Document:

Exhibit 10.3 Non-Exclusive License, Marketing and Distribution Agreement

    
      
        
          
            

          

          
            

          

          
            
              Non-Exclusive
                License, Marketing and Distribution Agreement

            

          

          
            
              

                Execution
                  Version

                 

                

                 

                

                 

                

                 

                

                 

                

                 

                

                 

                

                 

                

                 

                Non-Exclusive
                  License, Marketing and Distribution Agreement

                 

                Dated
                  As Of

                 

                September
                  29, 2006

                 

                Between

                 

                Inverness
                  Medical Innovations, Inc.

                 

                And

                 

                Chembio
                  Diagnostic Systems, Inc.

                 

                

                 

                

                
                  
                    
                    

                  

                  
                    
                    

                    
                      

                    

                  

                  
 

                

                Table
                  of Contents

                
                  
                    	
                            1.
                              Definitions

                          	
                             
                              1

                          
	
                            1.1.
                              Certain Definitions 

                          	
                             
                              1

                          
	
                            1.2.
                              Additional Definitions 

                          	
                             
                              6

                          
	
                            2.
                              License Grants. 

                          	
                             
                              6

                          
	
                            2.1.
                              Inverness License 

                          	
                             
                              6

                          
	
                            2.2.
                              Non-Exclusive Right to Purchase and Exploit

                          	
                             
                              7

                          
	
                            2.3.
                              Patent Marking 

                          	
                             
                              7

                          
	
                            2.4.
                              SDS Access

                          	
                             
                              8

                          
	
                            2.5.
                              Termination of Licenses Upon Challenge of Validity 

                          	
                             
                              8

                          
	
                            3.
                              Royalties and Payments. 

                          	
                             
                              8

                          
	
                            3.1.
                              Exclusive Payment Arrangements

                          	
                             
                              8

                          
	
                            3.2.
                              Pricing of Licensed Products

                          	
                             
                              8

                          
	
                            3.3.
                              Inverness Sale of Licensed Products - Division of Net
                              Sales

                          	
                             
                              8

                          
	
                            3.4.
                              Minimum Price

                          	
                             
                              8

                          
	
                            3.5.
                              Payment Mechanism for Licensed Products Sold by Inverness

                          	
                             
                              8

                          
	
                            3.6.
                              Royalties Payable by Chembio on Inverness Lateral Flow
                              Patents

                          	
                             
                              9

                          
	
                            3.7.
                              Payment by Inverness for Samples 

                          	
                            10

                          
	
                            3.8.
                              Reporting and Calculation of Payments.

                          	
                            10

                          
	
                            4.
                              Regulatory and License Matters. 

                          	
                            12

                          
	
                            4.1.
                              Facility Registration/Inspections

                          	
                            12

                          
	
                            4.2.
                              Regulatory Filings 

                          	
                            12

                          
	
                            5.
                              Manufacture and Sale. 

                          	
                            12

                          
	
                            5.1.
                              Chembio Efforts 

                          	
                            12

                          
	
                            5.2.
                              Forecasts 

                          	
                            12

                          
	
                            5.3.
                              Purchase Orders 

                          	
                            13

                          
	
                            5.4.
                              Shipment Terms 

                          	
                            13

                          
	
                            5.5.
                              Acceptance 

                          	
                            13

                          
	
                            5.6.
                              Inverness Responsibilities; Rights 

                          	
                            13

                          
	
                            6.
                              Trademarks 

                          	
                            14

                          
	
                            6.1.
                              Trademark License 

                          	
                            14

                          
	
                            6.2.
                              Compliance with Law; Registration

                          	
                            14

                          
	
                            6.3.
                              Termination 

                          	
                            14

                          
	
                            6.4.
                              Labeling

                          	
                            14

                          
	
                            7.
                              Prosecution and Enforcement of Licensed Intellectual
                              Property

                          	
                            14

                          
	
                            7.1.
                              Prosecution 

                          	
                            14

                          
	
                            7.2.
                              Enforcement of Licensed Patents

                          	
                            15

                          
	
                            8.
                              Confidentiality

                          	
                            15

                          
	
                            8.1.
                              Limited Disclosure and Use 

                          	
                            15

                          
	
                            8.2.
                              Exceptions

                          	
                            15

                          
	
                            8.3.
                              Use of Name; Disclosure of Terms of the Agreement 

                          	
                            16

                          
	
                            8.4.
                              Effect of Termination 

                          	
                            16

                          
	
                            8.5.
                              Survival

                          	
                            16

                          
	
                            9.
                              Representations; Warranties

                          	
                            16

                          
	
                            9.1.
                              Corporate Power 

                          	
                            16

                          
	
                            9.2.
                              No Default or Violation 

                          	
                            16

                          
	
                            9.3.
                              Licensed Intellectual Property 

                          	
                            17

                          
	
                            9.4.
                              Regulatory Matters

                          	
                            17

                          
	
                            9.5.
                              Product Quality 

                          	
                            17

                          
	
                            9.6.
                              Exclusion of Other Representations and Warranties 

                          	
                            17

                          
	
                            10.
                              Indemnification 

                          	
                            18

                          
	
                            10.1.
                              By Chembio as Manufacturer 

                          	
                            18

                          
	
                            10.2.
                              By Sellers

                          	
                            18

                          
	
                            10.3.
                              Notice of Claims

                          	
                            18

                          
	
                            10.4.
                              Disputes 

                          	
                            19

                          
	
                            11.
                              Term and Termination

                          	
                            19

                          
	
                            11.1.
                              Term of Agreement 

                          	
                            19

                          
	
                            11.2.
                              Material Breach 

                          	
                            19

                          
	
                            11.3.
                              Section 365(n); Agreement to Deliver Embodiments

                          	
                            20

                          
	
                            11.4.
                              Effect of Termination for Breach

                          	
                            20

                          
	
                            11.5.
                              Survival 

                          	
                            21

                          
	
                            12.
                              Limitation of Liability

                          	
                            21

                          
	
                            12.1.
                              Exclusion of Liability for Certain Damages

                          	
                            21

                          
	
                            12.2.
                              Limitation on Liability for Direct Damages

                          	
                            21

                          
	
                            13.
                              General

                          	
                            21

                          
	
                            13.1.
                              Waivers and Amendments

                          	
                            21

                          
	
                            13.2.
                              Entire Agreement

                          	
                            22

                          
	
                            13.3.
                              Severability

                          	
                            22

                          
	
                            13.4.
                              Relationship of the Parties

                          	
                            22

                          
	
                            13.5.
                              No Election of Remedies

                          	
                            22

                          
	
                            13.6.
                              Notices 

                          	
                            22

                          
	
                            13.7.
                              Governing Law 

                          	
                            23

                          
	
                            13.8.
                              Dispute Resolution 

                          	
                            23

                          
	
                            13.9.
                              Waiver of Jury Trial

                          	
                            23

                          
	
                            13.10.
                              Counterparts 

                          	
                            23

                          
	
                            13.11.
                              Assignment 

                          	
                            24

                          
	
                            13.12.
                              Force Majeure 

                          	
                            24

                          
	
                            13.13
                              Further Assurances

                          	
                            24

                          

                  

                

                
                  
                    
                    

                  

                  
                    
                    

                    
                      

                    

                  

                  
                    
                    

                  

                

                Non-Exclusive
                  License, Marketing and Distribution Agreement

                 

                PREAMBLE

                 

                This
                  Non-Exclusive License, Manufacturing and Distribution Agreement
                  (the
“Agreement”)
                  is
                  made as of September 29, 2006 (“Effective
                  Date”),
                  by
                  and between Chembio
                  Diagnostic Systems, Inc.,
                  a
Delaware
                  corporation
                  having its principal place of business at 3661 Horseblock Road,
                  Medford, New
                  York 11763, (“Chembio”)
                  and
Inverness
                  Medical Innovations, Inc.,
                  a
                  Delaware corporation having its principal place of business at
                  51 Sawyer Road,
                  Waltham, MA 02453 (“Inverness”).

                 

                RECITALS

                 

                Certain
                  capitalized terms used in these Recitals but not defined in the
                  Preamble or upon
                  first use are defined in Section 1.1.
                  

                 

                Inverness,
                  among other activities, is in the business of developing, marketing
                  and selling
                  products used to diagnose various diseases, and owns or has rights
                  to grant
                  licenses to a number of patents pertaining to disease diagnosis,
                  including the
                  Inverness Lateral Flow Patents.

                 

                Chembio,
                  among other things, is in the business of developing, marketing
                  and selling
                  products used to diagnose various diseases, and has designed and
                  developed the
                  Licensed Products, which Chembio manufactures and sells throughout
                  the
                  world.

                 

                During
                  the Term, Inverness wishes to license the Inverness Lateral Flow
                  Patents to
                  Chembio for the purpose of allowing Chembio to manufacture and
                  sell the Licensed
                  Products, and Chembio wishes to obtain such licenses to the extent
                  such licenses
                  are necessary.

                 

                During
                  the Term, Inverness wishes to be a non-exclusive marketer and distributor
                  of the
                  Licensed Products worldwide, and Chembio wishes to grant Inverness
                  the
                  non-exclusive right to market and sell the Licensed Products
                  worldwide.

                 

                In
                  addition, the Parties are simultaneously entering into certain
                  other agreements,
                  licenses and covenants, including an agreement between the Parties
                  and StatSure
                  Diagnostic Systems, Inc. (“SDS”).

                 

                NOW,
                  THEREFORE, in consideration of the premises and the mutual promises,
                  covenants
                  and conditions hereinafter set forth, the receipt and adequacy
                  of which are
                  hereby acknowledged, Chembio and Inverness hereby agree as follows:

                 

                1.
                  Definitions.

                 

                1.1.
                  Certain
                  Definitions

                 

                .
                  For
                  purposes of this Agreement, in addition to the terms that are defined
                  on first
                  use herein, the following terms shall have the following meanings:

                 

                (a)
                  The
“Act”
shall
                  mean the Federal Food, Drug and Cosmetic Act, as amended, and all
                  relevant
                  federal regulations pertaining thereto.

                 

                
                  
                    
                    

                  

                  
                    1

                    
                      

                    

                  

                  
                    
                    

                  

                

                (b)
                  “Affiliate”
shall
                  mean any Person that controls, is controlled by, or is under common
                  control with
                  a Party hereto. For purposes of this definition, “control” shall mean (i) in the
                  case of corporate entities, direct or indirect ownership of a majority
                  of the
                  stock or shares having the right to vote for the election of directors,
                  and (ii)
                  in the case of non-corporate entities, direct or indirect ownership
                  of a
                  majority of the equity interest with the power to direct the management
                  and
                  policies of such non-corporate entities.

                 

                (c)
                  “Audit”
                  shall
                  mean examination of each and every document relating to the licenses
                  and rights
                  granted herein, including but not limited to books, records, agreements,
                  communications, shipping records, purchase orders, invoices, credit
                  memos and
                  record of payments received or made, such audit to be conducted
                  by a nationally
                  recognized public accounting firm.

                 

                (d)
                  “Challenge”
means
                  to challenge the validity or enforceability of any Patent Rights,
                  including
                  without limitation by (i) filing a declaratory judgment action
                  in which Patent
                  Rights are alleged to be invalid or unenforceable; (ii) citing
                  prior art
                  pursuant to 35 U.S.C. Sec. 301, making a request for re-examination
                  of Patent
                  Rights pursuant to 35 U.S.C. Sec. 302 and/or 311, or provoking
                  or becoming party
                  to an interference with an application for Patent Rights pursuant
                  to 35 U.S.C.
                  Sec. 135; or (iii) filing or commencing any opposition, cancellation,
                  nullity or
                  similar proceedings against Patent Rights in any country.

                 

                (e)
                  “Chembio
                  IP”
shall
                  mean all proprietary rights and Intellectual Property Rights, including
                  but not
                  limited to Patent Rights, owned or Controlled by Chembio, which
                  are necessary or
                  useful for, or would be infringed by, the use, sale, distribution,
                  import or
                  export of the Licensed Products, whether now in existence or in
                  the future,
                  including but not limited to those as listed on Schedule A.

                 

                (f)
                  “Chembio
                  Listed Patents”
shall
                  mean the patents and patent applications listed on Schedule A.

                 

                (g)
                  “Chembio
                  Trademarks”
shall
                  mean the Trademarks listed on Schedule B.

                 

                (h)
                  “Confidential
                  Information”
shall
                  mean all Technology and ideas and information of any kind, whether
                  in written,
                  oral, graphical, machine-readable or other form, whether or not
                  marked or
                  identified as confidential or proprietary, which are transferred,
                  disclosed or
                  made available by any Party hereto to any other.

                 

                (i)
                  “Control”
                  or
“Controlled
                  by”
                  shall
                  mean, in the context of Patent Rights or other Intellectual Property
                  Rights,
                  possession of the ability on the part of a Party to grant access
                  to or a license
                  or sublicense as provided for herein without violating the terms
                  of any
                  agreement or other arrangement with any Third Party (other than
                  an Affiliate)
                  existing at the time such Party would be required hereunder to
                  grant another
                  Party such access or license or sublicense.

                 

                
                  
                    
                    

                  

                  
                    2

                    
                      

                    

                  

                  
                    
                    

                  

                

                (j)
                  “Costs”
                  shall
                  mean Chembio’s costs, calculated in accordance with GAAP and attributed on a
                  per-unit-of-Licensed Product basis, of manufacturing and shipping
                  the Licensed
                  Products provided to Inverness hereunder, obtaining and maintaining
                  regulatory
                  approvals for the Licensed Products, and obtaining and maintaining
                  licenses from
                  any Third Parties to manufacture, market, distribute or sell the
                  Licensed
                  Products and the amortization over the period during which Licensed
                  Products are
                  sold to Inverness of the cost in procuring such licenses. The term
“Costs” shall
                  also include costs associated with (1) compliance, (2) complaint
                  handling and
                  (3) quality control. Such costs shall be restricted to costs incurred
                  by Chembio
                  after the Effective Date, except that license fees paid for those
                  licenses
                  listed in Schedule C obtained prior to the Effective Date will
                  be amortized as
                  set forth in Schedule C over the period during which Licensed Products
                  are sold
                  to Inverness. 

                 

                (k)
                  “Developing
                  Countries” means
                  those countries listed on Schedule G.

                 

                (l)
                  “Dipstick
                  Product” means
                  Chembio’s HIV 1/2 STAT PAK(TM) Dipstick product.

                 

                (m)
                  “Distributor”
shall
                  mean any Third Party, other than an Affiliate of Inverness, to
                  which Inverness
                  or Chembio grants a limited sublicense under the rights granted
                  Inverness under
                  Section 2.2
                  or
                  granted Chembio under Section 2.1
                  for the
                  purpose of reselling or distributing Licensed Products.

                 

                (n)
                  “Exploit”
or
                  “Exploitation”
shall
                  mean to sell, offer for sale, import, export, transport, register,
                  distribute,
                  promote and market, together with other activities typically associated
                  with
                  maximizing the market penetration, profit margins and commercialization
                  of a
                  diagnostic medical product.

                 

                (o)
                  “FDA”
means
                  the U.S. Food and Drug Administration.

                 

                (p)
                  “First
                  Commercial Sale”
shall
                  mean, with respect to a product, the first sale to any
                  non-Affiliate.

                 

                (q)
                  “GAAP”
means
                  United States Generally Accepted Accounting Principles, as applicable
                  to the
                  Party in question. 

                 

                (r)
                  “GMP”
means
                  current Good Manufacturing Practices as promulgated by the FDA.

                 

                (s)
                  “Intellectual
                  Property Rights”
shall
                  mean (i)  Patent Rights; (ii) rights associated with works of
                  authorship including copyrights, copyright applications and copyright
                  registrations; and (iii) rights relating to the protection of trade
                  secrets, know-how and Confidential Information, but shall not include
                  any rights
                  to trade marks, trade names, or other distinctive brand names or
                  logos.

