Document:

Agreement

	

TECHNO-SCIENTIFIC CO-OPERATION: CONTRACT

FOR TRANSFER OF TECHNOLOGY AND MATERIALS

This Agreement effective as of ___________________,2004, between

(1)CHEMBIO DIAGNOSTIC SYSTEM, Inc. a company constituted under the laws of the state of Delaware, USA and with its headquarters at 3661 Horseblock Road, Medford, New York 11763, USA, represented in this act by its Director, hereinafter referred to as CHEMBIO;

AND

(2)FUNDAÇÃO OSWALDO CRUZ, a public foundation agency of the Brazilian Ministry of Health, organized in accordance with the laws of Brazil, having its main office at Avenida Brasil 4365, Manguinhos, Rio de Janeiro, RJ, CEP 21045-900, Brazil, CGC NI 33.781.055/0001-35, represented in this document by its President Dr. Paulo Marchiori Buss, hereinafter referred to as FIOCRUZ.

AND

(3)INSTITUTE OF IMMUNOBIOLOGICAL TECHNOLOGY, the FIOCRUZ unit producing vaccines and diagnostic kits, with headquarters at Avenida Brasil 4365, Manguinhos, Rio de Janeiro, RJ, Cep 21045-900, Brazil, represented by its Director Akira Homma, hereafter referred to as BIO-MANGUINHOS;

WHERE THE FOLLOWING HAS BEEN AGREED:

Considering that CHEMBIO is a company having as its main purpose the production of lateral flow rapid diagnostic test kits including but not limited to “HIV 1⁄2 Stat-Pak”, (hereinafter referred to as PRODUCT);

Considering that the parties signed, on the 10th of June, 2002, a Memorandum of Understanding, with the purpose of combining their efforts with the aim transferring the production of HIV 1⁄2 Stat-Pak and associated kit components thereof to FIOCRUZ;

Considering that CHEMBIO provided Bio Manguinhos, a FIOCRUZ unit, around 500 (five hundred) units of the PRODUCT as free samples, as well as the necessary technical documentation for a technical and operational evaluation of the PRODUCT, with BIO-MANGUINHOS having tested and approved the PRODUCT;

Considering that CHEMBIO possesses the confidential technical information for the Production of the rapid Test Kit based on immonochromatography and lateral flow, including, but not limited to, the STAT-PAK HIV-1/2.

THE PARTIES AGREE TO SIGN THE PRESENT CONTRACT, AS STIPULATED BELOW:

201651v1

	 
	 	 	 
	

	 

DEFINITIONS

FINAL PRODUCT - Rapid test kit for HIV 1⁄2 produced by FIOCRUZ termed HIV 1⁄2Stat - Pak composed of tests based on immunochromatography and lateral low, adapted to rapid supports for use with serum, plasma or whole blood, sealed in individual laminated foil pouches containing also, lancets, transfer loops, band-aids and dessicants. Product insert and vials of buffer solution complete the final product.

BUFFER SOLUTION - Buffer solution as provided in the Product Specifications (Exhibit B) necessary for the tests to aid in routing the serum, plasma or whole blood.

INTERMEDIATE PRODUCT 0 - Bulk buffer and plastic support adapted to a test strip sensitized with synthetic peptides of the HIV 1/2, together with colloidal gold, a membrane for retaining cells and hemoglobin and a liquid absorbent membrane, in a manner as to function perfectly within the principles of immunochromatography and lateral flow, packaged in individual laminated foil pouches, , containing dessinants, having as accessories lancets, transfer loops capable of collecting 5uL and band aids dressing. BIO-MANGUINHOS dispences the buffer, inserts, labels and packages of the product, as well as performs storage and Quality Control

INTERMEDIATE PRODUCT I- Plastic support adapted to a test strip sensitized with synthetic peptides of the HIV 1/2, together with colloidal gold, a membrane for retaining cells and hemoglobin and a liquid absorbent membrane, in a manner as to function perfectly within the principles of immunochromatography and lateral flow, packaged in individual laminated foil pouches containing dessinants, having as accessories lancets, transfer loops capable of collecting 5uL and band aids dressing. BIO-MANGUINHOS produces the buffer, inserts, labels and packages of the product, as well as performs storage and Quality Control. 

INTERMEDIATE PRODUCT II - Test membrane sensitized with synthetic peptides of the HIV 1/2 having as accessories the materials necessary for the production of the test supports, lancets, transfer loops capable of collecting 5uL and band aid. BIO-MANGUINHOS produces the plastic support adapted to a test strip sensitized with synthetic peptides of the HIV 1/2, together with colloidal gold, a membrane for retaining cells and haemoglobin and a liquid absorbent membrane, in a manner as to function perfectly within the principles of immunochromatography and lateral flow, packaged in individual laminated foil pouches containing dessicants, buffer, inserts, labels and packages the product, as well as performs storage and Quality Control.

PRODUCTS – includes mention of all or any PRODUCT, including the FINAL PRODUCT, INTERMEDIATE PRODUCT 0, INTERMEDIATE PRODUCT I and INTERMEDIATE PRODUCT II. 

NET SALES – includes the sales undertaken by FIOCRUZ of the PRODUCT, excluding the industrial and commercial taxes, insurance, freight and packaging.

MINISTRY OF HEALTH – an organism in the administrative structure of Brazil’s Federative Republic which is basically charged with the formulation and execution of public health policy, acting in the following areas:

	
   national health policy;

	
co-ordination and verification of the Sistema Único de Saude (Single Health System);

	
   environmental health and actions towards the promotion, maintenance and recovery of individual and collective health, including labor and native Indian health issues;

	
health information;

	
   critical health material;

	
   general preventive measures, sanitary vigilance and control of borders and maritime and fluvial ports and airports;

	
   scientific and technological research in the area of health;

ANVISA – Agência Nacional de Vigilância Sanitária (National Sanitary Vigilance Agency) – created by law n. 9.782, of the 26th of January, 1999. It is an autarchy under a special regime, as such, a regulatory agency characterized by its administrative independence, stability of its directors during the mandate period and financial autonomy. Its administration is the responsibility of a board of directors having five members.

FIOCRUZ – Fundação Oswaldo Cruz – public foundation in public law, linked to the Brazilian Ministry of Health, it develops measures in the area of science and technology related to health, including basic and applied research activities, teaching, formulation of public health policies, health information and its diffusion, training of human resources, production of vaccines, drugs, diagnostic kits and reagents, quality control, development of health related technology and is a 

SECTION 1 – Objective

1.1The present Contract for the Transfer of Technology and Material calls for the scientific and technological co-operation between FIOCRUZ and CHEMBIO for the production of the HIV 1⁄2 Stat-Pak produced by CHEMBIO DIAGNOSTIC SYSTEMS, INC., hereinafter referred to as the PRODUCT, which is to be produced by FIOCRUZ in its Bio-Manguinhos unit with both Parties estimating that the process for the transfer of technical knowledge for production, shall be completed on or before the third anniversary of the Effective Date of the present Contract. The schedule and process for this technology transfer is set forth in Exhibit A hereto.

	
FIOCRUZ will register the PRODUCT at the ANVISA, in its own name following the Effective Date of this contract, counting for this purpose on the technical assistance of CHEMBIO, if necessary; 

	
For the manufacture of the FINAL PRODUCT by FIOCRUZ, CHEMBIO shall provide all the confidential technical information, the necessary materials, as decided and required by FIOCRUZ, included the supplier of the synthetic peptides, as well as providing the technical assistance which may be necessary, including that which may be requested by FIOCRUZ. 

