Document:

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT ("Agreement") dated as of March 25, 2005, between STEVEN M.
PELTZMAN, residing at 12 Hopewell Farm Road, South Natick, MA 01760
("Employee"), and SALIVA DIAGNOSTIC SYSTEMS, INC., a corporation having its
current office at 2294 Nostrand Avenue, Brooklyn, NY 11210 ("the Company").

WHEREAS, the parties hereto desire to enter into this Agreement in order to set
forth the terms pursuant to which the Company will employ the Employee and the
Employee will serve as an employee of the Company.

NOW THEREFORE, in consideration of the foregoing and the mutual agreements set
forth herein, the parties hereto, intending to be legally bound, agree as
follows:

1. Employment

The Company agrees to employ the Employee, and the Employee hereby agrees to
such employment, subject to the terms and conditions set forth in this
Agreement.

2. Term

The employment of Employee shall be for a period of two (2) years commencing on
the date of this Agreement, renewable annually thereafter without further action
of the parties, provided that either party can terminate the employment at any
time, for any reason, upon 90 days' notice (the OEmployment PeriodO).

3. Position and Duties

The Employee shall serve as Chairman of the Board of Directors and Chief
Executive Officer, to perform the usual duties of said offices, and shall have
responsibility, subject to direction of the Board of Directors, for
participating in the management and direction of the Company's business and
operations, and shall perform such specific other tasks consistent with such
positions as may from time to time be assigned to him by the Board of Directors.
The Employee shall devote not less than 80% of his business time to the
performance of his duties hereunder, and shall devote his labor, skill,
attention and best ability in a manner that will faithfully and diligently
further the business and interests of the Company. Upon the commencement of the
Employment Period, the Employee shall fulfill such general management duties and
responsibilities as are consistent with the position of Chief Executive Officer.
In his capacity as Chief Executive Officer, the Employee shall endeavor to, and
shall be given all necessary support (including financial and administrative
support) by the Company to (i) identify markets for the Company's products and
services; (ii) maintain, expand, and improve the Company's profile in the
financial markets; (iii) develop strategies and operational plans for bringing
the Company products to market; (iv) identify potential business partners for
strategic or marketing alliances; (v) identify potential senior executives; (vi)
establish budgets and control costs with regard to the foregoing; and (vii)
implement the Company's business strategies.

<PAGE>

Employee shall primarily work out of a location of his selection in
Massachusetts. The Employee agrees that he will travel to whatever extent it is
reasonably necessary in the conduct of the Company's business; provided,
however, that the Employee shall not be required directly or indirectly to
relocate without his consent.

4. Indemnification

(a) Subject to the provisions of the Company's Certificate of Incorporation, as
amended from time to time, the Company shall indemnify the Employee to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time, for all amounts (including, without
limitation, judgments, fines, settlement payments, expenses, and attorney's
fees) actually and necessarily incurred or paid by the Employee in connection
with any action, suit, investigation, or proceeding arising out of or relating
to the performance by the Employee of services for, or the acting by Employee as
an officer or employee of, the Company, or any other person or enterprise at the
Company's request provided that he acted in good faith, for a purpose which he
reasonably believed to be in the best interests of the Company and, in criminal
actions or proceedings, in addition, had no reasonable cause to believe that his
conduct was unlawful. The Employee's expenses incurred in any such action, suit,
investigation or proceeding shall be advanced as incurred upon an undertaking by
the Employee to repay such expenses if they are subsequently finally adjudicated
and not indemnifiable.

(b) No indemnification may be made to or on behalf of the Employee if a judgment
or final adjudication adverse to the Employee establishes that his acts were
committed in bad faith or were the result of active and deliberate dishonesty
and were material to the cause of action so adjudicated, or that he personally
gained in fact a financial profit or other advantage to which he was not legally
entitled.

(c) The Company shall use its best efforts to obtain appropriate levels of D&O
insurance as soon as possible as well as other insurance for general business
and product liability insurances.

5. Compensation and Benefits

A. Base Salary

As compensation for the Employee's services hereunder during the Employment
Period, the Company shall pay the Employee a temporary base salary at the annual
rate of one hundred twenty thousand dollars ($120,000). Said base salary shall
increase to the annual rate of One Hundred Eighty Thousand and 00/100 Dollars
($180,000.00) upon the closing of a financing for the Company with gross
proceeds of at least three million dollars ($3,000,000). Any base salary payable
hereunder shall be paid in regular intervals in accordance with the Company's
payroll practices, but no less frequently than once each month. The Board of
Directors may determine, from time to time, in its sole discretion, to pay the
Employee bonuses or additional compensation. The Employee shall be entitled to
participate in all fringe benefits the Company provides for its employees
generally, and such other benefits as the Company provides generally for its
senior executives. Until such benefit programs are adopted, the Company shall
reimburse the Employee for 75% of Health Insurance and for up to $2,000/yr of
Life Insurance premiums.

<PAGE>

B. Stock Options

The Company shall grant 550,000 options to Employee to purchase the common stock
of the Company (the OCommon StockO) upon execution of this Agreement, as
follows:

(1) Stock options, vested as of the date hereof, exercisable from June 1, 2005
until June 1, 2015, entitling the Employee to purchase 100,000 shares of the
Company's common stock ("Common Stock") at an exercise price of $ 0.10-per
share.

(2) Stock options (the "Options") to acquire 450,000 shares of Common Stock.
Only if the Employee remains employed as of a vesting date, the Options shall
vest in three equal amounts annually, commencing on October 1, 2005 at which
time one-third, (150,000) of the Options shall vest, and on each of the two
anniversaries thereafter, an additional one-third of the Options shall vest,
provided that, if Employee is terminated without Cause within six months of a
vesting date, all Options due to vest as of such date shall vest as of the date
of termination. All vested Options shall terminate ten years from issuance. The
exercise price shall be equal to the lessor of (i) 66-2/3% of the price per
share of Common Stock as established in any Company offering and sale of Common
Stock occurring prior to April 30, 2006, and (ii) $1.00 per share. In the event
of a termination of Employee's employment for any reason other than for Cause,
Employee shall have until their expiration to exercise any vested portion of an
Option. In the event of an acquisition or change in control of the Company, all
unvested options shall immediately vest.