                 

                
                  
                    
                    

                  

                  
                    3

                    
                      

                    

                  

                  
                    
                    

                  

                

                (t)
                  “Inverness
                  Lateral Flow Patents”
shall
                  mean any Patent Rights in the patents and patent applications identified
                  on
                  Schedule E. 

                 

                (u)
                  “Inverness
                  Trademarks”
shall
                  mean the trademarks listed on Schedule F.

                 

                (v)
                  “Licensed
                  Products”
shall
                  mean (a) Chembio’s veterinary
                  tuberculosis and parvovirus products,
                  products
                  for the testing of Trypanasoma Cruzi, African Trypanasoma, human
                  tuberculosis,
                  Leishmaniasis, and Leptospirosis, as described on Schedule D; and
                  (b) the
                  Dipstick Product.

                 

                (w)
                  Net
                  Sales.

                 

                (i)
                  “Net
                  Sales”
shall
                  mean, with respect to any Licensed Product, the gross amount received
                  by the
                  seller or its Affiliates or permitted Sublicensees on bona fide
                  sales of such
                  Licensed Product to Third Parties, less the following items (to
                  the extent the
                  gross amount received by them otherwise reflects such items): (i) credits
                  and allowances for price adjustment, rejection, recall or return
                  of the Licensed
                  Product; (ii) amounts for transportation, insurance, handling or shipping
                  charges; (iii) taxes, duties and other governmental charges levied on or
                  measured by the sale of the Licensed Product, but not franchise
                  or income taxes
                  of any kind whatsoever; (iv) quantity and other trade discounts, credits or
                  allowances actually allowed and taken; (v) charge back payments and/or
                  rebates for the Licensed Product provided to managed health care
                  organizations,
                  international organizations, or federal, state, local or other
                  governments,
                  including, in the United States, Medicare and Medicaid; or (vi) license
                  fees, royalties or similar paid to Third Parties to allow the seller
                  or its
                  Affiliates to Exploit the relevant Licensed Product without infringement
                  of
                  Third Party (other than an Affiliate of the seller) Intellectual
                  Property
                  Rights.
                  Net
                  Sales shall not include any consideration received for demonstrations,
                  test
                  marketing, clinical trial purposes or compassionate or similar
                  use. All of the
                  amounts specified in the definition of Net Sales shall be determined
                  from the
                  books and records of seller of the Licensed Product and its Affiliates,
                  maintained in accordance with GAAP, consistently
                  applied.

                 

                (ii)
                  Bundling.
                  In the
                  event that any particular Licensed Product is sold as part of a
                  bundle or kit
                  with products other than such Licensed Product, the Net Sales allocated
                  to such
                  Licensed Product shall be determined by multiplying the net selling
                  price (that
                  is, the gross selling price less such applicable deductions as
                  are permitted in
                  the calculation of Net Sales) of the bundle or kit by the fraction
                  A ÷ (A + B)
                  where A is the average selling price during the period in question
                  in the
                  country in question in quantities similar to the sale in question
                  for the
                  Licensed Product sold separately and B is the average selling price
                  during the
                  period in question in the country in question in quantities similar
                  to the sale
                  in question for the remaining products in the bundle or kit, when
                  such products
                  are sold separately from the Licensed Product (in each case as
                  the average
                  selling price is documented by the seller or its Affiliates or
                  Sublicensees’
records). In the event that any products contained in the bundle
                  or kit are not
                  sold separately, the Net Sales from sales of such bundle or kit
                  allocated to
                  Licensed Products shall be determined in a fair and equitable manner
                  by mutual
                  agreement of the parties.

                 

                
                  
                    
                    

                  

                  
                    4

                    
                      

                    

                  

                  
                    
                    

                  

                

                (iii)
                  Sales
                  to Distributors.
                  It is
                  understood and agreed that all sales of Licensed Product by the
                  seller, its
                  Affiliates and permitted Sub-licensees to any Distributor shall
                  be treated as
                  Net Sales hereunder, and that subsequent sale of Licensed Product
                  by any such
                  Distributor shall not be treated as Net Sales hereunder. 

                 

                (x)
                  “Party”
or
                  “Parties”
shall
                  mean each of Inverness and Chembio (but not their Affiliates).

                 

                (y)
                  “Patent
                  Costs”
shall
                  mean the costs and expenses paid to outside legal counsel and other
                  Third
                  Parties, allocated in-house costs of legal counsel, and filing
                  and maintenance
                  expenses, incurred in connection with preparing, filing, prosecuting,
                  obtaining
                  and maintaining Patent Rights, including costs and expenses of
                  patent
                  interference, re-examination, reissue, opposition or similar
                  proceedings.

                 

                (z)
                  “Patent
                  Prosecution Action”
shall
                  mean any and all actions that may be taken in connection with preparing,
                  filing,
                  prosecuting, obtaining and maintaining throughout the world patent
                  protection
                  for Patent Rights licensed hereunder, including patent applications
                  and other
                  related material submissions and correspondence with any patent
                  authorities.

                 

                (aa)
                  “Patent
                  Rights”
shall
                  mean all patents, patent applications and inventions on which patent
                  applications are filed and all patents issuing therefrom worldwide,
                  all
                  disclosures of inventions, together with any extensions, registrations,
                  confirmations, reissues, continuations, divisionals, continuations,
                  continuations-in-part, reexamination certificates, substitutions
                  or renewals,
                  supplemental protection certificates, term extensions (under applicable
                  patent
                  law or other law), provisional rights and certificates of
                  inventions.

                 

                (bb)
                  “Person”
shall
                  mean an individual, corporation, partnership, limited partnership,
                  limited
                  liability company, unincorporated association, trust, joint venture
                  or other
                  organization or entity, including a governmental authority.

                 

                (cc)
                  “QSRs”
means
                  current Quality Systems Regulations as promulgated by the FDA.

                 

                (dd)
                  “Related
                  Documents”
shall
                  mean the
                  Settlement Agreement and HIV Barrel Product Commercialization Agreement
                  between
                  SDS and Chembio, the License and Distribution Agreement between
                  SDS and
                  Inverness, the HIV Cassette License, Marketing and Distribution
                  Agreement
                  between Chembio and Inverness, and the HIV Barrel License, Marketing
                  and
                  Distribution Agreement between Chembio and Inverness.

                 

                (ee)
                  “Rest
                  of the World”
means
                  worldwide, excluding the United States.

                 

                (ff)
                  “Specifications”
                  shall
                  mean the information contained in Schedule D regarding the Licensed
                  Product and
                  the together with any and all other related documentation or procedures
                  in
                  possession by Chembio that substantiate or support the information
                  contained
                  within Schedule D.

                 

                
                  
                    
                    

                  

                  
                    5

                    
                      

                    

                  

                  
                    
                    

                  

                

                (gg)
                  “Sublicensee”
shall
                  mean any sublicensee of any of the rights granted to Inverness
                  under
                  Section 2.2,
                  other
                  than an Affiliate or a Distributor.

                 

                (hh)
                  “Technology”
shall
                  mean all techniques, inventions, practices, procedures, knowledge,
                  improvements,
                  designs, processes, protocols, compositions, products, methods,
                  works of
                  authorship, know-how, data, clinical data, preclinical data, research
                  and
                  creations (whether or not subject to protection by any Intellectual
                  Property
                  Rights). 

                 

                (ii)
                  “Third
                  Party”
shall
                  mean any Person other than Inverness or Chembio. 

                 

                (jj)
                  “United
                  States”
means
                  the United States of America and its territories and possessions,
                  including
                  without limitation Puerto Rico and the U.S. Virgin Islands.

                 

                (kk)
                  “Valid
                  Claim”
shall
                  mean a claim of an issued and unexpired patent that has not been
                   permanently revoked, held unenforceable or invalid by a final,
                  nonappealable decision of a court or other governmental agency
                  of competent
                  jurisdiction (the term “final, nonappealable decision” includes decisions that
                  become final through exhaustion of all permissible avenues for
                  rehearing or
                  review by a superior tribunal and decisions that become final through
                  expiration
                  of the time allowable for appeal), or  admitted by the patentee to be
                  invalid or unenforceable through reissue, reexamination, disclaimer
                  or
                  otherwise.

                 

                1.2.
                  Additional
                  Definitions

                 

                .
                  Certain
                  additional capitalized terms are defined below in the body of this
                  Agreement.

                 

                2.
                  License
                  Grants. 

                 

                2.1.
                  Inverness
                  License

                 

                .
                  Inverness,
                  on and subject to the terms and conditions contained herein, hereby
                  grants to
                  Chembio and Chembio hereby accepts from Inverness, a non-transferable,
                  non-exclusive, royalty-bearing license, under the Inverness Lateral
                  Flow
                  Patents, for the Term to manufacture and to Exploit the Licensed
                  Products
                  worldwide, provided however that Chembio shall have no license
                  to Exploit the
                  Dipstick Product in the United States, but shall have a license
                  to export the
                  Dipstick Product from the United States (the “License”).
                  The
                  License may not be sublicensed. Chembio shall manufacture the Licensed
                  Products
                  itself or may subcontract the manufacture of the Licensed Products
                  to the extent
                  permitted by applicable law, but may not sublicense such manufacturing
                  right. If
                  Chembio subcontracts the manufacture of the Licensed Products,
                  Chembio shall
                  enter into a written agreement with any such manufacturer consistent
                  with the
                  terms of this Agreement and shall remain primarily liable for breach
                  of this
                  Agreement by the manufacturer. The License shall be deemed to include
                  a grant to
                  Chembio of the right to Exploit through any Affiliate of Chembio
                  and through
                  Distributors of Chembio or any Affiliate of Chembio.

                 

                
                  
                    
                    

                  

                  
                    6

                    
                      

                    

                  

                  
                    
                    

                  

                

                (a)
                  Inverness and Chembio acknowledge that the license in this Section
2.1
                  is
                  subject to the limitation that the Charlton Lateral Flow Patents
                  (as described
                  on Schedule E) are not licensed for the Over-The-Counter market;
                  such Charlton
                  Lateral Flow Patents are licensed only with respect to products
                  for
                  sale
                  through any channels for use by licensed professional health-care
                  providers
                  (including hospitals, physicians acting as such and licensed professional
                  health-care centers).

                 

                (b)
                  Subject to the obligations contained in this Agreement or any Related
                  Document
                  to the contrary, the
                  parties acknowledge that: (a) the Licensed Products may be divided
                  into the
“Existing
                  Products”,
                  meaning the Licensed Products as they exists on the Effective Date,
                  and the
“Future
                  Products”,
                  meaning any Licensed Products not in existence on the Effective
                  Date, and any
                  modified or future versions of the Existing Products made after
                  the Effective
                  Date; and (b) the Inverness Lateral Flow Patents may be divided
                  into
“Current
                  Lateral Flow Patents”
and
                  “Future
                  Lateral Flow Patents”.
                  The
“Current
                  Lateral Flow Patents”
are:
                  (i) the patents and patent applications on Schedule E; (ii) any
                  continuations
                  and divisionals of the patents and patent applications on Schedule
                  E; (iii) any
                  continuations-in-part of the patents and patent applications on
                  Schedule E to
                  the extent the claims thereof are directed to subject matter specifically
                  described in (i) and (ii) above; and (iv) any foreign counterparts
                  of the
                  patents and patent applications described in (i), (ii) and (iii)
                  above. The
“Future
                  Lateral Flow Patents“
means
                  any continuation-in-part of the Current Lateral Flow Patents not
                  described in
                  (iii) above, and any foreign counterpart of such continuation-in-part.
                  All
                  licenses granted by Inverness in this Agreement grant licenses
                  to the Current
                  Lateral Flow Patents with respect to both Existing Products and
                  Future Products.
                  The licenses granted by Inverness in this Agreement grant licenses
                  to Future
                  Lateral Flow Patents: (a) for Existing Products; and (b) for Future
                  Products,
                  but only with respect to claims in the Future Lateral Flow Patents
                  that are
                  infringed by the making, using, selling or importing of any Existing
                  Product.
                  Otherwise, Inverness grants no right or license to any Future Lateral
                  Flow
                  Patents under this Agreement, including without limitation any
                  license to any
                  Future Lateral Flow Patent except as described in the foregoing
                  sentence.

                 

                2.2.
                  Non-Exclusive
                  Right to Purchase and Exploit

                 

                .
                  Chembio,
                  on and subject to the terms and conditions contained herein, hereby
                  grants to
                  Inverness and Inverness hereby accepts from Chembio the non-exclusive
                  right to
                  purchase from Chembio and to Exploit, worldwide, during the Term,
                  the Licensed
                  Products (other than the Dipstick Product) and may do so only utilizing
                  Inverness Trademarks.
                  This
                  right shall be deemed to include a grant to Inverness of the right
                  and license
                  to sell through any Affiliate of Inverness and through Distributors
                  of Inverness
                  or of any Affiliate of Inverness.
                  Chembio
                  acknowledges that Inverness is under no obligation to purchase
                  or Exploit any or
                  all of the Licensed Products.

                 

                2.3.
                  Patent
                  Marking

                 

                .
                  Chembio
                  will include the patent numbers of the Inverness Lateral Flow Patents
                  and
                  indicate Inverness’ and its licensors ownership of such patents on the packaging
                  for all Licensed Products.

                 

                
                  
                    
                    

                  

                  
                    7

                    
                      

                    

                  

                  
                    
                    

                  

                

                2.4.
                  SDS
                  Access

                 

                .
                  It
                  is
                  understood by the Parties that SDS shall be entitled to receive
                  copies of this
                  agreement and any amendments if and when effected. 

                 

                2.5.
                  Termination
                  of Licenses Upon Challenge of Validity

                 

                .
                  In all
                  jurisdictions where such agreement is permitted by law, and to
                  the maximum
                  extent so permitted: (a) Chembio agrees not to Challenge any Patent
                  Rights of
                  Inverness or its Affiliates in the Inverness Lateral Flow Patents
                  listed on
                  Schedule E; and (b) Inverness agrees not to Challenge the Patent
                  Rights in the
                  Chembio Listed Patents. In addition to the foregoing, and whether
                  or not the
                  foregoing prohibition is permissible or otherwise enforceable,
                  in the event that
                  Inverness Challenges any Patents Rights in any Chembio Listed Patents,
                  or
                  Chembio Challenges any Patent Rights in any Inverness Lateral Flow
                  Patents, the
                  Party whose right is Challenged shall have the right, in its sole
                  discretion and
                  immediately on written notice, to terminate this Agreement for
                  cause.

                 

                3.
                  Royalties
                  and Payments.

                 

                3.1.
                  Exclusive
                  Payment Arrangements

                 

                .
                  This
                  Article 3
                  describes the manner in which the Parties will share revenues derived
                  from the
                  sale of Licensed Products. No other fees, payments or royalties
                  are due from any
                  Party to any other Party with respect to the licenses and rights
                  set forth in
                  this Agreement. 

                 

                3.2.
                  Pricing
                  of Licensed Products

                 

                .
                  Subject
                  to the limitations set forth in this Article 3,
                  each
                  Party that sells any Licensed Products hereunder may set the prices
                  at which it
                  sells such Licensed Products in its sole and absolute discretion. 

                 

                3.3.
                  Inverness
                  Sale of Licensed Products - Division of Net Sales

                 

                .
                  Inverness shall retain 35% of Net Sales of Licensed Products made
                  by Inverness
                  and its Affiliates in Developing Countries, and 50% of Net Sales
                  of Licensed
                  Products made by Inverness and its Affiliates in the Rest of the
                  World. For the
                  purposes of this paragraph, Net Sales of Licensed Products are
“made” in a
                  particular region, such as a Developing Country, when a sale is
                  made to a
                  Distributor that is located in such region. The remaining percentage
                  of Net
                  Sales (the “Chembio
                  Share”)
                  shall
                  be paid to Chembio.

