Exhibit 10.1


 








EMPLOYMENT AGREEMENT


 


This EMPLOYMENT AGREEMENT
(the “Agreement”) is entered into on this 6th day of June, 2014, to be effective as of June 1, 2014
(the “Effective Date”), by and between ERBA Diagnostics, Inc., a Delaware corporation (the “Company”),
and Prakash Patel (the “Executive”).


 


RECITALS


 


WHEREAS, the
Company wishes to employ the Executive as Controller of the Company upon the terms and subject to the conditions set forth in this
Agreement; and


 


WHEREAS, the
Executive is willing to accept such employment on such terms and conditions.


 


NOW, THEREFORE,
in consideration of the premises and of the mutual promises, representations and covenants herein contained, the Company and the
Executive hereby agree as follows:


 


AGREEMENT


 


1.            Scope
of Employment. The Company hereby agrees to employ the Executive, and the Executive hereby agrees to be employed by the
Company, as Controller of the Company. The Executive shall have the customary responsibilities and authority of such position and
shall perform such duties consistent with the responsibilities of such position as may be determined and assigned to the Executive
by the Chief Executive Officer, the Chief Financial Officer, the Executive Chairman of the Company’s Board of Directors (the
“Board”) and the Audit Committee of the Board (the “Audit Committee”). The Executive shall
devote his best efforts and his full business time, attention and energies to Company affairs as are necessary to fully perform
his duties for the Company.


 


2.            At-Will
Employment. The Executive acknowledges and agrees that there is no fixed duration for the Executive’s employment
as Controller of the Company and that the Executive’s employment as Controller of the Company is “at-will” and
may be terminated by the Company in accordance with Section 5. Nothing in this Agreement should be construed as creating
a contract of employment or in any way altering the Executive’s status as an “at-will” employee.


 


3.            Compensation.


 


(a)          Base
Salary. The Company agrees to pay the Executive, and the Executive agrees to accept, in payment for services to be rendered
by the Executive hereunder, an aggregate base salary of $105,000 per annum (the “Base Salary”). The Base Salary
shall be paid in approximately equal installments in accordance with the Company’s customary payroll practices. For all purposes
under this Agreement, the term “Base Salary” shall refer to the Executive’s base salary as in effect from
time to time in accordance with this Section 3(a).


 




    	 



    	 



    

 


(b)          Annual
Bonus. In addition to the Base Salary, the Executive shall also be eligible to receive an annual cash bonus of up to fifteen
percent (15%) of the Base Salary (the “Annual Bonus”) upon the achievement of Company-wide financial performance
targets and personal performance goals as jointly determined by the Chief Executive Officer and the Executive Chairman of the Board.
The Company shall pay the Annual Bonus, if any, in accordance with the terms of the particular bonus, but in no event later than
ninety (90) days after the end of the fiscal year to which the Annual Bonus relates.


 


(c)          Equity
Compensation. The Executive shall be eligible to receive any grants of awards by the Company under and in accordance with
the Company’s equity incentive compensation plans, subject to and in compliance with all applicable laws, rules and regulations,
including, without limitation, the Delaware General Corporation Law. Without limiting the generality of the foregoing, the Company
hereby agrees that it will cause its duly authorized representative to execute that certain Nonqualified Stock Option Agreement,
dated as of the date hereof, the form of which is attached hereto as Exhibit A, pursuant to which the Company shall grant
to the Executive a nonqualified stock option under the Company’s 2009 Equity Incentive Plan to purchase 10,000 shares of
the Company’s common stock, at an exercise price per share equal to the closing price of a share of the Company’s common
stock on the NYSE MKT on the date hereof, which options shall fully vest after three (3) years after the Effective Date, and which
options shall expire on the tenth anniversary of the Effective Date.


 


4.            Reimbursement
of Expenses, Fringe Benefits, Etc.


 


(a)          Business
Expenses. The Company shall pay, or promptly reimburse the Executive for, all reasonable expenses incurred by the Executive
in performing his duties for the Company upon the presentation of reasonably itemized statements of such expenses in accordance
with the Company’s policies and procedures now in effect or as such policies and procedures may be modified from time to
time.


 


(b)          Vacation;
Illness. The Executive shall be entitled to paid vacation, holidays, and sick leave benefits in accordance with the Company’s
policies.