C. Bonus

The Employee's performance shall be reviewed by the Board no less frequently
than annually and the Board shall have, at its discretion, the right to grant
additional stock options, increase base salary, or provide a cash bonus. The
Employee shall not vote on matters specifically and solely related to his
compensation. The Board is expected to provided performance guidelines and
strategic goals consistent with the Company's mission, objectives, and
resources. A Compensation Committee of the Board will compare the overall
Executive Compensation Program of the Company versus its competition and similar
businesses.

<PAGE>

D. Expense Reimbursement

The Company shall promptly pay the reasonable expenses incurred by the Employee
in the performance of his duties hereunder, including, without limitation, those
incurred in connection with business-related travel, telecommunications, and
entertainment, or, if such expenses are paid directly by the Employee, shall
promptly reimburse the Employee for such payment, provided that Employee has
properly accounted therefore in accordance with the Company's written policy of
which the Employee has had reasonable prior notice.

E. Portable or Cellular Telephone

The Company shall reimburse the Employee for business-related expenses incurred
in the use of a portable or cellular telephone.

6. Termination

Notwithstanding any other provisions of this Agreement, the Employee's
employment may be terminated:

A. Constructive Termination. If the Company moves its office more than fifty
(50) miles, reduces the Employee's title, duties or compensation, the Employee
may treat such action as a termination of his employment without cause and shall
be entitled to all rights set forth in paragraph E of this Section.

B. For Cause. By the Company for Cause upon notice to the Employee. "Cause"
shall mean the Employee's having engaged in fraud, embezzlement, theft,
commission of a felony or, except as may be required by law or upon advice of
counsel, his having been proven to have made an intentional unauthorized
disclosure with the knowledge that such disclosure would materially harm the
Company of trade secrets or other proprietary information of the Company or a
subsidiary in violation of written policies regarding disclosure of trade
secrets and such information, and in each case such disclosure shall have
damaged the Company or s subsidiary in a material manner.

C. Disability By the Company upon thirty (30) days notice to the Employee, if he
should be prevented by illness, accident or other disability (mental or
physical) from discharging his duties hereunder for a period of time which would
entitle him to disability payments under any long-term disability policy held by
or paid for by the Company or, if no such policy is then in effect, for one or
more periods totaling 90 work days during any consecutive twelve (12) month
period. In the event of such termination the Company shall pay the Employee an
amount each month for twenty-four (24) months, commencing with the month of his
termination, equal to (i) his highest salary during the twelve (12) month period
ending with the month of his termination, minus (ii) the amount actually
received by the Employee for such month under any long-term disability policy
held by or paid for by the Company.
<PAGE>

D. Death. In the event of Employee's death during the term of his employment,
the Company's obligation to pay further compensation hereunder shall cease
forthwith, except that Employee's legal representative shall be entitled to (a)
receive his monthly compensation for the period up to the last day of the month
in which such death shall have occurred and (b) receive on behalf of the
Employee's estate such benefits as to which the Employee may be entitled under
then existing; benefit policies and programs.

E. Not for Cause/Severance. By the Company other than for Cause in which event
the Company shall pay to the Employee an amount equal to six (6) months salary
as severance compensation (without regard to compensation or benefits the
Employee receives from any other source). The Employee shall be eligible for all
benefits during this 6 month period including bonuses, vesting of stock options,
health care insurance and other fringe benefits that have been ongoing prior to
the written notice(without regard to compensation or benefits the Employee
receives from any other source). The Company may elect to pay such severance
compensation in a lump sum or in equal payments over a period of not more than
six (6) months. If the Employee leaves the employ of the Company voluntarily as
a result of a breach of this Agreement by the Company, there having been as of
the date of the Company's breach no breach of this Agreement by the Employee
which has not been cured or waived, then the Employee's termination of
employment shall be deemed to have been a termination by the Company other than
for Cause. The Employee may treat reduction in rank or responsibilities as
termination of him without cause.

Notwithstanding any of the foregoing provisions of this Section 6, if the
Employee is indebted to the Company, the severance pay or other compensation
obligations of the Company shall be applied first to such indebtedness, but only
in the amount and to the extent that the Employee does not dispute, the excess,
if any, will be paid to said Employee and, in any event, the Employee shall
remain liable for any excess of his indebtedness to the Company over any amounts
owed by the Company. In addition, upon termination of the Employee's employment
(other than a voluntary termination by the Employee) all loans, expense
reimbursements and other amounts owed by the Company to the Employee (other than
severance compensation) shall become immediately due and payable.
<PAGE>

7. Compensation Upon Termination

Upon termination of this Agreement for any reason, the Company shall promptly
compensate the Employee (or, in the event of the Employee's death, his surviving
spouse, if any, or his estate) for all unreimbursed business expenses in
accordance with the Company's expense reimbursement policy in effect at the time
the expenses were incurred.

8. Nondisclosure of Proprietary/Confidential Information

The Employee acknowledges that he will have access to information about the
Company and his employment with the Company shall, throughout the Employment
Period, bring him into close contact with many confidential affairs of the
Company, its subsidiaries and affiliates, and their respective customers,
including, without limitation, information proprietary to the Company, trade
secrets, and other confidential material, which information is not readily
available to the public and all of which is highly confidential and proprietary
and was developed at great effort and expense (such material, "Confidential
Information"). In recognition of the foregoing, during the Employment Period and
for a period of one (1) year thereafter, regardless of the reason for any
termination of employment (whether voluntary or involuntary and whether for
Cause or otherwise), the Employee shall not, without the written consent of the
Shareholders of the Company or its delegate, disclose, or use or make available
for anyone to use (except in the course of his employment hereunder and in
furtherance of the business of the Company, its subsidiaries, or its affiliates)
any Confidential Information and the Employee shall during the continuance of
his employment by the Company use his best efforts to prevent the unauthorized
publication or misuse of any Confidential Information; provided, however, that
Confidential Information shall not include any information (i) known generally
to the public (other than as a result of unauthorized disclosure by the
Employee) or (ii) developed by the Employee without violating any of the
provisions of this Agreement.

