ex4_18.htm


    
      

    

    
      

    

    Exhibit
      4.18

    

      CHEMBIO
        DIAGNOSTICS, INC.

      


      STOCK
        OPTION AGREEMENT

      (Incentive
        Option)

       

      THIS
        STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into as of the
        ______________________ day of ____________________________ by and between
        Chembio Diagnostics, Inc., a Nevada corporation (the “Company”), and
        _________________________ (the “Optionee”).

       

      WITNESSETH:

       

      WHEREAS,
        the Optionee has received an incentive stock option to purchase shares of
        the
        Company’s Common Stock pursuant to the Company’s 1999 Stock Option Plan (the
“Plan”) in order to provide the Optionee with an opportunity for investment in
        the Company and additional incentive to pursue the success of the Company,
        and
        this option is to be for the number of shares, at the price per share and
        on the
        terms set forth in this Agreement;

       

      WHEREAS,
        the Company intends that the stock option granted pursuant to this Agreement
        qualify as an incentive stock option pursuant to Section 422 of the Internal
        Revenue Code of 1986, as amended (the “Code”); and

       

      WHEREAS,
        the Optionee desires to receive an option on the terms and conditions set
        forth
        in this Agreement.

       

      NOW,
        THEREFORE, the parties agree as follows:

       

      1.  Grant
        Of Option.  The Company hereby grants to the Optionee, as a matter
        of separate agreement and not in lieu of salary or any other compensation
        for
        services, the right and option (the “Option”) to purchase all or any part of an
        aggregate of _____________________ (________________)
        shares of the authorized and unissued $.01 par value common stock of the
        Company
        (the “Option Shares”) pursuant to the terms and conditions set forth in this
        Agreement.

       

      2.  Option
        Price.  At any time when shares are to be purchased pursuant to
        the Option, the purchase price for each Option Share shall be $_________
        (the
“Option Price”).

       

      3.  Exercise
        Period.

       

      (a)  The
        Option may be exercised at any time after _____________ (the “Trigger
        Date”).

       

      (b)  The
        period for exercise of the Option shall terminate at 5:00 p.m., Eastern Standard
        Time on _______________, unless terminated earlier as provided in this
        Agreement, which date is the seventh anniversary of the date of this
        Agreement.

       

      4.  Exercise
        Of Option.

       

      (a)  The
        Option may be exercised in whole or in part by delivering to the Treasurer
        of
        the Company (i) a Notice And Agreement Of Exercise Of Option, substantially
        in
        the form attached hereto as Exhibit A, specifying the number of Option Shares
        with respect to which the Option is exercised, and (ii) full payment of the
        Option Price for such shares.  Payment in cash shall be made by
        certified check or cleared funds. The Option may not be exercised in part
        unless
        the purchase price for the Option Shares purchased is at least $1,000 or
        unless
        the entire remaining portion of the Option is being exercised.

       

      (b)  Promptly
        upon receipt of the Notice And Agreement Of Exercise Of Option together with
        the
        full payment of the Option Price, the Company shall deliver to the Optionee
        a
        properly executed certificate or certificates representing the Option Shares
        being purchased.

       

      (c)  During
        the lifetime of the Optionee, the Option shall be exercisable only by the
        Optionee; provided, however, that in the event of the legal disability of
        an
        Optionee, the guardian or personal representative of the Optionee may exercise
        the Option if such guardian or personal representative obtains a ruling from
        the
        Internal Revenue Service or an opinion of counsel to the effect that neither
        the
        grant nor the exercise of such power is violative of Section 422(b)(5), or
        its
        successor provision, of the Internal Revenue Code of 1986, as amended (the
        “Code”).  Any opinion of counsel must be acceptable to the Option
        Committee both with respect to the counsel rendering the opinion and with
        respect to the form of opinion.

