem  appropriate,  the
            following:

                2.2.1.  A detailed description of the project;

                2.2.2.  Any  design  documents  or  specifications  (unless  the
                        project  contemplates  creation  or  development  of the
                        same);

                2.2.3.  Project  deliverables,  if  any,  that  either  or  both
                        Parties will be responsible for creating and developing;

                2.2.4.  Tasks,  responsibilities,  covenants  and  agreements of
                        each Party relating to the project;

                2.2.5.  Deadlines,   interim   milestones,   and  other  matters
                        relating to timing and delivery or performance under the
                        project;

                2.2.6.  Intellectual  property  rights or licenses to the extent
                        different from the terms of this Agreement;

                2.2.7.  Termination  rights  of  the  Parties  relating  to  the
                        project;

                2.2.8.  Obligations  of the Parties to market and  implement the
                        project; and

                2.2.9.  Any other terms or  conditions  that vary from the terms
                        and conditions set forth in this Agreement.

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3.    THE PRODUCTS AND GRANT OF EXCLUSIVE OWNERSHIP RIGHTS

Each Party hereby grants to the other Party joint,  world-wide  ownership rights
in and to the Products set forth in this Section 3. The Parties  agree that they
have the joint exclusive ownership rights to the products developed hereunder.

      3.1.  THE  PRODUCTS.  The Parties  agree to initially  develop two (2) new
            products  described in Sections  3.1.1 and 3.1.2 (the  "Products" or
            each a "Product" hereunder) as follows:

                3.1.1.  SELENIUM  RESIN. A new product and processing  system to
                        be applied  for the  removal of  selenium to be based on
                        PUROLITE's  current arsenic removal resin.  The modified
                        resin and/or the  processing  system will have reductive
                        functionality  for   transformation  of  selenates  into
                        selenites with the resulting  increase in total selenium
                        removal capacity.

                3.1.2.  PERCHLORATE  RESIN. A new product and processing  system
                        described as a boron based resin to be applied to reduce
                        the  perchlorate  in the influent to chloride,  which in
                        turn  can  be  removed  with  conventional  ion-exchange
                        resins (such as PUROLITE's A100 or A500).

      3.2.  DEVELOPMENT  AND  COMMERCIALIZATION  PLAN.  The  Parties  agree to a
            development and commercialization plan with respect to each Product,
            as follows:

                3.2.1.  MR3 will  implement  bench-scale,  prototype  and  pilot
                        studies and develop  commercial  Products and processing
                        systems in collaboration with PUROLITE.

                3.2.2.  The testing  results will be provided to PUROLITE  along
                        with MR3's specifications and recommendations  regarding
                        resin  improvements  and  modification,  and new Product
                        synthesis.  PUROLITE will  synthesize the Products based
                        on MR3's  specifications  and data and will  incorporate
                        all possible  improvements  based on the Parties'  joint
                        development recommendations.

                3.2.3.  Each   developed   Product  will  be  marketed  under  a
                        trademark to be jointly owned by PUROLITE and MR3.

                3.2.4.  PUROLITE will provide reasonable samples of its existing
                        resins or its  modifications to MR3 free of charge on an
                        "As Needed" basis.

                3.2.5.  PUROLITE  and  MR3  will  jointly  patent  the  new  and
                        modified  Products  based on MR3's  tests  and  piloting
                        work,  and the Parties will have joint  ownership of all
                        intellectual property in the Products.

                3.2.6.  The Product  resins will be  marketed  under  PUROLITE's
                        marketing  program  and  applied  by MR3  in its  metals
                        removal markets. The pricing of all Products will be set
                        by PUROLITE,  whether sold directly by PUROLITE, by MR3,
                        or by third  parties.  The  pricing of all MR3  turn-key
                        systems shall be set by MR3.

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                3.2.7.  PUROLITE  agrees  to pay MR3 a  percentage  of its gross
                        receipts  from  the  sale of any and all  Products  to a
                        third  party,  payable  monthly  (within  30 days  after
                        PUROLITE has been paid by a third party). The percentage
                        is  determined by the selling price and margin as agreed
                        by the Parties after  determining  the standard cost and
                        selling price.

                3.2.8.  MR3 will be  granted  the right to  purchase  any of the
                        Products  from  PUROLITE at an agreed upon price  level.
                        All costs will have to be determined in consideration of
                        the price.

