Document:

Unassociated Document

     

    Exhibit 10.1

     

    MUTUAL
RELEASE AND SETTLEMENT AGREEMENT

     

    THIS
MUTUAL RELEASE AND SETTLEMENT AGREEMENT ("Agreement") is made
and entered into this 11th day of February, 2011, between First China
Pharmaceutical Group, Inc., a Nevada corporation (the "Company"), and Mr.
Aidan Hwuang, an individual ("Hwuang") (sometimes
referred to herein individually as “Party” and
collectively as the “Parties”).

     

    Recitals

     

    A.           WHEREAS,
Hwuang has served as a member of the Company’s Board of Directors since his
appointment on June 7, 2010, and

     

    B.           WHEREAS,
the Parties desire to fully and finally discontinue their relationship with one
another, and the Company is willing to pay US $150,000.00 to Hwuang in exchange
for entering into this Agreement.

     

    Agreement

     

    NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein made, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:

     

    1.           Effective
as of the date hereof, Hwuang does hereby resign as a member of the Company’s
Board of Directors and any and all other positions with the Company or any of
its subsidiaries or affiliates.  The Company hereby accepts Hwuang’s
resignation.

     

    2.           Subject
to the terms and conditions of this Agreement, including the Company’s payment
of US $150,000.00 to Hwuang, the receipt and sufficiency of which is hereby
acknowledged and accepted, Hwuang agrees (on his own behalf and on behalf of
each of his affiliates) to and does hereby release and forever discharge the
Company and its affiliates, officers, directors, shareholders and successors in
interest of and from any and all claims, demands, rights, liabilities, and
causes of action relating to any matters of any kind, whether presently known or
unknown, suspected or unsuspected, which Hwuang may now have, has ever had, or
may hereafter have against the Company or its affiliates arising
contemporaneously with or prior to the date hereof or arising out of any
omissions, acts, or facts which have occurred up until the date hereof and
whether or not relating to claims pending on, or asserted after, the date
hereof.

     

    3.           Subject
to the terms and conditions of this Agreement, the Company agrees (on its own
behalf and on behalf of each of its affiliates) to and does hereby release and
forever discharge Hwuang and his affiliates and successors in interest of and
from any and all claims, demands, rights, liabilities, and causes of action
relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, which the Company may now have, has ever had, or may
hereafter have against Hwuang or his affiliates arising contemporaneously with
or prior to the date hereof or arising out of any omissions, acts, or facts
which have occurred up until the date hereof and whether or not relating to
claims pending on, or asserted after, the date hereof.

     

    4.           Subject
to the terms and conditions of this Agreement, including the Company’s payment
of US $150,000.00 to Hwuang before February 19, 2011, the Parties irrevocably
covenant to refrain from directly or indirectly asserting any claim or demand,
or commencing, instituting, or causing to be commenced, any proceeding of any
kind against the other Party, based upon any matter released
hereby.

     

    5.           Without
in any way limiting any of the rights and remedies otherwise available the other
Party, each Party (each an "Indemnifying Party")
shall indemnify and hold harmless each of the other parties hereto from and
against all loss, liability, claim, damage, or expense (including costs of
investigation and defense and reasonable attorneys' fees), whether or not
involving third party claims, arising directly or indirectly from or in
connection with (a) the assertion by or on behalf of such Indemnifying Party (or
any affiliate, assignee or successor of such Indemnifying Party) of any claim or
other matter released by such Indemnifying Party pursuant to this Agreement, and
(b) the assertion by any third party of any claim or demand against any other
party hereto which claim or demand arises directly or indirectly from, or in
connection with, any assertion by or on behalf of such Indemnifying Party (or
any affiliate, assignee or successor of such Indemnifying Party) against such
third party of any claims or other matters released pursuant to this
Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.           The
Parties understand that future claims, demands, rights, liabilities, and causes
of action released under Sections 2 and 3 above, which
presently are unknown, unforeseen, or not yet in existence may occur and
consciously intend to release all such claims.

     

    7.           The
Parties represent and warrant that they have made no and shall not make any
assignment, transfer, conveyance, pledge, or other disposition of any of the
claims, demands, causes of action, obligations, damages, or liabilities released
under Sections
2 and 3
above, and that they are fully entitled to give its or his full and complete
release of all such claims and demands.

     

    8.           The
Parties agree and understand that once this Agreement becomes effective, it
cannot be revoked, and no Party can proceed against the other Party on account
of any of the claims released herein.  The Parties further agree and
understand that any Party defending an action or claim commenced, maintained, or
prosecuted in violation of this Agreement will be entitled to recover from the
Party bringing the action or claim any damages or costs, including reasonable
attorneys' fees and costs, incurred in defending the action or
claim.

     

    9.           The
Parties represent and warrant that (a) each has read and understands the terms
of the Agreement, (b) each has the full power and authority to execute and
deliver this Agreement and to perform and carry out all covenants and
obligations to be performed and carried out by them hereunder, (c) each has duly
taken all required actions to authorize the execution of this Agreement and the
performance of the other obligations to be performed by each of them hereunder,
(d) this Agreement constitutes a legal, valid, and binding obligation of the
Parties, enforceable against such party in accordance with its terms, and (e)
each has entered into this Agreement voluntarily and for reasons of their own
and not based upon the representations of the other party hereto except as
contained in this Agreement.

     

    10.           The
Parties shall (i) take all actions necessary to comply promptly with all
requirements which may be imposed on them with respect to the consummation of
the transactions contemplated by this Agreement, and (ii) take all actions
necessary to obtain (and shall cooperate with the other Party in obtaining) any
consent, signature, approval, order or authorization of, or any registration,
declaration or filing with, any governmental entity, required to be obtained or
made in connection with the taking of any action contemplated by this
Agreement.