       

      (d)  If
        for
        any reason other than the termination of Optionee’s employment by the Company
        for cause or other than the termination of Optionee’s employment by Optionee’s
        resignation or other voluntary act, the Optionee ceases to be employed by
        the
        Company, any Option held by the Optionee at the time the Optionee’s employment
        ceases may be exercised within thirty days after the date his employment
        ceases,
        but only to the extent that (i) the Option was exercisable according to its
        terms on the date of termination of the Optionee’s employment, and (ii) the
        period for exercise of the Option, as defined in Section 3 of this Agreement,
        has not terminated as of the date of exercise.  Upon termination of
        the period ending thirty days after cessation of the Optionee’s employment for
        any reason other than for cause and other than by Optionee’s voluntary act, any
        unexercised portion of an Option shall expire. If the Optionee ceases to
        be
        employed by the Company because of termination by the Optionee by resignation
        or
        other voluntary act, any Option held by the Optionee at the time the Optionee’s
        employment ceases shall terminate immediately upon the cessation of employment
        and all rights to purchase shares pursuant to the Option shall terminate
        immediately.  If the Optionee’s employment by the Company is
        terminated by the Company for cause, any Option held by the Optionee at the
        time
        Optionee’s employment is terminated shall expire upon delivery to the Optionee
        of notice of termination, which may be oral or in writing, and all rights
        to
        purchase shares pursuant to the Option shall terminate
        immediately.  As used in this Section 4(d), termination “for cause”
means a discharge on account of dishonesty, disloyalty or insubordination
        on the
        part of the Optionee as determined by the Board Of Directors of the Corporation
        or a Committee of the Board Of Directors.

       

      5.  Withholding
        Taxes.  The Company may take such steps as it deems necessary or
        appropriate for the withholding of any taxes which the Company is required
        by
        any law or regulation or any governmental authority, whether federal, state
        or
        local, domestic or foreign, to withhold in connection with the Option including,
        but not limited to, the withholding of all or any portion of any payment
        owed by
        the Company to the Optionee or the withholding of issuance of Option Shares
        to
        be issued upon the exercise of the Option.

       

      6.  Securities
        Laws Requirements.  The issuance of the Option has not been
        registered under the 1933 Act, in reliance upon an exemption from
        registration.  In addition, no Option Shares shall be issued unless
        and until, in the opinion of the Company, there has been full compliance
        with
        any applicable registration requirements of the 1933 Act, any applicable
        listing
        requirements of any securities exchange on which stock of the same class
        has
        been listed, and any other requirements of law or any regulatory bodies having
        jurisdiction over such issuance and delivery.  Optionee hereby
        acknowledges, represents, warrants and agrees as follows, and, pursuant to
        the
        terms of the Notice And Agreement Of Exercise Of Option (Exhibit A) that
        shall
        be delivered to the Company upon each exercise of the Option, Optionee shall
        acknowledge, represent, warrant and agree as follows:

       

      (a)  Optionee
        is acquiring the Option and the Option Shares for investment purposes only
        and
        the Option and the Option Shares that Optionee is acquiring will be held
        by
        Optionee without sale, transfer or other disposition for an indefinite period
        unless the transfer of those securities is subsequently registered under
        the
        federal securities laws or unless exemptions from registration are
        available;

       

      (b)  Optionee’s
        overall commitment to investments that are not readily marketable is not
        disproportionate to Optionee’s net worth and Optionee’s investment in the Option
        and the Option Shares will not cause such overall commitments to become
        excessive;

       

      (c)  Optionee’s
        financial condition is such that Optionee is under no present or contemplated
        future need to dispose of any portion of the Option or the Option Shares
        to
        satisfy any existing or contemplated undertaking, need or
        indebtedness;

       

      (d)  Optionee
        has sufficient knowledge and experience in business and financial matters
        to
        evaluate, and Optionee has evaluated, the merits and risks of an investment
        in
        the Option and the Option Shares;

       

      (e)  The
        address set forth in this Agreement is Optionee’s true and correct residence,
        and Optionee has no present intention of becoming a resident of any other
        state
        or jurisdiction;

       

      (f)  Optionee
        confirms that all documents, records and books pertaining to an investment
        in
        the Option and the Option Shares have been made available or delivered to
        Optionee and Optionee has had the opportunity to discuss the acquisition
        of the
        Option and the Option Shares with the Company. Optionee also confirms that
        Optionee has obtained or been given access to all information concerning
        the
        Company that Optionee has reasonably requested;

       

