Document:

Exhibit 10.15 Registration Rights Agreement

    
      
        
          
            
              
                
                  
                    
                      

                    

                    
                      

                    

                    Exhibit
                      10.15 Registration Rights Agreement

                    
                      

                           

                        

                        REGISTRATION
                          RIGHTS AGREEMENT

                        

                        This
                          Registration Rights Agreement (this “Agreement”)
                          is
                          made and entered into as of June 29, 2006, among Chembio
                          Diagnostics, Inc., a
                          Nevada corporation (the “Company”),
                          and
                          the several purchasers signatory hereto (each such purchaser
                          is a “Purchaser”
and
                          collectively, the “Purchasers”).

                        

                        This
                          Agreement is made pursuant to the Securities Purchase Agreement,
                          dated as of the
                          date hereof between the Company and each Purchaser (the
“Purchase
                          Agreement”).

                        

                        The
                          Company and each Purchaser hereby agrees as follows:

                        

                        1.
                          Definitions

                        

                         Capitalized
                          terms used and not otherwise defined herein that are defined
                          in the Purchase
                          Agreement shall have the meanings given such terms in the
                          Purchase
                          Agreement.
                          As used
                          in this Agreement, the following terms shall have the following
                          meanings:

                        

                        “Advice”
shall
                          have the meaning set forth in Section 6(d).

                        

                        “Effectiveness
                          Date”
means,
                          with respect to the initial Registration Statement required
                          to be filed
                          hereunder, the earlier of (i) 90 calendar days following
                          the date when the
                          Company completes a private placement of at least $2,000,000
                          of the Company’s
                          securities (the 120th
                          calendar
                          day in the case of a “full review” by the Commission of the initial Registration
                          Statement) and (ii) the 180th
                          calendar
                          day following the date hereof (the 210th
                          calendar
                          day in the case of a “full review” by the Commission of the initial Registration
                          Statement) and, with respect to any additional Registration
                          Statements which may
                          be required pursuant to Section 3(c), the 60th
                          calendar
                          day following the date on which the Company first knows,
                          or reasonably should
                          have known, that such additional Registration Statement
                          is required hereunder;
provided,
                          however,
                          in the
                          event the Company is notified by the Commission that one
                          of the above
                          Registration Statements will not be reviewed or is no longer
                          subject to further
                          review and comments, the Effectiveness Date as to such
                          Registration Statement
                          shall be the fifth Trading Day following the date on which
                          the Company is so
                          notified if such date precedes the dates required above.

                        

                        “Effectiveness
                          Period”
shall
                          have the meaning set forth in Section 2(a).

                        

                        “Event”
shall
                          have the meaning set forth in Section 2(b).

                        

                        “Event
                          Date”
shall
                          have the meaning set forth in Section 2(b).

                        

                        “Filing
                          Date”
means,
                          with respect to the initial Registration Statement required
                          hereunder, the
                          earlier of (i) 30 calendar days following the date when
                          the Company

                        
                          
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                        completes
                          a private placement of at least $2,000,000 of the Company’s securities and (ii)
                          the 120th
                          calendar
                          day following the date hereof and, with respect to any
                          additional Registration
                          Statements which may be required pursuant to Section 3(c),
                          the 30th
                          day
                          following the date on which the Company first knows, or
                          reasonably should have
                          known that such additional Registration Statement is required
                          hereunder.

                        

                        “Holder”
or
                          “Holders”
means
                          the holder or holders, as the case may be, from time to
                          time of Registrable
                          Securities.

                        

                        “Indemnified
                          Party”
shall
                          have the meaning set forth in Section 5(c).

                        

                        “Indemnifying
                          Party”
shall
                          have the meaning set forth in Section 5(c).

                        

                        “Losses”
shall
                          have the meaning set forth in Section 5(a).

                        

                        “Plan
                          of Distribution”
shall
                          have the meaning set forth in Section 2(a). 

                        

                        “Prospectus”
means
                          the prospectus included in a Registration Statement (including,
                          without
                          limitation, a prospectus that includes any information
                          previously omitted from a
                          prospectus filed as part of an effective registration statement
                          in reliance upon
                          Rule 430A promulgated under the Securities Act), as amended
                          or supplemented by
                          any prospectus supplement, with respect to the terms of
                          the offering of any
                          portion of the Registrable Securities covered by a Registration
                          Statement, and
                          all other amendments and supplements to the Prospectus,
                          including post-effective
                          amendments, and all material incorporated by reference
                          or deemed to be
                          incorporated by reference in such Prospectus.

                        

                        “Registrable
                          Securities”
means
                          (i) all Warrant Shares, (ii) any additional shares issuable
                          in connection with
                          any anti-dilution provisions in the Warrants (without giving
                          effect to any
                          limitations on exercise set forth in the Warrant) and (iii)
                          any securities
                          issued or issuable upon any stock split, dividend or other
                          distribution,
                          recapitalization or similar event with respect to the foregoing.

                        

                        “Registration
                          Statement”
means
                          the registration statements required to be filed hereunder
                          and any additional
                          registration statements contemplated by Section 3(c), including
                          (in each case)
                          the Prospectus, amendments and supplements to such registration
                          statement or
                          Prospectus, including pre- and post-effective amendments,
                          all exhibits thereto,
                          and all material incorporated by reference or deemed to
                          be incorporated by
                          reference in such registration statement.

                        

                        “Rule
                          415”
means
                          Rule 415 promulgated by the Commission pursuant to the
                          Securities Act, as such
                          Rule may be amended from time to time, or any similar rule
                          or regulation
                          hereafter adopted by the Commission having substantially
                          the same purpose and
                          effect as such Rule.

                        

                        “Rule
                          424”
means
                          Rule 424 promulgated by the Commission pursuant to the
                          Securities Act, as such
                          Rule may be amended from time to time, or any similar rule
                          or 

                        
                          
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                        regulation
                          hereafter adopted by the Commission having substantially
                          the same purpose and
                          effect as such Rule.

                        

                        “Selling
                          Shareholder Questionnaire”
shall
                          have the meaning set forth in Section 3(a).

                        

                        2.
                           Shelf
                          Registration

                        

                        (a) On
                          or
                          prior to each Filing Date, the Company shall prepare and
                          file with the
                          Commission a “Shelf” Registration Statement covering the resale of 130% of the
                          Registrable Securities on such Filing Date for an offering
                          to be made on a
                          continuous basis pursuant to Rule 415. The Registration
                          Statement shall be on
                          Form SB-2 (except if the Company is not then eligible to
                          register for resale the
                          Registrable Securities on Form SB-2, in which case such
                          registration shall be on
                          another appropriate form in accordance herewith) and shall
                          contain (unless
                          otherwise directed by at least an 85% majority in interest
                          of the Holders)
                          substantially the “Plan
                          of Distribution”
                          attached hereto as Annex
                          A.
                          Subject
                          to the terms of this Agreement, the Company shall use its
                          best efforts to cause
                          a Registration Statement to be declared effective under
                          the Securities Act as
                          promptly as possible after the filing thereof, but in any
                          event prior to the
                          applicable Effectiveness Date, and shall use its best efforts
                          to keep such
                          Registration Statement continuously effective under the
                          Securities Act until all
                          Registrable Securities covered by such Registration Statement
                          have been sold, or
                          may be sold without volume restrictions pursuant to Rule
                          144(k), as determined
                          by the counsel to the Company pursuant to a written opinion
                          letter to such
                          effect, addressed and acceptable to the Company’s transfer agent and the
                          affected Holders (the “Effectiveness
                          Period”).
                          The
                          Company shall telephonically request effectiveness of a
                          Registration Statement
                          as of 5:00 p.m. New York City time on a Trading Day. The
                          Company shall
                          immediately notify the Holders via facsimile of the effectiveness
                          of a
                          Registration Statement on the same Trading Day that the
                          Company telephonically
                          confirms effectiveness with the Commission, which shall
                          be the date requested
                          for effectiveness of a Registration Statement. The Company
                          shall, by 9:30 a.m.
                          New York City time on the Trading Day after the Effective
                          Date (as defined in
                          the Purchase Agreement), file a final Prospectus with the
                          Commission as required
                          by Rule 424. Failure to so notify the Holder within 1 Trading
                          Day of such
                          notification of effectiveness or failure to file a final
                          Prospectus as a
                          foresaid shall be deemed an Event under Section 2(b).