1.2. After the conditions of 3.2 (iii) have been met each Party shall forbear, directly or indirectly, from entering any negotiation or contract with third parties for the purpose of development, production and/or commercialization of the PRODUCT (or any other lateral flow HIV rapid test) without the knowledge and consent of the other Party. 

SECTION 2 – Rights granted

2.1. CHEMBIO and FIOCRUZ agree that supply of the PRODUCT manufactured in BIO-MANGUINHOS shall, mainly, meet the public market in Brazil and members of Mercosul, as well as, occasionally, multilateral agencies of the United Nations and governments of developing countries, in accordance to the present legislation.

2.2. At the end of the technology transfer process, FIOCRUZ shall make the best efforts to meet, as soon as possible, the demand of the Brazilian Public Market. Only after having regularly met Brazilian public market, FIOCRUZ may offer to other customers, mainly, the countries of Mercosul, in accordance to the present legislation. 

2.3. Neither Party has the right to sublicense to third parties the rights granted in this Section, except if formally authorized, in writing, by the other Party.

SECTION 3 – Conditions for entering into effect

3.1. This Contract shall become effective, Effective Date, when the following stages are cumulatively complied with and fulfilled.

1) it is examined and considered in accordance with the pertinent legislation by the FIOCRUZ attorney general; and

2) after registry at the Instituto Nacional de Propriedade Industrial (INPI-National Institute of Industrial Property), an agency of the Brazilian government, and the notification thereof to FIOCRUZ under the terms of Law n. 9.279, of the 14th of May, 1996. 

3.2 Any of the Parties shall have the right to cancel this Contract, due to lack of conditions enabling it to become effective, in the occurrence of the following events:

(i) registration by the INPI is not granted within sixty days after the last date of signature by any of the Parties; 

(ii) the Parties do not reach an agreement for compliance with the requirements made by the INPI within thirty days after notification of the requirement; and

(iii) in case the PRODUCT is not accepted by the DST/AIDS and for the use by FIOCRUZ , and the Parties did not reach another solution.

3.3. In the case that ANVISA does not register the PRODUCT, both Parties shall automatically consider this contract null and void, and consider this Technical-Scientific Cooperation at an end.

SECTION 4 – Transfer of technology

4.1 The transfer of technology for the local production of the FINAL PRODUCT by FIOCRUZ includes CHEMBIO sending technical production information, quality control, as well as assistance and training of technicians, where this process is described in Exhibit A I, which becoMonth an integral part of this Contract;

4.2 The transfer of technology shall take effect in three phases, and should be complete at the end of the third phase, and at its end FIOCRUZ shall be entirely capable of industrially producing the FINAL PRODUCT, in accordance with article 5, Exhibit A mentioned above.

4.3. Each step specified in the schedule for the transfer of technology (Exhibit A) will result an increasing amounts of the Brazilian local production represented by the achievement of PRODUCTS (IP0,IP1,IP2 IP3) until the completion of the technology process and the production of FINAL PRODUCT.

4.4 The responsibilities for both CHEMBIO and FIOCRUZ towards the completion of each event of the process for the transfer of technology are determined by the headings of the respective columns.

4.5 The transfer of technology (in each phase) shall be considered complete when after it is mutually agreed between the parties that the aims have been fulfilled.

	 
	 	 	 
	

	 

SECTION 5 – Technical Assistance 

5.1. CHEMBIO shall provide the technical assistance and services as specifically set forth in the Technology Transfer Schedule (Exhibit A) which services shall include but not be limited to the following:

	
Training for FIOCRUZ technicians to gain an operational knowledge of the CHEMBIO installations, the production of cassettes, preparation of the buffer and package;

	
Support towards registering the PRODUCT at the ANVISA;

	
Drafting technical specifications of the industrial plans and equipment specifications.

	
Training for FIOCRUZ technicians, as requested by BIO-MANGUINHOS, for the production of the immunochromatographic test supports, including the preparation of the Protein A-Gold colloidal, the sensitizing of the membranes with synthetic peptides, and, mainly, the overall revision of all the stages of the production process of the PRODUCT

	
Providing data and assistance at the beginning of the Clinical Tests.

SECTION 6 – Confidentiality

6.1. CHEMBIO will provide FIOCRUZ, phase by phase, all the technical information necessary to the execution of the phase and all the stages of industrial production, during the course of this Contract.

6.2. CHEMBIO shall also provide FIOCRUZ all the technical information for the improvement of the production process of the FINAL PRODUCT, while this Contract remains in force. 

6.3. FIOCRUZ will provide CHEMBIO the information concerning this Contract, with the intent of facilitating the technology transfer process.

6.4. All information received by one of the Parties from the other Party, during the course of this Contract, shall be kept confidential and shall not be disclosed to any third party, without the prior consent of the furnishing party, except when the information:

a) is to the knowledge of the receiving party before being disclosed by the furnishing party;

b) is obtained by the receiving party in a legal manner from a source other than the furnishing party, and such source did not require confidentiality of the receiving party, or did not limit or restrict the use of this fact by the receiving party;

c) is of public knowledge without the receiving party being responsible for this fact;

d) has been developed by the party independent of the information received, corroborated by written records;

e) has disclosure required by the receiving party (i) due to the necessity of obtaining government authorisations for use of the process and/or commercialisation of the PRODUCT, (ii) by legal requirement 

6.5. The confidentiality obligations established in this Section will remain in force for a period of 5 years after the Effective Date or the cancellation of this Contract, whichever later.

SECTION 7 – Technical Information and Samples

7.1 CHEMBIO shall deliver to BIO-MANGUINHOS, within 30 (thirty) days after the sanction of this Contract by the INPI or immediately after signature of this contract, at the criteria of CHEMBIO:

	
the technical information and documents necessary to register the PRODUCT at the ANVISA, in the name of BIO-MANGUINHOS; and

	
samples of the PRODUCT necessary for prior analysis to be undertaken by the Instituto Nacional de Controle de Qualidade em Saude (National Institute for Quality Control in Health).

SECTION 8 - Delivery of Intermediary Products 0, I, and II 

8.1FIOCRUZ shall make its best efforts to buy from CHEMBIO the PRODUCTS mentioned below, being accepted that all and any acquisition will ruled by terms and conditions of the Law no. 8.666/93, Law no. 4.320/64, Decree no. 93.872/86 and and the annual budget::

Year 1: SeMonthter 1: 150.000 unit of the INTERMEDIATE PRODUCT 0

Year 1: SeMonthter 2: 150.000 unit of the INTERMEDIATE PRODUCT I

Year 2: SeMonthter 1: 150.000 unit of the INTERMEDIATE PRODUCT I

Year 2: SeMonthter 2: 150.000 unit of the INTERMEDIATE PRODUCT II

Year 3: SeMonthter 1: 150.000 unit of the INTERMEDIATE PRODUCT II

Year 3: SeMonthter 2: 150.000 unit of the INTERMEDIATE PRODUCT II

Year 4 and after: All the phases of the technology transfer are finished and the production of the FINAL PRODUCT is started at plant of BIO-MAMGUINHOS.

The previous quantities must be considered cumulative provided that at least the quantities established above are purchased in accordance to the schedule above. 