     

    11.           The
Parties hereby covenant and agree that they will not, directly or indirectly,
(a) disparage the other party; or (b) disseminate, or cause or permit
others to disseminate, negative statements regarding the other
party.  The Parties further agree to caution their respective
affiliates and successors in interest to refrain from any disparaging remarks or
conduct.

     

    12.           For
a period of 12 months from the date of execution of this Agreement, Hwuang
agrees not to (i) directly or indirectly contact any officer, director
or affiliate of the Company or any of its subsidiaries for any
matters relating to the Company, (ii) directly or indirectly contact any
employee, consultant, or advisor of the Company or any of its subsidiaries as
provided in writing to Hwuang as of the date of this Agreement for any matters
relating to the Company, and (iii) discuss any matters relating to the Company
with any regulatory authority governing the Company or any of its subsidiaries
without first providing written notice to the Company and affording the Company
a reasonable time period to file a protective order in the relevant court and
jurisdiction.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    13.           This
Agreement and any dispute arising hereunder shall be interpreted, enforced, and
governed under the laws of Hong Kong.

     

    14.           Hwuang
recognizes that if he violates his obligations or covenants under this
Agreement, irreparable damage will result to the Company that cannot be remedied
by monetary damages.  As a result, Hwuang hereby agrees that, in the
event of any such breach by him, or in the event of apparent danger of such
breach, the Company shall be entitled to an injunction to restrain the violation
of any and all portions of this Agreement by Hwuang, in addition to any other
legal remedy available to the Company, and to the recovery of reasonable
attorneys' fees which may be incurred in enforcing the provisions of this
Agreement.

     

    15.           This
Agreement shall be interpreted to be effective and valid under applicable law,
but if any provision shall be held to be prohibited or invalid, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the other remaining
provisions of this Agreement.

     

    16.           This
Agreement shall be binding upon and inure to the benefit of each of the
affiliates, officers, directors, shareholders and successors in interest of each
Party.  The Parties may not assign or transfer their rights or
obligations under this Agreement without the prior written consent of the other
Party, and any attempted assignment or transfer without such consent shall be
void.

     

    17.           The
Parties hereto acknowledge and agree that nothing in this Agreement is meant to
suggest that any party has violated any law or that any Party has any claim
against the other Party.

     

    18.           The
Parties hereto understand and agree that this Agreement supersedes and displaces
any prior agreements made among the Parties relating to its subject
matter.  There are no other understandings or agreements between them
with respect to such subject matter.  This Agreement may be amended
only by written instruments designated as amendments to this Agreement and
executed by the signatories or their successors.

     

    19.           This
Agreement and all obligations and rights contained herein shall become effective
immediately upon the time when both Parties herein execute this Agreement and
Hwuang or his designated account has received the fund as indicated in Section 2
hereinabove.

     

    20.           This
Agreement may be executed in one or more counterparts, each of which shall
constitute a duplicate original.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    
      	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              FIRST
      CHINA PHARMACEUTICAL GROUP, INC.,

              a
      Nevada corporation

               

               

            
	 
      	
              By:

            	
              /s/ Zhen Jiang Wang

            
	 
      	
              Name:

            	
              Zhen Jiang Wang

            
	 
      	
              Title:

            	
              Chairman and Chief Executive
      Officer

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
               

              AIDAN
      HWUANG

               

               

            
	 
      	
              /s/ Aidan HwuangUnassociated Document

    Exhibit
10.1

    

    RESEARCH/MANUFACTURING
AGREEMENT

    

    THIS
RESEARCH/MANUFACTURING AGREEMENT (“Agreement”), effective as of the last date of
signature by the parties below (“Effective Date”), is by and between Schering
Corporation, acting through its Schering-Plough Research Institute division,
2000 Galloping Hill Road, Kenilworth, New Jersey 07033-0539 (hereinafter
“SPRI”); and Albany Molecular Research, Inc., 21 Corporate Circle, Albany, New
York 12203-5154 (together with its subsidiaries and affiliates hereinafter
collectively referred to as “AMRI”).

    

    WHEREAS,
SPRI is engaged in the development of pharmaceutical products; and,

    

    WHEREAS,
AMRI is engaged in the business of providing synthetic chemical research and
analysis, chemistry consulting, medicinal chemical synthesis, computational
chemistry services, manufacturing of specialty chemical products, process
development, cGMP synthesis, analytical method development, validation and
release testing, stability studies, and related services, and undertakes such as
an independent company, understanding that neither AMRI nor its employees nor
agents shall be considered an employee of SPRI; nor a participant in any
programs, insurance or other benefits extended to SPRI’s employees;
and,

    

    WHEREAS,
AMRI hereby represents and warrants to SPRI that this undertaking does not
conflict with its duties and obligations under any other agreement to which it
is a party, including any agreement with any other company or institution or any
policies applicable to them; and,

    

    WHEREAS,
SPRI proposes to engage AMRI for the specific purpose of providing chemical
research, analysis, manufacturing of specialty chemical products or related
services which AMRI may offer on a project-by-project basis.

    

    NOW,
THEREFORE, IT IS AGREED AS FOLLOWS:

    

    
      	
              A.

            	
              AMRI
      Services:

            

    

     

    
      	
               
      

            	
              1.