                 

                3.4.
                  Minimum
                  Price

                 

                .
                  Notwithstanding Sections 3.2
                  and
3.3,
                  Chembio
                  shall be under no obligation to supply Licensed Products to Inverness
                  for less
                  than 115% of Costs. As such, in the event that the Chembio Share
                  of Net Sales
                  for any Licensed Product in any particular country or countries
                  is less than
                  115% of Costs, Chembio may, by written notice, require Inverness
                  not to sell
                  such Licensed Product in such country.

                 

                3.5.
                  Payment
                  of Cost of Licensed Products
                  Sold by Inverness

                 

                .
                  Inverness
                  shall pay Chembio its Costs of Licensed Products in accordance
                  with the
                  following procedure: 

                 

                (a)
                  Prior
                  to Inverness’ order for any Licensed Product, Chembio shall provide to Inverness
                  a reasonable, good faith estimate of the per-unit amount representing
                  Chembio’s
                  Cost for such Licensed Product (
                  (“Deemed
                  Cost”),
                  and
                  Inverness shall provide to Chembio the estimated per-unit amount
                  representing
                  Inverness’ Net Sales for such Licensed Product (“Deemed
                  Price”).
                  The
                  initial Deemed Cost and Deemed Price shall apply for the purposes
                  of
                  sub-paragraph (b) below from Inverness’ initial order until the end of the
                  calendar quarter immediately following the calendar quarter in
                  which the initial
                  order was placed. For the remainder of the Term, the Deemed Cost
                  shall be
                  adjusted each quarter based on the actual Cost of Licensed Products
                  in the
                  latest quarter for which actual Costs have been reported pursuant
                  to Section
3.8

                 

                
                  
                    
                    

                  

                  
                    8

                    
                      

                    

                  

                  
                    
                    

                  

                

                (b)
                  Each
                  shipment of Licensed Products by Chembio shall be accompanied by
                  an invoice, in
                  a form reasonably satisfactory to Inverness, for the Licensed Products
                  in the
                  shipment at the then-current Deemed Cost (as hereinafter defined).
                  Within thirty
                  (30) days of receipt of a duly issued invoice for Licensed Product
                  shipped by
                  Chembio in accordance with this Agreement, Inverness shall pay
                  Chembio such
                  Deemed Cost and any additional Chembio Share.

                 

                (c)
                  Any
                  adjustments to actual Costs for overpayments or underpayments made
                  by Inverness
                  shall be made pursuant to the quarterly accountings set forth in
                  Section
3.8.
                  For
                  purposes of these calculations, Cost of Licensed Product will be
                  matched to
                  sales on a FIFO basis. 

                 

                3.6.
                  Royalties
                  Payable by Chembio on Inverness Lateral Flow Patents

                 

                .
                  Chembio
                  shall pay Inverness royalties of five
                  percent (5%) of Net Sales of Licensed Products made by Chembio
                  and its
                  Affiliates in Developing Countries, and eight and one-half percent
                  (8.5%) of Net
                  Sales of Licensed Products made by Chembio and its Affiliates in
                  the Rest of the
                  World excluding Developing Countries (provided that no Dipstick
                  Products are
                  licensed for the United States). For the purposes of this paragraph,
                  sales of
                  Licensed Products are “made” in a particular region, such as a Developing
                  Country, when a sale is made to a Distributor that is located in
                  such region;
                  provided, however that Inverness reserves the right to charge the
                  higher royalty
                  rate if it can reasonably show that a Distributor located in a
                  Developing
                  Country is selling Licensed Products to an end-purchaser located
                  in a
                  non-Developing Country, and Chembio shall have the right to pay
                  the lower
                  royalty rate if it can reasonably show that a Distributor located
                  in a
                  non-Developing Country is selling Licensed Products to an end-purchaser
                  in a
                  Developing Country.

                 

                (a)
                  No
                  royalties shall be payable unless the Licensed Product infringes
                  a Valid Claim
                  of the Inverness Lateral Flow Patents in the country in which the
                  Licensed
                  Product is manufactured or the country in which
                  the
                  Licensed Product is sold. 

                 

                (b)
                  Only
                  one royalty shall be due Inverness for any Licensed Product regardless
                  of the
                  number of Valid Claims of the Inverness Lateral Flow Patents that
                  would be
                  infringed.

                 

                (c)
                  The
                  obligation to pay royalties on Net Sales of Licensed Product shall
                  be imposed
                  only once with respect to each Licensed Product, even if such Licensed
                  Product
                  is sold more than once in the course of its transfer to the ultimate
                  end-user.

                 

                (d)
                  The
                  above
                  royalties on Licensed Products are not payable by Chembio with
                  respect to
                  Licensed Products distributed by Inverness, for which the revenue
                  sharing
                  arrangements set forth in Section 3.3
                  are the
                  sole and exclusive payment arrangements between the parties.

                 

                
                  
                    
                    

                  

                  
                    9

                    
                      

                    

                  

                  
                    
                    

                  

                

                3.7.
                  Payment
                  by Inverness for Samples

                 

                .
                  Subject
                  to Inverness’ review of and acceptance of Chembio’s Costs, Inverness shall pay
                  Chembio 110% of the Costs associated with the manufacture by Chembio
                  of Licensed
                  Products that are used by Inverness for demonstrations, testing,
                  clinical
                  trials, sample and compassionate or similar use.

                 

                3.8.
                  Reporting
                  and Calculation of Payments.

                 

                (a)
                  For
                  any calendar quarter for which payments under Section 3.3
                  are due
                  to Chembio, Inverness shall deliver to Chembio, within sixty (60)
                  days after the
                  end of such calendar quarter, reasonably detailed written accountings
                  of Net
                  Sales of the Licensed Products during such calendar quarter. Such
                  report shall
                  indicate Net Sales on a country-by-country and Licensed Product-by-Licensed
                  Product basis (and not on an order-by-order basis).

                 

                (b)
                  Within seventy-five (75) days of the end of each calendar quarter
                  during the
                  Term, Chembio shall deliver to Inverness a complete and accurate
                  accounting of
                  all Costs and a determination of the cost per unit for all Licensed Products
                  sold to Inverness pursuant to this Agreement. The Costs reflected
                  shall be the
                  basis for payments to Chembio to be made by Inverness pursuant
                  to Section
3.3.
                  The
                  per-unit allocation of Costs to products sold shall be determined
                  on a FIFO
                  basis. Cost so determined shall remain in effect until the next
                  such accounting.

                 

                (c)
                  Within
                  ninety (90) days after the end of any calendar quarter for which
                  reports have
                  been delivered pursuant to sub-paragraphs (a) and (b) above, Inverness
                  shall
                  deliver Chembio a report showing the calculation of the amounts
                  due to Chembio
                  pursuant to Section
                  3.3,
                  and any
                  payments to be made hereunder. Such payments may be payable from
                  either
                  Inverness or Chembio, depending on whether Chembio has been underpaid
                  or
                  overpaid pursuant to the procedure set forth in Section 3.4,
                  and
                  shall be made no later than seven days after delivery of such report.
                  With
                  respect to Net Sales invoiced in a currency other than United States
                  Dollars,
                  Net Sales and royalties payable shall be expressed in their United
                  States dollar
                  equivalent, calculated using an average exchange rate for buying
                  United States
                  dollars published by The Wall Street Journal during the calendar
                  quarter. All
                  payments due to Chembio hereunder shall be made from the United
                  States in United
                  States dollars by transfer to such bank account as Chembio may
                  designate.

                 

                (d)
                  For
                  any
                  calendar quarter for which payments are due under this Agreement
                  to Inverness,
                  Chembio shall deliver Inverness, within sixty (60) days after the
                  end of such
                  calendar quarter, reasonably detailed written accountings of Net
                  Sales of the
                  Licensed Products during such calendar quarter. Such report shall
                  indicate Net
                  Sales on a country-by-country and Licensed Product-by-Licensed
                  Product basis,
                  and the calculation of the royalty due to Inverness, and any payments
                  to be made
                  hereunder. When Chembio delivers such accountings, it shall also
                  deliver all
                  payments due under this Agreement to Inverness for such calendar
                  quarter. With
                  respect to Net Sales invoiced in a currency other than United States
                  Dollars,
                  Net Sales and royalties payable shall be expressed in their United
                  States dollar
                  equivalent, calculated using an average exchange rate for buying
                  United States
                  dollars published by The Wall Street Journal during the calendar
                  quarter. All
                  payments due from Chembio hereunder shall be made from the United
                  States in
                  United States dollars by transfer to such bank account as Inverness
                  may
                  designate.

                 

                
                  
                    
                    

                  

                  
                    10

                    
                      

                    

                  

                  
                    
                    

                  

                

                (e)
                  Chembio shall keep complete and accurate records of the latest
                  two (2) years of
                  Costs of Licensed Products sold to Inverness hereunder. For the
                  sole purpose of
                  verifying Costs to be reimbursed to Chembio, Inverness shall have
                  the right once
                  per calendar year to retain an independent certified public accountant,
                  selected
                  by Inverness and reasonably acceptable to Chembio, to conduct an
                  Audit in the
                  location(s) where such records are maintained upon twenty (20)
                  days prior
                  written notice and during regular business hours, with all information
                  disclosed
                  being deemed Confidential Information hereunder. The cost of the
                  Audit shall be
                  paid by Inverness. Such Audit shall be completed within fifteen
                  (15) business
                  days, subject to extension by the auditor if the auditor reasonably
                  determines
                  in good faith that data or information it requires is not available
                  and
                  identifies the data or information required. Results of such review
                  shall be
                  made available to Chembio and Inverness. Inverness shall recalculate
                  the
                  payments made to the Parties and any Party overpaid shall promptly
                  reimburse any
                  underpaid Party. If a recalculation of Costs is equal to or greater
                  than five
                  (5%) percent of the correctly-calculated Costs, Inverness shall
                  be entitled to
                  have Chembio pay the reasonable out-of-pocket costs incurred by
                  Inverness to
                  retain such independent certified public accountant to conduct
                  such
                  review.

                 

                (f)
                  Each
                  Party (“Payer”) shall keep complete and accurate records of the latest two (2)
                  years of sales of Licensed Products to which royalties or shares
                  of Net Sales to
                  the other Party (“Payee”) attach hereunder. For the sole purpose of verifying
                  payments due to a Payee, said Payee shall have the right, once
                  per calendar
                  year, to retain an independent certified public accountant, selected
                  by said
                  Payee and reasonably acceptable to the Payer, to conduct an Audit
                  in the
                  location(s) where such records are maintained upon twenty (20)
                  days prior
                  written notice and during regular business hours, with all information
                  disclosed
                  being deemed Confidential Information of the Payer. Such Audit
                  shall be
                  completed within fifteen (15) business days, subject to extension
                  by the auditor
                  if the auditor reasonably determines in good faith that data or
                  information it
                  requires is not available and identifies the data or information
                  required.
                  Whichever Party requests the Audit shall bear the costs thereof.
                  Results of such
                  review shall be made available to the Payer and the relevant Payee.
                  If the Audit
                  reflects an underpayment of amounts due, such underpayment shall
                  be promptly
                  remitted to the appropriate Payee by the Payer. If the underpayment
                  is equal to
                  or greater than five (5%) percent of the amount that was otherwise
                  due, the
                  Payee shall be entitled to have the Payer pay the reasonable out-of-pocket
                  costs
                  incurred by the Payee to retain such independent certified public
                  accountant to
                  conduct such review.

                 

                (g)
                  Whenever reports upon which payments are based are to be made by
                  any Party, they
                  shall be certified as correct by the Chief Financial Officer of
                  the Party. In
                  addition, to the extent required of a Party by the provisions of
                  the
                  Sarbanes-Oxley Act, each of the Parties shall make available information
                  as may
                  be required for proper certification in accordance with Section
                  404 and any
                  rules promulgated thereunder.

                 

                
                  
                    
                    

                  

                  
                    11

                    
                      

                    

                  

                  
                    
                    

                  

                

                4.
                  Regulatory
                  and License Matters.

                 

                4.1.
                  Facility
                  Registration/Inspections

                 

                .
                  Chembio
                  shall, if it has not done so prior to the Effective Date, register,
                  at its
                  expense, with FDA, in accordance with the Act, each establishment
                  in which it
                  intends to manufacture any Licensed Product and maintain, at its
                  expense, all
                  such establishment registrations during the term of this Agreement.
                  Chembio
                  shall permit FDA and Inverness to inspect each such establishment
                  for purposes
                  of verifying Chembio’s compliance with the Act, including GMPs and QSRs, and for
                  purposes of verifying that all items being manufactured by Chembio
                  for sale to
                  Inverness hereunder are being manufactured in accordance with the
                  applicable
                  Specifications; Inverness’ participation in such inspections shall be at
                  Inverness’ cost. Any such inspection by Inverness shall be conducted upon
                  reasonable advance notice to Chembio during the normal business
                  hours of the
                  facility to be inspected. Chembio acknowledges and agrees that
                  no inspection by
                  Inverness pursuant to this Section 4.1
                  shall
                  relieve or diminish any of Chembio’s obligations hereunder. 

                 

                4.2.
                  Regulatory
                  Filings

                 

                .
                  Chembio
                  shall be responsible for (1) obtaining and maintaining, and (2)
                  paying for the
                  obtaining and maintaining of, regulatory approvals required for
                  the lawful
                  distribution and sale of Licensed Products in the applicable territories.
                  So
                  long as Chembio is in compliance with all applicable regulatory
                  requirements for
                  the Licensed Product in the territories that it chooses to market
                  such Licensed
                  Products, nothing herein shall require Chembio to obtain or maintain
                  regulatory
                  approvals in any jurisdiction if Chembio, in its sole discretion,
                  deems that it
                  is not commercially reasonable to do so.

                 

                5.
                  Manufacture
                  and Sale. 

                 

                5.1.
                  Chembio
                  Efforts

                 

                .
                  Chembio
                  shall use commercially reasonable efforts to manufacture the Licensed
                  Product
                  and to supply all of Inverness’ requirements for such product, in accordance
                  with the published specifications for each such Licensed Product
                  (the
“Specifications”)
                  and
                  the supply requirements and limitations set forth in this Section
5.
                  In
                  the
                  event of any supply constraints which prevent Chembio from supplying
                  all of
                  Inverness’ requirements for Licensed Products, Chembio shall treat Inverness
                  no
                  less favorably than other distributors of Licensed Products and
                  shall ensure
                  that Inverness receives at least its pro rata share of available
                  products (based
                  on Inverness’ average pro rata share of sales over the four (4) most recent
                  calendar quarters).

                 

                5.2.
                  Forecasts

                 

                .
                  During
                  the Term, Inverness shall provide Chembio, on a quarterly basis,
                  with forecasts
                  of Inverness’s anticipated orders for the Licensed Product during the succeeding
                  three (3) quarters. The initial forecast shall be produced and
                  delivered by
                  Inverness to Chembio promptly after the Effective Date. Chembio
                  hereby
                  acknowledges and agrees that Inverness shall have the right to
                  revise any
                  quarterly forecast issued pursuant to this Section at any time
                  upon notice given
                  to Chembio not less than three months before the forecast delivery
                  date for any
                  products; any forecasts for delivery less than three months from
                  the forecast
                  date shall be binding on both parties. Inverness
                  shall issue purchase orders and accept delivery of not less than
                  ninety (90%)
                  percent of the forecast quantity. Chembio shall not be required
                  to timely
                  deliver more than one hundred and twenty-five (125%) percent of
                  the forecast
                  quantity, but shall deliver not less than 100% of the quantity
                  required by
                  Inverness’ binding forecasts.