8.2. The prices per unit to be paid by FIOCRUZ to CHEMBIO will be the following stipulated below:

	
Prices US$

 

US$/Qts.(103)

	

	
1o

seMonthter

Prod. 0
	
2 e 3o seMonthter

Prod. I
	
4 a 6o seMonthter Prod. II

	

	

	

	
Until 300  tests
	
2,40
	
2,35
	
1,70

	

	

	

	

	
From 301 to 500 tests
	
2,35
	
2,30
	
1,55

	

	

	

	

	
From 501 to 750 tests
	
2,20
	
2,15
	
1,31

	

	

	

	

	
From 750 to1.000 tests
	
2,15
	
2,10
	
1,21

	

	

	

	

	
Over 1.000 test-s 
	
2,10
	
2,00
	
1,16

	

	

	

	

The prices established are to be applied on a cumulative basis as each product is being supplied by CHEMBIO accordance to Exhibit A.

The Parties agree that in case the products used in the tests procedures in Brazil are being sold for a price that prevents Bio-Manguinhos from manufacturing the PRODUCT for a competitive price, they shall discuss this matter in good faith and try to negotiate a different price. Such a negotiation shall regard mainly the Brazilian Public market price, progress of the technology transfer program, and number of products bought from CHEMBIO so far.

SECTION 9 – Orders, Delivery, Supply and Inspection

9.1 Orders and Forecast - Within thirty (30) days after the Effective Date, FIOCRUZ shall provide CHEMBIO with its first non-binding annual forecast estimated for PRODUCTS whereby these estimates for the annual period shall be reviewed and revised if necessary quarterly. Any order for PRODUCTS, shall be placed by FIOCRUZ at least two (2) months in advance of the desired delivery date for such PRODUCTS, whereby any order given hereunder shall become firm and binding on the Parties. All Orders for PRODUCTS I, shall be in writing and shall be subject to the terms hereof, and may not be altered by any additional or differing terms in FIOCRUZ’s purchase order or otherwise, without the prior written consent of the Parties. 

9.2 Specifications, Testing Methods and Packaging. The PRODUCTS shall be prepared, tested, and packaged in accordance with the Product Specifications as set forth in Exhibit B.

9.3 Delivery - All sales of PRODUCTS shall be ex-works Medford, NY or such alternative site of principal manufacture located in the continental United States, as notified to FIOCRUZ by CHEMBIO in writing. CHEMBIO shall ship any Orders for quantities of PRODUCT that are less than or equal to FIFTY THOUSAND units within sixty (60) days of CHEMBIO’S acceptance of such Order. CHEMBIO shall ship any Order of PRODUCTS that are greater than FIFTY THOUSAND units within ninety (90) to one hundred twenty (120) days of CHEMBIO’S acceptance of such Order. CHEMBIO shall make the shipment of the PRODUCTS in packaging suitable for transportation of products. At the time of delivery of the PRODUCTS, CHEMBIO shall provide FIOCRUZ with a Certificate of Analysis in the form set forth in Exhibit C of this CONTRACT.

9.4. Inspection and Testing; Records 

	
Each shipment of PRODUCTS shall be subjected to a quality control inspection by CHEMBIO, as standard and customary for the industry. CHEMBIO shall number each shipment with a CHEMBIO lot number that is traceable to raw materials and/or components used in the manufacture of PRODUCTS.

	
Upon receipt of the PRODUCT, FIOCRUZ shall inspect the quantity and appearance of said PRODUCTS. Should FIOCRUZ find any defect in the appearance of the PRODUCTS and/or quantity of the PRODUCTS between the ordered and the delivered PRODUCTS, FIOCRUZ shall notify CHEMBIO, in writing, within ten (10) days after FIOCRUZ’s receipt of such PRODUCTS. If CHEMBIO receives FIOCRUZ’S notice with regard to a shortage in quantities, weight or with regard to defects in Specifications, CHEMBIO shall promptly take measures to remedy the situation by, as the case may be, supplementing the initial shipment with sufficient PRODUCTS so as to satisfy that initial order or substituting the non-conforming PRODUCTS with PRODUCTS that meet the Specifications, without any additional expenses to FIOCRUZ. CHEMBIO shall maintain adequate records of PRODUCTS manufacture by batch and lot, including test and laboratory observation data, and will provide copies of such records to FIOCRUZ as requested, as reasonably necessary in connection with any FIOCRUZ Product recall.

SECTION 10 – Prices and Payments 

10.1. Payment by FIOCRUZ for all orders of the PRODUCTS shall be via thirty days irrevocable letter of credit confirmed by a US bank and otherwise containing terms reasonably acceptable to CHEMBIO. Such letter of credit shall be issued to CHEMBIO prior to acceptance of the orders.

10.2. For the rights granted by CHEMBIO to FIOCRUZ for the intangible technical information for the production of the FINAL PRODUCT and the other obligations of CHEMBIO contained in this Contract, FIOCRUZ shall pay CHEMBIO a royalty o 5% (five per cent) of Selling Price of the Units.

10.2.1. 10.2.1 For royalties calculations, NET SALES of FINAL PRODUCT shall be regarded as the greatest potentially possible to be obtained by FIOCRUZ, considering the price to be charged similar to that one in arms length negotiations, or between non related parties, as well as the prices of similar and/or replacing products.

10.2.2 For royalties calculation purposes, NET SALES are defined as gross income of the FINAL PRODUCT undertaken by FIOCRUZ, taking commercial and industrial taxes, insurance, freight and packaging, as well as income of any import directly or indirectly carried out by CHEMBIO.

10.3. FIOCRUZ shall maintain a register of the sales and the royalties to be paid and already paid to CHEMBIO, having to inform CHEMBIO and quarterly the total amount to be paid.

10.4. CHEMBIO may assign a technician to confirm the accuracy of the accounting registers referred to in this in this Section 10, and FIOCRUZ will allow this technician complete access to this accounting data. 

10.5. All royalty payments due to the paragraph 10.2 shall be made by FIOCRUZ to CHEMBIO quarterly, within a 30 days period, counted from the date FIOCRUZ is obliged to notify CHEMBIO the amount owed. The payments shall be deposited in a bank account to be designated by CHEMBIO.

10.6. Technical Assistance Services - The payments for the assistance services are included in the payments for the Technology, as determined in paragraph 10.2, but FIOCRUZ being responsible for paying the airline tickets, executive class, normal lodging and other travel expenses and a daily service fee in Real currency corresponding of U.S.$ 150.00 per person.

SECTION 11 – Government authorizations

11.1. FIOCRUZ shall be responsible for registering the PRODUCTS at ANVISA, as well as at the other government authorities of the MERCOSUL countries, although FIOCRUZ will have full support from CHEMBIO in providing the necessary information. 

11.2. In the event ANVISA denies registry for the PRODUCTS, this Contract will be canceled and all its obligations will become null, except those determined in Section 6 of this Contract.

SECTION 12 – Term and Termination

12.1. This Contract will come into force between the Parties as of the Effective Date (i) for a period estimated in 3 years for the transfer of technology, and, (ii) at the end of this period, will remain in force for a period of 5 years as of the date of the first act in the market with the FINAL PRODUCT by FIOCRUZ, and (iii) shall be automatically renewed for a period of 5 (five) years, if INPI authorizes the renewal 

12.2. This Contract may be terminated in the failure by any of the Parties to fulfil their obligations as determined in this Contract, which must be notified by the Party considered injured, with the violating Party having to make amends for the violation in a period of not more than 30 days counted as of the notification, without which the Contract may be terminated, whereby the injured Party may further seek remedial action. 