            	
              SPRI may engage AMRI to perform chemistry
      services, which may include consulting, chemical synthesis, chemical
      process research, analytical methods development, validation or release
      testing, and other related services
      (collectively, the “Services”) in connection with one or more projects
      (each a “Project” and collectively, the “Projects”) during the Term (as
      hereinafter defined) as mutually agreed by the Parties from time to time
      pursuant to one or more written Research Project Appendices in the form of
      Appendix 1 attached hereto (each a “Research Project Appendix” and
      collectively, the “Research Project Appendices”).  AMRI shall
      not commence work on any Project or provide any Services until the parties
      enter into a Research Project Appendix, which will set forth (i) the
      Services to be performed by AMRI (including deliverables to be provided to
      SPRI in connection therewith), (ii) the timing for the Project (including
      relevant deadlines and delivery dates for deliverables), (iii) the cost
      and payment schedule with respect to such Services, (iv) any individuals
      designated to have management responsibility for the Project or otherwise
      required to perform the Services, and (v) to the extent necessary and
      appropriate, additional provisions applicable to the Services to be
      provided pursuant to the Research Project Appendix which shall not be
      inconsistent with the terms of this Agreement and which are not otherwise
      set forth in this Agreement.  Any terms or conditions included
      in a Research Project Appendix other than those described in this Section
      A.1. shall be deemed to conflict with this Agreement and shall have no
      force or effect.  References in this Agreement to this
      “Agreement” shall be deemed to include any Research Project Appendix
      entered into pursuant hereto, subject to the preceding
      sentence.  The parties expressly agree that the terms hereof
      cannot be altered by course of
dealings.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              2.

            	
              Anything to the contrary contained in this
      Agreement notwithstanding, AMRI acknowledges and agrees that there is no
      minimum number of Projects for which SPRI is obligated to engage the
      services of AMRI and this Agreement shall not be construed as limiting in
      any way SPRI’s right to contract for any services with any other
      party.

            

    

     

    
      	
               
      

            	
              3.

            	
              In no event shall this Agreement be construed as
      obligating SPRI to pay any amounts for Services performed under this
      Agreement unless (i) SPRI actually engages AMRI to perform Services
      pursuant to this Agreement, (ii) such engagement is evidenced by a
      Research Project Appendix in the form of Appendix 1 entered into pursuant
      to this Agreement by the parties prior to the commencement of any such
      engagement, and (iii) AMRI complies with the procedures set forth in
      Section F.2. herein.  AMRI acknowledges and agrees that verbal
      authorization or instructions from SPRI or any of its affiliates to
      commence work or Services shall not be sufficient and shall have no force
      or effect and that any work or Services performed by AMRI prior to
      execution by the parties of a Research Project Appendix for the engagement
      shall be at the sole risk and expense of AMRI.  The parties
      expressly agree that this provision cannot be altered by course of
      dealings.

            

    

     

    
      	
               
      

            	
              4.

            	
              SPRI will define and the parties shall
      mutually agree upon the parameter of the Projects and define the time
      frame in which the Services are to be
      provided as requested.  Such Projects shall include, but not be
      limited to, the following:

            

    

    

    
      	
               
      

            	
              a)

            	
              Product Development
      Assistance:  AMRI shall be available to SPRI to advise on
      design and synthesis of organic compounds, to perform process chemistry
      and analytical services, and/or to complete the manufacture of organic
      compounds, subject to mutually acceptable Research Project Appendices
      governing the requested projects.  Such Research Project
      Appendices will specify the work to be undertaken, the conditions and
      timing under which work is to be completed, and the amount of AMRI’s
      compensation.

            

    

    

    
      	
               
      

            	
              b)

            	
              Technical
      Assistance:  AMRI shall be available to SPRI to perform
      synthetic chemical research, medicinal chemistry, process development, and
      process optimization studies.  The chemistry and scope of work
      is to be defined under mutual agreement between AMRI and
    SPRI.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              c)

            	
              Technical
      Consultations:  AMRI shall be available to SPRI at such
      times as are requested by SPRI for technical consultations with SPRI’s
      Research and Development personnel via telephone.  AMRI shall be
      available for consultation at mutually agreed upon sites, provided that
      the extent of this activity will be set by mutual agreement of SPRI and
      AMRI.  SPRI shall reimburse AMRI for [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/]

            

    

    

    
      [CONFIDENTIAL TREATMENT REQUESTED BY AMRI –
01].

    

    

    
      	
              B.

            	
              Specific Duties of
      AMRI:

            

    

    

    
      	
               
      

            	
              1.

            	
              In
      assuming responsibility for undertaking this Agreement, AMRI
      will:

            

    

    

    
      	
               
      

            	
              a)

            	
              Perform
      chemistry consulting, computational services, synthetic chemical research,
      medicinal chemistry, process development and process optimization studies,
      and manufacturing of specialty chemicals for any Projects entered
      into.

            

    

    

    
      	
               
      

            	
              b)

            	
              Provide
      technical consultation, technical assistance and product development
      assistance, as defined, for any Projects entered
  into.

            

    

    

    
      	
               
      

            	
              c)

            	
              Develop
      or utilize existing analytical methods which will allow determination of
      the identity and quantification of the purity of any compounds
      delivered.

            

    

    

    
      	
               
      

            	
              d)

            	
              Provide
      Services and/or compounds as
      expeditiously as possible.

            

    

    

    
      	
               
      

            	
              e)

            	
              Provide
      to SPRI Certificates of Analysis to include, as appropriate, elemental
      analysis, optical rotation, HPLC analysis, NMR spectra, and an IR spectrum
      on any compounds provided.

            

    

    

    
      	
               
      

            	
              f)

            	
              Perform
      experiments using standard and accepted good laboratory practices and
      current Good Manufacturing Practices, techniques, and record keeping
      procedures, as appropriate to each
project.

            

    

    

    
      	
               
      

            	
              g)

            	
              Interact
      with SPRI’s scientists as is deemed appropriate in the conduct of a fully
      integrated drug discovery project team
effort.

            

    

    

    
      	
               
      

            	
              h)

            	
              Interact
      with and communicate with SPRI, to its satisfaction, and upon all
      requests, regarding any Projects.

            

    

    

    
      	
               
      

            	
              i)

            	
              Provide
      written research reports to SPRI describing the results and including full
      experimental procedures, due upon mutually agreed upon interim dates and
      upon the completion of individual
Projects.