                         

                        (b) If:
                          (i) a
                          Registration Statement is not filed on or prior to its
                          Filing Date (if the
                          Company files a Registration Statement without affording
                          the Holders the
                          opportunity to review and comment on the same as required
                          by Section 3(a), the
                          Company shall not be deemed to have satisfied this clause
                          (i)), or (ii) the
                          Company fails to file with the Commission a request for
                          acceleration in
                          accordance with Rule 461 promulgated under the Securities
                          Act, within five
                          Trading Days of the date that the Company is notified (orally
                          or in writing,
                          whichever is earlier) by the Commission that a Registration
                          Statement will not
                          be “reviewed,” or not subject to further review, or (iii) prior to its
                          Effectiveness Date, the Company fails to file a pre-effective
                          amendment and
                          otherwise respond in writing to comments made by the Commission
                          in respect of
                          such Registration 

                        
                          
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                        Statement
                          within 18 calendar days after the receipt of comments by
                          or notice from the
                          Commission that such amendment is required in order for
                          a Registration Statement
                          to be declared effective, or (iv) a Registration Statement
                          filed or required to
                          be filed hereunder is not declared effective by the Commission
                          by its
                          Effectiveness Date, or (v) after the Effectiveness Date,
                          a Registration
                          Statement ceases for any reason to remain continuously
                          effective as to all
                          Registrable Securities for which it is required to be effective,
                          or the Holders
                          are otherwise not permitted to utilize the Prospectus therein
                          to resell such
                          Registrable Securities for more than 15 consecutive calendar
                          days or more than
                          an aggregate of 20 calendar days during any 12-month period
                          (which need not be
                          consecutive calendar days) (any such failure or breach
                          being referred to as an
“Event”,
                          and
                          for purposes of clause (i) or (iv) the date on which such
                          Event occurs, or for
                          purposes of clause (ii) the date on which such five Trading
                          Day period is
                          exceeded, or for purposes of clause (iii) the date which
                          such 15 calendar day
                          period is exceeded, or for purposes of clause (v) the date
                          on which such 15 or
                          20 calendar day period, as applicable, is exceeded being
                          referred to as
“Event
                          Date”),
                          then
                          in addition to any other rights the Holders may have hereunder
                          or under
                          applicable law, on each such Event Date and on each monthly
                          anniversary of each
                          such Event Date (if the applicable Event shall not have
                          been cured by such date)
                          until the applicable Event is cured, the Company shall
                          pay to each Holder an
                          amount in cash, as partial liquidated damages and not as
                          a penalty, equal to 1%
                          of the aggregate Subscription Amount paid by such Holder
                          pursuant to the
                          Purchase Agreement. The parties agree that the maximum
                          aggregate liquidated
                          damages payable to a Holder under this Agreement shall
                          be 24% of the aggregate
                          Subscription Amount paid by such Holder pursuant to the
                          Purchase Agreement. If
                          the Company fails to pay any partial liquidated damages
                          pursuant to this Section
                          in full within seven days after the date payable, the Company
                          will pay interest
                          thereon at a rate of 18% per annum (or such lesser maximum
                          amount that is
                          permitted to be paid by applicable law) to the Holder,
                          accruing daily from the
                          date such partial liquidated damages are due until such
                          amounts, plus all such
                          interest thereon, are paid in full. The partial liquidated
                          damages pursuant to
                          the terms hereof shall apply on a daily pro-rata basis
                          for any portion of a
                          month prior to the cure of an Event.

                        

                        3.
                           Registration
                          Procedures.

                        

                        In
                          connection with the Company’s registration obligations hereunder, the Company
                          shall:

                        

                        (a) Not
                          less
                          than five Trading Days prior to the filing of each Registration
                          Statement and
                          not less than one Trading Day prior to the filing of any
                          related Prospectus or
                          any amendment or supplement thereto (including any document
                          that would be
                          incorporated or deemed to be incorporated therein by reference),
                          the Company
                          shall, (i) furnish to each Holder copies of all such documents
                          proposed to be
                          filed, which documents (other than those incorporated or
                          deemed to be
                          incorporated by reference) will be subject to the review
                          of such Holders, and
                          (ii) cause its officers and directors, counsel and independent
                          certified public
                          accountants to respond to such inquiries as shall be necessary,
                          in the
                          reasonable opinion of respective counsel to each Holder
                          to conduct a reasonable
                          investigation within the meaning of the Securities Act.
                          The Company shall not

                        
                          
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                        file
                          a
                          Registration Statement or any such Prospectus or any amendments
                          or supplements
                          thereto to which the Holders of a majority of the Registrable
                          Securities shall
                          reasonably object in good faith, provided that, the Company
                          is notified of such
                          objection in writing no later than 5 Trading Days after
                          the Holders have been so
                          furnished copies of a Registration Statement or 1 Trading
                          Day after the Holders
                          have been so furnished copies of any related Prospectus
                          or amendments or
                          supplements thereto. Each Holder agrees to furnish to the
                          Company a completed
                          Questionnaire in the form attached to this Agreement as
                          Annex B (a “Selling
                          Shareholder Questionnaire”)
                          not
                          less than two Trading Days prior to the Filing Date or
                          by the end of the fourth
                          Trading Day following the date on which such Holder receives
                          draft materials in
                          accordance with this Section. 

                        

                        (b) (i)
                          Prepare and file with the Commission such amendments, including
                          post-effective
                          amendments, to a Registration Statement and the Prospectus
                          used in connection
                          therewith as may be necessary to keep a Registration Statement
                          continuously
                          effective as to the applicable Registrable Securities for
                          the Effectiveness
                          Period and prepare and file with the Commission such additional
                          Registration
                          Statements in order to register for resale under the Securities
                          Act all of the
                          Registrable Securities; (ii) cause the related Prospectus
                          to be amended or
                          supplemented by any required Prospectus supplement (subject
                          to the terms of this
                          Agreement), and as so supplemented or amended to be filed
                          pursuant to Rule 424;
                          (iii) respond as promptly as reasonably possible to any
                          comments received from
                          the Commission with respect to a Registration Statement
                          or any amendment thereto
                          and as promptly as reasonably possible provide the Holders
                          true and complete
                          copies of all correspondence from and to the Commission
                          relating to a
                          Registration Statement (provided that the Company may excise
                          any information
                          contained therein which would constitute material non-public
                          information as to
                          any Holder which has not executed a confidentiality agreement
                          with the Company);
                          and (iv) comply in all material respects with the provisions
                          of the Securities
                          Act and the Exchange Act with respect to the disposition
                          of all Registrable
                          Securities covered by a Registration Statement during the
                          applicable period in
                          accordance (subject to the terms of this Agreement) with
                          the intended methods of
                          disposition by the Holders thereof set forth in such Registration
                          Statement as
                          so amended or in such Prospectus as so supplemented.

                        

                        (c) If
                          during
                          the Effectiveness Period, the number of Registrable Securities
                          at any time
                          exceeds 90% of the number of shares of Common Stock then
                          registered in a
                          Registration Statement, then the Company shall file as
                          soon as reasonably
                          practicable but in any case prior to the applicable Filing
                          Date, an additional
                          Registration Statement covering the resale by the Holders
                          of not less than 130%
                          of the number of such Registrable Securities.

                        

                        (d) Notify
                          the Holders of Registrable Securities to be sold (which
                          notice shall, pursuant
                          to clauses (iii) through (vi) hereof, be accompanied by
                          an instruction to
                          suspend the use of the Prospectus until the requisite changes
                          have been made) as
                          promptly as reasonably possible (and, in the case of (i)(A)
                          below, not less than
                          one Trading Day prior to such filing) and (if requested
                          by any such Person)
                          confirm such notice in writing no later than one Trading
                          Day following the day
                          (i)(A) when a Prospectus or any Prospectus supplement or
                          post-effective
                          amendment to a Registration Statement is proposed to be

                        
                          
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                        filed;
                          (B) when the Commission notifies the Company whether there
                          will be a “review” of
                          such Registration Statement and whenever the Commission
                          comments in writing on
                          such Registration Statement; and (C) with respect to a
                          Registration Statement or
                          any post-effective amendment, when the same has become
                          effective; (ii) of any
                          request by the Commission or any other Federal or state
                          governmental authority
                          for amendments or supplements to a Registration Statement
                          or Prospectus or for
                          additional information; (iii) of the issuance by the Commission
                          or any other
                          federal or state governmental authority of any stop order
                          suspending the
                          effectiveness of a Registration Statement covering any
                          or all of the Registrable
                          Securities or the initiation of any Proceedings for that
                          purpose; (iv) of the
                          receipt by the Company of any notification with respect
                          to the suspension of the
                          qualification or exemption from qualification of any of
                          the Registrable
                          Securities for sale in any jurisdiction, or the initiation
                          or threatening of any
                          Proceeding for such purpose; (v) of the occurrence of any
                          event or passage of
                          time that makes the financial statements included in a
                          Registration Statement
                          ineligible for inclusion therein or any statement made
                          in a Registration
                          Statement or Prospectus or any document incorporated or
                          deemed to be
                          incorporated therein by reference untrue in any material
                          respect or that
                          requires any revisions to a Registration Statement, Prospectus
                          or other
                          documents so that, in the case of a Registration Statement
                          or the Prospectus, as
                          the case may be, it will not contain any untrue statement
                          of a material fact or
                          omit to state any material fact required to be stated therein
                          or necessary to
                          make the statements therein, in light of the circumstances
                          under which they were
                          made, not misleading; and (vi) the occurrence or existence
                          of any pending
                          corporate development with respect to the Company that
                          the Company believes may
                          be material and that, in the determination of the Company,
                          makes it not in the
                          best interest of the Company to allow continued availability
                          of a Registration
                          Statement or Prospectus; provided that any and all of such
                          information shall
                          remain confidential to each Holder until such information
                          otherwise becomes
                          public, unless disclosure by a Holder is required by law;
provided,
                          further,
                          notwithstanding each Holder’s agreement to keep such information confidential,
                          the Holders make no acknowledgement that any such information
                          is material,
                          non-public information.