 


(c)          Welfare,
Pension and Incentive Benefit Plans. The Executive shall be entitled to participate in and be covered under all the welfare
benefit plans or programs maintained by the Company from time to time, including, without limitation, all medical, hospitalization,
dental, disability, accidental death and dismemberment and travel accident insurance plans and programs, in each case, subject
to and in compliance with the terms and conditions of such plans and programs. In addition, the Executive shall be eligible to
participate in and be covered under all pension, retirement, savings and other employee benefit and perquisite plans and programs
maintained from time to time by the Company, in each case, subject to and in compliance with the terms and conditions of such plans
and programs.


 




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5.            Termination.
This Agreement, and the Executive’s employment hereunder, may be terminated under the circumstances set forth below.


 


(a)          Death.
This Agreement, and the Executive’s employment hereunder, shall terminate upon the Executive’s death.


 


(b)          Disability.
If, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been substantially
unable to perform his duties hereunder for an entire period in excess of one hundred twenty (120) days in any twelve (12) month
period despite any reasonable accommodation available from the Company, then the Company shall have the right to terminate this
Agreement, and the Executive’s employment hereunder, for “Disability.” The Disability of the Executive
shall be determined by a medical doctor approved by the Company. The Executive shall submit to a reasonable number of examinations
by the medical doctor making the determination of Disability, and the Executive hereby authorizes the disclosure and release to
the medical doctor of all supporting medical records.


 


(c)          For
Any Reason or For No Reason. Each of the Executive and the Company shall have the right to terminate this Agreement, and
the Executive’s employment hereunder, for any reason or for no reason, by providing the other with at least sixty (60) days
prior written notice. Only if the Executive delivers such notice, then the Company may waive its right to such notice period and
cause the effective date of termination of this Agreement, and Executive’s employment hereunder, to be a date that is earlier
than the date specified by the Executive in such written notice, and the Company shall not be obligated to provide the Executive
any compensation or benefits in connection with such waiver of such notice period. In any event, regardless of which party delivers
such notice, during any such notice period, the Company may bar the Executive from the premises of the Company and otherwise instruct
the Executive to not perform the Executive’s duties with the Company.


 


(d)          By
the Company with Cause. The Company shall have the right to terminate this Agreement, and the Executive’s employment
hereunder, for Cause (as hereinafter defined). For purposes of this Agreement, the Company shall have “Cause”
to terminate this Agreement, and the Executive’s employment hereunder:


 


(i)          upon
the Indictment (as hereinafter defined) or conviction of, or plea of nolo contendere by, the Executive for (A) a felony or (B)
any misdemeanor involving moral turpitude, deceit, dishonesty or fraud;


 


(ii)         upon
a material violation of the policies and procedures of the Company, including, without limitation, the Company’s policies
with respect to insider trading and sexual harassment, in each case, as in effect from time to time;


 


(iii)        upon
the Executive’s gross negligence, willful misconduct or insubordination with respect to the Company or any Affiliate (as
hereinafter defined) of the Company; or


 


(iv)        upon
a material breach by the Executive of any of the Executive’s material obligations under this Agreement.


 




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For purposes of this Agreement, the term
“Indictment” shall mean an indictment, probable cause hearing or any other procedure pursuant to which an initial
determination of probable or reasonable cause with respect to such offense is made. For purposes of this Agreement, the term “Affiliate,”
when used with respect to a specified person or entity, means any other person or entity in control of, controlled by or under
common control with such specified person or entity.         


 


In the event a final determination is made
by a court of competent jurisdiction that the Company’s termination of this Agreement, and the Executive’s employment
hereunder, under this Section 5(d), does not meet the definition of Cause, then this Agreement, and the Executive’s
employment hereunder, will be deemed to have been terminated by the Company without Cause.


 


The Company shall provide the Executive
with written notice describing any event or condition that gives the Company Cause for terminating this Agreement and the Executive’s
employment hereunder. Only in the case of conduct described in clause (iv) above, Cause will not be considered to exist unless
the Executive is given thirty (30) days after the date of such written notice to cure such breach to the reasonable satisfaction
of the Board. If the Executive cures such breach to the reasonable satisfaction of the Board within such thirty (30) day period,
then the Company shall not be entitled to terminate this Agreement, and the Executive’s employment hereunder, for Cause.