The Employee agrees that upon termination of his employment with the Company for
any reason, voluntary or involuntary, with or without Cause, he will immediately
return to the Company all Confidential Information within his possession (or
under his control), and shall not at any time thereafter copy or reproduce the
same.

<PAGE>
9. Restrictive Covenant

(a) Employee recognizes and acknowledges that during employment the Employee
will have access to, learn, be provided with, and, in some cases, will prepare
and create certain confidential proprietary business information, including, but
not limited to, client and customer information and customer lists, all of which
are of substantial value to the Company's business. The Employee agrees that in
addition to any other limitation, for a period of twelve (12) months after the
termination of employment hereunder by him or for Cause, the Employee will not,
on his behalf or on behalf of any other person, firm, or corporation, call on
any of the Employer's customers, or any of its affiliates or subsidiaries for
the purpose of soliciting and/or providing to any of these customers any
non-public customer information relating to the Company's services, nor will the
Employee in any way, directly or indirectly, for himself, or on behalf of any
other person, firm, or corporation competing with the Company, solicit, divert,
or take away any customers of the Employer, its affiliates, or its subsidiaries.
In the event of an actual or threatened breach by the Employee of the provisions
of this paragraph, the Company shall be entitled to injunctive relief
restraining the Employee from the breach or threatened breach. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
available to the Company for such breach or threatened breach, including the
recovery of damages from the Employee.

(b) During the course of employment and for a period of six (6) months from the
date of termination of this Agreement by him or for Cause, Employee shall not,
directly or indirectly, individually or on behalf of persons not now parties to
this agreement, or as a partner, stockholder, director, officer, principal,
agent, employee, or in any other capacity or relationship, engage in any
business or employment, or aid or endeavor to assist any business or legal
entity to engage in the business of rapid diagnostic testing for infectious
disease or other products that directly compete with the Company's then current
customer sales (as of termination) within the United States. Employee
acknowledges the reasonableness of this restrictive covenant and the
reasonableness of the geographic area and duration which are a part of this
covenant.

(c) The Company recognizes that the Employee has had 35 years of experience in
the diagnostic and health care industry, and that concomitant with such
experience is a network of personal and business relationships already
established prior to employment with the Company, and nothing in this Section 9
will limit the business or activities of Employee except for the restriction on
information and customers set forth above.

10. Independence and Severability

Each of the rights enumerated in Sections 8 and 9 (the Restrictive Covenant,
Nondisclosure, and No-Solicitation clauses) shall be independent of the others
and shall be in addition to and not in lieu of any other rights and remedies
available to the Company at law or in equity. If any of the covenants contained
in Sections 8 or 9, or any part of any of them is hereafter construed or
adjudicated to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants or rights or remedies which shall be
given full effect without regard to the invalid portions. If any of the
covenants contained in Sections 8 and 9, is held to be invalid or unenforceable
because of the duration of such provision or the area covered thereby, the
parties agree that the court making such determination shall have the power to
reduce the duration and/or area of such provision and in its reduced form said
provision shall then be enforceable.
<PAGE>

11. Solicitation of Former Employees

Employee agrees that during his employment with Employer and for twelve (12)
months, after termination of employment by him or for cause, the Employee will
not, on behalf of himself or on behalf of any, other person, firm, or
corporation, solicit for hire, nor for six months after such termination, hire
any of the professional or scientific employees of the Company employed as of
such termination.

12. Specific Remedies

(a) The Employee acknowledges that the Company shall suffer irreparable injury
if he breaches his obligations under Sections 8, 9 and 11. Accordingly, in the
event of such breach, the Employee acknowledges that the Company will be
entitled to injunctive relief in any state or federal court of competent
jurisdiction within the Commonwealth of Massachusetts. The Employee further
submits to the personal jurisdiction of such courts for the purposes of any such
action.

(b) Employee hereby acknowledges that his services are unique and extraordinary,
and are not readily replaceable, and hereby expressly agrees that the Company,
in enforcing the covenants contained herein, in addition to any other remedies
provided for herein or otherwise available at law, shall be entitled in any
court of equity having jurisdiction to an injunction restraining him in the
event of a breach, actual or threatened, of the agreements and covenants
contained in these paragraphs.

13. Employee's Duty to Mitigate

In the event Employee's employment is actually or constructively terminated by
the Company prior to the end of the Employment Period, whether or not such
termination is for Cause, Employee agrees to exert reasonable efforts to seek
alternative employment in the same or substantially similar position as that
held with the Company and at the same or substantially similar remuneration.

14. Cooperation Following Termination

Provided that he is fairly compensated for his time and reimbursed for his
out-of-pocket expenses, the Employee agrees that, following notice of
termination of his employment, (i) he will cooperate fully with the Company in
all matters relating to the completion of his pending work on behalf of the
Company and the orderly transition of such work to such other employees as the
Company may designate; and (ii) he will cooperate with the Company as to any and
all claims, controversies, disputes, or complaints over which he has any
knowledge or that may relate to him or his employment relationship with the
Company. Such cooperation includes, but is not limited to, providing the Company
with all information known to him related to such claims, controversies,
disputes, or complaints and appearing and giving testimony in any forum.
<PAGE>

15. Arbitration

To ensure rapid and economical resolution of any and all disputes directly or
indirectly arising out of, or in any way connected or related to the Executive's
employment with the Company or the termination of that employment, the Company
and the Executive each agree that any and all such dispute, whether of law or
fact of any nature whatsoever, shall, if dispute cannot be resolved within
thirty days despite good faith negotiation, be resolved by final and binding
arbitration by Judicial Arbitration and Mediation Services, Inc. ("JAMS") in
Boston, Massachusetts. The Employee agrees to submit to binding arbitration for
the resolution of any employment related controversy, dispute or claim
("Employment Related Claim"). The term "Employment Related Claim" means any
dispute, claim, or controversy against the Company, including claims related to
salary, bonuses, stock, options, vacation pay, fringe benefits, expense
reimbursement, severance benefits, wrongful discharge, defamation, fraud, and
breach of good faith and fair dealing, whether arising out of Employee's
employment, the cessation of Employee's employment or any terms or conditions of
Employee's employment, or arising out of this Agreement (including the
restrictive covenant hereunder), which could have been brought before an
appropriate government administrative agency or in an appropriate court.
Arbitration pursuant to this Agreement shall be the exclusive means for
resolution of such claims and the Company and the Employee understand that by
signing this Agreement, they are waiving his right to obtain any legal or
equitable relief from any government agency or court, or to commence any court
action or to have a jury trial. Notwithstanding the foregoing, Employee does not
waive his right to file a complaint with the Equal Employment Opportunity
Commission pursuant to Title VII, the ADEA, and/or the OWBPA.