            

    

    

    
      	
               
      

            	
              j)

            	
              Retain
      experimental records and laboratory notebooks containing experimental
      descriptions and data generated from this work for a period of seven (7)
      years.  After this time and on request by SPRI, AMRI shall
      provide to SPRI all experimental records and laboratory notebooks, or
      copies thereof, containing information from the Projects for retention in
      SPRI’s archives.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
              C.

            	
              SPRI’s
      Obligations:  SPRI will:

            

    

    

    
      	
               
      

            	
              1.

            	
              Provide
      research samples, chromatographic information, and appropriate structural
      characterization spectra of relevant compounds to AMRI, as agreed to by
      SPRI.

            

    

    

    
      	
               
      

            	
              2.

            	
              Provide
      intermediates to AMRI where (and if) AMRI and SPRI mutually agree to be
      appropriate for project conduct and
completion.

            

    

    

    
      	
               
      

            	
              3.

            	
              Agree
      to pay AMRI for the Services to be performed by AMRI as set forth in
      Section F.2. herein and agreed upon in the applicable Research Project
      Appendix.

            

    

    

    
      	
              D.

            	
              Confidentiality:

            

    

    

    
      	
               
      

            	
              1.

            	
              With
      respect to any and all information indicated as being or which reasonably
      appears to be or is marked to be confidential, including, but not limited
      to, chemical synthesis or process data, proprietary chemicals, preclinical
      and clinical data and program results, or any other information or data
      acquired or generated by AMRI as a result of this Agreement or from
      performance of the Services to be rendered hereunder (“SPRI Confidential
      Information”), AMRI agrees that it will not, and will not permit any of
      its employees, consultants, or representatives to, use said information
      other than for the purposes of this Agreement, it will not, and will not
      permit any of its employees, consultants, or representatives to, disclose
      any of said information to a third party except as is required pursuant to
      the purposes of this Agreement, and it will not, and will not permit any
      of its employees, consultants, or representatives to, publish or submit
      for publication said information without SPRI’s prior
      approval.  AMRI shall only disclose SPRI Confidential
      Information to AMRI’s employees, consultants or representatives who have
      entered into written confidentiality and non-use agreements with AMRI
      having terms substantially similar to those set forth in this
      Agreement.

            

    

    

    
      	
               
      

            	
              2.

            	
              AMRI
      agrees to utilize all reasonable efforts to create confidentiality
      firewalls between different groups of its employees working on different
      Projects under this Agreement so that SPRI Confidential Information from
      one Project is not disclosed to AMRI employees working on a different
      Project.

            

    

    

    
      	
               
      

            	
              3.

            	
              AMRI’s
      obligation with regard to confidential information, which is a Trade
      Secret (as defined herein) shall continue at all times from and after the
      date of this Agreement, and with regard to confidential information which
      is not a Trade Secret, shall continue for a period of five (5) years from
      the date of termination of this Agreement.  For purposes of this
      Agreement, the term “Trade Secrets” shall mean:  information
      including, but not limited to, technical or nontechnical data, a formula
      pattern, compilation, program, device, method, technique, drawing,
      process, financial data, or list of actual or potential customers or
      suppliers which:

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (i)

            	
              Derives
      economic value, actual or potential, from not being generally known to
      other persons who can obtain economic value from its disclosure or use;
      and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Is
      the subject of efforts that are reasonable under the circumstances to
      maintain its secrecy or
confidentiality.

            

    

    

    SPRI
shall promptly identify the information that SPRI considers Trade Secrets in
order for AMRI to perform the obligations hereunder.  If information
is not designated by SPRI as a Trade Secret upon disclosure, it shall be treated
by AMRI as confidential.

    

    
      	
               
      

            	
              4.

            	
              The
      foregoing obligations shall not apply to information which is or lawfully
      becomes generally available to the public through no fault of AMRI, which
      is lawfully acquired from third parties who have a right to disclose such
      information, or which by mutual agreement is released from a confidential
      status.

            

    

    

    
      	
              E.

            	
              Term and
      Termination:

            

    

    

    
      	
               
      

            	
              1.

            	
              This
      Agreement shall commence on the date first set forth above and shall
      terminate after three (3) years, unless earlier terminated by either party
      hereto (the “Term”).  The Term of this Agreement may be extended
      by mutual written agreement of the
parties.

            

    

    

    
      	
               
      

            	
              2.

            	
              The
      representations and warranties contained in this Agreement (including the
      recitals hereto), as well as those rights and/or obligations contained in
      the terms of this Agreement which by their intent or meaning have validity
      beyond the term hereof, including without limitation Sections D, I, and
      K.3. hereof, shall survive the expiration or termination of this
      Agreement.

            

    

    

    
      	
               
      

            	
              3.

            	
              This
      Agreement may be terminated prior to the expiration of the term only under
      the following Conditions:

            

    

    

    
      	
               
      

            	
              a)

            	
              By
      either party, if the other party materially breaches any of the covenants
      and agreements under this Agreement, upon thirty (30) days written notice
      to the other party.

            

    

    

    
      	
               
      

            	
              b)

            	
              By
      SPRI, if AMRI is substantially unable to perform assigned duties hereunder
      whether due to sickness, disability or incapacity, or any other reason,
      upon thirty (30) days written notice to
AMRI.

            

    

    

    
      	
               
      

            	
              c)

            	
              By
      AMRI, if SPRI fails to pay fees and/or fails to reimburse AMRI for
      reimbursable expenses as provided in Section F.2. upon thirty (30) days
      written notice to SPRI.