 


6.            Termination
Procedure.


 


(a)          Notice
of Termination. Any termination of this Agreement, and the Executive’s employment hereunder, whether by the Company
or by the Executive, except as a result of the Executive’s death, shall be communicated by written notice of termination
to the other party hereto in accordance with Section 15. Such notice of termination shall state the specific termination
provision in this Agreement relied upon in terminating this Agreement, and the Executive’s employment hereunder, and the
notice of termination shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination.


 


(b)          Date
of Termination. The effective date of any termination of this Agreement, and the Executive’s employment hereunder,
whether by the Company or by the Executive, shall be, in the event of the Executive’s death, the date of his death, or, in
the event of termination for any other reason, the date of termination set forth in such notice of termination, subject to any
applicable notice or cure periods described in Section 5.


 


7.            Effects
of Termination.


 


(a)          Termination
Compensation and Benefits. If this Agreement, and the Executive’s employment hereunder, is terminated, then: (i)
the Company shall pay to the Executive promptly after the effective date of termination that portion of the Executive’s Base
Salary which has been fully earned but not yet paid to the Executive and which is not subject to a deferral election or deferral
requirement that has become irrevocable; and (ii) all unvested awards by the Company under the Company’s equity incentive
compensation plans and other equity compensation in the Company granted to the Executive shall be forfeited.


 




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(b)          Acknowledgements.
The Executive acknowledges and agrees that the compensation and benefits set forth in this Section 7 constitute liquidated
damages upon the termination of this Agreement, and the Executive’s employment hereunder, and the parties hereto have agreed
that such compensation and benefits are reasonable. The Executive further acknowledges and agrees that he shall have no other remedies
in connection with, or as a result of, any such termination. The Company’s obligations under this Section 7 shall
survive the termination of this Agreement.


 


8.            Restrictive
Covenants.


 


(a)          Executive
Acknowledgements. The Executive acknowledges and agrees that: (i) as a part of the Executive’s employment hereunder,
the Executive shall be afforded access to Confidential Information (as hereinafter defined); (ii) public disclosure or utilization
of such Confidential Information in violation of this Agreement could have a material and adverse impact on the Company and its
business; and (iii) accordingly, the non-disclosure provisions of this Agreement are reasonable and necessary to prevent the improper
use or disclosure of Confidential Information. The Executive further acknowledges and agrees that: (i) that the Company’s
business is international in scope and its products and services are marketed throughout the world; (ii) the Company and its products
and services compete with other businesses and products and services located throughout the world; (iii) the Company provides resources
and training to the Company’s employees (including, without limitation, the Executive) related to the Company’s products
and services and processes that are available only to the Company’s employees and cannot be acquired outside of the Company;
and (iv) accordingly, the non-solicitation, anti-raiding and related restrictive provisions of this Agreement are reasonable and
necessary to protect, among other things, the Company’s goodwill with its customer base, its investment in its employees
and its interests in its Confidential Information.


 


(b)          Non-Disclosure
Obligation. Without the prior written consent of the Company, except as may be required by applicable law, rule or regulation,
the Executive will not, at any time, either during or after his employment with the Company, directly or indirectly, divulge or
disclose to any person or entity, including, without limitation, any future employer, or use for the Executive’s own or others’
benefit or gain, any financial information, prospects, customers, tenants, suppliers, clients, sources of leads, methods of doing
business, intellectual property, plans, products, data, results of tests or any other trade secrets or confidential materials or
like information of the Company, including, without limitation, any and all information and instructions, technical or otherwise,
prepared or issued for the use of the Company (collectively, the “Confidential Information”), it being the intent
of the Company, with which intent the Executive hereby agrees, to restrict the Executive from dissemination or using any like information
that is not readily available to the general public.


 


(c)          Information
is Property of the Company. All books, records, accounts, customer, client and other lists, customer and client street
and e-mail addresses and information (whether in written form or stored in any computer medium) relating in any manner to the business,
operations, or prospects of the Company, whether prepared by the Executive or otherwise coming into the Executive’s possession,
shall be the exclusive property of the Company and shall be returned immediately to the Company upon the termination of the Executive’s
employment with the Company, or at the Company’s request at any time. Upon the termination of the Executive’s employment
with the Company, the Executive shall immediately deliver to the Company all lists, books, records, schedules, data and other information
(including all copies thereof) of every kind relating to or connected with the Company and its activities, business and customers.