                3.2.9.  PUROLITE agrees to refer to MR3 all contacts,  requests,
                        leads,  and  the  like,  received  by  PUROLITE  for the
                        purchase  or  application  of  turn-key   extraction  or
                        remediation systems which appear to benefit from the use
                        of the Products.

                3.2.10. Exclusive Manufacturing Rights: MR3 agrees that PUROLITE
                        will have exclusive manufacturing rights to the Products
                        for the lifetime of the Products.  If PUROLITE is unable
                        to supply the Products, PUROLITE will advise MR3 and MR3
                        will have the right to seek an additional  supplier.  If
                        the  contract is  terminated  for reasons  specified  in
                        section 7.4, this clause is null and void.

4.    ADDITIONAL AGREEMENTS OF THE PARTIES

      4.1.  PUBLICITY;  PRESS RELEASES.  The Parties may by mutual consent agree
            to issue a joint press release  describing the  collaboration of the
            Parties. In addition,  each of PUROLITE and MR3 may, at such Party's
            discretion:  (a)  identify  the other as a  strategic  partner;  (b)
            hyperlink from an appropriate area within its website to the other's
            home page;  and (c)  display the other  Party's  logo on the its web
            site (in accordance with such Party's guidelines for the use of such
            mark).  The Parties shall also consult  regularly during the term of
            the Agreement and issue, as and when appropriate, such further press
            releases and/or other publicity materials as may be appropriate. The
            contents  of the  press  releases  issued  by the  parties  shall be
            subject to the approval of each Party,  which  approval shall not be
            unreasonably withheld or delayed.

      4.2.  USE OF NAME IN PROMOTIONAL  MATERIALS.  Each Party shall, with prior
            approval of the other Party (which will not be unreasonably withheld
            or delayed), be permitted to identify the other Party as a strategic
            partner,  to use the other Party's name in connection with proposals
            to prospective  customers,  and to refer to the other Party in print
            or  electronic  form for marketing or reference  purposes,  provided
            however that such  proposals and  marketing and reference  materials
            are for  projects  that both  Parties  have  agreed to  pursue.  The
            content of the Promotional Materials shall be approved by each Party
            in advance of the printing.

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      4.3.  MARKETING, DISTRIBUTION AND SUPPORT EFFORTS; PROMOTIONAL ACTIVITIES.
            To the extent agreed upon by the Parties  pursuant to the applicable
            Project  Plan or  otherwise,  each of  PUROLITE  and  MR3  agree  to
            undertake an active  marketing and promotion  effort for each of the
            projects pursuant to this Agreement. Each Party agrees to serve as a
            reference in the other Party's  proposals for a reasonable number of
            contacts by  prospective  customers  of the other  Party.  Under the
            direction  of the  Project  Managers,  the  Parties  may  by  mutual
            agreement or plan undertake joint-marketing or co-marketing programs
            or activities as appropriate to further the intent of this Agreement
            and the alliance created hereby.

5.    TERM OF AGREEMENT

This  Agreement  shall  be  for a term  commencing  on  November  1,  2004,  and
continuing for one (1) years,  after which the Agreement will renew with one (1)
years  evergreen  renewal  up to two (2)  years  unless  terminated  earlier  as
provided  in Section 7. The  agreement  may be  extended  with  approval by both
parties.

6.    RELATIONSHIP BETWEEN PARTIES

Each  Party's  relationship  with  the  other  Party  is  strictly  that  of  an
independent  business  corporations  participating  in a strategic  alliance and
project  venture under this  Agreement.  It is explicitly  understood and agreed
that no  other  relationship  is  intended,  including  partnership,  franchise,
agency,  employer/employee,  fiduciary,  master/servant  relationship,  or other
special  relationship.  Neither  Party shall act in a manner that  expresses  or
implies a relationship other than that stated in Section 6 herein.

7.    TERMINATION

This Agreement may be terminated by any one of the following:

      7.1.  The end of term of this Agreement as specified in Section 5.

      7.2.  The agreement may be terminated with 3 months notification.

      7.3.  The  failure of the  Parties to execute  the  projects  outlined  in
            Section 3 to mutual  satisfaction of the Parties within one (1) year
            after signing of this agreement.