                        

                        (e) Use
                          its
                          best efforts to avoid the issuance of, or, if issued, obtain
                          the withdrawal of
                          (i) any order suspending the effectiveness of a Registration
                          Statement, or (ii)
                          any suspension of the qualification (or exemption from
                          qualification) of any of
                          the Registrable Securities for sale in any jurisdiction,
                          at the earliest
                          practicable moment.

                        

                        (f) Furnish
                          to each Holder, without charge, at least one conformed
                          copy of each such
                          Registration Statement and each amendment thereto, including
                          financial
                          statements and schedules, all documents incorporated or
                          deemed to be
                          incorporated therein by reference to the extent requested
                          by such Person, and
                          all exhibits to the extent requested by such Person (including
                          those previously
                          furnished or incorporated by reference) promptly after
                          the filing of such
                          documents with the Commission.

                        

                        (g) Subject
                          to the terms of this Agreement, the Company hereby consents
                          to the use of such
                          Prospectus and each amendment or supplement thereto by
                          each of the selling
                          Holders in connection with the offering and sale of the
                          Registrable Securities

                        
                          
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                        covered
                          by such Prospectus and any amendment or supplement thereto,
                          except after the
                          giving of any notice pursuant to Section 3(d).

                        

                        (h) If
                          NASDR
                          Rule 2710 requires any broker-dealer to make a filing prior
                          to executing a sale
                          by a Holder, the Company shall (i) make an Issuer Filing
                          with the NASDR, Inc.
                          Corporate Financing Department pursuant to proposed NASDR
                          Rule
                          2710(b)(10)(A)(i), (ii) respond within five Trading Days
                          to any comments
                          received from NASDR in connection therewith, (iii) and
                          pay the filing fee
                          required in connection therewith.

                        

                        (i) Prior
                          to
                          any resale of Registrable Securities by a Holder, use its
                          commercially
                          reasonable efforts to register or qualify or cooperate
                          with the selling Holders
                          in connection with the registration or qualification (or
                          exemption from the
                          Registration or qualification) of such Registrable Securities
                          for the resale by
                          the Holder under the securities or Blue Sky laws of such
                          jurisdictions within
                          the United States as any Holder reasonably requests in
                          writing, to keep each
                          registration or qualification (or exemption therefrom)
                          effective during the
                          Effectiveness Period and to do any and all other acts or
                          things reasonably
                          necessary to enable the disposition in such jurisdictions
                          of the Registrable
                          Securities covered by each Registration Statement, provided
                          that the Company
                          shall not be required to qualify generally to do business
                          in any jurisdiction
                          where it is not then so qualified, subject the Company
                          to any material tax in
                          any such jurisdiction where it is not then so subject or
                          file a general consent
                          to service of process in any such jurisdiction.

                        

                        (j) If
                          requested by the Holders, cooperate with the Holders to
                          facilitate the timely
                          preparation and delivery of certificates representing Registrable
                          Securities to
                          be delivered to a transferee pursuant to a Registration
                          Statement, which
                          certificates shall be free, to the extent permitted by
                          the Purchase Agreement,
                          of all restrictive legends, and to enable such Registrable
                          Securities to be in
                          such denominations and registered in such names as any
                          such Holders may
                          request.

                        

                        (k) Upon
                          the
                          occurrence of any event contemplated by this Section 3,
                          as promptly as
                          reasonably possible under the circumstances taking into
                          account the Company’s
                          good faith assessment of any adverse consequences to the
                          Company and its
                          stockholders of the premature disclosure of such event,
                          prepare a supplement or
                          amendment, including a post-effective amendment, to a Registration
                          Statement or
                          a supplement to the related Prospectus or any document
                          incorporated or deemed to
                          be incorporated therein by reference, and file any other
                          required document so
                          that, as thereafter delivered, neither a Registration Statement
                          nor such
                          Prospectus will contain an untrue statement of a material
                          fact or omit to state
                          a material fact required to be stated therein or necessary
                          to make the
                          statements therein, in light of the circumstances under
                          which they were made,
                          not misleading. If
                          the
                          Company notifies the Holders in accordance with clauses
                          (iii) through (vi) of
                          Section 3(d) above to suspend the use of any Prospectus
                          until the requisite
                          changes to such Prospectus have been made, then the Holders
                          shall suspend use of
                          such Prospectus. The Company will use its best efforts
                          to ensure that the use of
                          the Prospectus may be resumed as promptly as is practicable.
                          The

                        
                          
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                        Company
                          shall be entitled to exercise its right under this Section
                          3(k) to suspend the
                          availability of a Registration Statement and Prospectus,
                          subject to the payment
                          of partial liquidated damages pursuant to Section 2(b),
                          for a period not to
                          exceed 60 calendar days (which need not be consecutive
                          days) in any 12 month
                          period.

                        

                        (l) Comply
                          with all applicable rules and regulations of the Commission.

                        

                        (m) The
                          Company may require each selling Holder to furnish to the
                          Company a certified
                          statement as to the number of shares of Common Stock beneficially
                          owned by such
                          Holder and, if required by the Commission, the natural
                          persons thereof that have
                          voting and dispositive control over the Shares. During
                          any periods that the
                          Company is unable to meet its obligations hereunder with
                          respect to the
                          registration of the Registrable Securities solely because
                          any Holder fails to
                          furnish such information within three Trading Days of the
                          Company’s request, any
                          liquidated damages that are accruing at such time as to
                          such Holder only shall
                          be tolled and any Event that may otherwise occur solely
                          because of such delay
                          shall be suspended as to such Holder only, until such information
                          is delivered
                          to the Company.

                        

                        4.
                           Registration
                          Expenses.
                          All
                          fees and expenses incident to the performance of or compliance
                          with this
                          Agreement by the Company shall be borne by the Company
                          whether or not any
                          Registrable Securities are sold pursuant to a Registration
                          Statement. The fees
                          and expenses referred to in the foregoing sentence shall
                          include, without
                          limitation, (i) all registration and filing fees (including,
                          without limitation,
                          fees and expenses (A) with respect to filings required
                          to be made with any
                          Trading Market on which the Common Stock is then listed
                          for trading, (B) in
                          compliance with applicable state securities or Blue Sky
                          laws reasonably agreed
                          to by the Company in writing (including, without limitation,
                          fees and
                          disbursements of counsel for the Company in connection
                          with Blue Sky
                          qualifications or exemptions of the Registrable Securities)
                          and (C) if not
                          previously paid by the Company in connection with an Issuer
                          Filing, with respect
                          to any filing that may be required to be made by any broker
                          through which a
                          Holder intends to make sales of Registrable Securities
                          with NASD Regulation,
                          Inc. pursuant to the NASD Rule 2710, so long as the broker
                          is receiving no more
                          than a customary brokerage commission in connection with
                          such sale, (ii)
                          printing expenses (including, without limitation, expenses
                          of printing
                          certificates for Registrable Securities), (iii) messenger,
                          telephone and
                          delivery expenses, (iv) fees and disbursements of counsel
                          for the Company, (v)
                          Securities Act liability insurance, if the Company so desires
                          such insurance,
                          and (vi) fees and expenses of all other Persons retained
                          by the Company in
                          connection with the consummation of the transactions contemplated
                          by this
                          Agreement. In addition, the Company shall be responsible
                          for all of its internal
                          expenses incurred in connection with the consummation of
                          the transactions
                          contemplated by this Agreement (including, without limitation,
                          all salaries and
                          expenses of its officers and employees performing legal
                          or accounting duties),
                          the expense of any annual audit and the fees and expenses
                          incurred in connection
                          with the listing of the Registrable Securities on any securities
                          exchange as
                          required hereunder. In no event shall the Company be responsible
                          for any broker
                          or similar commissions of any Holder or, except to the
                          extent provided for in
                          the Transaction Documents, any legal fees or other costs
                          of the
                          Holders.