 




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(d)          Covenant
Not to Solicit. The Executive agrees that, during the period that the Executive is employed by the Company hereunder and
for a period of one (1) year thereafter, (such one (1) year period, the “Post-Employment Restricted Period”),
the Executive shall not, without the prior written consent of the Company, directly or indirectly, interfere with or disrupt or
diminish or attempt to disrupt or diminish, or take any action that could reasonably be expected to disrupt or diminish, any past,
present or prospective relationship, contractual or otherwise, between the Company and any customer, supplier, consultant, advisor,
employee or independent contractor of the Company.


 


(e)          No
Raiding. The Executive agrees that, during the period that the Executive is employed by the Company hereunder and throughout
the Post-Employment Restricted Period, the Executive shall not, without the prior written consent of the Company, directly or indirectly,
solicit, recruit, employ or otherwise engage as an employee, independent contractor, consultant or advisor or attempt to solicit,
recruit, employ or otherwise engage as an employee, independent contractor, consultant or advisor, any person who is or was an
employee, independent contractor, consultant or advisor of or to the Company at any time during the Executive’s last twelve
(12) months of employment with the Company, or in any manner induce or attempt to induce any person who is or was during the Executive’s
last twelve (12) months of employment with the Company an employee, independent contractor, consultant or advisor of or to the
Company to terminate that person’s relationship with the Company.


 


(f)          Non-Disparagement.
The Executive agrees that he will not, directly or indirectly, disparage the Company or disseminate, or cause or permit others
to disseminate, negative statements regarding the Company or any employee, officer, director or agent of the Company. The Company
agrees that it will not, directly or indirectly, disparage the Executive or disseminate, or cause or permit others to disseminate,
negative statements regarding the Executive. Notwithstanding the foregoing, neither the Executive nor the Company is barred or
otherwise restricted from complying with applicable laws, rules and regulations.


 


(g)          Survival.
The obligations contained in this Section 8 shall survive the termination of this Agreement.


 


9.            Enforcement
and Remedies.


 


(a)          Enforcement.
It is the desire and intent of the Company and the Executive that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws, rules, regulations and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, although the Executive and the Company consider the provisions of this Agreement to be reasonable for the purpose
of preserving and protecting the legitimate interests of the Company, if any particular provision of this Agreement shall be adjudicated
to be invalid or unenforceable, such provision shall be deemed amended to delete the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such provision in the particular jurisdiction in which
such adjudication is made. Additionally, it is expressly understood and agreed that, although the Company and the Executive consider
the provisions contained in this Agreement to be reasonable, if a final determination is made by a court of competent jurisdiction
that the time or territory or any other restriction contained in this Agreement, including, without limitation, in Section 8,
is unenforceable against the Executive, then the provisions of this Agreement shall be deemed amended to apply as to such maximum
time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable.


 




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(b)          Remedies.
The Company and the Executive acknowledge that the Company’s damages at law would be an inadequate remedy for the breach
or threatened breach by the Executive of any provision of Section 8. Accordingly, the Company and the Executive agree, in
the event of any such breach or threatened breach, that the Company shall be entitled to temporary and permanent injunctive or
other equitable relief restraining the Executive from such breach or threatened breach, as the Company may deem appropriate, without
the accounting of all earnings, profits, and other benefits arising from any such breach or threatened breach. The rights of the
Company under this paragraph shall be cumulative and in addition to any other rights or remedies available to the Company hereunder
or at law or in equity.


 


10.           Withholding.
The Company shall withhold and deduct such amounts from any compensation or other benefits payable to the Executive under this
Agreement on account of payroll and other taxes and similar items as may be required by applicable law, rule or regulation.


 


11.           Successors;
Binding Agreement. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their
respective heirs, successors, permitted assigns and personal representatives.


 


(a)          The
Company’s Successors. The rights or obligations of the Company under this Agreement may be assigned or transferred,
in whole or in part, to any successor in interest of the Company or its business. As used in this Agreement, “Company”
shall mean the Company as herein before defined and any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the equity, business and/or assets of the Company.