The arbitrator's decision shall be final and binding. The arbitrator shall have
the power to award all legal or equitable relief that would have been available
in a court of law, including the costs of arbitration, to the extent such
damages are allowed under law.

Employee further acknowledges that he has been advised of his right to consult
legal counsel with regard to this Agreement.

The arbitration shall be governed by the laws of the Commonwealth of
Massachusetts.

16. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts (without giving effect to conflicts of law).
Only the state and federal courts of Massachusetts shall have jurisdiction over
any controversies regarding this Agreement; any action may be brought only in
those courts in the Commonwealth of Massachusetts and the United States District
Court for the District of Massachusetts having jurisdiction of the subject
matter. Any process in any such action may be served upon either party by
delivering it or mailing it, certified mail, directed to the addresses listed in
Section 20.
<PAGE>

17. Integration

This Agreement constitutes the entire understanding between the parties hereto
relating to the subject matter hereof, superseding all negotiations, prior
discussions, preliminary agreements, and agreements related to the subject
matter hereof made prior to the date hereof.

18. Modifications and Amendments

This Agreement may be modified or amended only by an instrument in writing
executed by the parties hereto and approved in writing by a majority of the
Board of Directors. Such modification or amendment will not become effective
until such approval has been given.

19. Severability

If any of the terms or conditions of this Agreement shall be declared void or
unenforceable by any court or administrative body of competent jurisdiction,
such term or condition shall be deemed severable from the remainder of this
Agreement, and the other terms and conditions of this Agreement shall continue
to be valid and enforceable.

20. Notice

For the purpose of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been duly
given as of the date delivered if delivered in person or by telecopy or if
mailed, by express courier, postage prepaid, addressed as follows:

If to Employee:                   STEVEN M. PELTZMAN
                                  12 Hopewell Farm Rd.
                                  South Natick, MA 01760
                                  Phone:  508 655 7064

If to the Company:                SALIVA DIAGNOSTIC SYSTEMS, INC.
                                  2294 Nostrand Avenue
                                  Brooklyn, NY 11210
                                  Phone:  (718) 552-3599
                                  Fax:  (718)228-2522

                                  ATTENTION:  Mo Bodner

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of changes of address shall be
effective upon receipt.
<PAGE>

21. Waiver

The observation or performance of any condition or obligation imposed upon the
Employee hereunder may be waived only upon the written consent of the
Shareholders of the Company. Such waiver shall be limited to the terms thereof
and shall not constitute a waiver of any other condition or obligation of the
Employee under this Agreement.

22. Assignment

Neither party shall have the right to assign any rights or obligations under
this Agreement without the prior written approval of the other party.

23. Headings

The headings have been inserted for convenience only and are not to be
considered when construing the provisions of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first written upon.

                               SALIVA DIAGNOSTIC SYSTEMS, INC.

                               By
                                 -------------------------------------------
                               Name:
                                    ----------------------------------------
                               Title:
                                     ---------------------------------------
                               STEVEN PELTZMAN

                               ---------------------------------------------EXCLUSIVE DISTRIBUTION AGREEMENT

                        made on this 8th day, July, 2004

By and among:     Memorand Management (1998) Ltd.
                  a company duly incorporated and existing
                  under the laws of the State of Israel
                  of 52 Betzalel St., Ramat Gan 52521, Israel
                  (hereinafter: "Distributor")
                                                                    on one part;

and:              SALIVA DIAGNOSTIC SYSTEMS, INC..
                  a company duly incorporated and existing under the
                  laws of the State of Delaware
                  of 2294 Nostrand Avenue
                  Brooklyn, NY 11210
                  (hereinafter: "SDS")
                                                                 on second part;

Whereas:          SDS warrants and represents that it has developed a device for
                  rapid test for HIV, known as "HemaStrip" and its accessories,
                  as more fully detailed in Appendix A hereto (the "Product"),
                  and has all the rights in and titles to the products and its
                  manufacturing, including all intellectual property rights;

and whereas:      The parties desire that SDS grant the Distributor the
                  exclusive right to act as the sole and exclusive distributor
                  for the marketing of the Product in the Territories, as
                  defined hereunder, at the terms and conditions set forth in
                  this Agreement;

In light of the foregoing, the parties have declared, stipulated and agreed as
follows:

1. Recital, Appendices and Headings:

      1.1.  The recital to the present Agreement, and the Appendices hereto, are
            integral parts thereof.

      1.2.  The headings of the Agreement have been included for purposes of
            convenience only, and may not be used for interpretation of the
            Agreement.

2. Exclusive Distribution Rights:

      2.1.  SDS hereby appoints the Distributor as its sole and exclusive
            distributor for the marketing of the Product in the Territories, as
            defined in Clause 2.4 below, all at the terms set out hereunder. The
            Distributor shall have the exclusive rights to sell, market and
            distribute the Product to any medical facility, governmental or
            municipal authority, army, and/or any other entity or person in the
            Territories, at the Distributor's sole discretion, provided such
            distribution does not conflict with any applicable local laws.

<PAGE>
                                       2

      2.2.  SDS undertakes to sell the Product in the Territories only to the
            Distributor, and not to sell the Product in the Territories to any
            person other than the Distributor, without obtaining the
            Distributor's prior written consent thereto. In addition, SDS
            undertakes not to market, distribute or sell the Products to any
            third party which will sell or distribute the Products in the
            Territories.

      2.3.  It is hereby explicitly agreed that the Distributor shall act
            through its affiliates and use sub-distributors in each of the
            Territories, with SDS' consent regarding the sub-distributors, which
            shall not be unreasonably withheld, for the implementation of this
            agreement.