                 

                
                  
                    
                    

                  

                  
                    12

                    
                      

                    

                  

                  
                    
                    

                  

                

                5.3.
                  Purchase
                  Orders

                 

                .
                  All
                  sales
                  and purchases of the Licensed Product, if any, hereunder shall
                  be initiated
                  pursuant to Inverness’s purchase order for the same placed with Chembio. Such
                  purchase orders shall include relevant details of the order such
                  as quantity,
                  the current Costs of each Licensed Product, destination, billing
                  and shipping
                  information, and requested delivery date(s) (a “Purchase
                  Order”).
                  Chembio shall accept Purchase Orders by written notice to Inverness
                  within five
                  (5) days of receipt. In the event that Chembio cannot comply with
                  a delivery
                  date requested by Inverness in any Purchase Order, Chembio may
                  request an
                  alternative delivery date, which shall be not more than forty-five
                  (45) days
                  after the date requested by Inverness. Any terms and conditions
                  contained in any
                  Purchase Order or written acceptance of a Purchase Order, invoice
                  or other
                  writing delivered by Chembio to Inverness or by Inverness to Chembio
                  that are
                  inconsistent with the terms and conditions of this Agreement shall
                  be null and
                  void and of no effect unless agreed to in a writing executed by
                  an authorized
                  representative of Inverness and Chembio. At
                  any
                  time up to ten (10) days prior to the delivery date set forth in
                  any Purchase
                  Order, Inverness may issue an alteration to a Purchase Order in
                  order to
                  (i) change a location for delivery, (ii) correct typographical or
                  clerical errors, or (iii) reschedule a delivery. In such event, Inverness
                  shall reimburse Chembio for all reasonable resulting costs incurred
                  by Chembio
                  and notified by Chembio to Inverness within seven (7) days after
                  alteration of
                  the purchase order.

                 

                5.4.
                  Shipment
                  Terms

                 

                .
                  Licensed Product ordered by Inverness shall be shipped FOB, point
                  of
                  manufacture, with the carrier and to the destination specified
                  in the Purchase
                  Order. 

                 

                5.5.
                  Acceptance

                 

                .
                  Within
                  twenty (20) days after receipt of any Licensed Products, Inverness
                  shall inspect
                  and, in its discretion, test the Licensed Products to determine
                  whether they
                  conform in all material respects to the Specifications. In the
                  event an Licensed
                  Product does not so conform, Inverness may within such twenty (20)
                  day period
                  (i) continue to test the Licensed Product, or (ii) return the
                  non-conforming Licensed Product to Chembio, at Chembio’s expense, and any
                  amounts paid by Inverness for the Licensed Product returned shall
                  be refunded by
                  Chembio to Inverness. If Inverness does not return a non-conforming
                  Licensed
                  Product within such twenty (20) day period, it is deemed accepted.

                 

                5.6.
                  Inverness
                  Responsibilities; Rights

                 

                .
                  In
                  connection with its distribution, marketing and sales of the Licensed
                  Products
                  (as permitted in this Agreement), Inverness shall provide all sales
                  force
                  (including, without limitation, sales administration and training),
                  order entry,
                  customer service, reimbursement management, medical affairs, medical
                  information, marketing (including all advertising and promotional
                  expenditures),
                  warehousing, physical distribution, invoicing, credit and collections,
                  production forecasting and other related facilities and services
                  as it deems
                  necessary or desirable for such distribution, marketing and sales.

                 

                
                  
                    
                    

                  

                  
                    13

                    
                      

                    

                  

                  
                    
                    

                  

                

                6.
                  Trademarks

                 

                6.1.
                  Trademark
                  License

                 

                .
                  Inverness shall Exploit the Licensed Products (other than the Dipstick
                  Product)
                  under the Inverness Trademarks. Accordingly, Chembio hereby grants
                  Inverness, to
                  the extent that Chembio possesses such rights, a worldwide, royalty-free
                  license
                  during the Term to use the Chembio Trademarks but only for the
                  purpose of
                  indicating that the Licensed Products are manufactured by Chembio
                  for Inverness.
                  All such use of the Chembio Trademarks shall inure to the benefit
                  of Chembio.
                  Inverness hereby grants Chembio a non-exclusive, non-transferable
                  license to use
                  the Inverness Trademarks, but only for the purpose of labeling
                  and packaging the
                  Licensed Products for sale to Inverness in the event that Inverness
                  elects to
                  mark the Licensed Products with Inverness Trademarks. All such
                  use of the
                  Inverness Trademarks shall inure to the benefit of Inverness. Neither
                  party
                  shall use or alter such marks in a manner which may jeopardize
                  or diminish the
                  other party’s rights to use them, and all notices of rights therein and all
                  notices of any patent and/or patent pending rights to the Licensed
                  Products
                  shall be clearly designated in all written materials in which such
                  marks are
                  used.

                 

                6.2.
                  Compliance
                  with Law; Registration

                 

                .
                  Each
                  Party, in using the other Party’s trademarks, shall use such marks and/or names
                  only in such manner as will comply with the provisions of applicable
                  trademark
                  laws. Any and all trademark applications which are filed in any
                  jurisdiction for
                  a Party’s trademarks shall be filed by that Party and that Party shall
                  bear all
                  costs incurred in connection with such trademark applications and
                  registrations.
                  No trademark costs incurred by Chembio shall be included in Costs.

                 

                6.3.
                  Termination

                 

                .
                  The
                  licenses granted under Section 6.1
                  shall
                  terminate upon any termination of this Agreement, and thereafter
                  neither party
                  shall use the other party’s trade names, service marks, or trademarks except in
                  connection with sale by Inverness of Licensed Products purchased
                  prior to the
                  termination of this Agreement.

                 

                6.4.
                  Labeling

                 

                .
                  Inverness
                  shall develop, produce and provide all labeling for such Licensed
                  Product,
                  subject to Chembio’s approval, such approval not to be unreasonably withheld.
                  All materials referring or relating to the Licensed Products shall
                  include the
                  following in legible font: “Manufactured by Chembio Diagnostic Systems, Inc.,
                  Medford, NY for Inverness Medical Innovations under [patents no.s
                  of Inverness
                  Lateral Flow Patents] owned or licensed by Inverness Medical Innovations,
                  Inc.”.

                 

                7.
                  Prosecution
                  and Enforcement of Licensed Intellectual Property.

                 

                7.1.
                  Prosecution

                 

                .
                  The
                  owner or Controller of Intellectual Property Rights (the “Patent
                  Owner”)
                  (for
                  example, Inverness in the case of the Inverness Lateral Flow Patents
                  and Chembio
                  in the case of the Chembio IP) shall have the sole right to prepare,
                  file,
                  prosecute, obtain and maintain throughout the world, and otherwise
                  take all
                  Patent Prosecution Actions with respect to its Intellectual Property
                  Rights as
                  such Patent Owner shall deem to be appropriate in its discretion.
                  Each Patent
                  Owner shall pay all Patent Costs incurred by it in connection with
                  the foregoing
                  activities and such Patent Costs shall not be deemed Costs hereunder.
                  If it
                  becomes necessary or desirable, the
                  other
                  Parties shall fully cooperate with the Patent Owner, at the Patent
                  Owner’s
                  request and expense, in connection with all Patent Prosecution
                  Actions; provided
                  that no Party shall be obligated to provide such cooperation if,
                  in its
                  reasonable business judgment, such cooperation would be adverse
                  to its interests
                  outside this Agreement.

                 

                
                  
                    
                    

                  

                  
                    14

                    
                      

                    

                  

                  
                    
                    

                  

                

                7.2.
                  Enforcement
                  of Licensed Patents

                 

                .
                  The
                  Patent Owner shall have the sole right to enforce and defend any
                  of its
                  Intellectual Property Rights licensed hereunder, at its own expense.
                  Notwithstanding the foregoing, each of the Parties shall inform
                  the other
                  Parties promptly in writing of any alleged infringement, misuse
                  or
                  misappropriation by any Person of any Intellectual Property Rights
                  licensed
                  hereunder that affects the Exploitation of Licensed Products or
                  other products
                  licensed hereunder, and the Parties shall reasonably consult with
                  each other
                  with respect to the strategy to resolve the alleged infringement,
                  misuse or
                  misappropriation. In the event that a Patent Owner shall initiate
                  an
                  infringement action or defend an action in accordance with this
                  Section, the
                  other Parties shall fully cooperate and supply such assistance
                  as reasonably
                  requested by the Patent Owner; provided that no Party shall be
                  obligated to
                  provide such cooperation if, in its reasonable business judgment,
                  such
                  cooperation would be adverse to its interests outside this Agreement.
                  

                 

                8.
                  Confidentiality.

                 

                8.1.
                  Limited
                  Disclosure and Use

                 

                .
                  Each of
                  Inverness and Chembio shall hold in confidence any Confidential
                  Information
                  disclosed by any other Party or otherwise obtained by such Party
                  from any other
                  as a result of this Agreement, and each of Inverness and Chembio
                  shall protect
                  the confidentiality thereof with the same degree of care that it
                  exercises with
                  respect to its own information of a like nature, but in no event
                  less than
                  reasonable care. Without the prior written consent of the disclosing
                  Party, a
                  receiving Party shall not use, disclose, or distribute any Confidential
                  Information, in whole or in part, except as required to perform
                  such Party’s
                  obligations or exercise such Party’s rights hereunder. Access to the disclosing
                  Party’s Confidential Information shall be restricted to the receiving
                  Party’s
                  employees and agents, who, in each case, need to have access to
                  carry out a
                  permitted use and are bound in writing to maintain the confidentiality
                  of such
                  Confidential Information.

                 

                8.2.
                  Exceptions

                 

                .
                  The
                  obligations set forth in Section 8.1
                  shall
                  not apply to any portion of the Confidential Information that the
                  receiving
                  Party can demonstrate by legally sufficient evidence: (i) now or hereafter,
                  through no act or failure to act on the part of the receiving Party,
                  is or
                  becomes generally available; (ii) is known to the receiving Party at the
                  time of receiving such Confidential Information and not subject
                  to an obligation
                  of confidentiality to a Third Party; (iii) is hereafter furnished to the
                  receiving Party by a Third Party as a matter of right (and without
                  violating any
                  agreement with the disclosing Party) without restriction on use
                  or disclosure;
                  or (iv) is independently developed by the receiving Party without use of
                  any Confidential Information received from the other
                  Party.
                  In addition, each receiving Party may disclose Confidential Information
                  to the
                  extent such disclosure is reasonably necessary to protect Intellectual
                  Property
                  Rights to which such Party has a license hereunder, to prosecute
                  or defend
                  litigation, to comply with applicable law or regulation, to obtain
                  necessary or
                  desirable regulatory approvals, to respond to a valid order of
                  a court or other
                  governmental body or any political subdivision thereof, or to conduct
                  preclinical or clinical trials, provided that, other than with
                  respect to
                  disclosure for protecting Intellectual Property Rights, the receiving
                  Party
                  shall use reasonable efforts to secure confidential treatment of
                  such
                  Confidential Information required to be disclosed.

                 

                
                  
                    
                    

                  

                  
                    15

                    
                      

                    

                  

                  
                    
                    

                  

                

                8.3.
                  Use
                  of Name; Disclosure of Terms of the Agreement

                 

                .
                  Except
                  as authorized in Section 6
                  hereof
                  or otherwise required by applicable law, regulation or the rules
                  of any
                  securities exchange on which such Party’s securities are listed, no Party shall
                  use the names of the other Parties in any publicity or advertising
                  without the
                  prior written approval of the other Parties, except that any Party
                  may disclose
                  that they have entered into this Agreement. Except as may be required
                  by
                  applicable law, regulation or the rules of any securities exchange
                  on which such
                  Party’s securities are listed, no Party shall disclose any terms or conditions
                  of this Agreement without the prior written consent of the other
                  Parties,
                  provided that a Party may disclose such terms and conditions to
                  any Third Party
                  with whom such Party has entered into or proposes to enter into
                  a business
                  relationship (including any transaction that would result in a
                  permitted
                  assignment in accordance with the terms and conditions of
                  Section 13.11),
                  provided any such Third Party is informed of the confidentiality
                  restrictions
                  herein with respect to such terms and conditions and agrees to
                  abide by such
                  restrictions.

                 

                8.4.
                  Effect
                  of Termination

                 

                .
                  Each
                  Party shall, upon termination of this Agreement, immediately discontinue
                  use of
                  the other’s Confidential Information. Within
                  a
                  reasonable time after termination of this Agreement, but in no
                  event later than
                  thirty (30) days thereafter, all materials containing such Confidential
                  Information shall be returned by the receiving Party or (with the
                  disclosing
                  Party’s prior written consent) destroyed.

                 

                8.5.
                  Survival

                 

                .
                  The
                  confidentiality obligations set forth in this Section 8
                  shall
                  survive any termination or expiration of this Agreement in perpetuity
                  .

                 

                9.
                  Representations;
                  Warranties.

                 

                9.1.
                  Corporate
                  Power

                 

                .
                  Each
                  Party represents to the other Parties that it has full corporate
                  power and
                  authority to enter into this Agreement and to carry out the provisions
                  hereof.
                  Each Party represents to the other that this Agreement constitutes
                  a valid and
                  binding agreement, enforceable against it in accordance with its
                  terms.

                 

                9.2.
                  No
                  Default or Violation

                 

                .
                  Each
                  Party represents and warrants to the other Parties that the execution,
                  delivery
                  and performance of this Agreement does not (i) violate or require
                  any
                  registration, qualification, consent, approval, or filing under, (1) any
                  law, statute, ordinance, rule or regulation, or (2) any judgment,
                  injunction, order, writ or decree of any court, arbitrator, or
                  governmental
                  entity by which such Party or any of its assets or properties may
                  be bound or
                  (ii) conflict with, require any consent, approval, or filing under,
                  result in
                  the breach or termination of any provision of, constitute a default
                  under,
                  result in the acceleration of the performance of any obligations
                  under, result
                  in the vesting or enhancement of any other Person’s rights under, or result in
                  the creation of any lien upon any of such Party’s properties, assets, or
                  businesses pursuant to (x) its organizing documents or By-Laws
                  or (y) any
                  material indenture, mortgage, deed of trust, license, permit, approval,
                  consent,
                  franchise, lease, contract, or other instrument or agreement to
                  which such Party
                  is a Party or by which such Party or any of such Party’s properties or assets is
                  bound.

                 

                
                  
                    
                    

                  

                  
                    16

                    
                      

                    

                  

                  
                    
                    

                  

                

                9.3.
                  Licensed
                  Intellectual Property

                 

                .
                  Each Party licensing any Intellectual Property
                  Rights (a “Licensor”)
                  to any
                  other Party hereunder (a “Licensee”)
                  represents and warrants to each such Licensee that: (a) it has
                  the full
                  right,
                  title
                  and
                  authority to grant to Licensee the licenses granted hereunder;
                  and (b) to the
                  best of the Licensor’s knowledge and except as otherwise disclosed to the
                  Licensee, all such licensed Patent Rights existing as of the Effective
                  Date are
                  valid and enforceable, and all patents, if any, issuing on any
                  of the pending
                  patent applications of the Patent Rights existing as of the Effective
                  Date will
                  be valid and enforceable. Inverness represents and warrants that
                  the Inverness
                  Lateral Flow Patents constitute all Patent Rights claiming lateral
                  flow
                  technology that Inverness has the right to sublicense.

                   

                 

                9.4.
                  Regulatory Matters

                 

                .
                  Chembio
                  represents and warrants that, with respect to the manufacture of
                  the Licensed
                  Products, Chembio will comply with the requirements of the Act,
                  and to the best
                  of its knowledge, all other applicable federal and state laws.