      (g)  Optionee
        has had the opportunity to ask questions of, and receive the answers from,
        the
        Company concerning the terms of the investment in the Option and the Option
        Shares and to receive additional information necessary to verify the accuracy
        of
        the information delivered to Optionee, to the extent that the Company possesses
        such information or can acquire it without unreasonable effort or
        expense;

       

      (h)  Optionee
        understands that the Option has not been, and the Option Shares issuable
        upon
        exercise of the Options will not be, registered under the 1933 Act or any
        state
        securities laws in reliance on an exemption for private offerings, and no
        federal or state agency has made any finding or determination as to the fairness
        of this investment or any recommendation or endorsement of the issuance of
        the
        Option or the Option Shares;

       

      (i)  The
        Option and the Option Shares that Optionee is acquiring will be solely for
        Optionee’s own account, for investment, and are not being purchased with a view
        to or for the resale, distribution, subdivision or fractionalization
        thereof.  Optionee has no agreement or arrangement for any such
        resale, distribution, subdivision or fractionalization thereof; and

       

      (j)  Optionee
        acknowledges and is aware of the following:

       

      (i)  The
        Company has a history of losses.  The Option and the Option Shares
        constitute a speculative investment and involve a high degree of risk of
        loss by
        Optionee of Optionee’s total investment in the Option and the Option
        Shares.

       

      (ii)  There
        are
        substantial restrictions on the transferability of the Option and the Option
        Shares.  The Option is not transferable except as provided in Section
        7 below.  The Option Shares cannot be transferred, pledged,
        hypothecated, sold or otherwise disposed of unless they are registered under
        the
        1933 Act or an exemption from such registration is available and established
        to
        the satisfaction of the Company; investors in the Company have no rights
        to
        require that the Option Shares be registered; there is no right of presentment
        of the Option Shares and there is no obligation by the Company to repurchase
        any
        of the Option Shares; and, accordingly, Optionee may have to hold the Option
        Shares indefinitely and it may not be possible for Optionee to liquidate
        Optionee’s investment in the Company.

       

      (iii)  Each
        certificate issued representing the Option Shares shall be imprinted with
        a
        legend that sets forth a description of the restrictions on transferability
        of
        those securities, which legend will read substantially as follows:

       

      “THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED
        UNDER FEDERAL OR STATE SECURITIES LAWS.  THESE SECURITIES MAY NOT BE
        OFFERED FOR SALE, SOLD, PLEDGED, OR OTHERWISE DISPOSED OF UNLESS SO REGISTERED
        OR QUALIFIED OR UNLESS AN EXEMPTION EXISTS, THE AVAILABILITY OF WHICH IS
        TO BE
        ESTABLISHED BY AN OPINION OF COUNSEL (WHICH OPINION AND COUNSEL SHALL BOTH
        BE
        REASONABLY SATISFACTORY TO THE COMPANY).”

       

      The
        restrictions described above, or notice thereof may be placed on the
        certificates representing the Option Shares purchased pursuant to the Option,
        and the Company may refuse to issue the certificates or to transfer the shares
        on its books unless it is satisfied that no violation of such restrictions
        will
        occur.

       

      7.  Transferability
        Of Option.  The Option shall not be transferable except by will or
        the laws of descent and distribution, and any attempt to do so shall void
        the
        Option.

       

      8.  Adjustment
        By Stock Split, Stock Dividend, Etc.  If at any time the Company
        increases or decreases the number of its outstanding shares of common stock,
        or
        changes in any way the rights and privileges of such shares, by means of
        the
        payment of a stock dividend or the making of any other distribution on such
        shares payable in its common stock, or through a stock split or subdivision
        of
        shares, or a consolidation or combination of shares, or through a
        reclassification or recapitalization involving its common stock, the numbers,
        rights and privileges of the shares of common stock included in the Option
        shall
        be increased, decreased or changed in like manner as if such shares had been
        issued and outstanding, fully paid and nonassessable at the time of such
        occurrence.