 


(b)          The
Executive’s Successors. No rights or obligations of the Executive under this Agreement may be assigned or transferred,
other than his rights to payments or benefits hereunder, which may be transferred only by will or the laws of descent and distribution.
Upon the Executive’s death, this Agreement and all rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive’s beneficiary or beneficiaries, personal or legal representatives or estate, to the extent
any such person succeeds to the Executive’s interests under this Agreement. The Executive shall be entitled to select and
change a beneficiary or beneficiaries to receive any benefit or compensation payable hereunder following the Executive’s
death by giving the Company written notice thereof. In the event of the Executive’s death or a judicial determination of
the Executive’s incompetence, references in this Agreement to the “Executive” shall be deemed, where appropriate,
to refer to the Executive’s beneficiary(ies), estate or other legal representative(s). If the Executive should die following
the effective date of termination of his employment while any amounts would still be payable to the Executive hereunder if he had
continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement
to such person or persons so appointed in writing by the Executive, or otherwise to the Executive’s legal representatives
or estate.


 




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12.           Indemnity.
The Company shall, to the fullest extent permitted under the Delaware General Corporation Law, indemnify and hold harmless the
Executive from and against any and all liabilities, costs and expenses, including, but not limited to, amounts paid in satisfaction
of judgments, in settlement or as fines or penalties, and counsel fees and disbursements, reasonably incurred by the Executive
in connection with the defense or disposition of, or otherwise in connection with or resulting from, any action, suit or other
proceeding, whether civil, criminal, administrative or investigative, before any court or administrative or legislative or investigative
body, in which the Executive may be or may have been involved as a party or otherwise or with which the Executive may be or may
have been threatened, while in office or thereafter, by reason of the Executive’s being an executive officer of the Company
or by reason of any action taken or not taken in such capacity, except with respect to any matter as to which the Executive shall
have been finally adjudicated by a court of competent jurisdiction not to have acted in good faith or in a manner he reasonably
believed to be in or not opposed to the best interests of the Company or, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful.


 


13.           Entire
Agreement. This Agreement contains the entire understanding between the Company and the Executive and supersedes any and
all other oral and written agreements or understandings between them.


 


14.           Controlling
Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the
State of Florida, without regard to its conflicts of law principles. Each of the Company and the Executive unconditionally and
irrevocably agrees that the exclusive forum and venue for any action, suit or proceeding shall be in Miami-Dade County, Florida,
and each consents to submit to the exclusive jurisdiction, including, without limitation, personal jurisdiction, and forum and
venue of the Circuit Courts of the State of Florida or the United States District Court for the Southern District of Florida, in
each case, located in Miami-Dade County, Florida.


 


15.           Notice.
All notices or other communications that are required or permitted hereunder shall be in writing and delivered personally, or sent
by nationally-recognized, overnight courier or by registered or certified mail, return receipt requested and postage prepaid, addressed
as follows:


 


	If to the Company, then to:	ERBA Diagnostics, Inc.
	 	14100 NW 57th Court
	 	Miami Lakes, FL  33014
	 	Attention: Executive Chairman


 




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	with a copy to:	Stearns Weaver Miller Weissler
	 	Alhadeff & Sitterson, P.A.
	 	150 West Flagler Street, Suite 2200
	 	Miami, FL  33130
	 	Attention: David Seifer, Esq.
	 	 
	If to the Executive, then to:	Prakash Patel
	 	14100 NW 57th Court
	 	Miami Lakes, FL 33014
	 	 
	with a copy to:	___________________
	 	___________________
	 	___________________
	 	___________________







 


or to such other address as either party
may furnish to the other in writing in accordance herewith. All such notices and other communications shall be deemed to have been
received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of delivery by nationally-recognized,
overnight courier, on the first business day immediately following dispatch and (iii) in the case of mailing as described above,
on the third business day following such mailing.


 


16.           Amendment
and Waiver.  No provision of this Agreement may be amended, modified or canceled unless such amendment, modification
or cancellation is agreed to in a writing signed by the Executive and by a duly authorized officer of the Company, and no provision
of this Agreement may be waived unless such waiver is set forth in a writing signed by the party to be charged. No waiver by either
party hereto at any time of any breach by the other party hereto of any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time.