      2.4.  "The Territories" shall mean, for the purposes of this Agreement,
            the following territories: Russia, each of the CIS countries
            (Commonwealth of Independent States), South Africa, Angola, Namibia,
            Botswana, Democratic Republic of Congo, Zambia, Tanzania, Ethiopia
            and Kenya (each individually a "Territory").

            The Distributor shall be entitled to waive its exclusive rights
            hereunder in respect of any of the African Territories, by a written
            notice delivered to SDS within 6 months from the date hereof.

      2.5.  SDS hereby grants the Distributor the right of first refusal to have
            the exclusive marketing and distribution rights in the Territories
            for any future products utilizing the technology set forth on
            Appendix A it may develop, directly and/or through any affiliate,
            and the terms of this Agreement shall apply to any such future
            products.

3.    Warranties and Representation of SDS:

      3.1.  Without prejudice to anything in the recital to this Agreement, SDS
            warrants and represents to the Distributor, acknowledging and
            confirming that the Distributor is relying on such warranties and
            representations in entering into this Agreement, that:
<PAGE>
                                       3

           3.1.1. SDS is a corporation duly continued and validly existing
                  under the laws of the State of Delaware and is duly qualified
                  to execute, deliver and perform any of its obligations under
                  this Agreement.

           3.1.2. SDS has all necessary licenses, permits, approvals, consents,
                  certificates, registrations and authorizations, to manufacture
                  sell and distribute the Product outside the United States,
                  including a license from the USFDA ("Licenses"), and the
                  Licenses are validly existing and in good standing. None of
                  the Licenses contain any burdensome term, provision, condition
                  or limitation, which has or may have a materially adverse
                  effect on the implementation of this Agreement. SDS undertakes
                  to obtain extension of the term and validity of all Licenses,
                  for the full term of this Agreement.

           3.1.3. SDS solely holds title to all rights and titles, including
                  patent rights as described in Appendix D hereto, and all other
                  intellectual property rights in connection with the Product,
                  which rights are owned free and clear from any mortgage,
                  pledge, cession, lien or other encumbrance or security of any
                  kind or any other third party's right.

           3.1.4. SDS is the owner of, and the holder of title to all the
                  rights in all the manufacturing equipment and technical
                  know-how relating to the manufacturing of the Products, which
                  rights are owned free and clear from any mortgage, pledge,
                  cession, lien or other encumbrance or security of any kind or
                  any other third party's right.

           3.1.5. The execution, delivery and the performance by SDS of its
                  obligations hereunder, and compliance with the terms,
                  conditions and provisions of this Agreement, will not conflict
                  with, or result in a breach of, any of the terms or conditions
                  of: (i) the constituting documents or by-laws of SDS, (ii) any
                  applicable law, statute, rule or regulation of any
                  governmental entity, (iii) any contractual restriction binding
                  on or affecting it or its assets and properties, or (iv) any
                  judgment, injunction, determination or award which is binding
                  on it.

           3.1.6. The execution of this Agreement by SDS and the performance of
                  its obligations hereunder, have been duly authorized by all
                  necessary corporate action.
<PAGE>
                                       4

           3.1.7. Except as explicitly provided herein, no authorization,
                  consent, approval, registration, qualification, designation,
                  declaration or filing with any governmental entity or other
                  person, is or was necessary in connection with the execution,
                  delivery and performance of any of the obligations of SDS
                  under this Agreement.

           3.1.8. To the knowledge of SDS, no law, rule or regulation have been
                  enacted, promulgated, applied or proposed, which may challenge
                  the validity or propriety of the transaction contemplated
                  hereunder, or which questions, or may question, the validity
                  of any action taken or to be taken by SDS pursuant to or in
                  connection with this Agreement.

4.    Warranties and Representations of the Distributor:

      4.1.  The Distributor, as at the date of this Agreement, warrants and
            represents to SDS that it is a corporation duly continued and
            validly existing under the laws of the State of Israel, and has all
            requisite corporate power and authority to execute, deliver and
            perform any of its obligations under this Agreement.

5.    Duties of the Distributor:

      5.1.  The Distributor shall, under the terms of this Agreement in order to
            assist SDS in its coordination of sales and delivery, provide SDS
            with quarterly forecasts with the Distributor's requirements for the
            Product, which forecasts shall not constitute a binding purchase
            order of the Distributor. Additionally, the Distributor shall:

           5.1.1. Provide SDS with reports on a quarterly basis regarding sales
                  activity, distribution partners and other arrangements that
                  the Distributor is making to promote the Product.

           5.1.2. At the Distributor's sole expense, obtain all licenses,
                  permits, approvals and other governmental authorizations, and
                  make all filings, notifications and registrations
                  (collectively "Authorizations and Registrations") will all
                  governmental agencies necessary or appropriate for the
                  distribution and sale of the Product by the Distributor and
                  its sub-distributors, and use by the Distributor and its
                  sub-distributors and their customers, of the Product in the
                  Territories.

           5.1.3. Undertake all reasonable means, measures and efforts and
                  implement policies and procedures to ensure that the Products
                  sold to the Distributor by SDS are not sold for resale outside
                  the Territories by the Distributor, its agents, affiliates
                  and/or consultants.
<PAGE>
                                       5

           5.1.4. Subject to the laws and regulations applicable in each of the
                  Territories, the Distributor shall obtain registration of the
                  Product in each of the Territories in the name of the
                  Distributor and/or its respective subsidiary in such
                  Territories. In the event that SDS shall request additional
                  registration of the Product (i) in its name, and/or (ii) in
                  the name of any other distributor in the event that the
                  Distributor does not meet the Minimum Purchases hereunder;
                  then SDS or such distributor ,as the case may be, shall solely
                  bear all the expenses associated with the registration of the
                  Product.