                        

                        5.
                           Indemnification

                        
                          
                            8

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        (a) Indemnification
                          by the Company.
                          The
                          Company shall, notwithstanding any termination of this
                          Agreement, indemnify and
                          hold harmless each Holder, the officers, directors, members,
                          partners, agents,
                          brokers (including brokers who offer and sell Registrable
                          Securities as
                          principal as a result of a pledge or any failure to perform
                          under a margin call
                          of Common Stock), investment advisors and employees (and
                          any other Persons with
                          a functionally equivalent role of a Person holding such
                          titles, notwithstanding
                          a lack of such title or any other title) of each of them,
                          each Person who
                          controls any such Holder (within the meaning of Section
                          15 of the Securities Act
                          or Section 20 of the Exchange Act) and the officers, directors,
                          members,
                          shareholders, partners, agents and employees (and any other
                          Persons with a
                          functionally equivalent role of a Person holding such titles,
                          notwithstanding a
                          lack of such title or any other title) of each such controlling
                          Person, to the
                          fullest extent permitted by applicable law, from and against
                          any and all losses,
                          claims, damages, liabilities, costs (including, without
                          limitation, reasonable
                          attorneys’ fees) and expenses (collectively, “Losses”),
                          as
                          incurred, arising out of or relating to (1) any untrue
                          or alleged untrue
                          statement of a material fact contained in a Registration
                          Statement, any
                          Prospectus or any form of prospectus or in any amendment
                          or supplement thereto
                          or in any preliminary prospectus, or arising out of or
                          relating to any omission
                          or alleged omission of a material fact required to be stated
                          therein or
                          necessary to make the statements therein (in the case of
                          any Prospectus or form
                          of prospectus or supplement thereto, in light of the circumstances
                          under which
                          they were made) not misleading or (2) any violation or
                          alleged violation by the
                          Company of the Securities Act, the Exchange Act or any
                          state securities law, or
                          any rule or regulation thereunder, in connection with the
                          performance of its
                          obligations under this Agreement, except to the extent,
                          but only to the extent,
                          that (i) such untrue statements or omissions are based
                          solely upon information
                          regarding such Holder furnished in writing to the Company
                          by such Holder
                          expressly for use therein, or to the extent that such information
                          relates to
                          such Holder or such Holder’s proposed method of distribution of Registrable
                          Securities and was reviewed and expressly approved in writing
                          by such Holder
                          expressly for use in a Registration Statement, such Prospectus
                          or such form of
                          Prospectus or in any amendment or supplement thereto (it
                          being understood that
                          the Holder has approved Annex A hereto for this purpose)
                          or (ii) in the case of
                          an occurrence of an event of the type specified in Section
                          3(d)(iii)-(vi), the
                          use by such Holder of an outdated or defective Prospectus
                          after the Company has
                          notified such Holder in writing that the Prospectus is
                          outdated or defective and
                          prior to the receipt by such Holder of the Advice contemplated
                          in Section 6(d).
                          The Company shall notify the Holders promptly of the institution,
                          threat or
                          assertion of any Proceeding arising from or in connection
                          with the transactions
                          contemplated by this Agreement of which the Company is
                          aware.

                        

                        (b) Indemnification
                          by Holders.
                          Each
                          Holder shall, severally and not jointly, indemnify and
                          hold harmless the
                          Company, its directors, officers, agents and employees,
                          each Person who controls
                          the Company (within the meaning of Section 15 of the Securities
                          Act and Section
                          20 of the Exchange Act), and the directors, officers, agents
                          or employees of
                          such controlling Persons, to the fullest extent permitted
                          by applicable law,
                          from and against all Losses, as incurred, to the extent
                          arising out of or based
                          solely upon: (x) such Holder’s failure to comply with the prospectus delivery
                          requirements of the Securities Act or (y) any untrue or
                          alleged untrue statement
                          of a material fact contained in 

                        
                          
                            9

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        any
                          Registration Statement, any Prospectus, or any form of
                          prospectus, or in any
                          amendment or supplement thereto or in any preliminary prospectus,
                          or arising out
                          of or relating to any omission or alleged omission of a
                          material fact required
                          to be stated therein or necessary to make the statements
                          therein not misleading
                          (i) to the extent, but only to the extent, that such untrue
                          statement or
                          omission is contained in any information so furnished in
                          writing by such Holder
                          to the Company specifically for inclusion in such Registration
                          Statement or such
                          Prospectus or (ii) to the extent that such information
                          relates to such Holder’s
                          proposed method of distribution of Registrable Securities
                          and was reviewed and
                          expressly approved in writing by such Holder expressly
                          for use in a Registration
                          Statement (it being understood that the Holder has approved
                          Annex A hereto for
                          this purpose), such Prospectus or such form of Prospectus
                          or in any amendment or
                          supplement thereto or (ii) in the case of an occurrence
                          of an event of the type
                          specified in Section 3(d)(iii)-(vi), the use by such Holder
                          of an outdated or
                          defective Prospectus after the Company has notified such
                          Holder in writing that
                          the Prospectus is outdated or defective and prior to the
                          receipt by such Holder
                          of the Advice contemplated in Section 6(d). In no event
                          shall the liability of
                          any selling Holder hereunder be greater in amount than
                          the dollar amount of the
                          net proceeds received by such Holder upon the sale of the
                          Registrable Securities
                          giving rise to such indemnification obligation.

                        

                        (c) Conduct
                          of Indemnification Proceedings.
                          If any
                          Proceeding shall be brought or asserted against any Person
                          entitled to indemnity
                          hereunder (an “Indemnified
                          Party”),
                          such
                          Indemnified Party shall promptly notify the Person from
                          whom indemnity is sought
                          (the “Indemnifying
                          Party”)
                          in
                          writing, and the Indemnifying Party shall have the right
                          to assume the defense
                          thereof, including the employment of counsel reasonably
                          satisfactory to the
                          Indemnified Party and the payment of all fees and expenses
                          incurred in
                          connection with defense thereof; provided, that the failure
                          of any Indemnified
                          Party to give such notice shall not relieve the Indemnifying
                          Party of its
                          obligations or liabilities pursuant to this Agreement,
                          except (and only) to the
                          extent that it shall be finally determined by a court of
                          competent jurisdiction
                          (which determination is not subject to appeal or further
                          review) that such
                          failure shall have prejudiced the Indemnifying Party.

                        

                        An
                          Indemnified Party shall have the right to employ separate
                          counsel in any such
                          Proceeding and to participate in the defense thereof, but
                          the fees and expenses
                          of such counsel shall be at the expense of such Indemnified
                          Party or Parties
                          unless: (1) the Indemnifying Party has agreed in writing
                          to pay such fees and
                          expenses; (2) the Indemnifying Party shall have failed
                          promptly to assume the
                          defense of such Proceeding and to employ counsel reasonably
                          satisfactory to such
                          Indemnified Party in any such Proceeding; or (3) the named
                          parties to any such
                          Proceeding (including any impleaded parties) include both
                          such Indemnified Party
                          and the Indemnifying Party, and counsel to the Indemnified
                          Party shall
                          reasonably believe that a material conflict of interest
                          is likely to exist if
                          the same counsel were to represent such Indemnified Party
                          and the Indemnifying
                          Party (in which case, if such Indemnified Party notifies
                          the Indemnifying Party
                          in writing that it elects to employ separate counsel at
                          the expense of the
                          Indemnifying Party, the Indemnifying Party shall not have
                          the right to assume
                          the defense thereof and the reasonable fees and expenses
                          of no more than one
                          separate counsel shall be at the expense of the Indemnifying
                          Party). The
                          Indemnifying Party shall not be liable 

                        
                          
                            10

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        for
                          any
                          settlement of any such Proceeding effected without its
                          written consent, which
                          consent shall not be unreasonably withheld or delayed.
                          No Indemnifying Party
                          shall, without the prior written consent of the Indemnified
                          Party, effect any
                          settlement of any pending Proceeding in respect of which
                          any Indemnified Party
                          is a party, unless such settlement includes an unconditional
                          release of such
                          Indemnified Party from all liability on claims that are
                          the subject matter of
                          such Proceeding.