      7.4.  The financial insolvency, liquidation, or dissolution of PUROLITE.

      7.5.  The financial insolvency, liquidation, or dissolution of MR3.

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8.    CONSEQUENCES OF TERMINATION

Upon  termination  of this  Agreement  under  Section  7.4 and only  7.4  above,
PUROLITE hereby grants to MR3, as of the date of such termination,  a perpetual,
royalty-free  license  to  manufacture  and use any  products,  which  have been
commercialized  under  Section 3.2 above or which have entered  into  evaluation
under Section 3.1 above.

Upon  termination  of this Agreement  under Section 7.5 and only 7.5 above,  MR3
hereby  grants to  PUROLITE,  as of the date of such  termination,  a perpetual,
royalty-free  license  to  manufacture  and use any  products,  which  have been
commercialized  under  Section 3.2 above or which have entered  into  evaluation
under Section 3.1 above.

9.    NO ASSIGNMENTS

Neither  Party may assign  its rights or  delegate  its  obligations  hereunder,
either in whole or in part,  whether by operation of law or  otherwise,  without
the prior  written  consent of the other  Party.  Any  attempted  assignment  or
delegation  without  consent  will be void.  The rights and  liabilities  of the
Parties under this  Agreement will bind and inure to the benefit of the Parties'
respective   successors  and  permitted  assigns;  such  as  personal  or  legal
representatives,  executors,  administrators,  successors,  heirs, distributees,
devisees, legatees and permitted assignees of the Parties hereto.

10.   NOTICE

For the purpose of this Agreement,  any notice required or permitted to be given
by either Party under this Agreement shall be in writing and shall be personally
delivered or sent by a reputable overnight mail service (e.g., Federal Express),
or by first class mail (certified or registered),  or by facsimile  confirmed by
first class mail  (registered  or  certified),  to the Project  Manager of other
Party.  Notices  will be  deemed  effective  (I) three (3)  working  days  after
deposit,  postage  prepaid,  if mailed,  (II) the next day if sent by  overnight
mail,  or (III) the same day if sent by  facsimile  and  confirmed  as set forth
above. A copy of any notice shall be sent to the following:

      10.1. MR3 Systems, Inc., 435 Brannan Street, Suite 200, San Francisco,  CA
            94107-1780; Attn: William C. Tao, Ph.D., CEO; Fax: (415) 947-1095.

      10.2. PUROLITE,  150 Monument Road, Bala Cynwyd, PA 19004; Attn: Ted Begg,
            Northeast Sales and Marketing Manager; Fax: (610) 668-8139.

11.   RESTRICTIVE COVENANTS

      11.1. CONFIDENTIALITY.  Each  Party  acknowledges  that  in  forming  this
            strategic alliance and venture  hereunder,  each Party will occupy a
            position of extreme trust and  confidence  with respect to the other
            Party's business  information,  organizational  goals, and corporate
            strategy.  The Parties have entered into a separate  Confidentiality
            Agreement that sets forth the  obligations and rights of the Parties
            concerning confidentiality.  A copy of the Confidentiality Agreement
            is attached hereto as Exhibit "A" and is hereby incorporated by this
            reference.

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      11.2. NON-SOLICITATION  OF EMPLOYEES.  Each Party  recognizes  that it may
            obtain confidential  information about the other Party's consultants
            and employees.  Each Party  recognizes that this  information is not
            generally  known,  and is of  substantial  value in  developing  and
            maintaining  the other  Party's  business.  Each Party  agrees  that
            during the term of this  Agreement and for a period of two (2) years
            after  termination,  each Party will not,  directly  or  indirectly,
            solicit or recruit any consultant or employee of the other Party for
            any other employment or consultancy.

      11.3. NON-COMPETITION  OF BUSINESS AND  PROJECTS.  During the term of this
            Agreement and for a period of two (2) years after termination,  each
            Party shall not, directly or indirectly,  pursue the projects,  with
            the Products,  initiated and implemented under this Agreement with a
            third Party  without the written  consent of PUROLITE and MR3.  Each
            Party  agrees  that it  will  not  reverse  engineer  the  concepts,
            strategies, implementation plans of the projects outlined in Section
            3 so as to reproduce  the projects  under a different  name or venue
            for the purpose of  independent  operation  or venture  with a third
            Party outside of this Agreement.