                 

                9.5.
                  Product
                  Quality

                 

                .
                  Chembio
                  represents and warrants that:

                 

                (a)
                  Each
                  unit of Licensed Product sold to Inverness hereunder shall be manufactured
                  in
                  accordance with and shall comply, at the time of delivery to Inverness,
                  in all
                  material respects with the applicable Specifications therefor,
                  shall perform as
                  intended in all material respects, and shall otherwise be free
                  from defects in
                  material and workmanship; and each unit of Licensed Product sold
                  to Inverness
                  hereunder will not, at the time of delivery, be adulterated or
                  misbranded within
                  the meaning of the Act or within the meaning of any jurisdiction
                  in which the
                  definitions of misbranding and adulteration are substantially the
                  same as in the
                  Act, nor will any such unit of Licensed Product, at the time of
                  delivery to
                  Inverness, be an article which may not, under the Act, be introduced
                  into
                  interstate commerce. 

                 

                (b)
                  In
                  the event any unit(s) of Licensed Product does not conform with
                  a warranty set
                  forth in Section 9.5(a)
                  applicable thereto, Inverness or an Affiliate of Inverness may
                  return such
                  unit(s) of Licensed Product within twenty (20 days of its receipt
                  to Chembio
                  and, in the event Inverness or an Affiliate of Inverness does so,
                  Chembio,
                  within thirty (30) days of its receipt of the return, shall either;
                  (a) refund or credit Inverness’s account in an amount equal to the purchase
                  price paid by Inverness for such unit(s) of non-conforming Licensed
                  Product, as
                  the case may be, plus freight and insurance charges incurred by
                  Inverness and/or
                  its Affiliate incident to the original and return shipment, as
                  documented by
                  Inverness, or (b) replace, without charge, the non-conforming unit(s) of
                  Licensed Product, as the case may be, with an equivalent number
                  of like unit(s)
                  Licensed Product, as the case may be, conforming with the applicable
                  warranties
                  set forth in Section 9.5(a)
                  and
                  refund or credit Inverness’s account in an amount equal to said original and
                  return freight and insurance charges incurred as documented by
                  Inverness. The
                  cost of returned units and freight and insurance charges hereunder
                  shall not be
                  included in Costs.

                 

                9.6.
                  Exclusion
                  of Other Representations and Warranties

                 

                .
                  EXCEPT
                  AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NO PARTY MAKES ANY REPRESENTATIONS
                  OR
                  WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
                  REPRESENTATIONS
                  OR WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE
                  OR
                  NON-INFRINGEMENT. NO PARTY WARRANTS THAT THE OTHER PARTIES WILL
                  RECEIVE ANY
                  PARTICULAR AMOUNT, OR ANY, REVENUES OR PROFITS AS A RESULT OF ENTERING
                  INTO THE
                  BUSINESS ARRANGEMENTS DESCRIBED IN THIS AGREEMENT.

                 

                
                  
                    
                    

                  

                  
                    17

                    
                      

                    

                  

                  
                    
                    

                  

                

                10.
                  Indemnification

                 

                10.1.
                  By
                  Chembio
                  as Manufacturer

                 

                .
                  Chembio
                  hereby agrees to indemnify, defend (using counsel selected by Chembio
                  which is
                  reasonably acceptable to Inverness) and hold harmless Inverness,
                  its Affiliates
                  and their respective Distributors and customers, from and against
                  any and all
                  liabilities, losses, (exclusive of lost profits) damages, costs
                  and expenses
                  (including, without limitation, reasonable attorneys’ fees, court costs, and
                  out-of pocket expenses) suffered or incurred which arise or result
                  from: (i) the
                  material breach of any warranty or representation of Chembio contained
                  in this
                  Agreement; (ii) any third party claim of personal injury (including
                  death) or
                  property damage arising in connection with any Licensed Product
                  manufactured by
                  or for Chembio; (iii) any material failure by Chembio to perform
                  any of the
                  covenants, agreements or obligations of Chembio contained in this
                  Agreement; or
                  (iv) any third party claim alleging that the manufacture, use,
                  sale, offer for
                  sale, import or export of the Licensed Products manufactured by
                  or for Chembio
                  infringes the proprietary rights of the third party claimant.

                 

                10.2.
                   By
                  Sellers

                 

                .
                  Each
                  seller of any Licensed Product hereunder (a “Seller”)
                  hereby
                  agrees to indemnify, defend (using counsel selected by the Seller
                  which is
                  reasonably acceptable to the other Party) and hold harmless the
                  other Party from
                  and against any and all liabilities, losses (exclusive of lost
                  profits),
                  damages, costs, and expenses (including, without limitation, reasonable
                  attorneys’ fees, court costs, and out-of pocket expenses) suffered or incurred
                  by the other Party which arise or result from: (i) the material
                  breach of any
                  warranty or any representation of the Seller contained in this
                  Agreement; (ii)
                  any material failure by the Seller to perform any of its covenants,
                  agreements,
                  or obligations contained in this Agreement; or (iii) the promotion
                  and sale by
                  the Seller or any Affiliate or Distributor of the Seller of any
                  Licensed
                  Product, except to the extent covered by the Manufacturer’s defense and
                  indemnification obligations under Section 10.1.

                 

                10.3.
                   Notice
                  of Claims

                 

                .
                  Within
                  thirty (30) days after a Person seeking indemnification hereunder
                  (hereinafter
                  the “Indemnified
                  Party”)
                  has
                  received notice of or has acquired knowledge of any claim by any
                  Person not a
                  Party to this Agreement of the commencement or threatened commencement
                  of any
                  action or proceeding by any Person not a Party to this Agreement
                  (“third
                  party claim”)
                  or has
                  acquired knowledge of any other claim hereunder against another
                  Party hereto
                  (“first
                  party claim”)
                  the
                  Indemnified Party shall, if such claim is indemnifiable by the
                  other Party
                  pursuant hereto (hereinafter the “Indemnifying
                  Party”),
                  give
                  the Indemnifying Party written notice of such claim and the commencement
                  or
                  threatened commencement of such action or proceeding, if any. Such
                  notice shall
                  state the nature and basis of such claim, and, if ascertainable,
                  the amount
                  thereof. Notwithstanding the foregoing, the failure of the Indemnified
                  Party to
                  give such notice shall not excuse the Indemnifying Party’s obligation to
                  indemnify and, in the case of a third party claim, defend the Indemnified
                  Party,
                  except to the extent the Indemnifying Party has suffered damage
                  or prejudice by
                  reason of the Indemnified Party’s failure to give or delay in giving such
                  notice. Within ten (10) business days of receipt of any notice
                  issued by the
                  Indemnified Party pursuant to this Section 10.3,
                  the
                  Indemnifying Party shall notify the Indemnified Party whether the
                  Indemnifying
                  Party acknowledges its indemnification obligation and, in the case
                  of a third
                  party claim, its defense obligation with respect to the claim which
                  was the
                  subject of the Indemnified Party’s notice or whether it disclaims such
                  obligations. In the event the Indemnifying Party disclaims or fails
                  to timely
                  acknowledge its obligations with respect to any claim by the Indemnified
                  Party
                  relating to any third party claim, the Indemnified Party shall
                  have the right to
                  defend such claim, with counsel of its own selection, and compromise
                  such claim
                  without prejudice to its right to indemnification hereunder. In
                  the event the
                  Indemnifying Party timely acknowledges its obligations hereunder
                  with respect to
                  any third party claim, the Indemnifying Party shall defend the
                  same with counsel
                  in accordance with this Section. Where the Indemnifying Party shall
                  have
                  acknowledged in writing its obligations hereunder with respect
                  to any third
                  party claim, the Indemnified Party may, at its expense, participate
                  in the
                  defense of such third party claim and no such third party claim
                  shall be settled
                  by the Indemnified Party without the prior written consent of the
                  Indemnifying
                  Party which consent shall not be unreasonably withheld or delayed.
                  At any time
                  after the Indemnifying Party acknowledges its obligations hereunder
                  with respect
                  to any third party claim, the Indemnifying Party may request the
                  Indemnified
                  Party to agree in writing to the payment or compromise of such
                  third party claim
                  (provided such payment or compromise has been previously approved
                  in writing by
                  the third party claimant), and, in the event the Indemnifying Party
                  does so, the
                  Indemnified Party shall promptly agree in writing to such settlement,
                  unless
                  such settlement would involve a remedy or remedies, other than
                  the payment of
                  money damages by the Indemnifying Party, to which the Indemnified
                  Party
                  reasonably objects.

                 

                
                  
                    
                    

                  

                  
                    18

                    
                      

                    

                  

                  
                    
                    

                  

                

                10.4.
                  Disputes

                 

                .
                  In
                  the
                  event any party to this Agreement makes a claim against another
                  Party under this
                  Section 10
                  or in
                  any way relating to or arising under this Agreement and further
                  in the event the
                  Party receiving notice of such claim fails to timely acknowledge
                  its obligations
                  hereunder with respect to such claim or disclaims such obligations,
                  the relevant
                  Parties, within forty (40) days of the date of issuance of notice
                  by the Party
                  making such claim, shall meet and attempt to resolve in good faith
                  the dispute
                  between or among the Parties with respect to such claim. If the
                  Parties fail to
                  resolve such dispute within seventy-five (75) days of the date
                  of issuance of
                  notice by the Party making such claim, the Party making such claim
                  may
                  thereafter commence to arbitrate the claim in accordance with the
                  provisions set
                  forth in Section 13.8.
                  Upon
                  resolution of any claim referred to in this Section 10,
                  whether
                  by agreement between the Parties to this Agreement or the rendering
                  of a final
                  arbitration award, the appropriate Party under such agreement or
                  the Party
                  against which the arbitration award is rendered shall, within ten
                  (10) days of
                  such resolution, pay over and deliver to the other Party funds
                  in the amount of
                  any claim as resolved.

                 

                11.
                  Term
                  and Termination.

                 

                11.1.
                  Term
                  of Agreement

                 

                .
                  Unless
                  otherwise terminated as expressly provided herein or with respect
                  to any
                  perpetual licenses granted herein, with respect to each Licensed
                  Product, the
                  licenses granted and appointments made hereunder shall commence
                  on the Effective
                  Date and continue until May 31, 2016 (the “Term”).
                  

                 

                11.2.
                  Material
                  Breach

                 

                .
                  If a
                  Party:

                 

                (a)
                  materially breaches this Agreement in a manner which cannot be
                  cured;

                 

                (b)
                  materially breaches this Agreement in a manner that can be cured
                  and a Party has
                  failed to take steps to begin to cure within ninety (90) days following
                  written
                  notice of breach by the Party or Parties affected by the breach
                  or is not
                  diligently pursuing a cure thereafter; or

                 

                (c)
                  is
                  subject to a petition for relief under any bankruptcy legislation,
                  or makes an
                  assignment for the benefit of creditors, or is subject to the appointment
                  of a
                  receiver for all or a substantial part of the Party’s assets, and such petition,
                  assignment or appointment is not dismissed or vacated within ninety
                  (90)
                  days,

                 

                
                  
                    
                    

                  

                  
                    19

                    
                      

                    

                  

                  
                    
                    

                  

                

                then,
                  on
                  each such occasion, the non-breaching Party shall have the right
                  to exercise one
                  or more of the following remedies: (x) upon written notice by the
                  non-breaching Party to the breaching Party within thirty (30) days
                  of the end of
                  the applicable cure period (if any) (assuming that the non-breaching
                  Party has
                  not already given such a notice upon the occurrence of a prior
                  material, uncured
                  breach by the breaching Party), the non-breaching Party shall have
                  the right to
                  seek monetary damages for such material breach within the limitations
                  set forth
                  in Section 12
                  hereof
                  and/or equitable relief to prevent such material breach from continuing
                  or
                  occurring again in the future; and, at its option, the non-breaching
                  Party shall
                  have the right to terminate this Agreement. Notwithstanding
                  the foregoing, if Chembio shall be enjoined from supplying Licensed
                  Products to
                  Inverness because of a lawsuit regarding Intellectual Property
                  Rights of a Third
                  Party, or Inverness shall be enjoined from selling Licensed Products
                  because of
                  a lawsuit regarding Intellectual Property Rights of a Third Party,
                  and such
                  injunction shall in either case cause a material breach of this
                  Agreement, the
                  non-breaching Party shall not have the right to seek monetary damages
                  for such
                  material breach. Whenever a breach occurs and such breach can be
                  cured in a
                  timely manner, the non-breaching Party shall cooperate with the
                  Party in breach
                  and take reasonable steps (at the cost of the breaching Party)
                  to allow the
                  breaching Party to cure the breach.

                 

                11.3.
                  Section
                  365(n); Agreement to Deliver Embodiments

                 

                .
                  All
                  rights and licenses granted under or pursuant to this Agreement
                  are, and shall
                  otherwise be deemed to be, for purposes of Section 365(n) of Title
                  11, U.S. Code
                  (the “Bankruptcy
                  Code”),
                  licenses of rights to “intellectual property” as defined in the Bankruptcy Code.
                  The Parties agree that the licensee of such rights shall retain
                  and may fully
                  exercise all of its rights and elections under the Bankruptcy Code.
                  All rights,
                  powers and remedies of the licensee provided under this
                  Section 11.3
                  are in
                  addition to and not in substitution for any and all other rights,
                  powers and
                  remedies now or hereafter existing at law or in equity in the event
                  of any such
                  commencement of a bankruptcy proceeding by or against the licensor. 

                 

                11.4.
                   Effect
                  of Termination for Breach

                 

                .
                  Upon
                  any
                  termination of this Agreement:

                 

                (a)
                  The
                  license grants contained in Section 2.1
                  and
2.2
                  shall
                  terminate; 

                 

                (b)
                  subject to Sections 3.3
                  and
3.4,
                  Inverness may sell any inventory of Licensed Products in its possession
                  at the
                  effective date of termination, but shall have no further right
                  to Exploit the
                  Licensed Products; and

                 

                
                  
                    
                    

                  

                  
                    20

                    
                      

                    

                  

                  
                    
                    

                  

                

                (c)
                  subject to the payment of royalties to Inverness pursuant to Section
                  3.6,
                  Chembio
                  may Exploit any inventory of Licensed Products in its possession
                  as at the
                  effective date of termination, but Chembio shall have no license
                  rights to
                  manufacture or Exploit any further Licensed Products. 

                 

                11.5.
                  Survival

                 

                .
                  No
                  expiration or termination of this Agreement shall affect any rights
                  or
                  liabilities of the Parties which may have accrued prior to the
                  date of
                  expiration or termination. Notwithstanding anything herein to the
                  contrary, upon
                  any expiration or termination of this Agreement, in addition to
                  any provisions
                  that by their terms survive, the provisions of Sections 3.8,
                  7,
                  8,
                  9.5(b),
                  10,
                  11.4,
                  12
                  and
13 
                  shall survive and shall continue in full force and effect in accordance
                  with
                  their respective terms.

                 

                12.
                  Limitation
                  of Liability.

                 

                12.1.
                  Exclusion
                  of Liability for Certain Damages

                 

                .
                  EXCEPT
                  FOR BREACHES OF ITS CONFIDENTIALITY OBLIGATIONS HEREUNDER AND FOR
                  VIOLATIONS OF
                  ANOTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS AND FOR DAMAGES CAUSED BY A PARTY’S
                  GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT, IN NO EVENT SHALL A
                  PARTY BE LIABLE
                  TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
                  INCLUDING,
                  WITHOUT LIMITATION, DAMAGES RESULTING FROM LOSS OF USE, PROFITS,
                  BUSINESS OR
                  GOODWILL, WHETHER OR NOT THE PARTY ALLEGEDLY CAUSING THE DAMAGE
                  HAS BEEN ADVISED
                  OF THE POSSIBILITY THEREOF. THIS SECTION 12
                  SHALL
                  NOT BE CONSTRUED TO LIMIT ANY PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION
10
                  HEREOF.