 


17.           Survival
of Rights and Obligations. The respective rights and obligations of the Executive and the Company set forth in this Agreement
shall survive the termination of this Agreement to the extent necessary for the intended preservation of such rights and obligations.


 


18.           Validity.
If any provision of this Agreement shall for any reason be finally held illegal, invalid or unenforceable by a court or agency
of competent jurisdiction, such provision shall be modified by such court or the parties, as the case may be, so as to cause such
provision to be legal, valid and enforceable to the maximum extent permitted by law (and to the extent modified, it shall be modified
so as to reflect, to the extent possible, the intent of the parties) and shall in no way affect or impair the legality, validity
or enforceability of the remaining provisions of this Agreement, which shall remain in full force and effect, and this Agreement
shall be interpreted as if such illegal, invalid or unenforceable provision was not contained in this Agreement.


 




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19.           Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together
will constitute one and the same instrument.


 


20.           Headings.
The section and paragraph headings in this Agreement are for convenience of reference only and in no way define, limit or describe
the scope of this Agreement or the intent of any provision hereof.


 


[ SIGNATURES ON FOLLOWING PAGE ]


 




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IN WITNESS WHEREOF, each
of the parties hereto has duly executed this Agreement as of the date and year first above written to be effective as of the Effective
Date.


 


	 	THE COMPANY:
	 	 
	 	ERBA Diagnostics, Inc.,
	 	a Delaware corporation
	 	 
	 	By:	/s/ Suresh Vazirani
	 	Name: Suresh Vazirani
	 	Title: Executive Chairman
	 	 
	 	THE EXECUTIVE:
	 	 
	 	/s/ Prakash Patel
	 	Prakash Patel


 




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EXHIBIT A


 


FORM OF NONQUALIFIED STOCK OPTION
AGREEMENT


 


ERBA DIAGNOSTICS, INC.


Nonqualified Stock Option Award Agreement


(Employee)


 


1.          Grant
of Stock Option. In accordance with and subject to the terms and conditions of (a) the ERBA Diagnostics, Inc. 2009 Equity Incentive
Plan, as it may be amended from time to time (the “Plan”), a copy of which is attached hereto as Exhibit
A, and (b) this Nonqualified Stock Option Award Agreement (the “Award Agreement”), ERBA Diagnostics, Inc.,
a Delaware corporation (the “Company”), grants to the optionee identified on Schedule 1 attached hereto
(the “Optionee”) a nonqualified stock option (the “Stock Option”) to purchase the number
of shares (the “Shares”) of the Company’s common stock, par value $0.01 per share, set forth on Schedule
1, at the per Share exercise price set forth on Schedule 1.


 


2.          Acceptance
by Optionee. The exercise of the Stock Option, or any portion thereof, is conditioned upon acceptance by the Optionee of the
terms and conditions of this Award Agreement, as evidenced by the Optionee’s execution of Schedule 1, and the delivery
to the Company of a copy of Schedule 1 which has been executed by the Optionee.


 


3.          Vesting
of Stock Option. The Stock Option shall become exercisable in accordance with the vesting schedule set forth on Schedule
1. If the Optionee’s employment agreement with the Company, dated effective as of June 1, 2014 (the “Employment
Agreement”), and the Executive’s employment thereunder, is terminated for any reason whatsoever (including, without
limitation, by reason of the Optionee’s death or Disability, by the Company with Cause or for any reason or for no reason,
or by the Optionee for any reason or for no reason (each of the foregoing terms, as defined in the Employment Agreement)) prior
to the date on which the Stock Option, or any portion thereof, becomes vested, then: (a) the non-vested portion of the Stock Option
will thereupon automatically terminate and be void and will not become exercisable; and (b) the vested portion of the Stock Option
will survive and will be exercisable until the earlier of the Expiration Date and the date which is thirty (30) days after the
effective date of termination of the Employment Agreement and the Optionee’s employment thereunder, and, upon the earlier
to occur of the foregoing, the vested portion of the Stock Option will automatically terminate and be void and will not be exercisable.


 


4.          Expiration
of Stock Option. The Stock Option shall expire on the expiration date set forth on Schedule 1 (the “Expiration
Date”), and may not be exercised after such date.