            

    

    

    
      	
               
      

            	
              d)

            	
              SPRI
      may terminate this Agreement or any Project without cause upon written
      notice to AMRI under the following
conditions:

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (i)

            	
              if
      SPRI desires to terminate the Agreement or any Project within thirty (30)
      days written notice to AMRI and wind-down any Projects, AMRI shall reduce
      the then current number of Full-Time Equivalents (“FTE, defined as a
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] or [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/]) for such Projects at the rate of no less than
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] per month until the total number
      of [/*[CONFIDENTIAL TREATMENT REQUESTED]*/];
or

            

    

    

    
      	
               
      

            	
              (ii)

            	
              if
      SPRI desires to terminate the Agreement or any Project immediately upon
      thirty (30) days written notice to AMRI, then SPRI shall pay AMRI a
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/]  that AMRI would have
      billed  under the reduction in Services as described in
      E.3.d.(i) above using the then current annual [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/].

            

    

    

    
      [CONFIDENTIAL
TREATMENT REQUESTED BY AMRI – 02]

    

    

    
      	
               
      

            	
              4.

            	
              If
      any Research Project Appendix entered into prior to the end of the Term
      shall have an expiration date after the last day of the Term, then
      nothwithstanding the end of the Term set forth in this Section E, this
      Agreement shall remain in full force and effect until the expiration of
      such Research Project Appendix and references herein to “Term” shall refer
      to the period ending with the expiration date of such Research Project
      Appendix, but only with respect to such Research Project Appendix and the
      Services described therein.

            

    

    

    
      	
              F.

            	
              Communications and
      Payments:

            

    

    

    
      	
               
      

            	
              1.

            	
              Communications:  All
      communications associated with this Agreement shall be by first class mail
      or courier, addressed to the respective parties as
  follows:

            

    

    

    
      	
               
      

            	
              To
      AMRI:

            	
              Chief
      Financial Officer

            

    

    Albany
Molecular Research, Inc

    21
Corporate Circle

    Albany,
New York 12203-5154

    

    
      	 	
              With
      a copy to:

            	
              Director,
      Contracts, Licensing & Legal
Affairs

            

    

    Albany
Molecular Research, Inc

    21
Corporate Circle

    Albany,
New York 12203-5154

    

    
      	 	
              To
      SPRI:

            	
              Vice
      President, Chemistry

            

    

    Schering-Plough
Research Institute

    2015
Galloping Hill Road

    Kenilworth,
New Jersey  07033

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      	 	
              With
      a copy to:

            	
              Director,
      Discovery Collaborations

            

    

    Schering-Plough
Research Institute

    2015
Galloping Hill Road

    Kenilworth,
NJ  07033

    

    
      	
               
      

            	
              2.

            	
              Payments:  In
      consideration of the Services that are performed by AMRI under this
      Agreement, SPRI will pay AMRI at the following [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/] for work conducted pursuant to agreed upon [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/]:

            

    

    

    
      	
               
      

            	
              a)

            	
              Fees:  The
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] rate per FTE is outlined in the
      table below.  When the total number of FTEs employed under this
      Agreement triggers [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] in the
      applicable FTE rate below, then that [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/] shall [/*[CONFIDENTIAL TREATMENT
    REQUESTED]*/].

            

    

    

    
      
        
          
            
              	
                      Number of 

                      FTEs

                    	 	
                      [/*[CONFIDENTIAL

                      TREATMENT

                      REQUESTED]*/]

                      Rate

                      Per FTE

                    	 	
                      Estimated [/*[CONFIDENTIAL

                      TREATMENT REQUESTED]*/]

                      Expenses per [/*[CONFIDENTIAL

                      TREATMENT REQUESTED]*/]

                      per FTE

                    
	
                      [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/]

                    	 	
                      $[/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/]

                    	 	
                      $[/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/]

                    
	
                      [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/]

                    	 	
                      $[/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/]

                    	 	
                      $[/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/]

                    
	
                      [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/]

                    	 	
                      $[/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/]

                    	 	
                      $[/*[CONFIDENTIAL
      TREATMENT
REQUESTED]*/]

                    

            

          

        

      

    

    

    Payment
to AMRI by SPRI shall not be later than [/*[CONFIDENTIAL TREATMENT REQUESTED]*/]
of an appropriately documented and undisputed invoice.  The above FTE
rate may be adjusted [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] by a percentage
that is [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] in the [/*[CONFIDENTIAL
TREATMENT REQUESTED]*/] for the [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] region
from the prior year, as reported by the [/*[CONFIDENTIAL TREATMENT
REQUESTED]*/].  Such [/*[CONFIDENTIAL TREATMENT REQUESTED]*/]
adjustments shall not exceed [/*[CONFIDENTIAL TREATMENT
REQUESTED]*/].

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
            	
              b)

            	
              Reimbursed
      Expenses:  SPRI will reimburse AMRI for [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] reasonable and necessary expenses [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] while [/*[CONFIDENTIAL TREATMENT REQUESTED]*/]
      pursuant to this Agreement and which are in accordance with SPRI’s
      Reimbursement Policy, a copy of which is attached hereto as Appendix 2.  AMRI shall submit
      signed requests with each invoice for reimbursement on AMRI’s letterhead
      or other identifying stationery (“Expense Reports”), accompanied by a
      reasonably detailed list of expenses.  [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] reimbursable expenses shall not [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] an aggregate total of [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/] multiplied by the [/*[CONFIDENTIAL TREATMENT REQUESTED]*/]
      working on SPRI projects without prior authorization from SPRI, such
      authorization shall not be unreasonably delayed or
      withheld.  Reasonable and necessary expenses shall include:
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] used directly in the Projects;
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/], etc.); [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] used directly in the Projects; [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] used in the Projects (upon authorization by SPRI
      to [/*[CONFIDENTIAL TREATMENT REQUESTED]*/]; and, [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] requested by SPRI.  AMRI will not
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/], nor [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/] in the normal course of performing
  Services.

            

    

    

    
      [CONFIDENTIAL
TREATMENT REQUESTED BY AMRI – 03]

    

    

    
      	
              G.