                  In the event that the Distributor does not meet the Minimum
                  Purchases for a certain Territory, it will not impede other
                  distributors appointed by SDS from registration of the Product
                  in their name in such Territory

           5.1.5. In order to maintain the exclusive rights granted in this
                  Agreement, meet the minimum annual purchases set forth in
                  Appendix B hereto ("Minimum Purchases"). In the event that the
                  Distributor does not meet such Minimum Purchases, SDS will be
                  allowed to appoint additional distributors in such Territory.
                  In such case, the right of the Distributor to continue as a
                  non-exclusive distributor shall be decided at the sole
                  discretion of SDS. This provision is subject to clause 7
                  below.

           5.1.6. Refrain from entering into any contract or other arrangement
                  with any other party for the sale, marketing, or distribution
                  of any products in the Territories that are competitive to the
                  Product during the term of this Agreement.

           5.1.7. Not to divulge any information with respect to SDS operations
                  except as may be necessary to carry out its activities under
                  this Agreement. This obligation shall survive the termination
                  or expiration of this Agreement.
<PAGE>
                                       6

6.    Assistance by SDS:

      6.1.  SDS shall furnish the Distributor, free of charge, all relevant
            material related to the Product, such as data sheets, brochures,
            related scientific material and application instructions.

      6.2.  Without prejudice to the generality of clause 6.1 above, SDS
            undertakes to provide at its own cost to the Distributor any and all
            information reasonably required in order to obtain the
            Authorizations and Registration and all other necessary licenses,
            permits and approvals, including scientific, technical, legal and
            other information, and SDS shall use its best endeavors to otherwise
            assist the Distributor is obtaining the Authorizations and
            Registration, as shall be requested by the Distributor.

      6.3.  SDS shall, at all reasonable times, at the request of the
            Distributor, advise and consult the Distributor in all matters
            concerning the application and eventual use of the Product, its
            manufacturing, promotion and marketing. In the event such
            consultation takes place outside the State of New York, Distributor
            shall bear the reasonable travel expenses of SDS or its personnel.

7.    Purchase Orders:

      7.1.  The Distributor undertakes that it shall place the first order of
            Products from SDS by the end of 6 months from the date of signature
            hereof, and that during the following 12 months (the "First Year")
            the total orders shall meet the annual Minimum Purchases according
            to Appendix B hereto. Following the First Year, the total orders
            placed during each subsequent 6 month period, shall meet at least
            50% of the Minimum Purchases according to Appendix B hereto.

      7.2.  Notwithstanding the provision of clause 7.1 above, in the event the
            Distributor does not place the first order for a certain Territory
            by the end of 6 months from the date hereof, however the Distributor
            notifying SDS in writing that it is close to obtaining the
            Authorization and Registration for such Territory, then the time
            frame to place the first order shall be extended by 90 days (i.e.
            the Distributor shall be obliged to place the first order within 9
            months from the date hereof). For the purpose of this Article 7, an
            order shall be deemed placed if delivery is to occur within 60 days
            after the order is placed.
<PAGE>
                                       7

8.    Indemnity and Warranty:

      8.1.  SDS warrants that, to the best of the knowledge of its directors and
            officers, in manufacturing and/or supplying the Product, it has not
            infringed any third party's rights, including without limitation any
            intellectual property rights, patent rights, copyrights, trade
            marks, etc., and SDS undertakes to hold the Distributor harmless and
            to indemnify it against any claim or demand submitted against it by
            any third party in respect of an infringement of any such third
            party's rights. SDS either owns or licenses all of the Patents
            listed on Appendix D, and has the exclusive right to grant licenses
            and sublicenses therefore without the consent or approval of any
            Third Party. SDS shall be exclusively liable and responsible towards
            the Distributor and its affiliates and sub-distributors in
            connection with any claim, suit or demand brought against the
            Distributor alleging that any of the Products infringes proprietary
            rights or other intellectual property rights of any third party.

      8.2.  SDS makes no warranty of any kind, express or implied, except that
            the goods sold hereunder are merchantable and fit for the purpose
            set forth in the literature accompanying such Product when
            transported, stored and utilized by Distributor under atmospheric,
            transportation and storage conditions set forth in such literature.
            The buyer assumes all risk and liability resulting from the use of
            the material, whether used singly or in combination with other
            products. SDS shall in no way be responsible for their proper use
            and service.

            SDS shall in no way be deemed or held to be obligated, liable or
            accountable upon or under any guarantees or warranties, express or
            implied, whether by operation of law or otherwise, in any manner or
            form beyond the express agreements herein set forth and under no
            circumstances shall SDS be liable for special, indirect or
            consequential damages, unless such damages arise from a Defective
            Product as defined in Section 9.1.

      8.3.  SDS undertakes to indemnify, defend and hold harmless the
            Distributor from and against any and all damages, liabilities, costs
            and expenses (including reasonable fees of counsel and other
            professionals) incurred by the Distributor, in relation with the use
            of and/or infringement by the Products distributed by the
            Distributor, solely as specified in Clause 8.2 above, provided
            however that: (i) the Distributor shall notify SDS in writing of any
            such claim, proceeding or investigation, and (ii) the Distributor
            shall cooperate in the handling of any such claim, proceeding or
            investigation. SDS will reimburse the Distributor for all reasonable
            out-of-pocket expenses incurred, at its request, in connection with
            the above.
<PAGE>
                                       8

      8.4.  SDS shall have the option, at its own expense, to carry out the sole
            management and defense of such claims or suits, and will provide
            attorneys acceptable to the Distributor, to defend against such
            claim, proceeding or investigation. In such event, the Distributor
            shall also have the right but not the obligation to be represented
            with respect to any such claim by counsel of its own selection, at
            its own expense.

      8.5.  SDS shall not settle any dispute with respect to the abovementioned
            without the prior written consent of the Distributor, which shall
            not be unreasonably withheld.

      8.6.  The Distributor warrants that it will abide by all local rules and
            regulations in each Territory in which it sells the Product.

      8.7.  The Distributor shall instruct its affiliates, sub-distributors (if
            appropriate) and customers to store and handle the Product in
            accordance with the specifications of SDS.

      8.8.  The Distributor shall not grant any warranty to any third party
            which exceeds the warranty granted herein, .This warranty is in lieu
            of all other warranties, express or implied, regarding the Product,
            including the implied warranties of merchantability and fitness for
            a particular purpose.