SECTION 13 – Effects of termination

13.1. In the case this Contract should be rescinded, through the fault or unjustified initiative of FIOCRUZ, it shall hand over to CHEMBIO all and any documents (including any copy of such document) and all and any record, of any type and done by any means, that contains or concerns the technical information and any other technical information of a confidential nature provided by FIOCRUZ to CHEMBIO and any apparatus, substance or model that may, in some form, constitute a physical form or represent any such technical information or any such technical information of a confidential nature in the possession or in the power of FIOCRUZ at the moment of terminating this Contract. 

13.1.1. FIOCRUZ will cease all and any use of the technical information or any other technical information of a confidential nature provided by CHEMBIO to FIOCRUZ for any purpose. 

13.1.2. FIOCRUZ will cease production of the PRODUCT and, will negotiate the sale of the PRODUCT that remain stored in accordance with the Decree no. 99.658/90.

13.2. In the case this Contract becoMonth extinct through the expiry of its term or earlier, by fault or unjustified initiative of CHEMBIO, FIOCRUZ will not hand over any document (including any copy of such document) or any record, of any type and done by any means, that contains or concerns the technical information and any other technical information of a confidential nature provided by FIOCRUZ to CHEMBIO and any apparatus, substance or model that may, in some form, constitute a physical form or represent any such technical information or any such technical information of a confidential nature in the possession or in the power of FIOCRUZ at the moment of terminating this Contract. 

13.2.1. FIOCRUZ will not cease all and any use of the technical information or any other technical information of a confidential nature provided by CHEMBIO to FIOCRUZ for any purpose. 

13.2.2. FIOCRUZ will not cease production of the PRODUCT, and the payment of royalties will no longer be appropriate.

SECTION 14 - Controversies and disputes

14.1 The Parties agree that this CONTRACT shall be governed by the laws of Brazil and its courts shall have jurisdiction over any dispute that may occur from or related to this CONTRACT. Both CHEMBIO and FIOCRUZ recognize they shall not be considered excluded from adjudication and compliance with their obligations under this CONTRACT concerning countries other than Brazil (including, but not limited to the compliance with any restriction of one of the Parties outside the TERRITORY) by courts outside Brazil.

SECTION 15 - Obligations

15.1. CHEMBIO has the following obligations, in particular:.

1. that the PRODUCTS delivered to FIOCRUZ conform to the Specifications at the time of delivery and for the duration of the shelf life as stipulated in the Specifications, within the time frame allotted and if handled and stored in accordance with the Specifications and other instructions provided by CHEMBIO. 

2. to provide FIOCRUZ with all the intangible technical information necessary for the manufacture, quality control and commercialization of PRODUCT.

3. to provide FIOCRUZ a list of installations, equipment and personnel necessary to comply with the all phases of the technology transfer as the schedule of Exhibit A and render free technical assistance, in accordance with the provisions of Section 5.

15.2. FIOCRUZ has the following obligations, in particular:

1. to register the PRODUCT at ANVISA

2. to assume responsibility for all the expenses of buying the equipment and installations, as well as for all the employment, training and supervision of the agreed services to be provided by CHEMBIO concerning the technology transfer. 

3.To attend the DST/AIDS Program demand as estimated set forth in Section 8.1. 

15.3. If FIOCRUZ does not satisfy Section 15.2.3, the Parties in good faith will discuss methods to cure the breach of this situation. This shall not prohibit CHEMBIO’s right to suspend or terminate the Agreement according to the Section 12.2. 

SECTION 16 – Intellectual Property Rights and Improvements

16.1. CHEMBIO guarantees that no right of intellectual property belongs to Parties or third parties, which might prevent the product from being manufactured. If any technical information disclosed by CHEMBIO to BIO-MANGUINHOS should violate the rights of intellectual property of third parties, CHEMBIO shall be responsible for any costs and indemnification incurred, and BIO-MANGUINHOS shall help advocating for CHEMBIO, giving notice of the related matters.

16.2. Should any improvement be made by any of the Parties concerning the PRODUCT, during the term of this Contract, that Party shall promptly disclose the improvement to the other Party, and both Parties will negotiate and reach an agreement concerning the treatment of such improvement. The legal right of the Party that developed the improvement will be respected. Except in the case of improvements that alter substantially the Product, the improvements will be used by both of the Parties without any remuneration to the other Party, and, in this event, the permitted use shall be done without any new contract or addendum to this CONTRACT.

SECTION 17 – Informing of adverse experiences and recall of the PRODUCT

17.1. Each Party will provide the other with the name, position and fax and telephone numbers of a designated safety representative to whom all reports governed by this Section shall be addressed to. 

Dr. Avi Pelossof

Vice President – Sales and Marketing

CHEMBIO DIAGNOSTIC SYSTEM, Inc.

3661 Horseblock Rd., Medford

New York 11763

USA

and

Dr. Akira Homma

Diretor

Fundação Oswaldo Cruz – FIOCRUZ

Instituto de Tecnologia em Imunobiológicos – BIO-MANGUINHOS

Pabilhão Rocha Lima

Av. Brasil 4365 – Manguinhos

21.045-900 Rio de Janeiro, RJ 

Brasil

17.2. If any of the Parties receives a report of any adverse experience concerning the Product, such Party will notify the problem to the regulatory authority of the country in which the occurrence was reported, observing the laws and regulations of such country. A copy of each such report will simultaneously be forwarded to the other Party. 

17.3. Each Party will inform the other by telephone, fax, e-mail or any other means, with notification by registered mail being indispensable:

	
within a business day as of receipt by the central safety department/committee of the Party, of any unexpected serious and fatal or life threatening adverse experience;

	
within 5 business days as of receipt by the central safety department/committee of the Party, of all other serious adverse experiences. 

17.4. A monthly summary of all the adverse experiences will be undertaken in writing by any of the Parties to the other Party, indicating which cases previously reported in accordance with this Section. 

17.5. Any other additional information received by a Party about any serious adverse experience, or any information that renders an adverse experience into a serious adverse experience, will also be informed by telephone, fax, e-mail or any other means, with notification to the other Party by registered mail being indispensable within one or five business days as of receipt by the first Party (as appropriate, in accordance with the criteria defined in paragraph 17.3.).

17.6. The Party that receives the notification of an adverse experience shall employ reasonable efforts to follow the case and inform the other Party. 

17.7. The Parties, as soon as they have knowledge of an occurrence with the PRODUCT, will take all the measures necessary to recall the PRODUCT from the circulation, as well as promptly seeking to comply with the national legislation of the country in question.

SECTION 18 - Limited Warranty and Indemnification

18.1. In the event that the PRODUCTS do not conform to the Specifications and such failure does not result from the fault, negligence or wilful misconduct of FIOCRUZ or any of its Affiliates or their directors, officers, agents or employees, CHEMBIO shall replace them immediately upon written request by FIOCRUZ, as set forth in Section 8.4 above. In the event that there is a disagreement between the Parties as to the conformity of the PRODUCTS to the Specifications, a neutral third Person, mutually agreed upon, shall test the PRODUCTS. The Party whose assertion as to the conformity or non-conformity of the PRODUCTS is not confirmed by such neutral review shall bear the costs of carrying out such review. FIOCRUZ shall return the non-conforming PRODUCTS at its own cost, unless it is determined that the non-conforming PRODUCTS do not meet Specifications. In such event, in addition to replacing the non-conforming PRODUCTS, CHEMBIO will reimburse FIOCRUZ for the costs of returning the non-conforming PRODUCTS.