                 

                12.2.
                  Limitation
                  on Liability for Direct Damages

                 

                .
                  EXCEPT
                  FOR BREACHES OF ITS CONFIDENTIALITY OBLIGATIONS HEREUNDER AND FOR
                  VIOLATIONS OF
                  ANOTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS, FOR DAMAGES CAUSED BY A PARTY’S
                  GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT, OR FOR ANY PARTY’S INDEMNIFICATION
                  OBLIGATIONS UNDER SECTION 10
                  HEREOF,
                  EACH PARTY’S MAXIMUM AGGREGATE LIABILITY TO THE OTHER PARTY, OTHER THAN FOR
                  PAYMENTS DUE HEREUNDER, SHALL IN NO EVENT EXCEED THE AMOUNT OF
                  $1 MILLION,
                  WHETHER SUCH DAMAGES ARISE IN CONTRACT, TORT (INCLUDING NEGLIGENCE),
                  STRICT
                  LIABILITY OR OTHERWISE. 

                 

                13.
                  General.

                 

                13.1.
                  Waivers
                  and Amendments.

                 

                (a)
                  This
                  Agreement may be amended, modified or supplemented only by a written
                  instrument
                  executed by the Parties hereto.

                 

                (b)
                  No
                  waiver of any provision of this Agreement, or consent to any departure
                  from the
                  terms hereof, shall be effective unless the same shall be in writing
                  and signed
                  by the Party waiving or consenting thereto. No failure on the part
                  of any Party
                  to exercise, and no delay in exercising, any right or remedy hereunder
                  shall
                  operate as a waiver thereof, nor shall any single or partial exercise
                  of any
                  such right or remedy by such Party preclude any other or further
                  exercise
                  thereof or the exercise of any other right or remedy. The waiver
                  by any Party
                  hereto of a breach of any provision of this Agreement shall not
                  operate as a
                  waiver of any subsequent breach. All rights and remedies hereunder
                  are
                  cumulative and are in addition to and not exclusive of any other
                  rights and
                  remedies provided by law.

                 

                
                  
                    
                    

                  

                  
                    21

                    
                      

                    

                  

                  
                    
                    

                  

                

                13.2.
                  Entire
                  Agreement

                 

                .
                  This
                  Agreement, the Schedules hereto and the Related Documents constitute
                  the entire
                  agreement among the Parties hereto with respect to the subject
                  matter hereof and
                  supersede all prior agreements and understandings, whether written
                  or oral,
                  among the Parties, or any of the Parties, in connection with such
                  subject
                  matter.

                 

                13.3.
                  Severability

                 

                .
                  If any
                  provision of this Agreement is found invalid or unenforceable by
                  a court of
                  competent jurisdiction, such provision shall be enforced to the
                  maximum extent
                  permissible by law and the other provisions of this Agreement shall
                  remain in
                  full force and effect.

                 

                13.4.
                  Relationship
                  of the Parties

                 

                .
                  This
                  Agreement shall not constitute any Party the agent or legal representative
                  of
                  any other Party for any purpose whatsoever, and no Party shall
                  hold itself out
                  as an agent of any other Party. This Agreement creates no relationship
                  of joint
                  venturers, partners, associates, employment or principal and agent
                  between or
                  among the Parties, and each of the Parties is acting as an independent
                  contractor. No Party is granted herein any right or authority to,
                  and shall not
                  attempt to, assume or create any obligation or responsibility for
                  or on behalf
                  of any other Party. No Party shall have any authority to bind any
                  other Party to
                  any contract, whether of employment or otherwise, and each Party
                  shall bear all
                  of their respective expenses for its operations, including, without
                  limitation,
                  the compensation of its employees and salespersons and the maintenance
                  of its
                  offices, service and warehouse facilities. Each Party shall each
                  be solely
                  responsible for its own employees and salespersons and for their
                  acts and the
                  things done by them. 

                 

                13.5.
                  No
                  Election of Remedies

                 

                .
                  The
                  rights and remedies accorded herein are cumulative and in addition
                  to those
                  provided by law, and may be exercised separately, concurrently,
                  or
                  successively.

                 

                13.6.
                  Notices

                 

                .
                  All
                  notices and other communications hereunder shall be in writing
                  and shall be
                  deemed given if delivered personally, telecopied (with confirmation)
                  or mailed
                  by registered or certified mail (return receipt requested) or delivered
                  by
                  recognized courier service providing evidence of delivery to the
                  Parties at the
                  following addresses:

                 

                (a)
                  if to
                  Chembio, to:

                 

                Chembio
                  Diagnostic Systems, Inc.

                3661
                  Horseblock Road

                Medford,
                  New York 11763

                

                Attention:
                  Lawrence A. Siebert, President

                Telecopier
                  No.: (631) 924-6033

                

                 

                with
                  a
                  copy to:

                 

                Ruskin
                  Moscou Faltischek, P.C.

                1425
                  Reckson Plaza

                15th
                  Floor,
                  East Tower

                Uniondale,
                  New York 11556

                

                Attention:
                  Michael L. Faltischek, Esq.,

                Telecopier
                  No.: (516) 663-6640

                 

                
                  
                    
                    

                  

                  
                    22

                    
                      

                    

                  

                  
                    
                    

                  

                

                (b)
                  if to
                  Inverness, to: 

                 

                Inverness
                  Medical Innovations, Inc.

                51
                  Sawyer
                  Road,

                Waltham
                  MA 02454 

                Attention:
                  General Counsel’s office 

                Telecopier:
                  (781) 314 4073

                

                or
                  at
                  such other address for a Party as shall be specified by like
                  notice.

                 

                13.7.
                  Governing
                  Law

                 

                .
                  This
                  Agreement shall be governed by, and construed and enforced in accordance
                  with,
                  the substantive laws of the State of New York , without giving
                  effect to its
                  conflicts of laws rules. 

                 

                13.8.
                  Dispute
                  Resolution

                 

                .
                  In
                  the
                  event of any dispute or disagreement between or among any of the
                  Parties as to
                  the interpretation of any provision of this Agreement or the performance
                  of any
                  obligations hereunder, the matter, upon written request of any
                  Party, shall be
                  referred to mediation and arbitration in accordance with the procedures
                  set
                  forth in Schedule  G to this Agreement. 

                 

                13.9.
                  Waiver
                  of Jury Trial

                 

                .
                  The
                  Parties each hereby irrevocably and unconditionally waives all
                  rights to trial
                  by jury in any legal action, proceeding or counterclaim with respect
                  to any
                  matter whatsoever arising out of or in connection with or related
                  to this
                  Agreement or the enforcement thereof.

                 

                13.10.
                  Counterparts

                 

                .
                  This
                  Agreement may be executed in two or more counterparts, all of which
                  shall be
                  considered one and the same agreement and shall become effective
                  when two or
                  more counterparts have been signed by each of the Parties and delivered
                  to the
                  other Parties, it being understood that all Parties need not sign
                  the same
                  counterpart. Facsimile execution and delivery of this Agreement
                  by any of the
                  Parties shall be legal, valid and binding execution and delivery
                  of such
                  document for all purposes.

                 

                
                  
                    
                    

                  

                  
                    23

                    
                      

                    

                  

                  
                    
                    

                  

                

                13.11.
                  Assignment

                 

                .
                  This
                  Agreement is personal to each of the Parties, and no Party shall
                  assign any of
                  its rights or delegate any of its obligations hereunder, including
                  without
                  limitation by operation of law, Change of Control, or otherwise,
                  without the
                  prior written consent of the affected other Party or Parties, which
                  consent
                  shall not be unreasonably withheld or delayed, provided,
                  however, that without
                  the consent of the other Parties, Inverness may (i) assign its
                  rights under this
                  Agreement and delegate its obligations hereunder, in whole or in
                  part, to any
                  Person that shall acquire the business of Inverness to which this
                  Agreement
                  relates, or to any Affiliate of such Party, if the assignee shall
                  assume
                  Inverness’ obligations hereunder in writing, and (ii) assign this Agreement
                  in
                  connection with a sale or transfer of substantially all of the
                  assets of, or a
                  majority interest in the voting shares of, Inverness or its corporate
                  parent to,
                  or the merger or consolidation of Inverness or its corporate parent
                  with or
                  into, any other Person. In this paragraph, “Change of Control” means any sale of
                  the equity securities of a Party following which the equity holders
                  of such
                  Party immediately prior to such sale own, directly or indirectly,
                  less than 50%
                  of the combined voting power of the outstanding voting securities
                  of such Party,
                  other than in a transaction involving a sale of equity securities
                  for the
                  purpose of raising capital to a group of financial investors in
                  which not less
                  than 50% of such equity securities are purchased by a recognized
                  venture capital
                  or private equity fund or funds and where the management of the
                  selling Party
                  before the financing is substantially the same as the management
                  of such Party
                  after the financing..

                 

                13.12.
                  Force
                  Majeure

                 

                .
                  No
                  Party shall be liable for failure to perform any of its obligations
                  under this
                  Agreement when such failure is due to fire, flood, strikes, labor
                  troubles or
                  other industrial disturbances, legal restriction, riot, insurrection,
                  or any
                  other cause beyond the reasonable ability of the Party affected
                  thereby to
                  foresee and avoid, and without such party’s fault or negligence (“Force
                  Majeure”), provided that any Party claiming the existence of Force Majeure
                  shall
                  give notice to the other parties not more than seven (7) days after
                  the
                  commencement of the event of Force Majeure, and shall use prompt
                  and diligent
                  efforts to mitigate the effects of Force Majeure. In the event
                  that any event of
                  Force Majeure prevents performance for sixty (60) days or more,
                  any other party
                  may terminate this Agreement on written notice to all parties.

                 

                13.13.
                  Further
                  Assurances

                 

                .
                  Each
                  Party hereto will, upon the request of the other Party and without
                  further
                  consideration, execute and deliver such other instruments, and
                  take such other
                  actions, as such other Party may reasonably request, and at the
                  other Party’s
                  expense, to more effectively and efficiently carry out the covenants,
                  licenses
                  and agreements of the Parties set forth in this Agreement and consummate
                  the
                  transactions contemplated by this Agreement. Without limitation
                  of the
                  foregoing, each exclusive licensee of rights granted hereunder
                  shall have the
                  right, at its sole cost and expense, to register, record and otherwise
                  document
                  such exclusive license in any country where there are any pending
                  or issued
                  Patent Rights. Such licensee may require that the other Party execute
                  a “short
                  form” license in order to effect the foregoing registration, recordal
                  or other
                  documentation in any such country, and may record such short form
                  license, but
                  no short form license shall in any way alter or otherwise affect
                  the rights and
                  obligations of the Parties hereunder.

                 

                [remainder
                  of this page intentionally left blank]

                 

                

                
                  
                    
                      

                    

                    
                    

                  

                  
                    24

                    
                      

                    

                  

                  
                    
                    

                    
                    

                  

                

                *
                  *
                  *

                IN
                  WITNESS WHEREOF, the Parties have executed, or caused their duly
                  authorized
                  representatives to execute, this Agreement under seal as of the
                  date first
                  written above.

                 

                Chembio
                  Diagnostic Systems, Inc.

                 

                By: 

                Title: 

                 

                Inverness
                  Medical Innovations, Inc.

                 

                By: 

                Title: 

                 

                [Signature
                  page to Non-Exclusive License, Marketing and Distribution
                  Agreement]Exhibit 10.4 Joint HIV Barrel Product Marketing Agreement

    
      
        
          

        

        
          

        

         

        
          FINAL

           

          Joint
            HIV Barrel Product Commercialization Agreement

           

          PREAMBLE

           

          This
            Joint HIV Barrel Product Commercialization Agreement (the “Agreement”)
            is
            made as of September 29, 2006 (“Effective
            Date”),
            by
            and between Chembio
            Diagnostic Systems, Inc.,
            a
            Delaware corporation having its principal place of business at 3661 Horseblock
            Road, Medford, NY 11763 (“Chembio”),
            and
StatSure
            Diagnostic Systems, Inc.,
            (f/k/a
            Saliva Diagnostic Systems) a Delaware corporation having its principal
            place of
            business at One Clarks Hill, Framingham, MA 01702 (“SDS”)
            (Chembio and SDS are each referred to herein as a “Party” and jointly as the
“Parties”).

           

          RECITALS

           

          Chembio,
            among other things, is in the business of developing, marketing and selling
            products used to diagnose various diseases, including HIV, and has designed,
            developed or is in the process of developing products for the diagnosis
            or
            detection of HIV or HIV infection (“HIV
            Products”) and has received approval of a pre-market application to the FDA for
            the HIV Barrel Product for manufacture by Chembio at its facility in
            Medford,
            New York and for Chembio to market to clinical laboratories and hospitals
            in the
            United States

           

          SDS,
            among other activities, is in the business of developing, manufacturing
            and
            marketing medical diagnostic products and owns the SDS Patents.

           

          SDS,
            Chembio and Inverness Medical Innovations, Inc., a Delaware corporation,
            (“Inverness”) have entered into a License, Marketing and Distribution Agreement
            of even date herewith (the “3-Way Agreement”), pursuant to which Inverness has
            been granted the worldwide exclusive right to market and distribute the
            HIV
            Barrel Product. 

           

          During
            the Term, to the extent such license is necessary, SDS wishes to license
            the SDS
            Patents to Chembio on an exclusive basis with respect to the HIV Barrel
            Product,
            and Chembio wishes to accept such license without acknowledging or agreeing
            to
            its necessity with respect to the HIV Barrel Product, on an exclusive
            basis,
            with respect to manufacture of the HIV Barrel Products solely for resale
            by
            Inverness as long as the 3-Way Agreement is in effect or, in the event
            of
            termination of the 3-Way Agreement, as otherwise set forth herein.

           

          The
            Parties may also enter into such other ancillary agreements, licenses
            and
            covenants as may be appropriate to permit the parties to fulfill the
            business
            objectives of this Agreement.

           

          Chembio
            and SDS wish to collaborate exclusively with each other, and to agree
            to work
            only with each other and not alone, to develop and commercialize products
            in the
            Barrel Field for the diagnosis or detection of HIV or HIV infection in
            order to
            facilitate introduction, distribution and sale of such products in the
            market.

           

          NOW,
            THEREFORE, in consideration of the premises and the mutual promises,
            covenants
            and conditions hereinafter set forth, the receipt and adequacy of which
            are
            hereby acknowledged, Chembio and SDS hereby agree as follows:

           

          1.
            Definitions.

           

          1.1.
            Certain
            Definitions.
            For
            purposes of this Agreement, in addition to the terms that are defined
            on first
            use herein, the following terms shall have the following meanings:

           

          (a)
            The
“Act”
shall
            mean the Federal Food, Drug and Cosmetic Act, as amended, and all relevant
            federal regulations pertaining thereto.

           

          (b)
            “Affiliate”
shall
            mean any Person that controls, is controlled by, or is under common control
            with
            a Party hereto. For purposes of this definition, “control” shall mean (i) in the
            case of corporate entities, direct or indirect ownership of a majority
            of the
            stock or shares having the right to vote for the election of directors,
            and (ii)
            in the case of non-corporate entities, direct or indirect ownership of
            a
            majority of the equity interest with the power to direct the management
            and
            policies of such non-corporate entities.

           

          (c)
            “Audit”
            shall
            mean examination of each and every document relating to the licenses
            and rights
            granted herein, including but not limited to books, records, agreements,
            communications, shipping records, purchase orders, invoices, credit memos
            and
            record of payments received or made by a nationally recognized public
            accounting
            firm.