                        

                        Subject
                          to the terms of this Agreement, all reasonable fees and
                          expenses of the
                          Indemnified Party (including reasonable fees and expenses
                          to the extent incurred
                          in connection with investigating or preparing to defend
                          such Proceeding in a
                          manner not inconsistent with this Section) shall be paid
                          to the Indemnified
                          Party, as incurred, within ten Trading Days of written
                          notice thereof to the
                          Indemnifying Party; provided, that the Indemnified Party
                          shall promptly
                          reimburse the Indemnifying Party for that portion of such
                          fees and expenses
                          applicable to such actions for which such Indemnified Party
                          is judicially
                          determined to be not entitled to indemnification hereunder.

                        

                        (d) Contribution.
                          If the
                          indemnification under Section 5(a) or 5(b) is unavailable
                          to an Indemnified
                          Party or insufficient to hold an Indemnified Party harmless
                          for any Losses, then
                          each Indemnifying Party shall contribute to the amount
                          paid or payable by such
                          Indemnified Party, in such proportion as is appropriate
                          to reflect the relative
                          fault of the Indemnifying Party and Indemnified Party in
                          connection with the
                          actions, statements or omissions that resulted in such
                          Losses as well as any
                          other relevant equitable considerations. The relative fault
                          of such Indemnifying
                          Party and Indemnified Party shall be determined by reference
                          to, among other
                          things, whether any action in question, including any untrue
                          or alleged untrue
                          statement of a material fact or omission or alleged omission
                          of a material fact,
                          has been taken or made by, or relates to information supplied
                          by, such
                          Indemnifying Party or Indemnified Party, and the parties’ relative intent,
                          knowledge, access to information and opportunity to correct
                          or prevent such
                          action, statement or omission. The amount paid or payable
                          by a party as a result
                          of any Losses shall be deemed to include, subject to the
                          limitations set forth
                          in this Agreement, any reasonable attorneys’ or other fees or expenses incurred
                          by such party in connection with any Proceeding to the
                          extent such party would
                          have been indemnified for such fees or expenses if the
                          indemnification provided
                          for in this Section was available to such party in accordance
                          with its
                          terms.

                        

                        The
                          parties hereto agree that it would not be just and equitable
                          if contribution
                          pursuant to this Section 5(d) were determined by pro rata
                          allocation or by any
                          other method of allocation that does not take into account
                          the equitable
                          considerations referred to in the immediately preceding
                          paragraph.
                          Notwithstanding the provisions of this Section 5(d), no
                          Holder shall be required
                          to contribute, in the aggregate, any amount in excess of
                          the amount by which the
                          net proceeds actually received by such Holder from the
                          sale of the Registrable
                          Securities subject to the Proceeding exceeds the amount
                          of any damages that such
                          Holder has otherwise been required to pay by reason of
                          such untrue or alleged
                          untrue statement or omission or alleged omission.

                        

                        
                          
                            11

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        The
                          indemnity and contribution agreements contained in this
                          Section are in addition
                          to any liability that the Indemnifying Parties may have
                          to the Indemnified
                          Parties.

                        

                        6.
                           Miscellaneous

                        

                        (a) Remedies.
                          In the
                          event of a breach by the Company or by a Holder, of any
                          of their respective
                          obligations under this Agreement, each Holder or the Company,
                          as the case may
                          be, in addition to being entitled to exercise all rights
                          granted by law and
                          under this Agreement, including recovery of damages, will
                          be entitled to
                          specific performance of its rights under this Agreement.
                          The Company and each
                          Holder agree that monetary damages would not provide adequate
                          compensation for
                          any losses incurred by reason of a breach by it of any
                          of the provisions of this
                          Agreement and hereby further agrees that, in the event
                          of any action for
                          specific performance in respect of such breach, it shall
                          not assert or shall
                          waive the defense that a remedy at law would be adequate.

                        

                        (b) No
                          Piggyback on Registrations.
                          Except
                          as set forth on Schedule
                          6(b)
                          attached
                          hereto and securities of the Company issued in a private
                          placement of at least
                          $2,000,000 within 90 calendar days of the date hereof,
                          neither the Company nor
                          any of its security holders (other than the Holders in
                          such capacity pursuant
                          hereto) may include securities of the Company in the initial
                          Registration
                          Statement other than the Registrable Securities. The Company
                          shall not file any
                          other registration statements until the initial Registration
                          Statement required
                          hereunder is declared effective by the Commission, provided
                          that this Section
                          6(b) shall not prohibit the Company from filing amendments
                          to registration
                          statements already filed.

                        

                        (c) Compliance.
                          Each
                          Holder covenants and agrees that it will comply with the
                          prospectus delivery
                          requirements of the Securities Act as applicable to it
                          in connection with sales
                          of Registrable Securities pursuant to a Registration Statement.

                        

                        (d) Discontinued
                          Disposition.
                          Each
                          Holder agrees by its acquisition of Registrable Securities
                          that, upon receipt of
                          a notice from the Company of the occurrence of any event
                          of the kind described
                          in Section 3(d)(iii) through (vi), such Holder will forthwith
                          discontinue
                          disposition of such Registrable Securities under a Registration
                          Statement until
                          it is advised in writing (the “Advice”)
                          by the
                          Company that the use of the applicable Prospectus (as it
                          may have been
                          supplemented or amended) may be resumed. The Company will
                          use its best efforts
                          to ensure that the use of the Prospectus may be resumed
                          as promptly as it
                          practicable. The Company agrees and acknowledges that any
                          periods during which
                          the Holder is required to discontinue the disposition of
                          the Registrable
                          Securities hereunder shall be subject to the provisions
                          of Section
                          2(b).

                        

                        (e) Piggy-Back
                          Registrations.
                          If at
                          any time during the Effectiveness Period there is not an
                          effective Registration
                          Statement covering all of the Registrable Securities and
                          the Company shall
                          determine to prepare and file with the Commission a registration
                          statement
                          relating to an offering for its own account or the account
                          of others under the
                          Securities Act of any of its equity securities, other than
                          on Form S-4 or Form
                          S-8 (each as promulgated under the Securities Act) or their
                          then equivalents
                          relating to equity securities to be issued solely in 

                        
                          
                            12

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        connection
                          with any acquisition of any entity or business or equity
                          securities issuable in
                          connection with the stock option or other employee benefit
                          plans, then the
                          Company shall send to each Holder a written notice of such
                          determination and, if
                          within fifteen days after the date of such notice, any
                          such Holder shall so
                          request in writing, the Company shall include in such registration
                          statement all
                          or any part of such Registrable Securities such Holder
                          requests to be
                          registered; provided,
                          however,
                          that,
                          the Company shall not be required to register any Registrable
                          Securities
                          pursuant to this Section 6(e) that are eligible for resale
                          pursuant to Rule
                          144(k) promulgated under the Securities Act or that are
                          the subject of a then
                          effective Registration Statement.

                        

                        (f) Amendments
                          and Waivers.
                          The
                          provisions of this Agreement, including the provisions
                          of this sentence, may not
                          be amended, modified or supplemented, and waivers or consents
                          to departures from
                          the provisions hereof may not be given, unless the same
                          shall be in writing and
                          signed by the Company and each Holder of the then outstanding
                          Registrable
                          Securities. Notwithstanding the foregoing, a waiver or
                          consent to depart from
                          the provisions hereof with respect to a matter that relates
                          exclusively to the
                          rights of Holders and that does not directly or indirectly
                          affect the rights of
                          other Holders may be given by Holders of all of the Registrable
                          Securities to
                          which such waiver or consent relates; provided,
                          however,
                          that
                          the provisions of this sentence may not be amended, modified,
                          or supplemented
                          except in accordance with the provisions of the immediately
                          preceding sentence.

                        

                        (g) Notices.
                          Any and
                          all notices or other communications or deliveries required
                          or permitted to be
                          provided hereunder shall be delivered as set forth in the
                          Purchase Agreement.

                        

                        (h) Successors
                          and Assigns.
                          This
                          Agreement shall inure to the benefit of and be binding
                          upon the successors and
                          permitted assigns of each of the parties and shall inure
                          to the benefit of each
                          Holder. The Company may not assign (except by merger) its
                          rights or obligations
                          hereunder without the prior written consent of all of the
                          Holders of the
                          then-outstanding Registrable Securities. Each Holder may
                          assign their respective
                          rights hereunder in the manner and to the Persons as permitted
                          under the
                          Purchase Agreement.