 




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5.          Procedure
for Exercise. The Stock Option may be exercised for the number of Shares specified in a written notice which has been executed
by the Optionee and delivered to the Company at least ten (10) days prior to the date on which purchase is requested, accompanied
by full payment for the Shares with respect to which the Stock Option is being exercised, in the manner and subject to the terms
and conditions set forth in the Plan. Notwithstanding the foregoing, the Stock Option may not be exercised as to less than ten
(10) Shares at any time or, if less than ten (10) Shares, the number of Shares subject to the Stock Option. If any applicable law,
rule or regulation requires the Company to take any action with respect to the Shares specified in such notice or if any action
remains to be taken under the Certificate of Incorporation or Bylaws of the Company, as they may be amended from time to time,
to effect due issuance of the Shares, then the Company shall take such action and the day for delivery of such Shares shall be
extended for the period necessary to take such action. Neither the Optionee nor any other Person entitled to exercise the Stock
Option, if any, shall be, or have any rights or privileges of, a stockholder of the Company in respect of any of the Shares issuable
upon exercise of the Stock Option, unless and until the Shares are issued to the Optionee by the Company.


 


6.          No
Right to Employment. Neither the grant of the Stock Option nor the issuance of any Shares pursuant to the Stock Option shall
give the Optionee any right to be employed or retained in the employ of the Company. Neither the grant of the Stock Option nor
the issuance of any Shares pursuant to the Stock Option shall affect the right of the Company to discharge or discipline the Optionee
or the right of the Optionee to terminate his or her employment.


 


7.          Return
of Economic Value. If the Optionee’s employment with the Company or its subsidiaries ceases by reason of termination
by the Company “with cause” (as “with cause” may be determined under the procedures established by the
Committee for purposes of the Plan), then the Committee may require the Optionee to return to the Company the economic value of
the Stock Option, or any portion thereof, which was realized or obtained by the Optionee at any time during the period beginning
on the date which is twelve (12) months prior to the date of such cessation of the Optionee’s employment with the Company
or its subsidiaries. If the Optionee’s employment with the Company or its subsidiaries ceases for any reason whatsoever and
if, within one (1) year after such cessation thereof, the Optionee accepts employment with any competitor of, or otherwise engages
in competition with, the Company or its subsidiaries, then the Committee may require the Optionee to return to the Company the
economic value of the Stock Option, or any portion thereof, which was realized or obtained by the Optionee at any time during the
period beginning on the date which is twelve (12) months prior to the date of the Optionee’s cessation of employment with
the Company or its subsidiaries.


 


8.          Representations
as to Purchase of Shares. As a condition of the Company’s obligation to issue Shares upon exercise of the Stock Option,
if requested by the Company, then the Optionee shall, concurrently with the delivery of the stock certificate representing the
Shares so purchased, give such written assurances to the Company, in the form and substance that the Company’s counsel reasonably
requests, to the effect that the Optionee is acquiring the Shares for investment and without any present intention of reselling
or redistributing the same in violation of any applicable law, rule or regulation. If the Company elects to register, or has registered,
the Shares under the Securities Act of 1933, as amended, and any applicable state laws, rules and regulations, then the issuance
of such Shares shall not be subject to the aforementioned conditions contained in this Section 8.


 




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9.          Compliance
with Applicable Law. The issuance of the Shares pursuant to the exercise of this Stock Option is subject to compliance with
all applicable laws, rules and regulations, including, without limitation, laws, rules and regulations governing withholding from
employees and nonresident aliens for income tax purposes.


 


IN WITNESS WHEREOF, the Company has caused
this Award Agreement to be executed as of the date of grant set forth on Schedule 1.


 


	 	ERBA Diagnostics, Inc.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 


 




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Schedule 1


to


Nonqualified Stock Option Award Agreement


(Employee)


 


	Name of Optionee:	______________
	Number of Shares:	______________
	Exercise Price Per Share:	______________
	Date of Grant:	______________
	Expiration Date:	______________
	Vesting Schedule:	______________


 


The undersigned agrees to the terms and
conditions of the Nonqualified Stock Option Award Agreement of which this Schedule 1 is a part, and acknowledges receipt
of the prospectus relating to the Plan and of the Company’s most recent annual report to stockholders.








 


	 	 





	 	Name:	 





	 	Social Security No.:	 
	 	Date of Acceptance:	 













 




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