            	
              Assignment:

            

    

    

    
      	
               
      

            	
              Neither
      party shall have the right to assign this Agreement or any of the rights
      or obligations hereunder without the prior written consent of the other
      party, except that either party may assign this Agreement to an affiliate
      without such prior consent.

            

    

    

    
      	
              H.

            	
              Entire
      Agreement:

            

    

    

    
      	
               
      

            	
              1.

            	
              This
      Agreement represents the entire agreement of the parties with respect to
      the subject matter hereof and supersedes all prior understandings and
      agreements with respect thereto.

            

    

    

    
      	
               
      

            	
              2.

            	
              No
      change or modification of the provisions of this Agreement shall be
      effective unless it is in writing and signed by a duly authorized officer
      of AMRI and SPRI.

            

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
      	
              I.

            	
              Project Ownership and
      Retention of Records:

            

    

    

    
      	
               
      

            	
              1.

            	
              Subject to SPRI satisfying its obligations under
      C.3. and F.2., all [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] of
      any kind and [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] supplied to AMRI
      from SPRI or [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] the Services
      performed hereunder shall be the sole and exclusive property of
      SPRI.  Any [/*[CONFIDENTIAL TREATMENT REQUESTED]*/], whether
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] or not that may [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] above described or [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/] shall be the sole and exclusive property of SPRI, and AMRI
      agrees to assign or cause to be assigned all rights thereto to
      SPRI.  AMRI and its employees agree to cooperate with SPRI in
      taking all steps which SPRI believes reasonably necessary or desirable to
      secure its rights on this property at SPRI’s cost.  In
      consideration of the foregoing, SPRI agrees to grant to AMRI
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] to practice any [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] solely generated by AMRI that are specifically
      directed to AMRI’s [/*[CONFIDENTIAL TREATMENT REQUESTED]*/], to the extent
      such technology has [/*[CONFIDENTIAL TREATMENT REQUESTED]*/]; provided,
      however, that such use by AMRI under this [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/] shall not [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] any
      program or product [/*[CONFIDENTIAL TREATMENT
    REQUESTED]*/].

            

    

    

    
      [CONFIDENTIAL
TREATMENT REQUESTED BY AMRI – 04]

    

    

    
      	
               
      

            	
              2.

            	
              During
      the term of this Agreement, AMRI shall maintain all written materials and
      all other data obtained or generated by AMRI in the course of providing
      the Services performed under this Agreement in a secure area reasonably
      protected from fire, theft and destruction.  At the expiration
      or termination of this Agreement, all written materials and other data and
      information obtained or generated by AMRI in the course of providing the
      Services will be retained by AMRI in accordance with Section B.1.j or, at
      SPRI’s option, be (a) delivered to SPRI or its designee in such form as is
      then currently in the possession of AMRI, (b) retained by AMRI for SPRI
      for a period of time mutually agreed upon by the parties, or (c) disposed
      of, at the direction and written request of SPRI, unless such materials
      are otherwise required to be stored or maintained by AMRI as a matter of
      law or regulation.

            

    

    

    
      	
              J.

            	
              Safety and
      Environmental:

            

    

    

    
      In
carrying out its responsibilities under this Agreement, AMRI agrees to assure
that the Services are conducted in compliance with any applicable SPRI protocols
and/or specifications of which AMRI is reasonably advised in a timely manner and
in compliance with all applicable laws, rules, and regulations, including, but
not limited to, the U.S. Food, Drug and Cosmetic Act and the regulations
promulgated pursuant thereto.  Also included is compliance with all
relevant environmental regulations in force at the U.S. Federal, State, and
Local levels.

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      	
              K.

            	
              Miscellaneous:

            

    

    

    
      	
               
      

            	
              1.

            	
              AMRI
      represents and warrants that it will render the Services hereunder in
      accordance with prevailing high professional standards and will make all
      reasonable efforts to produce consistently high levels of accuracy and
      expertise and to meet timetables set forth under this Agreement for
      completion of Services.  AMRI further represents and warrants
      that personnel assigned to perform Services under this Agreement shall
      have the skills necessary to efficiently perform such Services and shall
      produce chemicals, data, and/or reports, as the case may be, in a form and
      of a quality suitable to SPRI and that for each group of five (5) AMRI
      employees providing Services hereunder, at least two (2) employees shall
      have a doctorate degree in the chemistry
field.

            

    

    

    
      	
               
      

            	
              2.

            	
              AMRI
      will endeavor with all reasonable effort to conform to its obligations
      identified herein.  Although no delays or limits beyond AMRI’s reasonable control in
      performing any Projects are expected, if such delays or limits are
      encountered, AMRI will promptly notify SPRI accordingly and AMRI shall use
      all reasonable efforts to eliminate or minimize such delays or
      limits.  SPRI agrees to accommodate any reasonable change in
      timetables as a result of such delays that AMRI cannot reasonably
      eliminate or minimize, provided the Projects have been proceeding to
      SPRI’s satisfaction.

            

    

    

    
      	
               
      

            	
              3.

            	
              AMRI
      will further permit SPRI to audit AMRI’s relevant, non-financial records
      during and after the term of this Agreement, but not more than once per
      calendar year, solely to permit SPRI to confirm that the Services are or
      have been performed in compliance with applicable laws and
      regulations.

            

    

    

    
      	
               
      

            	
              4.

            	
              AMRI
      is an independent company and nothing in this Agreement shall be construed
      to create a partnership, joint venture, or employment relationship between
      the parties.

            

    

    

    
      	
               
      

            	
              5.

            	
              AMRI,
      on behalf of itself and its employees, agents, subcontractors, and
      affiliates agrees not to use the name of SPRI or any of its employees,
      agents, affiliates, or subsidiaries, or reference any of their products,
      in any publicity, advertising, or other publication without SPRI’s prior
      written approval.

            

    

    

    
      	
               
      

            	
              6.