18.2. FIOCRUZ has the expertise and skill in the commercialization and use of the PRODUCT and has made its own evaluation of the capabilities, safety, utility and commercial application of the product. CHEMBIO makes no representation and extends no condition or warranty of any kind, either express or implied, with respect to the suitability of the product, for use by fiocruz other than as specifically provided in the immediately preceding paragraph; and expressly disclaims any warranties of merchantability, satisfactory quality, fitness for a particular purpose and any other implied warranties with respect to the capabilities safety, utility or commercial application of the product FIOCRUZ shall indemnify and hold CHEMBIO, its directors, officers, agents or employees, or any of its Affiliates or their directors, officers, agents or employees (collectively, the “CHEMBIO Parties”; individually, a “CHEMBIO Party”) harmless from any and all liability, damage, loss, cost or expense resulting from any claims or suits brought against any FIOCRUZ Party by any third person which arise solely from FIOCRUZ’s use of the PRODUCT and/or FIOCRUZ’s manufacture, handling or sale of PRODUCTS, unless such liability, damage, loss, cost or expense is directly attributable to any fault, negligence, or wilful misconduct of a CHEMBIO Party or to the failure of the PRODUCT to conform to Specifications or the warranties made in this Agreement.

18.3. In the event that the use of any PRODUCTS infringes or would infringe any third Person patent rights, the Party first becoming aware of same shall notify the other and the Parties shall discuss the matter and decide on a course of action. Should any such infringement claim or suit be made with regard to the PRODUCTS, CHEMBIO may 

	
change the PRODUCTS so as to make them non-infringing ; 

	
obtain rights to the third Person PRODUCTS and make such rights available to FIOCRUZ; or

	
if neither of the foregoing options is commercially feasible, terminate this Contract without any indemnity to FIOCRUZ.

Despite the agreement above, in the eventuality of the occurrence of an indemnity to be made to the owner of the patent, such indemnity shall be the entire responsibility of CHEMBIO, considering that FIOCRUZ is not party to the intangible confidential information to be furnished by CHEMBIO under the obligations of this Contract. 

SECTION 19 - Assignment of Rights:

19.1. No rights or obligations under this Contract may be assigned or transferred by any of the Parties in this Contract to any third party, including the successor of any of the Parties, without prior consent in writing by the other Party, and any attempt to cede or transfer without such consent will be considered null and void. 

SECTION 20 – Notification

20.1. Any notification to be furnished in accordance with this CONTRACT shall be by registered airmail, even after prior notification by any other means, sent to the addresses of the headquarters of each of the Parties contained in the beginning of this document. A Party may change such address for purposes of notification, by notification sent to the other Party, in accordance with the determinations of this Section. 

20.1.1. Any notification to CHEMBIO shall be addressed as follows:

Dr. Avi Pelossof

CHEMBIO DIAGNOSTIC SYSTEM, Inc.

Horseblock St. 3661, Medford

New York 11763

USA

20.1.2. Any notification to FIOCRUZ shall be addressed as follows:

Dr. Akira Homma

Diretor

Fundação Oswaldo Cruz – FIOCRUZ

Instituto de Tecnologia em Imunobiológicos – BIO-MANGUINHOS

Pabilhão Rocha Lima

Av. Brasil 4365 – Manguinhos

Rio de Janeiro, RJ 21.045-900

Brasil

SECTION 21 – Duplicates of this Contract

21.1. This Contract is executed with two duplicated originals in the Portuguese language and two duplicated originals in the English language. The texts in Portuguese and English are true and faithful translations, one of the other, but in the case of difference between the two texts, the text in Portuguese shall prevail. 

SECTION 22 – Exclusions

22.1. In the event any of the dispositions of this Contract should come to be considered invalid or impossible to enforce due to being in violation of any law or regulation, the remaining dispositions of this Contract shall remain valid and in force, as if the disposition being invalid or impossible to enforce were not part of the Contract. Both Parties agree to substitute such disposition with a new valid and applicable disposition capable of attaining the purposes of this Contract and the original intentions of the Parties, wherever possible under the applicable laws. 

SECTION 23 – Entire content

23.1. This Contract represents the entire content and agreement between the Parties concerning the subject of the Contract, as of the Effective Date of this Contract, and supercedes all and any Contract, negotiation, understanding, representation, request or prior document made and exchanged between the Parties concerning such subject. No amendment, modification or alteration to any of the terms and conditions of this Contract or renouncement concerning these shall be considered valid and in force by the Parties, unless done in writing and signed by both the Parties considered here.

SECTION 24 – Non-competition

24.1. During the term of the Contract, CHEMBIO shall not transfer the technology for the manufacture of the PRODUCT in Brazil to any third party in Brazil, without prior written consent from FIOCRUZ. 

24.2. During the term of the Contract, FIOCRUZ shall not transfer the technology for the manufacture of the PRODUCT to any third party without prior written consent from CHEMBIO.

SECTION 25 – Force majeure

25.1. Neither of the Parties can be held responsible to the other Party for any impossibility to comply with its obligations in this Contract, provided they are the result of war, revolution, strike, acts of God, official acts by the government or any other event that is beyond reasonable control of that Party; however, in the occurrence of an event of force majeure, the Party whose compliance with its obligations was affected shall immediately inform the other Party, aiming to jointly encounter measures that may circumvent the problem.

AND, BEING IN AGREEMENT AFTER HAVING BEEN READ AND FOUND IN ACCORDANCE, THE PARTIES SIGN THE PRESENT INSTRUMENT, IN FOUR PARTS, WITH TWO IN THE ENGLISH LANGUAGE AND TWO IN THE PORTUGUESE LANGUAGE, ALL HAVING THE SAME CONTENT AND FORM, WITH ONE SINGLE EFFECT, IN THE PRESENCE OF THE WITNESSES BELOW.

	
Local:
	
Local:

	
Data:
	
Data:

	
Chembio Diagnostic System, Inc.
	
Fundação Oswaldo Cruz

	
Lawrence A. Siebert
	
Paulo Buss

	
Presidente
	
Presidente

	
 
	
Instituto de Tecnologia em Imunobiológicos

	
 
	
Akira Homma

	
 
	
Diretor

Testemunhado por:

________________________________       ____________________________

________________________________       _____________________________Registrant's 1998 Employee Stock Purchase Plan

 EXHIBIT 4.01 
  
 VERISIGN, INC. 
  