       

      9.  Common
        Stock To Be Received Upon Exercise.  Optionee understands that the
        Company is under no obligation to register the issuance of the Option Shares,
        the resale (by directors and officers) of the Option Shares, or the Option
        Shares, under the Securities Act of 1933, as amended (the “1933 Act”), and that
        in the absence of any such registration, the Option Shares cannot be sold
        unless
        they are sold pursuant to an exemption from registration under the 1933
        Act.  The Company is under no obligation to comply, or to assist the
        Optionee in complying, with any exemption from such registration requirement,
        including supplying the Optionee with any information necessary to permit
        routine sales of the Stock under Rule 144 of the Securities and Exchange
        Commission.  Optionee also understands that with respect to Rule 144,
        routine sales of securities made in reliance upon such Rule can be made only
        in
        limited amounts in accordance with the terms and conditions of the Rule,
        and
        that in cases in which the Rule is inapplicable, compliance with either
        Regulation A or another disclosure exemption under the 1933 Act will be
        required.  Thus, the Option Shares will have to be held indefinitely
        in the absence of registration under the 1933 Act or an exemption from
        registration.

       

      Furthermore,
        the Optionee fully understands that issuance of the Option Shares may not
        be
        registered under the 1933 Act and that if their issuance is not registered,
        they
        will be issued in reliance upon an exemption which is available only if Optionee
        acquires such shares for investment and not with a view to
        distribution.  Optionee is familiar with the phrase “acquired for
        investment and not with a view to distribution” as it relates to the 1933 Act
        and the special meaning given to such term in various releases of the Securities
        And Exchange Commission.

       

      10.  Privilege
        Of Ownership.  Optionee shall not have any of the rights of a
        stockholder with respect to the shares covered by the Option except to the
        extent that one or more certificates for such shares shall be delivered to
        him
        upon exercise of the Option.

       

      11.  Relationship
        To Employment Or Position.  Nothing contained in this Agreement
        (i) shall confer upon the Optionee any right with respect to continuance of
        Optionee’s employment by, or position or affiliation with, or relationship to,
        the Company, or (ii) shall interfere in any way with the right of the
        Company at any time to terminate the Optionee’s employment by, position or
        affiliation with, or relationship to, the Company.

       

      12.  Notices.  All
        notices, requests, demands, directions and other communications (“Notices”)
        concerning this Agreement shall be in writing and shall be mailed or delivered
        personally or sent by telecopier or facsimile to the applicable party at
        the
        address of such party set forth below in this Section 12.  When
        mailed, each such Notice shall be sent by first class, certified mail, return
        receipt requested, enclosed in a postage prepaid wrapper, and shall be effective
        on the fifth business day after it has been deposited in the
        mail.  When delivered personally, each such Notice shall be effective
        when delivered to the address for the respective party set forth in this
        Section
        12, provided that it is delivered on a business day and further provided
        that it
        is delivered prior to 5:00 p.m., local time of the party to whom the notice
        is
        being delivered, on that business day; otherwise, each such Notice shall
        be
        effective on the first business day occurring after the Notice is
        delivered.  When sent by telecopier or facsimile, each such Notice
        shall be effective on the day on which it is sent provided that it is sent
        on a
        business day and further provided that it is sent prior to 5:00 p.m., local
        time
        of the party to whom the Notice is being sent, on that business day; otherwise,
        each such Notice shall be effective on the first business day occurring after
        the Notice is sent.  Each such Notice shall be addressed to the party
        to be notified as shown below:

       

      (a)           if
        to the
        Company:                                           Chembio
        Diagnostics, Inc.

      Attn:
        President

      3361
        Horseblock Road

      Medford,
        New York 11763

      Facsimile
        No. (516)
        924-6033

      


      (b)           if
        to the
        Optionee:                ________________________________

      ________________________________

      ________________________________

      ________________________________

      Either
        party may change its respective address for purposes of this Section 12 by
        giving the other party Notice of the new address in the manner set forth
        above.

       

      13.  General
        Provisions.  This instrument (a) contains the entire agreement
        between the parties, (b) may not be amended nor may any rights hereunder
        be
        waived except by an instrument in writing signed by the party sought to be
        charged with such amendment or waiver, (c) shall be construed in accordance
        with, and governed by the laws of the State of New York, except where conflicts
        of law rules require the application of Colorado law, and (d) shall be binding
        upon and shall inure to the benefit of the parties and their respective personal
        representatives and assigns, except as above set forth.  All pronouns
        contained herein and any variations thereof shall be deemed to refer to the
        masculine, feminine or neuter, singular or plural as the identity of the
        parties
        hereto may require.