            	
              If
      any provision hereof shall be determined to be invalid or unenforceable,
      such determination shall not affect the validity of the other provisions
      of this Agreement.

            

    

    

    
      	
               
      

            	
              7.

            	
              This
      Agreement shall be governed in accordance with the laws of the State of
      New York.

            

    

    

    
      	
               
      

            	
              8.

            	
              Waiver
      by either party or the failure by either party to claim a breach of any
      provision of this Agreement shall not be deemed to constitute a waiver or
      estoppel with respect to any subsequent breach of any provision
      hereof.

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              9.

            	
              [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] agrees to assume the liability for injury or
      damage caused by [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] provided by
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/], provided such [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] is not caused by [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/], intentional activity, or failure to meet required
      specifications or breach of any applicable federal, state, or local
      law.  [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] to indemnify,
      defend, and hold harmless [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] from
      any and all liability arising out of such [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/] assessed against it.  [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/] agrees to assume the liability for [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] caused by its [/*[CONFIDENTIAL TREATMENT
      REQUESTED]*/], provided such [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] is
      not caused by [/*[CONFIDENTIAL TREATMENT REQUESTED]*/], intentional
      activity, or failure to meet required specifications or breach of any
      applicable federal, state, or local law.  [/*[CONFIDENTIAL
      TREATMENT REQUESTED]*/] agrees to indemnify, defend and hold harmless
      [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] from any and all liability
      arising out of said [/*[CONFIDENTIAL TREATMENT REQUESTED]*/], including
      but not limited to [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] assessed
      against it.

            

    

    

    [CONFIDENTIAL
TREATMENT REQUESTED BY AMRI – 05]

    

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

    
      

      
        
          	
                  Albany
      Molecular Research, Inc.

                	 
      	
                  SCHERING
      CORPORATION,

                
	 
      	 
      	 
      	
                  acting
      through its Schering-Plough

                
	 
      	 
      	 
      	
                  Research
      Institute division

                
	 
      	 
      	 
      	 
      	 
      
	
                  By:

                	
                  /s/ Eric W. Smart

                	 
      	
                  By:

                	
                  /s/ Cecil B. Pickett

                
	 
      	 
      	 
      	 
      	
                  an
      authorized representative of

                
	 
      	 
      	 
      	 
      	
                  Schering-Plough
      Research Institute

                
	 
      	 
      	 
      	 
      	 
      
	
                  Name: 

                	
                  Eric W. Smart

                	 
      	
                  Name: 

                	
                  Cecil B. Pickett, Ph.D.

                
	 
      	 
      	 
      	 
      	 
      
	
                  Title:

                	
                  VP Business Development

                	 
      	
                  Title:

                	
                  President, SPRI

                
	 
      	 
      	 
      	 
      	 
      
	
                  Date:

                	
                  January 10, 2006

                	 
      	
                  Date:

                	
                  January 13,
2006

                

        

      

       

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    APPENDIX
1

    

    FORM OF
RESEARCH PROJECT APPENDIX

    

    This
Research Project Appendix is entered into by Schering Corporation, acting
through its Schering-Plough Research Institute division (“SPRI”) and Albany
Molecular Research, Inc. (“AMRI”) as of the Effective Date of the Agreement
(defined below).  This Research Project Appendix is entered into
pursuant to and is subject to the terms of  that certain
Research/Manufacturing Agreement dated _____________ (the “Agreement”) by and
between SPRI and AMRI.

     

    This
Research Project Appendix sets forth the Services to be performed by AMRI
(including deliverables to be provided to SPRI in connection therewith), the
timing for the Project, the cost and payment schedule, and any individuals
designated to have management responsibility for the Project or otherwise
required to perform the Services.  NO TERM, CONDITION OR OTHER
PROVISION OF THIS RESEARCH PROJECT APPENDIX (INCLUDING ANY ATTACHMENTS) SHALL
SUPERSEDE ANY TERM, CONDITION OR OTHER PROVISION OF THE AGREEMENT, AND WITH
RESPECT TO ANY INCONSISTENCY, CONFLICT OR AMBIGUITY, THE AGREEMENT, INCLUDING
APPENDIX 2, SHALL CONTROL.  ANY PROVISION OF THIS RESEARCH PROJECT
APPENDIX (INCLUDING ANY ATTACHMENTS) WHICH CONFLICTS WITH ANY TERM OF THE
AGREEMENT IS VOID AND OF NO FORCE OR EFFECT WHATSOEVER, NOTWITHSTANDING THAT
THIS RESEARCH PROJECT APPENDIX MAY BE EXECUTED AND DELIVERED AFTER THE EXECUTION
AND DELIVERY OF THE AGREEMENT.  Subject to the foregoing, this
Research Project Appendix is incorporated into the Agreement and expressly made
a part thereof.

     

    All
initially capitalized terms used in this Appendix but not defined in this
Appendix shall have the meanings given in the Agreement.

    

    
      	
              Purpose:

            	
              AMRI
      will provide up [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] Full-Time
      Equivalent (“FTE”) scientists (to the extent requested by SPRI) for
      medicinal chemistry services and synthesis services of compounds as
      described below or as may be amended from time to time in subsequent
      writings signed by both parties.  A detailed description of the
      Project and Services is set forth in Attachment 1, which is incorporated
      herein by reference.

            

    

    

    [CONFIDENTIAL
TREATMENT REQUESTED BY AMRI – 06]

    

    
      	
              Term:

            	
              Appendix
      1 is in effect beginning on the Effective Date of the Agreement and
      continues in effect until December 31, 2006 or earlier terminated by
      either party pursuant to Article E of the
  Agreement.

            

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    Additional
FTE scientists or the use of other part-time support, such as computational
services or non-routine analytical services shall be subject to separate written
agreement.