 1998 EMPLOYEE STOCK PURCHASE PLAN 
  
 As Adopted December 19, 1997 
 and Amended June
8, 2000 and October 22, 2003 
  
 1. Establishment of Plan.
VeriSign, Inc. (the “Company”) proposes to grant options for purchase of the Company’s Common Stock to eligible employees of the Company and its Participating Subsidiaries (as hereinafter defined) pursuant to this
Employee Stock Purchase Plan (this “Plan”). For purposes of this Plan, “Parent Corporation” and “Subsidiary” (collectively, “Participating Subsidiaries”)
shall have the same meanings as “parent corporation” and “subsidiary corporation” in Sections 424(e) and 424(f), respectively, of the Internal Revenue Code of 1986, as amended (the “Code”).
“Participating Subsidiaries” are Parent Corporations or Subsidiaries that the Board of Directors of the Company (the “Board”) designates from time to time as corporations that shall participate in this
Plan. The Company intends this Plan to qualify as an “employee stock purchase plan” under Section 423 of the Code (including any amendments to or replacements of such Section), and this Plan shall be so construed. Any term not expressly
defined in this Plan but defined for purposes of Section 423 of the Code shall have the same definition herein. A total of 3,500,000 shares of the Company’s Common Stock is reserved for issuance under this Plan. In addition, on each January 1,
the aggregate number of shares of the Company’s Common Stock reserved for issuance under the Plan shall be increased automatically by a number of shares equal to 1% of the total number of outstanding shares of the Company Common Stock on the
immediately preceding December 31; provided, that the aggregate number of shares increased under this Plan shall not exceed 2,500,000 shares per year. Such number shall be subject to adjustments effected in accordance with Section 14 of this
Plan. 
  
 2. Purpose. The purpose of this Plan is to
provide eligible employees of the Company and Participating Subsidiaries with a convenient means of acquiring an equity interest in the Company through payroll deductions, to enhance such employees’ sense of participation in the affairs of the
Company and Participating Subsidiaries, and to provide an incentive for continued employment. 
  
 3. Administration. This Plan shall be administered by the Compensation Committee of the Board (the “Committee”). Subject to the provisions of this Plan and the limitations of Section 423
of the Code or any successor provision in the Code, all questions of interpretation or application of this Plan shall be determined by the Committee and its decisions shall be final and binding upon all participants. Members of the Committee shall
receive no compensation for their services in connection with the administration of this Plan, other than standard fees as established from time to time by the Board for services rendered by Board members serving on Board committees. All expenses
incurred in connection with the administration of this Plan shall be paid by the Company. 
  
 4. Eligibility. Any employee of the Company or the Participating Subsidiaries is eligible to participate in an Offering Period (as hereinafter defined) under this Plan except the following: 
  
 (a) employees who are not employed by the Company or Participating
Subsidiaries ten (10) days before the beginning of such Offering Period, except that employees who are employed on the effective date of the registration statement filed by the Company with the Securities and Exchange Commission
(“SEC”) under the Securities Act of 1933, as amended (the “Securities Act”) registering the initial public offering of the Company’s Common Stock shall be eligible to participate in the first
Offering Period under the Plan; 
  
 (b) employees who are
customarily employed for twenty (20) hours or less per week; 
  
 (c) employees who are customarily employed for five (5) months or less in a calendar year; 
  
 (d) employees who, together with any other person whose stock would be attributed to such employee pursuant to Section 424(d) of the Code, own stock or
hold options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any of its Participating Subsidiaries or who, as a result of being granted an option under this
Plan with respect to such Offering Period, 

  

 VeriSign, Inc. 
 1998 Employee Stock Purchase Plan 
  

 
would own stock or hold options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of
the Company or any of its Participating Subsidiaries; and 
  
 (e)
individuals who provide services to the Company or any of its Participating Subsidiaries as independent contractors who are reclassified as common law employees for any reason except for federal income and employment tax purposes.

  
 5. Offering Dates. The offering periods of this Plan
(each, an “Offering Period”) shall be of twenty-four (24) months duration commencing on February 1 and August 1 of each year and ending on January 31 and July 31 of each year; provided, however, that
notwithstanding the foregoing, the first such Offering Period shall commence on the first business day on which price quotations for the Company’s Common Stock are available on the Nasdaq National Market (the “First Offering
Date”) and shall end on January 31, 2000. Except for the first Offering Period, each Offering Period shall consist of four (4) six-month purchase periods (individually, a “Purchase Period”) during which payroll
deductions of the participants are accumulated under this Plan. The first Offering Period shall consist of no more than five and no fewer than three Purchase Periods, any of which may be greater or less than six months as determined by the
Committee. The first business day of each Offering Period is referred to as the “Offering Date”. The last business day of each Purchase Period is referred to as the “Purchase Date”. The Committee shall
have the power to change the duration of Offering Periods or Purchase Periods with respect to offerings without stockholder approval if such change is announced at least fifteen (15) days prior to the scheduled beginning of the first Offering Period
or Purchase Period to be affected. 
  
 6. Participation in this
Plan. Eligible employees may become participants in an Offering Period under this Plan on the first Offering Date after satisfying the eligibility requirements by delivering a subscription agreement to the Company’s treasury department (the
“Treasury Department”) not later than five (5) days before such Offering Date unless a later time for filing the subscription agreement authorizing payroll deductions is set by the Committee for all eligible employees with
respect to a given Offering Period. An eligible employee who does not deliver a subscription agreement to the Treasury Department by such date after becoming eligible to participate in such Offering Period shall not participate in that Offering
Period or any subsequent Offering Period unless such employee enrolls in this Plan by filing a subscription agreement with the Treasury Department not later than five (5) days preceding a subsequent Offering Date. Once an employee becomes a
participant in an Offering Period, such employee will automatically participate in the Offering Period commencing immediately following the last day of the prior Offering Period unless the employee withdraws or is deemed to withdraw from this Plan
or terminates further participation in the Offering Period as set forth in Section 11 below. Such participant is not required to file any additional subscription agreement in order to continue participation in this Plan. 
  
 7. Grant of Option on Enrollment. Enrollment by an eligible employee
in this Plan with respect to an Offering Period will constitute the grant (as of the Offering Date) by the Company to such employee of an option to purchase on the Purchase Date up to that number of shares of Common Stock of the Company determined
by dividing (a) the amount accumulated in such employee’s payroll deduction account during such Purchase Period by (b) the lower of (i) eighty-five percent (85%) of the fair market value of a share of the Company’s Common Stock on the
Offering Date (but in no event less than the par value of a share of the Company’s Common Stock), or (ii) eighty-five percent (85%) of the fair market value of a share of the Company’s Common Stock on the Purchase Date (but in no event
less than the par value of a share of the Company’s Common Stock), provided, however, that the number of shares of the Company’s Common Stock subject to any option granted pursuant to this Plan shall not exceed the lesser of
(a) the maximum number of shares set by the Committee pursuant to Section 10(c) below with respect to the applicable Purchase Date, or (b) the maximum number of shares which may be purchased pursuant to Section 10(b) below with respect to the
applicable Purchase Date. The fair market value of a share of the Company’s Common Stock shall be determined as provided in Section 8 hereof. 
  
 8. Purchase Price. The purchase price per share at which a share of Common Stock will be sold in any Offering Period shall be eighty-five percent
(85%) of the lesser of: 
  
 (a) The fair market value on the
Offering Date; or 
  

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 VeriSign, Inc. 
 1998 Employee Stock Purchase Plan 
  

 (b) The fair market value on the Purchase Date. 
  
 For purposes of this Plan, the term “Fair Market Value” means, as of
any date, the value of a share of the Company’s Common Stock determined as follows: 
  
 (i) if such Common Stock is then quoted on the Nasdaq National Market, its closing price on the Nasdaq National Market on the date of
determination as reported in The Wall Street Journal; 
  
 (ii) if such Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Common Stock
is listed or admitted to trading as reported in The Wall Street Journal; 
  
 (iii) if such Common Stock is publicly traded but is not quoted on the Nasdaq National Market nor listed or admitted to trading on a
national securities exchange, the average of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal; or 
  
 (iv) if none of the foregoing is applicable, by the Board in good faith, which in the case of the First Offering Date will be the price
per share at which shares of the Company’s Common Stock are initially offered for sale to the public by the Company’s underwriters in the initial public offering of the Company’s Common Stock pursuant to a registration statement filed
with the SEC under the Securities Act. 
  