                        

                        (i) No
                          Inconsistent Agreements.
                          Neither
                          the Company nor any of its Subsidiaries has entered, as
                          of the date hereof, nor
                          shall the Company or any of its Subsidiaries, on or after
                          the date of this
                          Agreement, enter into any agreement with respect to its
                          securities, that would
                          have the effect of impairing the rights granted to the
                          Holders in this Agreement
                          or otherwise conflicts with the provisions hereof. Except
                          as set forth on
Schedule
                          6(i),
                          neither
                          the Company nor any of its subsidiaries has previously
                          entered into any
                          agreement granting any registration rights with respect
                          to any of its securities
                          to any Person that have not been satisfied in full.

                        

                        (j) Execution
                          and Counterparts.
                          This
                          Agreement may be executed in two or more counterparts,
                          all of which when taken
                          together shall be considered one and the same agreement
                          and shall become
                          effective when counterparts have been signed by each party
                          and delivered to the
                          other party, it being understood that both parties need
                          not sign the same
                          counterpart. In the event that any signature is delivered
                          by facsimile
                          transmission or by e-mail delivery of a “.pdf” format data file, such signature
                          shall create a valid and binding obligation of the party
                          executing

                        
                          
                            13

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        (or
                          on
                          whose behalf such signature is executed) with the same
                          force and effect as if
                          such facsimile or “.pdf” signature page were an original thereof.

                        

                        (k) Governing
                          Law.
                          All
                          questions concerning the construction, validity, enforcement
                          and interpretation
                          of this Agreement shall be determined in accordance with
                          the provisions of the
                          Purchase Agreement.

                        

                        (l) Cumulative
                          Remedies.
                          The
                          remedies provided herein are cumulative and not exclusive
                          of any other remedies
                          provided by law.

                        

                        (m) Severability.
                          If any
                          term, provision, covenant or restriction of this Agreement
                          is held by a court of
                          competent jurisdiction to be invalid, illegal, void or
                          unenforceable, the
                          remainder of the terms, provisions, covenants and restrictions
                          set forth herein
                          shall remain in full force and effect and shall in no way
                          be affected, impaired
                          or invalidated, and the parties hereto shall use their
                          commercially reasonable
                          efforts to find and employ an alternative means to achieve
                          the same or
                          substantially the same result as that contemplated by such
                          term, provision,
                          covenant or restriction. It is hereby stipulated and declared
                          to be the
                          intention of the parties that they would have executed
                          the remaining terms,
                          provisions, covenants and restrictions without including
                          any of such that may be
                          hereafter declared invalid, illegal, void or unenforceable.

                        

                        (n) Headings.
                          The
                          headings in this Agreement are for convenience only, do
                          not constitute a part of
                          the Agreement and shall not be deemed to limit or affect
                          any of the provisions
                          hereof.

                        

                        (o) Independent
                          Nature of Holders’ Obligations and Rights.
                          The
                          obligations of each Holder hereunder are several and not
                          joint with the
                          obligations of any other Holder hereunder, and no Holder
                          shall be responsible in
                          any way for the performance of the obligations of any other
                          Holder hereunder.
                          Nothing contained herein or in any other agreement or document
                          delivered at any
                          closing, and no action taken by any Holder pursuant hereto
                          or thereto, shall be
                          deemed to constitute the Holders as a partnership, an association,
                          a joint
                          venture or any other kind of entity, or create a presumption
                          that the Holders
                          are in any way acting in concert with respect to such obligations
                          or the
                          transactions contemplated by this Agreement. Each Holder
                          shall be entitled to
                          protect and enforce its rights, including without limitation
                          the rights arising
                          out of this Agreement, and it shall not be necessary for
                          any other Holder to be
                          joined as an additional party in any proceeding for such
                          purpose.

                        

                        ********************

                        
                          
                            14

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        

                        IN
                          WITNESS WHEREOF, the parties have executed this Registration
                          Rights Agreement as
                          of the date first written above.

                        

                        
                          	
                                  CHEMBIO
                                    DIAGNOSTICS, INC.

                                   

                                
	
                                  By:__________________________________________

                                  Name:

                                  Title:

                                

                        

                             

                        

                        

                        

                        

                        

                        

                        

                        

                        [SIGNATURE
                          PAGE OF HOLDERS FOLLOWS]

                        

                        
                          
                            15

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        [SIGNATURE
                          PAGE OF HOLDERS TO CEMI RRA]

                         

                        Name
                          of
                          Holder: __________________________

                        Signature
                          of Authorized Signatory of Holder:
                          __________________________

                        Name
                          of
                          Authorized Signatory: _________________________

                        Title
                          of
                          Authorized Signatory: __________________________

                         

                        

                        

                        [SIGNATURE
                          PAGES CONTINUE]Exhibit 10.16 Debenture

    
      
        
          
            
              
                
                  
                    
                      

                    

                    
                      

                    

                    Exhibit
                      10.16 Debenture

                    
                      

                         

                        

                        SECURED
                          DEBENTURE

                        

                        

                        

                        

                        $_________      June
                          29,
                          2006

                        

                        

                        FOR
                          VALUE
                          RECEIVED, Chembio Diagnostics, Inc., a Nevada corporation
                          (the "Maker"),
                          with
                          its primary offices located at 3661 Horseblock Road, Medford,
                          New York 11763,
                          promises to pay to the order of ____________, or its registered
                          assigns (the
                          "Payee"),
                          upon
                          the terms set forth below, the principal sum of __________________
                          ($____________) plus interest on the unpaid principal sum
                          outstanding at the
                          rate of 0.667% per month (the “Debenture”).
                          This
                          Debenture is issued pursuant to terms and conditions of
                          the Securities Purchase
                          Agreement, dated as of June 29, 2006, between the Maker,
                          Payee and other
                          investors signatory thereto (the “Purchase
                          Agreement”).
                          Any
                          terms used but not defined herein shall have the meanings
                          given such terms in
                          the Purchase Agreement.

                        

                        1. Payments.
                          

                        

                        (a)
                          The
                          full amount of principal and accrued interest under this
                          Debenture shall be due
                          on September 27, 2006 (the "Maturity
                          Date"),
                          unless due earlier in accordance with the terms of this
                          Debenture.

                        

                        (b)
                          Maker
                          may not prepay, in whole or in part, the principal sum
                          and interest under this
                          Debenture without the prior written consent of Payee.

                        

                        2.
                           Secured
                          Obligation.
                          As
                          security for the payment in full of principal, interest
                          and performance under
                          this Debenture and of all other liabilities and obligations
                          of the Maker to the
                          Payee, Maker hereby grants to the Payee a general security
                          interest in all
                          assets of the Maker and all proceeds arising therefrom
                          and any and all products
                          of such assets, as further set forth in the Security Agreement
                          between the
                          Maker, each subsidiary of the Maker (each, a “Subsidiary”
and
                          collectively the “Subsidiaries”)
                          and
                          the Payee, dated June 29, 2006 (the “Security
                          Agreement”).

                        

                        3.
                          Events
                          of Default.

                        

                        (a)
                           "Event
                          of Default",
                          wherever used herein, means any one of the following events
                          (whatever the reason
                          and whether it shall be voluntary or involuntary or effected
                          by operation of law
                          or pursuant to any judgment, decree or order of any court,
                          or any order, rule or
                          regulation of any administrative or governmental body):

                        

                        
                          
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                        (i)
                          any
                          default in the payment of the principal of, or the interest
                          on, this Debenture,
                          as and when the same shall become due and payable;

                        

                        (ii)
                          Maker shall fail to observe or perform any obligation or
                          shall breach any term
                          or provision of this Debenture and such failure or breach
                          shall not have been
                          remedied within 5 days after the date on which notice of
                          such failure or breach
                          shall have been delivered;

                        

                        (iii)
                          Maker or a Subsidiary shall fail to observe or perform
                          any of their respective
                          material obligations owed to Payee or any other covenant,
                          agreement,
                          representation or warranty contained in, or otherwise commit
                          any material breach
                          hereunder or in the Purchase Agreement, Security Agreement,
                          the Subsidiary
                          Guarantee, dated as of June __, 2006, by the Subsidiaries
                          in favor of the Payee
                          (the “Subsidiary
                          Guarantee”),
                          the
                          Common Stock Purchase Warrant, dated June __, 2006, issued
                          by the Maker and
                          registered in the name of the Payee (the “Warrant”)
                          or the
                          Registration Rights Agreement, dated as of June __, 2006,
                          between the Maker and
                          the Payee (the “Registration
                          Rights Agreement”)
                          (the
                          Debenture, Purchase Agreement, Security Agreement, Subsidiary
                          Guarantee, Warrant
                          and Registration Rights Agreement, collectively, the “Transaction
                          Documents”)
                          executed in connection herewith;