      8.9.  The provisions of this clause 8 shall survive termination hereof.

9.    Defective, Expired and Returned Products:

      9.1.  SDS guarantees that the Product will comply with the warranty set
            forth in Section 8.2 hereof within USFDA manufacturing tolerances
            for the Product, and will be liable towards the Distributors, its
            affiliates, sub-distributors for losses or damages sustained by them
            as a result of any Product not in compliance with said warranty and
            not within USFDA manufacturing tolerances for the Product.(whether
            such defects or vices are latent or not) (the "Defective Products").

      9.2.  In case of any Defective Product, the Distributor shall inform SDS
            thereof following discovery of the said imperfection or defect.
<PAGE>
                                       9

      9.3.  The Distributor will notify SDS, within fifteen (15) days from the
            beginning of each calendar quarter of any Products sold by the
            Distributor or the sub-distributors to customers in the Territories,
            which have been returned to the Distributor or the sub-distributors
            by their purchasers (the "Returned Products") during the precedent
            calendar quarter, for any reason whatsoever.

      9.4.  The Distributor may choose to require from SDS to fully credit the
            Distributor or the sub-distributors, as applicable, for the
            Defective Products.

      9.5.  The Distributor shall act with regards to the Defective Products, in
            accordance with the written instructions of SDS. In case SDS shall
            instruct the Distributor to dispose of any or all of the Defective
            Products, the Distributor shall perform the disposal thereof at the
            cost of SDS, and according to SDS instructions, as well as any
            government regulations or instructions of any competent authority,
            if existing.

      9.6.  SDS shall maintain, throughout the term of this Agreement, and as
            may be extended from time to time, customary professional and
            product liability insurance for reasonable amounts, and shall
            provide to the Distributor copy of such insurance policies and
            evidence of premium payment for the same.

      9.7.  The provisions of this clause 9.1 will survive the termination
            hereof.

10.   Product Service and Recall:

      10.1. The Distributor shall deliver to SDS, in writing, details of any
            material complaint received and relating to the Products in the
            Territories.

      10.2. The Distributor hereby undertakes to fully cooperate with SDS,
            and/or with any third party indicated by SDS, including government
            agencies, in conducting any recall ordered by a government agency or
            by SDS, of any of the Products (the "Recall").

      10.3. SDS hereby undertakes to bear and pay all reasonable costs and
            expenses incurred by the Distributor and by the sub-distributor with
            regard to such recall.
<PAGE>
                                       10

11.   Consideration:

      11.1. The consideration payable to SDS for the Products purchased by the
            Distributor, shall be in accordance with the price list attached as
            Appendix C hereto ("the Consideration").

      11.2. The payment of the Consideration shall be effected by way of wire
            transfer by the Distributor to SDS within 30 days after the Products
            were delivered to the Distributor, in respect of any certain
            purchase order.

      11.3. The payment of the Consideration will be guaranteed by the parent
            company of the Distributor, Memeorand Ltd., subject to SDS's consent
            which shall not be unreasonably withheld. SDS shall give the
            Distributor a credit line of USD 3,000,000.00. The Guarantee shall
            be in the Form annexed hereto as Appendix E.

12.   Delivery of the Product:

      12.1. SDS undertakes to deliver the Products to the port in the
            Territories as the Distributor shall instruct at the cost of SDS, by
            proper means of marine transportation and at the appropriate
            conditions which will allow their proper maintenance and storage for
            a reasonable period of time.

      12.2. SDS shall be liable for any and all damages to the Products until
            delivery to the port in the Territories.

      12.3. All costs and expenses in connection with the Product until the
            Delivery of the Product to the port in the Territories shall be
            borne by SDS, and thereafter shall be borne by the Distributor; it
            being understood that any additional costs of transportation for
            "rush' or other special shipments shall be at the expense of
            Distributor.

      12.4. Distributor shall bear all customs and import duties in respect of
            the Product and shall arrange for customs clearance at port of
            delivery.

      12.5. It is being clarified that the packaging of the Product shall be
            done in the United States by SDS, at its own cost, however it is
            understood that the costs relating to translation of the inscription
            of the packages and the accompanying material shall be borne by the
            Distributor.
<PAGE>
                                       11

13.   Term:

      13.1. This Agreement shall commence from the date of the signature hereof
            by all the parties hereto, for a period of 5 (five) years.

      13.2. Subject to the Distributor meeting the Minimum Purchases, as
            required herein, the Distributor shall have the option to extend the
            term of this Agreement by consecutive 1 year periods, to be
            exercised by a written notice to SDS 60 (sixty) days prior to the
            end of the term.

      13.3. The Distributor shall have the right, at its sole discretion, to
            terminate this Agreement at any time, by a 6 (six) months' prior
            written notice to SDS.

      13.4. The termination of the Agreement shall not effect the rights and
            obligations of the parties, which have not been fulfilled as at the
            termination of this Agreement, which shall remain in full force and
            effect and survive the termination hereof.

14.   Compensation:

      14.1. Without prejudice to any other obligation of SDS hereunder, any the
            remedies available to the Distributor under applicable laws and/or
            this Agreement, in the event that in respect of any Territory SDS
            either (i) denies from the Distributor the exclusivity granted
            hereunder, (ii) unlawfully terminates this Agreement. (iii) grants
            any other person any right to sell or distribute the product in such
            Territory (save as explicitly agreed hereunder), or (iv) sell or
            distributes the Product in the Territory itself, directly or
            indirectly, then SDS shall pay to the Distributor, as agreed and
            prevalued compensation, a sum equal to the price on Appendix C of
            the Minimum Purchase for 2 years, in respect of such Territory.

      14.2. The provisions of this clause 14 shall survive termination hereof.

15.   Assignment:

      15.1. Subject to Article 2.3 above, it is hereby agreed that the
            Distributor shall not be entitled to assign any of its rights and
            obligations hereunder, without the prior written consent of SDS,
            save for assignment to the Distributor's Affiliates.
<PAGE>
                                       12

      15.2. SDS shall be entitled to transfer its rights and obligations
            hereunder to a a Subsidiary or a third party, provided that such
            third party undertakes to be bound by the terms of this Agreement.