 9. Payment Of
Purchase Price; Changes In Payroll Deductions; Issuance Of Shares. 
  
 (a) The purchase price of the shares is accumulated by regular payroll deductions made during each Offering Period. The deductions are made as a percentage of the participant’s compensation in one percent (1%) increments not less than
two percent (2%), nor greater than ten percent (10%) or such lower limit set by the Committee. Compensation shall mean base salary, commissions, bonuses, incentive compensation and shift premiums not to exceed $250,000 per calendar year, provided
however, that for purposes of determining a participant’s compensation, any election by such participant to reduce his or her regular cash remuneration under Sections 125 or 401(k) of the Code shall be treated as if the participant did not make
such election. Payroll deductions shall commence on the first payday of the Offering Period and shall continue to the end of the Offering Period unless sooner altered or terminated as provided in this Plan. 
  
 (b) A participant may decrease or increase the rate of payroll deductions
during an Offering Period by filing with the Treasury Department a new authorization for payroll deductions, in which case the new rate shall become effective for the next payroll period commencing more than fifteen (15) days after the Treasury
Department’s receipt of the authorization and shall continue for the remainder of the Offering Period unless changed as described below. Such change in the rate of payroll deductions may be made at any time during an Offering Period, but not
more than two (2) changes may be made effective during any Purchase Period. A participant may increase or decrease the rate of payroll deductions for any subsequent Offering Period by filing with the Treasury Department a new authorization for
payroll deductions not later than fifteen (15) days before the beginning of such Offering Period. 
  
 (c) All payroll deductions made for a participant are credited to his or her account under this Plan and are deposited with the general funds of the
Company. No interest accrues on the payroll deductions. All payroll deductions received or held by the Company may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions.

  
 (d) On each Purchase Date, so long as this Plan remains in
effect and provided that the participant has not submitted a signed and completed withdrawal form before that date which notifies the Company that the participant wishes to withdraw from that Offering Period under this Plan and have all payroll
deductions accumulated in the account maintained on behalf of the participant as of that date returned to the participant, the Company shall apply the funds then in the participant’s account to the purchase of whole shares of Common Stock
reserved under the option granted to such participant with respect to the Offering Period to the extent that such option is exercisable on 

  

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 VeriSign, Inc. 
 1998 Employee Stock Purchase Plan 
  

 
the Purchase Date. The purchase price per share shall be as specified in Section 8 of this Plan. Any cash remaining in a participant’s account after
such purchase of shares shall be refunded to such participant in cash, without interest; provided, however that any amount remaining in such participant’s account on a Purchase Date which is less than the amount necessary to purchase a full
share of Common Stock of the Company shall be carried forward, without interest, into the next Purchase Period or Offering Period, as the case may be. In the event that this Plan has been oversubscribed, all funds not used to purchase shares on the
Purchase Date shall be returned to the participant, without interest. No Common Stock shall be purchased on a Purchase Date on behalf of any employee whose participation in this Plan has terminated prior to such Purchase Date. 
  
 (e) As promptly as practicable after the Purchase Date, the Company shall
issue shares for the participant’s benefit representing the shares purchased upon exercise of his or her option. 
  
 (f) During a participant’s lifetime, such participant’s option to purchase shares hereunder is exercisable only by him or her. The participant
will have no interest or voting right in shares covered by his or her option until such option has been exercised. 
  
 10. Limitations on Shares to be Purchased. 
  
 (a) No participant shall be entitled to purchase stock under this Plan at a rate which, when aggregated with his or her rights to purchase stock under all
other employee stock purchase plans of the Company or any Subsidiary, exceeds $25,000 in fair market value, determined as of the Offering Date (or such other limit as may be imposed by the Code) for each calendar year in which the employee
participates in this Plan. The Company shall automatically suspend the payroll deductions of any participant as necessary to enforce such limit provided that when the Company automatically resumes such payroll deductions, the Company must apply the
rate in effect immediately prior to such suspension. 
  
 (b) No
more than two hundred percent (200%) of the number of shares determined by using eighty-five percent (85%) of the fair market value of a share of the Company’s Common Stock on the Offering Date as the denominator may be purchased by a
participant on any single Purchase Date. 
  
 (c) No participant
shall be entitled to purchase more than the Maximum Share Amount (as defined below) on any single Purchase Date. Not less than thirty (30) days prior to the commencement of any Offering Period, the Committee may, in its sole discretion, set a
maximum number of shares which may be purchased by any employee at any single Purchase Date (hereinafter the “Maximum Share Amount”). Until otherwise determined by the Committee, there shall be no Maximum Share Amount. In no
event shall the Maximum Share Amount exceed the amounts permitted under Section 10(b) above. If a new Maximum Share Amount is set, then all participants must be notified of such Maximum Share Amount prior to the commencement of the next Offering
Period. Once the Maximum Share Amount is set, it shall continue to apply with respect to all succeeding Purchase Dates and Offering Periods unless revised by the Committee as set forth above. 
  
 (d) If the number of shares to be purchased on a Purchase Date by all
employees participating in this Plan exceeds the number of shares then available for issuance under this Plan, then the Company will make a pro rata allocation of the remaining shares in as uniform a manner as shall be reasonably practicable and as
the Committee shall determine to be equitable. In such event, the Company shall give written notice of such reduction of the number of shares to be purchased under a participant’s option to each participant affected thereby. 
  
 (e) Any payroll deductions accumulated in a participant’s account which
are not used to purchase stock due to the limitations in this Section 10 shall be returned to the participant as soon as practicable after the end of the applicable Purchase Period, without interest. 
  

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 VeriSign, Inc. 
 1998 Employee Stock Purchase Plan 
  

 11. Withdrawal. 
  
 (a) Each participant may withdraw from an Offering Period under this Plan by signing and delivering to the Treasury
Department a written notice to that effect on a form provided for such purpose. Such withdrawal may be elected at any time at least fifteen (15) days prior to the end of an Offering Period. 
  
 (b) Upon withdrawal from this Plan, the accumulated payroll deductions shall
be returned to the withdrawn participant, without interest, and his or her interest in this Plan shall terminate. In the event a participant voluntarily elects to withdraw from this Plan, he or she may not resume his or her participation in this
Plan during the same Offering Period, but he or she may participate in any Offering Period under this Plan which commences on a date subsequent to such withdrawal by filing a new authorization for payroll deductions in the same manner as set forth
above for initial participation in this Plan. 
  