    

    AMRI
personnel resources:

    

    AMRI
shall make available FTE scientists as follows:

    

    [/*[CONFIDENTIAL
TREATMENT REQUESTED]*/] FTEs [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] on the
Effective Date of the Agreement.

    

    [/*[CONFIDENTIAL
TREATMENT REQUESTED]*/] FTEs on or about February 1, 2006.

    

    [CONFIDENTIAL
TREATMENT REQUESTED BY AMRI – 07]

     

    
      	
              I.

            	
              AMRI
      FTE Assignments and Deliverables

            

    

     

    
      	
               
      

            	
              A.

            	
              AMRI
      shall prepare compounds for biological screening and other compounds,
      scaffolds, and reference compounds as SPRI directs AMRI during the term of
      this Research Project Appendix.

            

    

    

    
      	
               
      

            	
              B.

            	
              AMRI
      shall provide Certificates of Analysis for all compounds, including at
      least one proton NMR, mass spectrum, and other characterization as may be
      required and mutually agreed to by the parties. AMRI shall conduct
      analyses on the compounds pursuant to A) above utilizing appropriate
      chromatographic and spectroscopic
techniques.

            

    

    

    
      	
               
      

            	
              C.

            	
              AMRI
      shall prepare written reports on a periodic basis to SPRI detailing the
      progress of the research hereunder.

            

    

    

    
      	
              II. 

            	
              SPRI
      Resources and Materials

            

    

    

    SPRI
shall provide to AMRI compound formulae, samples, synthetic methodology,
spectral data, and literature references as SPRI deems appropriate and if
available.  SPRI further reserves the right to supply AMRI with raw
materials and reagents.

    

    
      	
              III. 

            	
              Invoicing
      and Payment

            

    

    

    AMRI
shall invoice SPRI [/*[CONFIDENTIAL TREATMENT REQUESTED]*/] for [/*[CONFIDENTIAL
TREATMENT REQUESTED]*/] devoted to this Project at the rate specified in Section
F.2.a of the Agreement, and SPRI shall pay each invoice as provided for pursuant
to Section F.2 of the Agreement.

    

    [CONFIDENTIAL
TREATMENT REQUESTED BY AMRI – 08]

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    All terms
and conditions of the Agreement shall remain in full force and
effect.

    

    NO WORK
SHALL BE PERFORMED HEREUNDER UNTIL BOTH PARTIES HAVE EXECUTED THIS RESEARCH
PROJECT APPENDIX.  VERBAL AUTHORIZATION AND/OR INSTRUCTIONS TO
COMMENCE WORK (INCLUDING ANY SERVICES) SHALL BE OF NO EFFECT, AND ANY WORK OR
SERVICES PERFORMED BY AMRI PRIOR TO EXECUTION OF THIS RESEARCH PROJECT APPENDIX
BY BOTH PARTIES SHALL BE AT AMRI’S SOLE RISK AND EXPENSE.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    In
Witness Whereof, the parties have duly executed and delivered to each other this
Appendix 1.

    

    
      
        	
                Albany
      Molecular Research, Inc.

              	 
      	
                SCHERING
      CORPORATION,

              
	 
      	 
      	 
      	
                acting
      through its Schering-Plough

              
	 
      	 
      	 
      	
                Research
      Institute division

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Eric W. Smart

              	 
      	
                By:

              	
                /s/ Cecil B. Pickett

              
	 
      	 
      	 
      	 
      	
                an
      authorized representative of

              
	 
      	 
      	 
      	 
      	
                Schering-Plough
      Research Institute

              
	 
      	 
      	 
      	 
      	 
      
	
                Name: 

              	
                Eric W. Smart

              	 
      	
                Name: 

              	
                Cecil B. Pickett, Ph.D.

              
	 
      	 
      	 
      	 
      	 
      
	
                Title:

              	
                VP Business Development

              	 
      	
                Title:

              	
                President, SPRI

              
	 
      	 
      	 
      	 
      	 
      
	
                Date:

              	
                January 10, 2006

              	 
      	
                Date:

              	
                January 13,
2006

              

      

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    APPENDIX 2

    

    REIMBURSEMENT POLICY

    

    In accordance with SPRI’s standard policies and
procedures, the following are types of expenses for which SPRI will not
reimburse, unless expressly agreed to in a prior writing by the
parties:

    

    
      	
              -

            	
              Commuting expenses to and/or from your place of
      business or residence (excluding transportation costs to and/or from the
      airport for SPRI-requested
business)

            

    

    

    
      	
              -

            	
              Add-on costs with respect to outside services,
      including but not limited to mark-up for the work product of outside
      professionals, including but not limited to
    freelancers

            

    

    

    
      	
              -

            	
              Meals (except during travel periods in connection
      with the services rendered to SPRI).  For this exception,
      reasonableness shall be measured at US rates of $50 for dinner and $25
      each for breakfast and lunch, tax and
      tip included in all cases

            

    

    

    
      	
              -

            	
              Administrative and/or overhead
      percentages

            

    

     

    
      	
              -

            	
              Agency presentations for new
      business

            

    

     

    
      	
              -

            	
              Business-class air
      travel.  Business-class air travel is only reimbursable if
      approved in writing in advance by the area Vice
President

            

    

    

    
      The following types of expenses are not
reimbursable:

       

    

    
      	
              -

            	
              First-class air
  travel

            

    

     

    
      	
              -

            	
              Mark-up on any out-of-pocket
      expenses

            

    

     

    
      	
              -

            	
              Travel
time

            

    

     

    
      	
              -

            	
              Gifts to SPRI’s
      employees

            

    

     

    
      	
              -

            	
              Entertainment of SPRI’s
      employees

            

    

     

    This list
sets forth the major items for which SPRI will not reimburse you and is meant to
be merely illustrative and not exhaustive. All your expenses shall be reviewed
with respect to the reasonableness of such expenses.

    
      
         

      

      
        16

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