                        

                        (iv)
                          Maker or any of its subsidiaries shall commence, or there
                          shall be commenced
                          against Maker or a Subsidiary, a case under any applicable
                          bankruptcy or
                          insolvency laws as now or hereafter in effect or any successor
                          thereto, or Maker
                          or a Subsidiary commences any other proceeding under any
                          reorganization,
                          arrangement, adjustment of debt, relief of debtors, dissolution,
                          insolvency or
                          liquidation or similar law of any jurisdiction whether
                          now or hereafter in
                          effect relating to Maker or a Subsidiary, or there is commenced
                          against Maker or
                          a Subsidiary any such bankruptcy, insolvency or other proceeding
                          which remains
                          undismissed for a period of 45 days; or Maker or a Subsidiary
                          is adjudicated
                          insolvent or bankrupt; or any order of relief or other
                          order approving any such
                          case or proceeding is entered; or Maker or a Subsidiary
                          suffers any appointment
                          of any custodian or the like for it or any substantial
                          part of its property
                          which continues undischarged or unstayed for a period of
                          45 days; or Maker or a
                          Subsidiary makes a general assignment for the benefit of
                          creditors; or Maker or
                          a Subsidiary shall fail to pay, or shall state that it
                          is unable to pay, or
                          shall be unable to pay, its debts generally as they become
                          due; or Maker or a
                          Subsidiary shall call a meeting of its creditors with a
                          view to arranging a
                          composition, adjustment or restructuring of its debts;
                          or Maker or a Subsidiary
                          shall by any act or failure to act expressly indicate its
                          consent to, approval
                          of or acquiescence in any of the foregoing; or any corporate
                          or other action is
                          taken by Maker or a Subsidiary for the purpose of effecting
                          any of the
                          foregoing;

                        

                        
                          
                            2

                            

                            
                            

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        (v)
                          Maker
                          or a Subsidiary shall default in any of its respective
                          obligations under any
                          other note or any mortgage, credit agreement or other facility,
                          indenture
                          agreement, factoring agreement or other instrument under
                          which there may be
                          issued, or by which there may be secured or evidenced any
                          indebtedness for
                          borrowed money or money due under any long term leasing
                          or factoring arrangement
                          of Maker or a Subsidiary, whether such indebtedness now
                          exists or shall
                          hereafter be created and such default shall result in such
                          indebtedness becoming
                          or being declared due and payable prior to the date on
                          which it would otherwise
                          become due and payable;

                        

                        (vi)
                          Maker shall (a) be a party to any Change of Control Transaction
                          (as defined
                          below), (b) agree to sell or dispose all or in excess of
                          33% of its assets in
                          one or more transactions (whether or not such sale would
                          constitute a Change of
                          Control Transaction), (c) redeem or repurchase more than
                          a de minimis
                          number
                          of shares of Common Stock or other equity securities of
                          Maker, or (d) make any
                          distribution or declare or pay any dividends (in cash or
                          other property, other
                          than common stock) on, or purchase, acquire, redeem, or
                          retire any of Maker's
                          capital stock, of any class, whether now or hereafter outstanding,
                          provided that
                          any regularly scheduled dividends payable on the Series
                          A Preferred Stock and
                          the Series B Preferred Stock (as defined in the Purchase
                          Agreement) shall not be
                          deemed an Event of Default under this Section 3(a)(vi),
                          provided that the terms
                          of Series A Preferred Stock and the Series B Preferred
                          Stock have not been
                          amended after the date of the Purchase Agreement. "Change
                          of Control Transaction"
                          means
                          the occurrence after the date hereof of any of (i) an acquisition
                          after the date
                          hereof by an individual or legal entity or “group” (as described in Rule
                          13d-5(b)(1) promulgated under the Securities Exchange Act
                          of 1934, as amended)
                          of effective control (whether through legal or beneficial
                          ownership of capital
                          stock of the Maker, by contract or otherwise) of in excess
                          of 33% of the voting
                          securities of the Maker (other than by means of exercise
                          of the Warrants), or
                          (ii) the Maker merges into or consolidates with any other
                          Person, or any Person
                          merges into or consolidates with the Maker and, after giving
                          effect to such
                          transaction, the stockholders of the Maker immediately
                          prior to such transaction
                          own less than 66% of the aggregate voting power of the
                          Maker or the successor
                          entity of such transaction, or (iii) the Maker sells or
                          transfers all or
                          substantially all of its assets to another Person and the
                          stockholders of the
                          Maker immediately prior to such transaction own less than
                          66% of the aggregate
                          voting power of the acquiring entity immediately after
                          the transaction, or (iv)
                          a replacement at one time or within a three year period
                          of more than one-half of
                          the members of the Maker’s board of directors which is not approved by a
                          majority of those individuals who are members of the board
                          of directors on the
                          date hereof (or by those individuals who are serving as
                          members of the board of
                          directors on any date whose nomination to the board of
                          directors was approved by
                          a majority of the members of the board of directors who
                          are 

                        
                          
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                        members
                          on the date hereof), or (v) the execution by the Maker
                          of an agreement to which
                          the Maker is a party or by which it is bound, providing
                          for any of the events
                          set forth in clauses (i) through (iv) above; or

                        

                        (viii)
                          any member of Maker's management shall cease to be a member
                          of Maker's senior
                          management or shall cease to perform any of the material
                          functions and duties
                          currently performed by such person. For purposes hereof,
                          "senior management"
                          refers to the President, the Chief Executive Officer, the
                          Chief Financial
                          Officer and any officer performing the customary function
                          of such officers;
                          or

                        

                        (ix)
                          Maker shall unreasonably modify or change its method of
                          accounting or enter
                          into, modify, or terminate any agreement currently existing,
                          or at any time
                          hereafter entered into with any third party accounting
                          firm or service bureau
                          for the preparation or storage of its accounting records,
                          or restate or modify
                          its financial statements for any period of time prior to
                          the date of this
                          Debenture.

                        

                        (b)
                           If
                          any
                          Event of Default occurs, the full principal amount of this
                          Debenture, together
                          with all accrued interest thereon, shall become, at the
                          Payee's election,
                          immediately due and payable in cash. Commencing 5 days
                          after the occurrence of
                          any Event of Default that results in the acceleration of
                          this Debenture, the
                          interest rate on this Debenture shall accrue at the rate
                          of 18% per annum, or
                          such lower maximum amount of interest permitted to be charged
                          under applicable
                          law. Except as specifically provided in this Debenture,
                          the Payee need not
                          provide and Maker hereby waives any presentment, demand,
                          protest or other notice
                          of any kind, and the Payee may immediately and without
                          expiration of any grace
                          period enforce any and all of its rights and remedies hereunder
                          and all other
                          remedies available to it under applicable law. Such declaration
                          may be rescinded
                          and annulled by Payee at any time prior to payment hereunder.
                          No such rescission
                          or annulment shall affect any subsequent Event of Default
                          or impair any right
                          consequent thereon.

                        

                        4.
                           Most
                          Favored Nation.
                          The
                          Payee shall have the right, in its sole discretion, to
                          convert the then
                          outstanding principal balance of this Debenture plus accrued
                          but unpaid
                          interest, in whole or in part, into securities of the Maker
                          (or its successor or
                          parent) being issued in any private or public offering
                          of equity securities of
                          the Maker (or its successor or parent) consummated while
                          this Debenture is
                          outstanding, upon the terms and conditions of such offering,
                          at a rate equal to,
                          for each $1.00 of principal amount of this Debenture surrendered
                          plus accrued
                          but unpaid interest, $1.14286 of new consideration offered
                          for such securities.
                          By way of example, if the Payee wishes to surrender $100,000
                          principal amount of
                          this Debenture to the Maker as consideration for the purchase
                          of new securities,
                          the Payee shall receive, and the Maker shall issue, $114,286
                          of new securities
                          to the Payee, otherwise on the same terms and conditions
                          as the other
                          participants.

                        
                          
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                        5. No
                          Waiver of Payee's Rights.
                          All
                          payments of principal and interest shall be made without
                          setoff, deduction or
                          counterclaim. No delay or failure on the part of the Payee
                          in exercising any of
                          its options, powers or rights, nor any partial or single
                          exercise of its
                          options, powers or rights shall constitute a waiver thereof
                          or of any other
                          option, power or right, and no waiver on the part of the
                          Payee of any of its
                          options, powers or rights shall constitute a waiver of
                          any other option, power
                          or right. Maker hereby waives presentment of payment, protest,
                          and all notices
                          or demands in connection with the delivery, acceptance,
                          performance, default or
                          endorsement of this Debenture. Acceptance by the Payee
                          of less than the full
                          amount due and payable hereunder shall in no way limit
                          the right of the Payee to
                          require full payment of all sums due and payable hereunder
                          in accordance with
                          the terms hereof.