 (c) If the
purchase price on the first day of any current Offering Period in which a participant is enrolled is higher than the purchase price on the first day of any subsequent Offering Period, the Company will automatically enroll such participant in the
subsequent Offering Period. Except with respect to the first Offering Period, any funds accumulated in a participant’s account prior to the first day of such subsequent Offering Period will be applied to the purchase of shares on the Purchase
Date immediately prior to the first day of such subsequent Offering Period. With respect to the first Offering Period, any funds accumulated in a participant’s account prior to the first day of such subsequent Offering Period will be applied to
the purchase of shares on the Purchase Date next following the first day of such subsequent Offering Period. A participant does not need to file any forms with the Company to automatically be enrolled in the subsequent Offering Period 
  
 12. Termination of Employment. Termination of a participant’s
employment for any reason, including retirement, death or the failure of a participant to remain an eligible employee of the Company or of a Participating Subsidiary, immediately terminates his or her participation in this Plan. In such event, the
payroll deductions credited to the participant’s account will be returned to him or her or, in the case of his or her death, to his or her legal representative, without interest. For purposes of this Section 12, an employee will not be deemed
to have terminated employment or failed to remain in the continuous employ of the Company or of a Participating Subsidiary in the case of sick leave, military leave, or any other leave of absence approved by the Board; provided that such
leave is for a period of not more than ninety (90) days or reemployment upon the expiration of such leave is guaranteed by contract or statute. 
  
 13. Return of Payroll Deductions. In the event a participant’s interest in this Plan is terminated by withdrawal, termination of employment or
otherwise, or in the event this Plan is terminated by the Board, the Company shall promptly deliver to the participant all payroll deductions credited to such participant’s account. No interest shall accrue on the payroll deductions of a
participant in this Plan. 
  
 14. Capital Changes. Subject
to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each option under this Plan which has not yet been exercised and the number of shares of Common Stock which have been authorized for issuance
under this Plan but have not yet been placed under option (collectively, the “Reserves”), as well as the price per share of Common Stock covered by each option under this Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued and outstanding shares of Common Stock of the Company resulting from a stock split or the payment of a stock dividend (but only on the Common Stock) or any other increase
or decrease in the number of issued and outstanding shares of Common Stock effected without receipt of any consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be
deemed to have been “effected without receipt of consideration”. Such adjustment shall be made by the Committee, whose determination shall be final, binding and conclusive. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an
option. 
  

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 VeriSign, Inc. 
 1998 Employee Stock Purchase Plan 
  

 In the event of the proposed dissolution or liquidation of the Company, the Offering Period will terminate
immediately prior to the consummation of such proposed action, unless otherwise provided by the Committee. The Committee may, in the exercise of its sole discretion in such instances, declare that this Plan shall terminate as of a date fixed by the
Committee and give each participant the right to purchase shares under this Plan prior to such termination. In the event of (i) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation
with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings and the options under this
Plan are assumed, converted or replaced by the successor corporation, which assumption will be binding on all participants), (ii) a merger in which the Company is the surviving corporation but after which the stockholders of the Company immediately
prior to such merger (other than any stockholder that merges, or which owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company, (iii) the sale of
substantially all of the assets of the Company or (iv) the acquisition, sale, or transfer of more than 50% of the outstanding shares of the Company by tender offer or similar transaction, the Plan shall continue for all Offering Periods which began
prior to the transaction and shares will be purchased based on the fair market value of the surviving corporation’s stock on each Purchase Date (taking into account the exchange ratio, where necessary). 
  
 The Committee may, if it so determines in the exercise of its sole discretion, also make
provision for adjusting the Reserves, as well as the price per share of Common Stock covered by each outstanding option, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or
reductions of shares of its outstanding Common Stock, or in the event of the Company being consolidated with or merged into any other corporation. 
  
 15. Nonassignability. Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option
or to receive shares under this Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 22 hereof) by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be void and without effect. 
  
 16. Reports. Individual accounts will be maintained for each participant in this Plan. Each participant shall receive promptly after the end of each Purchase Period a report of his or her account setting forth
the total payroll deductions accumulated, the number of shares purchased, the per share price thereof and the remaining cash balance, if any, carried forward to the next Purchase Period or Offering Period, as the case may be. 
  
 17. Notice of Disposition. Each participant shall notify the Company
if the participant disposes of any of the shares purchased in any Offering Period pursuant to this Plan if such disposition occurs within two (2) years from the Offering Date or within one (1) year from the Purchase Date on which such shares were
purchased (the “Notice Period”). Unless such participant is disposing of any of such shares during the Notice Period, such participant shall keep the certificates representing such shares in his or her name (and not in the
name of a nominee) during the Notice Period. The Company may, at any time during the Notice Period, place a legend or legends on any certificate representing shares acquired pursuant to this Plan requesting the Company’s transfer agent to
notify the Company of any transfer of the shares. The obligation of the participant to provide such notice shall continue notwithstanding the placement of any such legend on the certificates. 
  
 18. No Rights to Continued Employment. Neither this Plan nor the grant
of any option hereunder shall confer any right on any employee to remain in the employ of the Company or any Participating Subsidiary, or restrict the right of the Company or any Participating Subsidiary to terminate such employee’s employment.

  
 19. Equal Rights And Privileges. All eligible employees
shall have equal rights and privileges with respect to this Plan so that this Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 or any successor provision of the Code and the related regulations. Any
provision of this Plan which is inconsistent with Section 423 or any successor provision of the Code shall, without further act or amendment by the Company, the Committee or the Board, be reformed to comply with the requirements of Section 423. This
Section 19 shall take precedence over all other provisions in this Plan. 
  

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 VeriSign, Inc. 
 1998 Employee Stock Purchase Plan 
  

 20. Notices. All notices or other communications by a participant to the Company under or in
connection with this Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 
  
 21. Term; Stockholder Approval. After this Plan is adopted by the
Board, this Plan will become effective on the date that is the First Offering Date (as defined above). This Plan shall be approved by the stockholders of the Company, in any manner permitted by applicable corporate law, within twelve (12) months
before or after the date this Plan is adopted by the Board. No purchase of shares pursuant to this Plan shall occur prior to such stockholder approval. This Plan shall continue until the earlier to occur of (a) termination of this Plan by the Board
(which termination may be effected by the Board at any time), (b) issuance of all of the shares of Common Stock reserved for issuance under this Plan, or (c) ten (10) years from the adoption of this Plan by the Board. 
  
 22. Designation of Beneficiary. 
  
 (a) A participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, from the participant’s account under this Plan in the event of such participant’s death subsequent to the end of an Purchase Period but prior to delivery to him of such shares and cash. In addition, a
participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under this Plan in the event of such participant’s death prior to a Purchase Date. 
  
 (b) Such designation of beneficiary may be changed by the participant at any
time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under this Plan who is living at the time of such participant’s death, the Company shall deliver such shares or cash to
the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares or cash to the spouse or to any one
or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 
  
 23. Conditions Upon Issuance of Shares; Limitation on Sale of Shares. Shares shall not be issued with respect to an
option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act, the Securities
Exchange Act of 1934, the rules and regulations promulgated thereunder, and the requirements of any stock exchange or automated quotation system upon which the shares may then be listed, and shall be further subject to the approval of counsel for
the Company with respect to such compliance. 
  
 24. Applicable
Law. The Plan shall be governed by the substantive laws (excluding the conflict of laws rules) of the State of California. 
  
 25. Amendment or Termination of this Plan. The Board may at any time amend, terminate or extend the term of this Plan, except that any such
termination cannot affect options previously granted under this Plan, nor may any amendment make any change in an option previously granted which would adversely affect the right of any participant, nor may any amendment be made without approval of
the stockholders of the Company obtained in accordance with Section 21 hereof within twelve (12) months of the adoption of such amendment (or earlier if required by Section 21) if such amendment would: 
  
 (a) increase the number of shares that may be issued under this Plan; or

  
 (b) change the designation of the employees (or class of
employees) eligible for participation in this Plan. 
  

 - 7 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]