16.   Force Majeure:

      16.1. It is agreed that neither party shall be liable for delay or failure
            to perform its obligations hereunder due to intervention of a force
            majeure event, and the dates set in this Agreement shall be
            postponed for the period the force majeure circumstances apply. For
            the purposes of this Agreement force majeure covers any contingency
            beyond a Party's control, including but not limited to acts of God,
            fires, floods, earthquakes, acts of war, acts of terror, sabotage,
            civil riots or disputes, governmental laws, ordinances, rules or
            regulations, limitations and decrees by state authorities, strikes
            and other forms of workers protests,

      16.2. The party failing to perform its obligations under this Agreement
            due to a Force Majeure event shall promptly notify in writing the
            other party upon occurrence of such Force Majeure Event and provide
            supporting documentation/information. The party being notified such
            Force Majeure Event shall have the right to terminate this Agreement
            in case the Force Majeure Event notified to it by the other Party
            lasts for more than 3 (three) months.

17.   Confidentiality and Non-Competition:

      17.1. Each of the parties undertakes to maintain in complete confidence,
            without time limitation, any information which was and/or shall be
            brought to their knowledge, in all matters connected, concerned
            and/or pertaining to the parties and to this Agreement, including,
            without limitation, any financial, commercial and technical
            information, customer lists, trade secrets, and any other
            information, whether in written form, electronic form or otherwise
            (the "Confidential Information").

      17.2. The aforesaid obligation shall not apply in respect of Confidential
            Information and other documentation and/or information which: (i) at
            the time of disclosure, is in the public domain; or (ii) after
            disclosure becomes a part of the public domain through no act or
            omission in breach of this Agreement by any of the parties and/or
            anyone on his behalf; or (iii) was rightfully in the possession of
            such party prior to disclosure by the other parties; or (iv) the
            party is under a legal duty, by any law, to disclose it to third
            parties.
<PAGE>
                                       13

      17.3. Notwithstanding the aforesaid in Clause 17.1 and 17.2, it is agreed
            that the Distributor shall be entitled to disclose such Confidential
            Information as shall be required to obtain all the import licenses,
            permits and approval required for the implementation hereof and SDS
            shall be entitled to disclose and file such information as is
            required by applicable laws and regulations..

      17.4. The provisions of this clause 17 shall survive termination hereof.

18.   Law and Arbitration:

      18.1. This Agreement shall be governed by and construed in accordance with
            the laws of England, without giving effect to its conflicts of laws
            provisions.

      18.2. Any conflict, disagreement or dispute between the parties arising
            out of or in connection with this Agreement, including any question
            regarding its existence, validity or termination, shall be settled
            amicably within 15 days from the date of first written approach of a
            party to the other party, and if not settled amicably, shall be
            referred to and finally resolved by arbitration before the London
            Court of International Arbitration (LCIA), under its rules, which
            rules are deemed to be incorporated by reference into this clause.

            The number of arbiters shall be one. The seat, or legal place, of
            the arbitration shall be London, UK, and the language to be used in
            the arbitral proceedings shall be English.

            The arbitration award shall be final and binding upon the parties.

19.   Notices:

      All notices, requests, demands or other communications to or upon the
      parties shall be made to the parties by mail or by hand at the addresses
      and facsimile numbers set forth above, or given in writing from time to
      time by a party, and shall be deemed to have been given or made within 5
      (five) days after being posted by express courier, unless delivered by
      hand, in which case it shall be deemed to have been given or made at the
      time of delivery, or if transmitted by facsimile or e-mail - at the second
      business day following their transmission. A copy of any notice given
      shall be simultaneously delivered ;

      If to Distributor:

      Yitzhak Poran, Law Offices
      Century Tower,    15th Floor
      124  Ibn  Gvirol  St.
      Tel Aviv
      62038,  Israel
      Tel: 972-3-5238388
      Fax: 972-3-5290022
      E-mail: lpbm-law@zahav.net.il
<PAGE>
                                       14

      If to SDS;

      SAMUEL M. KRIEGER, ESQ.
      Krieger & Prager LLP
      39 Broadway, Suite 1440
      New York, NY 10006
      Tel:(212)363-2900
      Fax: (212) 363-2999
      skrieger@kplawfirm.com

20.   Miscellaneous:

      20.1. Any reputation gained as consequence of the distribution and
            marketing of the Products by the Distributor, shall be proprietary
            to the Distributor, save as otherwise mutually agreed by the
            parties.

      20.2. No Agency or Partnership - The parties hereby agree that no
            partnership or agency between them is created by this Agreement or
            shall arise pursuant to this Agreement.

      20.3. Breach - If either party fails duly to perform or comply with any of
            its obligations under this Agreement, and such failure is not
            remedied within 14 days after the offended party has given the other
            a written notice thereof, then the offended party may, without
            prejudice to the rights it may have hereunder, or any other
            applicable law, by written notice to the other, declare that the
            Agreement is terminated by the offended party forthwith.

      20.4. Costs - Each party shall bear its own costs in connection with the
            preparation of this Agreement.

      20.5. If any provision of this Agreement is held to be unenforceable, then
            such provision shall be excluded from this Agreement and the
            remainder of this Agreement shall be interpreted as if such
            provision was so excluded and shall be enforceable in accordance
            with its terms; Provided, however, that in such event this Agreement
            shall be interpreted so as to give effect, to the greatest extent
            consistent with and permitted by applicable law, to the meaning and
            intention of the excluded provision.
<PAGE>
                                       15

      20.6. This Agreement may be executed in any number of counterparts, and
            any single counterpart or set of counterparts signed, in either
            case, by all the parties hereto shall be deemed to constitute a full
            and original agreement for all purposes.

      20.7. Any change, amendment, waiver, relief, extension or agreement in
            connection with any instruction or provision of this Agreement shall
            be invalid, unless made by a written instrument, signed by all the
            parties.

      In Witness Whereof, the parties have caused this Agreement to be signed,
      by their duly authorized representatives:

-------------------------------             ------------------------------------
Memorand Management (1998) Ltd.             Saliva Diagnostic Systems. Inc.

by:                                         by:
   ----------------------------                ---------------------------------
title:                                      title:
      ----------------------------                ------------------------------

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