       
        
          

        

      

      IN
        WITNESS WHEREOF, the parties have executed this Agreement on the dates set
        forth
        below.

       

      CHEMBIO
        DIAGNOSTICS, INC.

      


      


      Date:
        __________                                                                                                             

      Lawrence
        Siebert,
        President

      


      


      


      OPTIONEE

      


      


      Date:                                                                                                                                       

      Name

      


      



      
        
           

        

        
           

          
            

          

        

        
           

        

      


      EXHIBIT
        A

      (To
        Chembio Diagnostic Systems Inc

      Stock
        Option Agreement)

      


      CHEMBIO
        DIAGNOSTICS, INC.

      


      NOTICE
        AND AGREEMENT OF EXERCISE OF OPTION

      


      I
        hereby
        exercise my Chembio Diagnostics, Inc. Stock Option dated as of _____________
        as
        to ________ shares of the $.01 par value common stock (the “Option Shares”) of
        Chembio Diagnostics, Inc. (the “Company”) at a purchase price of $______ per
        share.  The total exercise price for these Option Shares is
        $________.  Enclosed is payment in the form of
        ___________________.

       

      Enclosed
        are the documents and payment specified in Paragraph 4 of my Option
        Agreement.

       

      I
        understand that no Option Shares will be issued unless and until, in the
        opinion
        of the Company, there has been full compliance with any applicable registration
        requirements of the Securities Act of 1933, as amended, any applicable listing
        requirements of any securities exchange on which stock of the same class
        is then
        listed, and any other requirements of law or any regulatory bodies having
        jurisdiction over such issuance and delivery.  I hereby acknowledge,
        represent, warrant and agree, to and with the Company as follows:

       

      
        	
                a.  

              	
                The
                  Option Shares I am purchasing are being acquired for my own account
                  for
                  investment purposes only and with no view to their resale or other
                  distribution of any kind, and no other person (except, if I am
                  married, my
                  spouse) will own any interest therein.  (Note:  This
                  provision to be included only if issuance of Option Shares is not
                  registered at the time of
                  exercise.)

              


      

       

      
        	
                b.  

              	
                I
                  will not sell or dispose of my Option Shares in violation of the
                  Securities Act of 1933, as amended, or any other applicable federal
                  or
                  state securities laws.

              


      

       

      
        	
                c.  

              	
                I
                  will report all sales of Option Shares to the Company in writing
                  on a form
                  prescribed by the Company.

              


      

       

      
        	
                d.  

              	
                I
                  agree that the Company may, without liability for its good faith
                  actions,
                  place legend restrictions upon my Option Shares and issue “stop transfer”
                  instructions requiring compliance with applicable securities laws
                  and the
                  terms of my Option.

              


      

       

      
        	
                e.  

              	
                [For
                  officers only.]  If and so long as I am subject to reporting
                  requirements under Section 16(a) of the Securities Exchange Act
                  of 1934,
                  as amended (the “1934 Act”), I recognize that any sale by me or my
                  immediate family of the Company’s $.001 par value common stock may create
                  liability for me under Section 16(b) of the 1934 Act (“Section
                  16(b)”).  Therefore, I have consulted with my counsel regarding
                  the application of Section 16(b) to this exercise of my
                  Option.

              


      

       

      
        	
                f.  

              	
                [For
                  officers only.]  I will consult with my counsel regarding the
                  application of Section 16(b) before I can make any sale of the
                  Company’s
                  $.01 par value common stock, including the Option Shares, and I
                  will
                  furnish the Company with a copy of each Form 4 filed by me and
                  will timely
                  file all reports that I may be required to file under the federal
                  securities laws.

              


      

       

      The
        number of Option Shares specified above are to be issued in the name or names
        set forth below in the left-hand column.

      
                                                                                                             

      Name                                                                           Signature

      


      
                                                                                                        

      (Optionee
        - Print Name of
        Spouse                          Address

      if
        you
        wish joint
        registration)                                                                       

                                                                                          
        City, State and Zip Code

      


      


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