      11.4. SURVIVAL OF PROVISIONS. The obligations contained in this Section 11
            shall survive the  termination  or expiration of this  Agreement and
            shall be fully  enforceable  thereafter in accordance with the terms
            contained in Section 11. If it is determined by a court of competent
            jurisdiction in any state that any restriction in this Section 11 is
            excessive  in  duration or scope or extends for too long a period of
            time or over  too  great a range  of  activities  or in too  broad a
            geographic area or is unreasonable or  unenforceable  under the laws
            of  that  state,  it is the  intention  of  the  parties  that  such
            restriction  may be  modified  or  amended by the court to render it
            enforceable  to the  maximum  extent  permitted  by the  law of that
            state.

12.   SEVERABILITY

The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability   of  any   provision   shall  not  affect  the   validity   or
enforceability  of the other  provisions  hereof.  If for any  reason a court of
competent   jurisdiction   finds  any   provision   of  this   Agreement  to  be
unenforceable,  that  provision of the Agreement will be enforced to the maximum
extent permissible so as to affect the intent of the Parties,  and the remainder
of this Agreement will continue in full force and effect.

13.   COUNTERPARTS

This  Agreement  may be executed in several  counterparts  and  transmitted  via
facsimile,  each of which  shall be  deemed to be an  original  but all of which
together will constitute one and the same instruments.

14.   WAIVER

No provision of this Agreement may be modified, waived or discharged unless such
waiver,  modification  or  discharge  is agreed to in writing  and signed by the
Project  Managers of both Parties.  No waiver by either Party hereto at any time
of any breach by the other Party hereto of, or compliance with, any condition or
provision of this  Agreement to be performed by such other Party shall be deemed
a waiver or similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

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15.   GOVERNING LAW AND DISPUTE RESOLUTION

This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware.  This Agreement shall not be construed  against one Party
or the other as the drafter.  Any  disputes  arising  under or to interpret  the
terms of this Agreement shall be resolved in the following manner:

      15.1. INITIAL CONSULTATION AND NEGOTIATION. In the event a dispute between
            the Parties  arises  under the  Agreement  or a Party's  performance
            thereunder,  the  matter  shall  first be  escalated  to  PUROLITE's
            Project  Manager and MR3's  Project  Manager in an attempt to settle
            such dispute through  consultation and negotiation in good faith and
            a spirit of mutual cooperation.

      15.2. CONTINUED  PERFORMANCE.  Except where prevented from doing so by the
            matter in dispute,  the Parties agree to continue  performing  their
            obligations  under this  Agreement  while any good faith  dispute is
            being resolved  unless and until such  obligations are terminated by
            the termination or expiration of any project or this Agreement.

16.   FINAL AGREEMENT

This Agreement  terminates and supersedes all prior understandings or agreements
on  the  subject  matter  hereof  excluding   specifically  the  Confidentiality
Agreement  attached as Exhibit "A". Only a writing that is duly executed by both
the Parties may modify this  Agreement.  This Agreement  constitutes  the entire
Agreement  between the Parties with respect to the subject matter  hereof.  Each
person who signs this  Agreement  represents and warrants that he or she does so
after full  opportunity  to  consult  with  counsel  and with the full and legal
authority to execute this Agreement on behalf of the respective  Parties to this
Agreement.

17.   INSURANCE

Each Party shall maintain  liability and other insurance typical of the industry
for this type of Agreement  for their  respective  employees,  consultants,  and
contractors.

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18.   INDEMNIFICATION

To the fullest  extent  allowed by law, each Party shall  indemnify and hold the
other Party's officers,  directors,  employees,  shareholders,  agents,  and his
heirs,  personal  representatives,  successors and assigns  harmless against any
loss, expense, damage, claim, or injury suffered or sustained by either Party by
reason of any acts, errors,  omissions,  or alleged acts or omissions related to
this Agreement. Each Party's duty to indemnify will include any judgment, award,
settlement,  reasonable  legal fees, and other costs and expenses related to the
defense  of  any  actual  or  threatened  action,   proceeding,  or  claim.  The
indemnification  herein  provided shall apply also in respect of any amount paid
in compromise of any such action, suit,  proceeding or claim asserted (including
expenses,  counsel fees and costs reasonably incurred in connection  therewith),
provided  each  Party  shall  have  first  approved  such  proposed   compromise
settlement, which approval shall not be unreasonably withheld.

      This  Agreement  must be executed with the attachment of all the Signatory
pages.

IN WITNESS WHEREOF,  the Parties  consisting of PUROLITE and MR3, by and through
its duly authorized  officer,  have executed this Agreement as of the date first
written above.