                        

                        6.
                           Modifications.
                          No term
                          or provision contained herein may be modified, amended
                          or waived except by
                          written agreement or consent signed by the party to be
                          bound
                          thereby.

                        

                        7.
                           Cumulative
                          Rights and Remedies; Usury.
                          The
                          rights and remedies of Payee expressed herein are cumulative
                          and not exclusive
                          of any rights and remedies otherwise available under the
                          Transaction Documents
                          or applicable law (including at equity). The election of
                          Payee to avail itself
                          of any one or more remedies shall not be a bar to any other
                          available remedies,
                          which Maker agrees Payee may take from time to time. If
                          it shall be found that
                          any interest due hereunder shall violate applicable laws
                          governing usury, the
                          applicable rate of interest due hereunder shall be reduced
                          to the maximum
                          permitted rate of interest under such law.

                        

                        9.
                           Use
                          of
                          Proceeds.
                          Maker
                          shall use the proceeds from this Debenture hereunder for
                          working capital
                          purposes and not for the satisfaction of any portion of
                          Maker's or a
                          Subsidiary's debt (other than payment of trade payables
                          in the ordinary course
                          of Maker's business and prior practices), the redemption
                          of any of Maker's
                          equity or equity-equivalent securities or the settlement
                          of any outstanding
                          litigation.

                        

                        10.
                           Collection
                          Expenses.
                          If
                          Payee shall commence an action or proceeding to enforce
                          this Secured Debenture,
                          then Maker shall reimburse Payee for its costs of collection
                          and reasonable
                          attorneys fees incurred with the investigation, preparation
                          and prosecution of
                          such action or proceeding.

                        

                        11.
                           Severability.
                          If any
                          provision of this Debenture is declared by a court of competent
                          jurisdiction to
                          be in any way invalid, illegal or unenforceable, the balance
                          of this Debenture
                          shall remain in effect, and if any provision is inapplicable
                          to any person or
                          circumstance, it shall nevertheless remain applicable to
                          all other persons and
                          circumstances. If it shall be found that any interest or
                          other amount deemed
                          interest due hereunder shall violate applicable laws governing
                          usury, the
                          applicable rate of interest due hereunder shall automatically
                          be lowered to
                          equal the maximum permitted rate of interest.

                        

                        
                          
                            5

                            

                            
                            

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        12.
                           Successors
                          and Assigns.
                          This
                          Debenture shall be binding upon Maker and its successors
                          and shall inure to the
                          benefit of the Payee and its successors and assigns. The
                          term "Payee" as used
                          herein, shall also include any endorsee, assignee or other
                          holder of this
                          Debenture.

                        

                        13.
                           Lost
                          or Stolen Debenture.
                          If this
                          Debenture is lost, stolen, mutilated or otherwise destroyed,
                          Maker shall execute
                          and deliver to the Payee a new debenture containing the
                          same terms, and in the
                          same form, as this Debenture. In such event, Maker may
                          require the Payee to
                          deliver to Maker an affidavit of lost instrument and customary
                          indemnity in
                          respect thereof as a condition to the delivery of any such
                          new
                          debenture.

                        

                        14.
                           Due
                          Authorization.
                          This
                          Debenture has been duly authorized, executed and delivered
                          by Maker and is the
                          legal obligation of Maker, enforceable against Maker in
                          accordance with its
                          terms. No consent of any other party and no consent, license,
                          approval or
                          authorization of, or registration or declaration with,
                          any governmental
                          authority, bureau or agency is required in connection with
                          the execution,
                          delivery or performance by the Maker, or the validity or
                          enforceability of this
                          Debenture other than such as have been met or obtained.
                          The execution, delivery
                          and performance of this Debenture and all other agreements
                          and instruments
                          executed and delivered or to be executed and delivered
                          pursuant hereto or
                          thereto or the securities issuable upon conversion of this
                          will not violate any
                          provision of any existing law or regulation or any order
                          or decree of any court,
                          regulatory body or administrative agency or the certificate
                          of incorporation or
                          by-laws of the Maker or any mortgage, indenture, contract
                          or other agreement to
                          which the Maker is a party or by which the Maker or any
                          property or assets of
                          the Maker may be bound.

                        

                        15. Construction.
                          The
                          Maker and Payee and/or their respective counsel have reviewed
                          and had an
                          opportunity to review and revise this Debenture and, therefore,
                          the normal rule
                          of construction to the effect that any ambiguities are
                          to be resolved against
                          the drafting party shall not be employed in the interpretation
                          of this
                          Debenture.

                         

                        16.
                           Governing
                          Law.
                          All
                          questions concerning the construction, validity, enforcement
                          and interpretation
                          of this Debenture shall be governed by and construed and
                          enforced in accordance
                          with the internal laws of the State of New York, without
                          regard to the
                          principles of conflict of laws thereof. Each of Maker and
                          Payee agree that all
                          legal proceedings concerning the interpretations, enforcement
                          and defense of
                          this Debenture shall be commenced in the state and federal
                          courts sitting in the
                          City of New York, Borough of Manhattan (the "New
                          York Courts").
                          Each
                          of Maker and Payee hereby irrevocably submit to the exclusive
                          jurisdiction of
                          the New York Courts for the adjudication of any dispute
                          hereunder (including the
                          enforcement of this Debenture), and hereby irrevocably
                          waives, and agrees not to
                          assert in any suit, action or proceeding, any claim that
                          it is not personally
                          subject to the jurisdiction of any such court, that such
                          suit, action or
                          proceeding is improper. Each of Maker and Payee hereby
                          irrevocably waive
                          personal service of process and consents to process being
                          served in any such
                          suit, action or proceeding by mailing a copy thereof via
                          registered or certified
                          mail or overnight delivery (with evidence of delivery)
                          to the other at the
                          address in effect for notices to it under this Debenture
                          and agrees that such
                          service shall constitute good and sufficient 

                        
                          
                            6

                            

                            
                            

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                        

                        service
                          of process and notice thereof. Nothing contained herein
                          shall be deemed to limit
                          in any way any right to serve process in any manner permitted
                          by law. Each of
                          Maker and Payee hereby irrevocably waive, to the fullest
                          extent permitted by
                          applicable law, any and all right to trial by jury in any
                          legal proceeding
                          arising out of or relating to this Debenture or the transactions
                          contemplated
                          hereby.

                         

                        17. Notice. 
                          Any and
                          all notices or other communications or deliveries to be
                          provided by the Payee
                          hereunder shall be in writing and delivered personally,
                          by facsimile, sent by a
                          nationally recognized overnight courier service or sent
                          by certified or
                          registered mail, postage prepaid, addressed to the Maker
                          at 3661 Horseblock
                          Road, Medford, New York 11763, facsimile number: _______________,
Attention:
                          Lawrence A. Siebert, President,
                          or such
                          other address or facsimile number as the Maker may specify
                          for such purposes by
                          notice to the Payee delivered in accordance with this paragraph.
                          Any and all
                          notices or other communications or deliveries to be provided
                          by the Maker
                          hereunder shall be in writing and delivered personally,
                          by facsimile, sent by a
                          nationally recognized overnight courier service or sent
                          by certified or
                          registered mail, postage prepaid, addressed to the Payee
                          at _______________,
                          facsimile number: ______________, Attention: __________,
                          or such other address
                          or facsimile number as the Payee may specify for such purposes
                          by notice to the
                          Maker delivered in accordance with this paragraph. Any
                          notice or other
                          communication or deliveries hereunder shall be deemed given
                          and effective on the
                          earliest of (i) the date of transmission if delivered by
                          hand
                          or by telecopy that has been confirmed as received by 5:00
                          p.m. (New York City
                          time) on a business day,
                          (ii)
one
                          business day after being sent by nationally recognized
                          overnight courier or
                          received by telecopy after 5:00 p.m. (New York City time)
                          on any day,
                          or
                          (iii) 5
                          business
                          days
                          after being sent by certified or registered mail, postage
                          and charges prepaid,
                          return receipt requested.

                        

                           

                        

                        

                        The
                          undersigned signs this Debenture as a maker and not as
                          a surety or guarantor or
                          in any other capacity.

                        

                         

                        

                        CHEMBIO
                          DIAGNOSTICS, INC.

                        

                         

                        By:
                          _____________________

                        Name:

                        Title:

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