           

          (d)
            “Barrel
            Field”
means
            diagnostic testing for the presence of HIV antibodies utilizing an integrated
            in-vitro diagnostic testing device that (i) is a single-use disposable
            device,
            (ii) collects a physiologic sample from a patient directly into the device
            using
            a tip at one end of the device and delivers that sample into a system
            contained
            in the device, where the reaction reagent medium (for example, a reagent
            strip)
            is enclosed in a barrel or other container with a transparent portion
            which
            allows the results of the reaction to be visible, designed to protect
            the user
            from contact with its contents, (iii) produces a visually readable result
            in
            less than twenty minutes, and (iv) is primarily designed to be used in
            a Point
            of Care environment or for self-testing by consumers.
            

           

          (e)
            “Challenge”
means,
            with respect to Patent Rights, to challenge the validity or enforceability
            of
            any Patent Rights, including without limitation by (i) filing a declaratory
            judgment action in which Patent Rights are alleged to be invalid or
            unenforceable; (ii) citing prior art pursuant to 35 U.S.C. Sec. 301,
            making a
            request for re-examination of Patent Rights pursuant to 35 U.S.C. Sec.
            302
            and/or 311, or provoking or becoming party to an interference with an
            application for Patent Rights pursuant to 35 U.S.C. Sec. 135; or (iii)
            filing or
            commencing any opposition, cancellation, nullity or similar proceedings
            against
            Patent Rights in any country.

           

          (f)
            “Chembio
            IP”
shall
            mean all proprietary rights and Intellectual Property Rights, including
            but not
            limited to Patent Rights, owned or Controlled by Chembio, which are necessary
            or
            useful for, or would be infringed or that Chembio asserts would be infringed,
            by
            the manufacture, use, sale, distribution, import or export of the HIV
            Barrel
            Products or New HIV Barrel Products, whether in existence now or in the
            future,
            including but not limited to those listed on Schedule A.

           

          (g)
            “Confidential
            Information”
shall
            mean all Technology and ideas and information of any kind, whether in
            written,
            oral, graphical, machine-readable or other form, whether or not marked
            or
            identified as confidential or proprietary, which are transferred, disclosed
            or
            made available by either Party hereto to the other.

           

          (h)
            “Control”
            or
“Controlled
            by”
            shall
            mean, in the context of Patent Rights or other Intellectual Property
            Rights,
            possession of the ability on the part of a Party to grant access to or
            a license
            or sublicense as provided for herein without violating the terms of any
            agreement or other arrangement with any Third Party existing at the time
            such
            Party would be required hereunder to grant another Party such access
            or license
            or sublicense.

           

          (i)
            “Distributor”
shall
            mean any Third Party to which a Party grants a right to resell or distribute
            HIV
            Barrel Products or New HIV Barrel Products.

           

          (j)
            “Exploit”
or
            “Exploitation”
shall
            mean to sell, offer for sale, import, export, transport, register, distribute,
            promote and market, together with other activities typically associated
            with
            maximizing the market penetration, profit margins and commercialization
            of a
            diagnostic medical product that is marketed to hospitals and clinical
            laboratories for professional use and to doctors’ offices, insurance companies,
            military facilities, and other Point of Care clinics, as well as to the
            public
            for self-testing.

           

          (k)
            “FDA”
means
            the U.S. Food and Drug Administration.

           

          (l)
            “First
            Commercial Sale”
shall
            mean, with respect to a product, the first sale to any Third Party.

           

          (m)
            “GAAP”
means
            United States Generally Accepted Accounting Principles, as applicable
            to the
            Party in question.

           

          (n)
            “GMP”
means
            current Good Manufacturing Practices as promulgated by the FDA.

           

          (o)
            “HIV
            Barrel Product”
means
            the product for HIV testing known as SURE CHECK(R)
            HIV 1/2
            as described in Chembio’s PMA on file with the FDA and further described in the
            SURE CHECK(R)
            HIV 1/2
            package insert, Catalog #HIV202, attached hereto as Schedule A, together
            with
            any improvements thereto.

           

          (p)
            “Intellectual
            Property Rights”
shall
            mean (i)  Patent Rights; (ii) rights associated with works of
            authorship including copyrights, copyright applications and copyright
            registrations; and (iii) rights relating to the protection of trade
            secrets, know-how and Confidential Information, but shall not include
            any rights
            to trade marks, trade names, or other distinctive brand names or logos.
            

           

          (q)
            “New
            HIV Barrel Product”
means
            (i) the patent pending product in the Barrel Field for the diagnosis
            or
            detection of HIV or HIV infection currently being
            designed and developed by Chembio which Chembio describes as set forth
            in
            Schedule D, and/or (ii) any other new product in the Barrel Field for
            the
            diagnosis or detection of HIV or HIV infection Controlled by SDS or
            Chembio.

           

          (r)
            “Patent
            Rights”
shall
            mean all patents, patent applications and inventions on which patent
            applications are filed and all patents issuing therefrom worldwide, all
            disclosures of inventions, together with any extensions, registrations,
            confirmations, reissues, divisionals, continuations, continuations-in-part,
            reexamination certificates, substitutions or renewals, supplemental protection
            certificates, term extensions (under applicable patent law or other law),
            provisional rights and certificates of inventions.

           

          (s)
            “Person”
shall
            mean an individual, corporation, partnership, limited partnership, limited
            liability company, unincorporated association, trust, joint venture or
            other
            organization or entity, including a governmental authority.

           

          (t)
            “POC”
or
            “Point
            of Care”
means
            an environment where sampling and testing is performed in the presence
            or
            near-presence of the patient.

           

          (u)
            “Related
            Documents”
shall
            mean the
            3-Way
            Agreement, the Settlement Agreement between SDS and Chembio, the License
            and
            Distribution Agreement between SDS and Inverness, the License and Distribution
            Agreement between Chembio and Inverness, and the HIV Cassette Agreement
            between
            Chembio and Inverness.

           

          (v)
            “SDS
            Patents”
shall
            mean all Patent Rights owned or Controlled by SDS that would be infringed,
            or
            that SDS asserts would be infringed, by the manufacture, use, sale,
            distribution, import or export of the HIV Barrel Products or New HIV
            Barrel
            Products, whether in existence now or in the future, including but not
            limited
            to those listed in Schedule B.

           

          (w)
            “Sell”
            shall
            mean to sell, offer for sale, market, promote, transport, export and
            use in
            furtherance of sales activities.

           

          (x)
            “Settlement
            Agreement”
shall
            mean the Settlement Agreement of even date herewith between the
            Parties.

           

          (y)
            “Sublicensee”
shall
            mean any sublicensee of any of the rights granted to a Party under this
            Agreement, other than an Affiliate or a Distributor.

           

          (z)
            “Technology”
shall
            mean all techniques, inventions, practices, procedures, knowledge, improvements,
            designs, processes, protocols, compositions, products, methods, works
            of
            authorship, know-how, data, clinical data, preclinical data, research
            and
            creations (whether or not subject to protection by any Intellectual Property
            Rights). 

           

          (aa)
            “Third
            Party”
shall
            mean any Person other than SDS or Chembio or an Affiliate of either of
            them.

           

          (bb)
            “United
            States”
means
            the United States of America and its territories and possessions, including
            without limitation Puerto Rico and the U.S. Virgin Islands.

           

          1.2.
            Additional
            Definitions.
            Certain
            additional capitalized terms are defined in the Preamble or the Recitals
            or
            below in the body of this Agreement and, if not otherwise defined, shall
            have
            the meaning as set forth in the 3-Way Agreement.

           

          2.
             Joint
            Exploitation of HIV Products in the Barrel Field. 

           

          2.1  In
            General.
            The
            Parties shall act together in all matters relating to the Exploitation
            of the
            HIV Barrel Product and any New HIV Barrel Product, with a goal of maximizing
            the
            commercial value of the HIV Barrel Product and any New HIV Barrel Product,
            both
            in geographic markets and in customer market segments.

           

          2.2  Under
            the 3-Way Agreement.
            The
            Parties shall act together in all matters under the 3-Way Agreement,
            other than
            Chembio’s right and obligation to manufacture and supply the HIV Barrel Product
            thereunder. Without limiting the generality of the foregoing:

           

          (a)
            Neither Party shall (i) give any notice to Inverness under the 3-Way
            Agreement,
            (ii) terminate or attempt to terminate the 3-Way Agreement, or (iii)
            modify or
            amend the 3-Way Agreement without the prior written consent of the other
            Party.
            For clarity, if the Parties do not both agree to take an action described
            in the
            preceding sentence, then such action shall not be taken. 

           

          (b)
            In
            order to keep SDS properly informed, Chembio shall forward all forecasts,
            Purchase Orders or alterations thereof received from Inverness pursuant
            to
            Section 7.2 or 7.3 of the 3-Way Agreement to SDS within five (5) business
            days
            of receipt thereof by Chembio.

           

          (c)
            In
            the event either Party makes sales of HIV Barrel Products to a Third
            Party
            (other than Inverness) as permitted by the 3-Way Agreement, the selling
            Party
            shall pay the other Party a royalty of five percent (5%) of the Net Sales
            (as
            defined in the 3-Way Agreement) thereof. Sections 5.6 (other than subsections
            (a) and (d)) and Section 5.7 (other than subsections (b), (c), and (e))
            shall
            apply to such royalties with appropriate adjustments to reflect the differences
            in Payer and Payee.

           

          2.3 Outside
            the 3-Way Agreement.
            In the
            event of any termination or expiration of the 3-Way Agreement, SDS and
            Chembio
            agree that they will jointly seek a qualified Third Party to replace
            Inverness
            as the Distributor of the HIV Barrel Product and any New HIV Barrel Product
            and
            will enter into a written agreement with respect thereto. SDS and Chembio
            further agree that neither Party will Exploit the HIV Barrel Product
            or any New
            HIV Barrel Product except pursuant to this Agreement or another written
            agreement with the other Party, and neither Party will enter into a license
            agreement, a distribution agreement, a joint venture, or any other agreement
            with a Third Party involving the Exploitation of a product in the Barrel
            Field
            for the diagnosis or detection of HIV or HIV infection without the prior
            written
            agreement of the other Party. If any royalties are due to Inverness pursuant
            to
            Section 5.6 of the 3-Way Agreement as a result of any Exploitation pursuant
            to
            this Section 2.3, then the sharing of such royalties will be determined
            in
            accordance with the agreement for such Exploitation executed pursuant
            to this
            Section 2.3.

           

          2.4 Non-Competition.
            Neither
            Party shall manufacture, promote, market, distribute, sell, offer for
            sale,
            import, export, seek or obtain regulatory approval of the HIV Barrel
            Product or
            any New HIV Barrel Product except under this Agreement and neither Party
            shall
            grant any license to, or in any way assist, any Affiliate or Third Party
            to do
            so. Each Party acknowledges and agrees that the exclusivity resulting
            from this
            Section is of critical importance to the other Party, and that without
            such
            exclusivity, the other Party would not have entered into this
            Agreement.

           

          2.5 Joint
            Operating Committee. 

           

          (a)
            The
            JOC.
            Promptly
            after the execution of the 3-Way Agreement, the Parties shall establish
            a Joint
            Operating Committee (“Joint
            Operating Committee”
or
            “JOC”),
            which
            shall be responsible for planning and coordinating activities under this
            Joint
            Exploitation Agreement. The JOC shall be composed of three (3) members, one
            designated by each Party and one agreed upon by the two Parties, who
            (in the
            case of the third member) shall have no affiliation or relationship with
            either
            Party. Either Party may replace its representative at any time upon prior
            written notice to the other Party. If a Party’s representative is unable to
            attend a meeting, such Party may designate an alternate to attend such
            meeting
            and perform the functions of such representative. 

           

          (b)
            Responsibilities
            of JOC.
            The
            Joint Operating Committee shall have the authority to make all decisions
            under
            Article 2 and Article 5 of this Agreement, including without limitation
            all
            actions under the 3-Way Agreement or outside the 3-way Agreement in the
            event of
            termination or expiration of the 3-way Agreement, as set forth in Sections
            2.2
            and 2.3. Neither Party shall take any action under the 3-Way Agreement
            or any
            action to Exploit the HIV Barrel Product or any New HIV Barrel Product
            except
            pursuant to a specific decision of the JOC.

           

          (c)
            Decision
            Making Authority.
            With
            respect to the responsibilities of the Joint Operating Committee, each
            member
            (or alternate designated by a Party if a member representing a Party
            is unable
            to attend) shall have one (1) vote in all decisions. All decisions
            shall be
            made
            by majority vote and
            be
            memorialized.

           

          (d)
            Meetings;
            Minutes.
            The
            Joint Operating Committee shall meet quarterly, or more often as otherwise
            agreed by the Parties, at such locations as the Parties agree. The JOC
            may meet
            in person, by teleconference, videoconference or as otherwise agreed.
            Minutes of
            the JOC meetings shall be taken, and shall, at a minimum, record all
            decisions
            made. A draft of such minutes shall be promptly provided to and approved
            by both
            Parties in accordance with a formal approval process established by the
            JOC. A
            Party may, with the prior consent of the other Party, invite a reasonable
            number
            of non-voting employees, consultants or scientific advisors to attend
            the
            meetings of the JOC, provided that such invitees are bound by appropriate
            confidentiality obligations. Decisions shall be effective upon execution
            of a
            consent or approval agreed by a majority of the Joint Operating
            Committee.

           

          (e)
            Other
            Communications. In
            addition to formal meetings, the Joint Operating Committee representatives
            shall
            communicate as necessary to ensure the appropriate joint Exploitation
            of the HIV
            Barrel Product and any New HIV Barrel Product. Each Party shall have
            reasonable
            access to the other Party’s facilities and personnel to facilitate joint
            Exploitation of the HIV Barrel Product and any New HIV Barrel Product,
            upon
            reasonable notice.

           

          (f)
            Initial
            Members.
            The
            Initial Members of the Joint Operating Committee shall be Lawrence A.
            Siebert,
            Steve M. Peltzman and a third person to be agreed upon by SDS and
            Chembio.

           

          (g)
            Public
            Announcements. Except
            as
            authorized in this Agreement or otherwise required by applicable law,
            regulation
            or the rules of any securities exchange or other trading market on which
            such
            Party’s securities are listed, all public communications relating to the actions
            of the Joint Operating Committee shall be subject to the approval of
            the
            Parties.

           

          3. Licenses
            and Intellectual Property Matters. 

           

          3.1 Exclusive
            Right to Manufacture.
            SDS, on
            and subject to the terms and conditions contained herein and in the 3-Way
            Agreement, hereby grants to Chembio, and Chembio hereby accepts from
            SDS,
            without acknowledging or agreeing to its necessity with respect to the
            HIV
            Barrel Product, a worldwide exclusive license to manufacture the HIV
            Barrel
            Products for
            resale by Inverness under the 3-Way Agreement or, in the event of termination
            of
            the 3-Way Agreement, as otherwise set forth herein.

           

          3.2 Technology.
            Subject
            to Article 4, the Parties will give each other access to their respective
            know-how and Technology relevant to the HIV Barrel Product and any New
            HIV
            Barrel Products in order to optimize manufacturing processes and quality
            and
            reduce manufacturing costs. Notwithstanding the foregoing, neither Party
            has any
            obligation to disclose its intellectual property, including the Chembio
            IP,
            except as may be required to purchase, supply and assemble hardware components
            related to the HIV Barrel Product and any New HIV Barrel Product.

           

          3.3 Patent
            Validity.
            Chembio,
            having investigated and analyzed the SDS Patents, hereby acknowledges
            that each
            of the SDS Patents is valid and enforceable.

           

          3.4 No
            Validity Challenge.
            In order
            to assure the orderly Exploitation of the HIV Barrel Product and New
            HIV Barrel
            Products and to make such products available to the public to address
            medical
            needs: 

           

          (a)
            Chembio agrees not to (and to cause its Affiliates not to) Challenge
            Patent
            Rights in the SDS Patents,
            or
to
            assist
            any Third Party in doing so. 