THE PUROLITE COMPANY

By:    /S/ TEDD BEGG                              Date:  November 15, 2004
     ---------------------------------------             -----------------
      Ted Begg
      Northeast Sales and Marketing Manager

MR3 SYSTEMS, INC.

By:  /S/ WILLIAM C. TAO                           Date:  November 15, 2004
     ------------------                                  -----------------
      William C. Tao, Ph.D.
      Chief Executive Officer

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                      EXHIBIT A: CONFIDENTIALITY AGREEMENT

                Provisions Applicable to Confidential Information

                                   Definitions

      1.1 As used  herein  "Confidential  Information"  shall mean the terms and
conditions  of this  Agreement,  the  existence of the  discussions  between the
Parties,  any  information  disclosed in  connection  with the  development  and
integration  projects  being  undertaken  as described in Section 3 above in the
Agreement,  and any proprietary information a Party considers to be proprietary,
including but not limited to, information  regarding each Party's project plans,
project  designs,   project  costs,  product  and  component  prices,  finances,
marketing plans,  business  opportunities,  personnel,  research and development
activities,   know-how  and  pre-release  products;  provided  that  information
disclosed  by the  disclosing  party  ("Disclosing  Party")  in written or other
tangible form will be considered Confidential Information by the receiving party
("Receiving  Party") only if such  information  is  conspicuously  designated as
"Confidential,"  "proprietary" or a similar legend. Information disclosed orally
shall  only  be  considered  Confidential  Information  if:  (i)  identified  as
confidential,  proprietary  or the  like at the  time of  disclosure,  and  (ii)
confirmed  in  writing  within  thirty  (30)  days of  disclosure.  Confidential
Information  disclosed to the  Receiving  Party by any affiliate or agent of the
Disclosing Party is subject to this Agreement.

                             Disclosure Restrictions

      2.1 Except as set forth in Section 2.2 below,  the  Receiving  Party shall
treat as  confidential  and shall not  directly  or  indirectly  use or disclose
Confidential Information,  whether received prior to the date of this Agreement,
during its negotiation,  or after the execution hereof.  The Parties shall treat
the terms and  conditions  and the existence of this  Agreement as  Confidential
Information.   Each  Party  shall  obtain  the  other's  consent  prior  to  any
publication,  presentation,  public announcement or press release concerning the
existence or terms and conditions of this Agreement.

      2.2 The provisions of Section 2.1 above shall not apply to:

      (a)   Confidential  Information  that Receiving  Party can demonstrate was
            rightfully  in  Receiving  Party's  possession  prior to the date of
            disclosure to Receiving Party;

      (b)   Confidential  Information  that, at the time of disclosure or later,
            is published or becomes otherwise available to the general public as
            part of the  public  domain  through no act or failure to act on the
            part of Receiving Party receiving the disclosure;

      (c)   Confidential  Information  that is  disclosed  to a third  party  in
            accordance  with  written  direction  or  approval  from  or of  the
            Disclosing Party claiming the proprietary interest;

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      (d)   Confidential  Information  that  Receiving  Party  is  obligated  to
            produce under order of a court of competent  jurisdiction;  provided
            that Receiving Party shall, upon learning of the issuance or planned
            issuance of such order,  immediately give written notice of the same
            to  the  Disclosing   Party;   provided  further  that  when  either
            Disclosing  Party or  Receiving  Party has notice of the pendency of
            any  action  that  may  result  in a court  order  to  produce  such
            Confidential Information,  said recipient of notice agrees to notify
            the other Party of the facts  pertaining  to any such action as soon
            as practicable  under the  circumstances  in order to give the other
            Party an opportunity to protect its interests;

      (e)   Disclosures of Confidential Information by Receiving Party to any of
            its  employees,  officers,  agents,  consultants,   representatives,
            lenders,  counsel,  lender's  counsel  and  Affiliates  (hereinafter
            collectively  referred to as  "Representatives")  who have a need to
            know related to the business of the Disclosing Party;  provided that
            Receiving  Party  shall  instruct  its   Representatives   that  any
            Confidential  Information  conveyed is proprietary to the Disclosing
            Party  involved  and that it is to be held in strict  confidence  by
            said Representatives, and Receiving Party shall use its best efforts
            to  ensure  that  all of its  Representatives  to whom  Confidential
            Information  is disclosed  will take all  reasonable  precautions to
            safeguard and preserve the  confidential  status of the Confidential
            Information.

      2.3  Receiving  Party  shall  take all  necessary  precautions  to exclude
unauthorized personnel and visitors from areas where Confidential Information is
or may be available or observable.

                               Return of Materials

      3.1 Upon termination of the Agreement,  Receiving Party shall promptly (a)
return to the  Disclosing  Party the  originals  and any copies of  Confidential
Information that was provided to the Receiving Party by the Disclosing Party and
(b)  certify in writing to the  Disclosing  Party that the  Receiving  Party has
complied fully with the provisions of this Section 3.1.

                                   Limitation

      4.1 Nothing  contained in this Agreement  shall be construed as a grant of
any right or license  or an offer to grant any right or  license  by  Disclosing
Party to the  Receiving  Party  with  respect  to the  Confidential  Information
exchanged hereunder.

                                      Term

      5.1 The term of these  provisions shall run from the date hereof until two
(2) years after the termination of the Agreement.Exhibit
10.57

COLUMBIA
LABORATORIES, INC.

INCENTIVE
PLAN

	1.	Plan
      Objectives

 

The
objectives of the Columbia Laboratories Incentive Plan are to:

	·  	
      Encourage
      and reward Participants for achievement of the Company’s financial,
      tactical and strategic objectives;

	·  	
      Reinforce
      a strong performance orientation with variability in awards based on
      individual contribution and teamwork; and 

	·  	
      Provide
      a fully competitive compensation package that will attract, reward and
      retain high caliber employees.

	2.	Plan
      Year

 

The Plan
year is the Company’s fiscal year, January 1 through December 31. 

	3.	Eligibility
      and Participation

 

In
general, active exempt and non-exempt employees as of March 1 of the Plan year
are eligible to participate in the Incentive Plan. Employees who are eligible
for another term incentive plan (e.g., sales incentives) are not eligible to
participate. Participants who are hired after February 28, but before October 1,
of the Plan year are eligible for a pro-rated incentive award based on their
hire date. Participants hired on or after October 1, of the Plan year are not
eligible to participate that Plan year. 

To be
eligible for an incentive award, a Participant must be actively employed on the
date of distribution of awards for the Plan year. The following are exceptions to this
general rule:

 

	·  	
      If
      a Participant leaves the Company before the award distribution date for
      any of the following reasons, he or she will be eligible to receive a
      pro-rated target award based on the period of active employment during the
      year:

	o  	
      Retirement
      with the consent of the Company

	o  	
      Inability
      to perform the work as a result of injury, ill-health or
      disability

	o  	
      Death
      in service 

	·  	
      A
      Participant who takes an unpaid leave of absence (such as NJFLA) will be
      eligible for a pro-rated award for the period of active employment during
      the plan year. A Participant who begins an unpaid leave of absence and
      does not return prior to December 31 will be eligible for a pro-rated
      award upon return to work. Participants who do not return to work will not
      be eligible for an award.

 

	4.	General
      Approach

 

	·  	
      Each
      eligible Participant has an incentive target that is expressed in units as
      a percentage of base salary. The incentive target relates to the
      Participant’s position level.

	·  	
      Performance
      criteria and relative weightings of each performance factor are approved
      annually by the Compensation Committee of the Board of
      Directors.

	·  	
      A
      target incentive pool is established annually. The pool is the sum of the
      target incentive award opportunities for all Plan
      Participants.

	·  	
      Each
      year the number of units in the incentive pool available for payout is a
      function of Company performance against pre-determined financial and
      strategic objectives. The total number of units in the pool may be more or
      less than the target incentive pool based on Company
      performance.

	 	 

	·  	
      Individual
      awards will take into account performance against individual objectives
      and within the context of the overall annual incentive fund available for
      awards.

 

	5.	Individual
      Incentive Targets

 

The
following incentive targets (expressed in units as a percentage of annualized
base salary) will apply to participants in the Plan based on their position and
level of responsibility in the Company.*

 

	Position
	 	
      Incentive
      Target
	 
	
       

      Executive
      Officer
	 	 	
      

      30
	
      

      %

	
       

      Non-executive
      Officer

      Executive
      Director
	 	 	
      

      

      25
	
      

      

      %

	
       

      Director

      Associate
      Director
	 	 	
      

      

      20
	
      

      

      %

	
       

      Manager

      Senior
      Manager
	 	 	
      

      

      15
	
      

      

      %

	
       

      Administrator

      Supervisor
      
	 	 	
      

      

      10
	
      

      

      %

	
       

      Non-exempt
	 	 	
      

      4
	
      

      %

 

*COO
and President/CEO incentive targets are governed by their employment
contracts.

	6.	Funding
      Criteria

 

The
incentive pool is based upon the sum of all eligible Participants’ incentive
award targets against company goals. 

 

	
      7.
	Determination
      of Annual Incentive Pool

The
annual incentive pool is initially determined by the Compensation Committee of
the Board of Directors on the basis of the following: the attainment of the
financial and strategic goals for the Plan year as established by the Board of
Directors; competitive economic factors; the regulatory environment; the timely
and successful development of products, the Company’s exposure to product
liability and other lawsuits and contingencies; market and customer acceptance
and demand for the Company’s pharmaceutical products; reliability of supply of
the Company’s pharmaceutical products by contract manufacturers; product
recalls: relationships with significant customers; reimbursement policies of
third party payors; and general economic conditions. The annual incentive pool
is finally determined by the Board of Directors. 

 

The total
amount of the incentive pool sets the maximum that may be paid out in the total
awards to all individual Participants. 

	8.	Calculation
      of Individual Awards

 

To
determine a Participant’s actual award once the incentive pool funding
percentage is approved, involves two calculations: (a) determination of the
Participant’s target award, and (b) application of the individual’s performance
factor.

	(a)  	
      Determination
      of the Participant’s target award

The
target award for the individual Participant is determined using the following
formula:

 

Annualized
salary x position award target x pool funding percentage = target award in
units

Example: Salary
of $75,000 x position target award of 15% x pool funding percentage of 110% =
target award of 12,375 units. 

Note that
the target award is based on a Participant’s salary and position level in effect
on December 31 of the Plan year.

	(b)  	
      Application
      of individual’s performance factor

As a
result of the annual performance review and development process, each
Participant receives an overall performance rating. The rating reflects how well
the individual performed against his or her personal objectives and the Company
objectives.

Using the
following table as a guide, the individual’s target award (as determined in (a)
above) may be modified to reflect his or her overall performance rating.

For
example, assume that the Participant whose target award is 12,375 units has a
performance rating of exceeded expectations. The manager may recommend an award
ranging from 12,375 units (100%) to 15,469 units (125%) to reflect individual
performance. If that individual’s rating is fully met expectations, the award
range would be 9,281 units (75%) to 12,375 units (100%). Any individual with a
rating of performance improvement required will not receive an
award.

 

	
      Overall
      Performance Level Against Individual and Company Objectives
      
	 	
      Award
      Guideline

      (%
      of Target Award)
	 
	
      Exceeded
      expectations at exceptional level
	 	 	
      125
      -
      150%
	
      

      

       

      

	
      Exceeded
      expectations
	 	 	
      100
      - 125%
	
       

      

	
      Fully
      met expectations
	 	 	
      75
      - 100%
	
       

      

	
      Partially
      met expectations
	 	 	
      0 -
      75%
	
       

      

	
      Performance
      improvement required 
	 	 	
      0%
	
       

      

The
sum of all individual awards may not exceed the overall incentive pool allocated
to the Company, as explained in section 7 above.

	9.	Payment
      of Awards

 

The form
and timing of awards is at the discretion of the Company, but these will
normally be made to participants on or before March 15 following completion of
the fiscal year. If awards are made in the form of option grants, each unit
awarded will be equal to a number of options as determined by the Compensation
Committee of the Board in its sole discretion. Cash payments, if any, will be
made after the deduction of withholdings required by law or as authorized by the
recipient.

	10.	Plan
      Administration

 

The
Company has complete discretion regarding all aspects of the Incentive Plan’s
implementation and administration, and may change the Plan in whole or in part
or eliminate the Plan entirely at any time.

The
decision as to whether or not a Participant is eligible to receive an award
under the Plan rests solely with the Company, which also reserves the right to
forego awards or make reduced awards. The Company’s determination will be final
and binding. 

Participation
in this plan does not in any way whatsoever create a contractual relationship
between the Participant and the Company. 

The
impact of any award made under the Plan on other employee benefit programs will
be governed by the terms of those programs. 

The Plan
is managed by the Compensation Committee of the Board of Directors. The
Committee has full power and discretion to interpret and administer the
Plan.

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