           

          (b)
            SDS
            agrees not to (and to cause its Affiliates not to) Challenge any Patent
            Rights
            included in the Chembio IP or
            to
            assist any party in doing so,
            unless
            such Patent Rights are enforced or threatened to be enforced against
            SDS or an
            SDS customer or partner for infringement resulting from an SDS product
            or
            service other than a product in the Barrel Field that diagnoses or detects
            HIV
            or HIV infection which SDS product or service is sold in violation of
            this
            Agreement or the 3-Way Agreement. SDS further agrees not to challenge
            Chembio’s
            right to continued use for manufacture of the HIV Barrel Product of the
            Confidential Information or Technology utilized by Chembio in the manufacture
            of
            the HIV Barrel Product.

           

          (c)
            Neither Party has investigated the Confidential Information or Technology
            utilized by the other party in connection with the manufacture of the
            HIV Barrel
            Product, and nothing contained herein shall be construed as an admission
            by
            either Party that such Confidential Information or Technology is or is
            not
            covered by the SDS Patents or the Chembio IP.

           

          3.5 Consequences
            of Violation.
            If
            either Party Challenges the Patent Rights of the other Party in violation
            of
            Section 3.4, then the Party whose rights were the subject of the Challenge
            (the
“Challenged Party”), may, by written notice to the Party violating Section 3.4
            (the “Challenging Party”): 

           

          (i)
            terminate this Agreement or terminate any or all rights and licenses
            granted to
            the Challenging Party hereunder, and 

           

          (ii)
            if
            the 3-Way Agreement is in effect at the time of the violation of Section
            3.4,
            then if the Challenging Party is Chembio, reduce Chembio’s share of the
            SDS/Chembio share of Net Sales for the HIV Barrel Product or any New
            HIV Barrel
            Product under the 3-Way Agreement to 20% from 50% permanently; and if
            the
            Challenging Party is SDS, reduce SDS’s share of the SDS/Chembio share of Net
            Sales for the HIV Barrel Product or any New HIV Barrel Product under
            the 3-Way
            Agreement to 20% from 50% permanently. The Challenged Party shall have
            the right
            to notify Inverness of any action taken under this Section, and the Parties
            agree that Inverness shall have no liability for any action taken to
            distribute
            the SDS/Chembio share of Net Sales in accordance with such notice. In
            the event
            the alleged Challenging Party disputes in good faith that it has Challenged
            the
            Patent Rights of the other Party, then the matter will be resolved in
            accordance
            with Section 10.8 and the amounts of the foregoing reductions will be
            placed in
            escrow until the matter is resolved. 

           

          4.
            Confidentiality.
            

           

          4.1 Limited
            Disclosure and Use.
            Each of
            Chembio and SDS shall hold in confidence any Confidential Information
            disclosed
            by the other Party or otherwise obtained by such Party from the other
            Party as a
            result of this Agreement or the Settlement Agreement, and each of SDS
            and
            Chembio shall protect the confidentiality thereof with the same degree
            of care
            that it exercises with respect to its own information of a like nature,
            but in
            no event less than reasonable care. Without the prior written consent
            of the
            disclosing Party, a receiving Party shall not use, disclose, or distribute
            any
            Confidential Information, in whole or in part, except as required to
            perform
            such Party’s obligations or exercise such Party’s rights hereunder or under the
            Settlement Agreement. Access to the disclosing Party’s Confidential Information
            shall be restricted to the receiving Party’s employees and agents, who, in each
            case, need to have access to carry out a permitted use and are bound
            in writing
            to maintain the confidentiality of such Confidential Information.

           

          4.2 Exceptions.
            The
            obligations set forth in Section 4.1 shall not apply to any portion of
            the
            Confidential Information that the receiving Party can demonstrate by
            legally
            sufficient evidence: (i) now or hereafter, through no act or failure to act
            on the part of the receiving Party, is or becomes generally available;
            (ii) is known to the receiving Party at the time of receiving such
            Confidential Information and not subject to an obligation of confidentiality
            to
            a Third Party; (iii) is hereafter furnished to the receiving Party by a
            Third Party as a matter of right (and without violating any agreement
            with the
            disclosing Party) without restriction on use or disclosure; or (iv) is
            independently developed by the receiving Party without use of any Confidential
            Information received from the other
            Party.
            In addition, each receiving Party may disclose Confidential Information
            to the
            extent such disclosure is reasonably necessary to prosecute or defend
            litigation, to comply with applicable law or regulation or the rules
            of any
            securities exchange or other trading market on which such party’s securities are
            listed, to protect Intellectual Property Rights, to obtain necessary
            or
            desirable regulatory approvals, to respond to a valid order of a court
            or other
            governmental body or any political subdivision thereof, or to conduct
            preclinical or clinical trials, provided that, other than with respect
            to
            disclosure for protecting Intellectual Property Rights, the receiving
            Party
            shall use reasonable efforts to secure confidential treatment of such
            Confidential Information required to be disclosed.

           

          4.3 Use
            of Name; Disclosure of Terms of the Agreement.
            Except
            as
            authorized in this Agreement or otherwise required by applicable law,
            regulation
            or the rules of any securities exchange or other trading market on which
            such
            Party’s securities are listed, neither Party shall use the name of the other
            Party in any publicity or advertising without the prior written approval
            of the
            other Party, except that either Party may disclose that it has entered
            into this
            Agreement and the Settlement Agreement. Except as may be required by
            applicable
            law, regulation or the rules of any securities exchange or other trading
            market
            on which such Party’s securities are listed, neither Party shall disclose any
            terms or conditions of this Agreement or the Settlement Agreement without
            the
            prior written consent of the other Party, provided that a Party may disclose
            such terms and conditions to any Third Party with whom such Party has
            entered
            into or proposes to enter into a business relationship (including any
            transaction that would result in a permitted assignment in accordance
            with the
            terms and conditions of Section 9.11 hereof), provided any such Third Party
            is informed of the confidentiality restrictions herein with respect to
            such
            terms and conditions and agrees to abide by such restrictions.

           

          4.4 Survival.
            The
            obligations set forth in this Article 4 shall survive any termination
            or
            expiration of this Agreement in perpetuity (with respect to trade secrets)
            and
            for a period of five (5) years (with respect to all other data and
            information).

           

          5. Manufacturing

           

          5.1 SDS
            Manufacturing Equipment.
            SDS
            will lease a one-head assembler to Chembio. Chembio will make lease payments
            to
            SDS in accordance with Schedule C. 

           

          5.2 Reduction
            of Manufacturing Costs.
            Chembio
            will use commercially reasonable efforts to reduce Cost (as defined in
            the 3-Way
            Agreement) of the HIV Barrel Product for supply to Inverness under the
            3-Way
            Agreement, taking into consideration regulatory and quality obligations.
            The
            Parties will review all operations involved in such manufacturing and
            consult on
            appropriate changes in the process. Without limiting the generality of
            the
            foregoing, the Parties will consider (through the JOC) use of a Third
            Party
            manufacturer if significant cost savings can be achieved, as long as
            such Third
            Party manufacture is in compliance with applicable regulations, will
            not impair
            quality obligations or cause a material change in registrations or product
            approvals.

           

          5.3 Manufacturing
            Failures Under the 3-Way Agreement.
            In the
            event Chembio does not supply the quantity and/or quality of HIV Barrel
            Products
            required under the 3-Way Agreement, then the Joint Operating Committee,
            with the
            assistance of the Parties, will develop appropriate reasonable business
            strategies to fulfill such requirements.

           

          6. Joint
            Patent Rights. 

           

          The
            Parties do not intend to engage in joint research activities and acknowledge
            that they have no obligation to do so. Nonetheless, in the course of
            activities
            hereunder, patentable inventions may be made. As between the Parties,
            ownership
            of Patent Rights shall be determined in accordance with inventorship.
            The
            determination of inventorship for Patent Rights shall be made in accordance
            with
            applicable laws relating to inventorship set forth in the patent laws
            of the
            United States. As between the Parties, SDS shall own any invention that
            is
            conceived or reduced to practice by an employee of SDS solely (or jointly
            with a
            Third Party subcontractor of SDS), and Chembio shall own any Invention
            that is
            made solely by an employee of Chembio (or jointly with a Third Party
            subcontractor of Chembio). Any invention that is made jointly by both
            an
            employee of SDS (or a Third Party subcontractor of SDS) and an employee
            of
            Chembio (or a Third Party of Chembio) shall be jointly owned by the Parties
            (“Joint
            Patent Rights”).
            Each
            Party retains an undivided one-half interest in and to the Joint Patent
            Rights.
            Joint Patent Rights shall only be utilized in the Barrel Field under
            this
            Agreement. The Parties shall jointly control the filing and prosecution
            of
            patent applications for Joint Patent Rights, using mutually agreed counsel.
            Each
            Party may independently exercise its ownership rights in and to such
            Joint
            Patent Rights, for any other field, and including the right to license
            and
            sublicense or otherwise to exploit, transfer or encumber its ownership
            interest,
            without an accounting or obligation to, or consent required from, the
            other
            Party. 

           

          7. Representations
            and Warranties.

           

          7.1 Corporate
            Power.
            Each
            Party represents to the other Party that it has full corporate power
            and
            authority to enter into this Agreement and to carry out the provisions
            hereof.
            Each Party represents to the other that this Agreement constitutes a
            valid and
            binding agreement, enforceable against it in accordance with its
            terms.

           

          7.2 No
            Default or Violation.
            Each
            Party represents and warrants to the other Party that the execution,
            delivery
            and performance of this Agreement does not (i) violate or require any
            registration, qualification, consent, approval, or filing under, (1)
            any law,
            statute, ordinance, rule or regulation applicable to it, or (2) any judgment,
            injunction, order, writ or decree of any court, arbitrator, or governmental
            entity by which such Party or any of its assets or properties may be
            bound or
            (ii) conflict with, require any consent, approval, or filing under, result
            in
            the breach or termination of any provision of, constitute a default under,
            result in the acceleration of the performance of any obligations under,
            result
            in the vesting or enhancement of any other Person’s rights under, or result in
            the creation of any lien upon any of such Party’s properties, assets, or
            businesses pursuant to (x) its organizing documents or By-Laws or (y)
            any
            material indenture, mortgage, deed of trust, license, permit, approval,
            consent,
            franchise, lease, contract, or other instrument or agreement to which
            such Party
            is a party or by which such Party or any of such Party’s properties or assets is
            bound.

           

          7.3 Exclusion
            of Other Representations and Warranties.
            EXCEPT
            AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
            REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
            LIMITATION
            ANY REPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
            PURPOSE OR NON-INFRINGEMENT. NEITHER PARTY WARRANTS THAT THE OTHER PARTY
            WILL
            RECEIVE ANY PARTICULAR AMOUNT, OR ANY, REVENUES OR PROFITS AS A RESULT
            OF
            ENTERING INTO THE BUSINESS ARRANGEMENTS DESCRIBED IN THIS
            AGREEMENT.

           

          8. Term
            and Termination.

           

          8.1 Term
            of Agreement.
            Unless
            otherwise terminated by agreement of the Parties, this Agreement shall
            continue
            in effect perpetually with respect to all products in the Barrel Field
            for the
            diagnosis or detection of HIV or HIV infection.

           

          8.2 Material
            Breach. If
            there
            is a:

           

          (i)
            material breach by a Party of this Agreement which cannot be cured;
            or

           

          (ii)
            material breach by a Party of this Agreement that can be cured and such
            Party
            has failed to take steps to begin to cure the breach within sixty (60)
            days
            following written notice specifying the material breach by the Party
            affected by
            the breach or is not diligently pursuing a cure thereafter, or 

           

          (iii)
            is
            subject to a petition for relief under any bankruptcy legislation, or
            makes an
            assignment for the benefit of creditors, or is subject to the appointment
            of a
            receiver for all or substantially part of the Party’s assets, and such petition,
            assignment or appointment, if involuntary, is not dismissed or vacated
            within
            ninety (90) days.

           

          then,
            an
            Event of Default shall be deemed to have occurred. Upon an Event of Default,
            the
            non-breaching Party shall have the right to exercise one or more of the
            following remedies upon written notice by the non-breaching Party to
            the
            breaching Party within thirty (30) days of an Event of Default (if any)
            (assuming that the non-breaching Party has not already given such a notice
            upon
            the occurrence of a prior material, uncured breach by the breaching Party):
            (i)
            to seek monetary damages for such material breach within the limitations
            set
            forth in Section 9 hereof; (ii) to seek equitable relief to prevent such
            material breach from continuing or occurring again in the future; (iii)
            if the
            Event of Default can be cured, to effect a cure and be reimbursed for
            the costs
            incurred or (iv) at its option, to terminate this Agreement upon written
            notice
            to the breaching Party; provided, however, that in the event the alleged
            breaching Party in good faith challenges the allegation of breach, then
            the
            matter shall be resolved in accordance with Section 10.8, and the cure
            period
            set forth in Section 8.2(ii), which shall be reduced to thirty (30) days,
            shall
            only commence upon a decision pursuant to Section 10.8 that such breach
            has
            occurred. 

           

          8.3 Survival.
            No
            expiration or termination of this Agreement shall affect any rights or
            liabilities of the Parties which may have accrued prior to the date of
            expiration or termination. Notwithstanding anything herein to the contrary,
            upon
            any expiration or termination of this Agreement, in addition to any provisions
            that by their terms survive, the provisions of Sections [to
            be updated]
            shall
            survive and shall continue in full force and effect in accordance with
            their
            respective terms.

           

          9. Limitation
            of Liability.

           

          9.1 EXCEPT
            FOR BREACHES OF ITS CONFIDENTIALITY OBLIGATIONS HEREUNDER AND FOR VIOLATIONS
            OF
            THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS AND FOR DAMAGES CAUSED BY A
            PARTY’S GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT, IN NO EVENT SHALL A PARTY
            BE
            LIABLE TO ANY OTHER PARTY FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
            INCLUDING, WITHOUT LIMITATION, DAMAGES RESULTING FROM LOSS OF USE, PROFITS,
            BUSINESS OR GOODWILL, WHETHER OR NOT THE PARTY ALLEGEDLY CAUSING THE
            DAMAGE HAS
            BEEN ADVISED OF THE POSSIBILITY THEREOF. 

           

          10. General.

           

          10.1 Waivers
            and Amendments.

           

          (a)
            This
            Agreement may be amended, modified or supplemented only by a written
            instrument
            executed by the Parties hereto. For clarity, the Joint Operating Committee
            shall
            have no power to amend or modify this Agreement.

           

          (b)
            No
            waiver of any provision of this Agreement, or consent to any departure
            from the
            terms hereof, shall be effective unless the same shall be in writing
            and signed
            by the Party waiving or consenting thereto. No failure on the part of
            either
            Party to exercise, and no delay in exercising, any right or remedy hereunder
            shall operate as a waiver thereof, nor shall any single or partial exercise
            of
            any such right or remedy by such Party preclude any other or further
            exercise
            thereof or the exercise of any other right or remedy. The waiver by either
            Party
            hereto of a breach of any provision of this Agreement shall not operate
            as a
            waiver of any subsequent breach. All rights and remedies hereunder are
            cumulative and are in addition to and not exclusive of any other rights
            and
            remedies provided by law.

           

          10.2 Entire
            Agreement.
            This
            Agreement, the Schedules hereto and the Related Documents constitute
            the entire
            agreement between the Parties hereto with respect to the subject matter
            hereof
            and supersede all prior agreements and understandings, whether written
            or oral,
            between the Parties in connection with such subject matter.

           

          10.3 Severability.
            If any
            provision of this Agreement is found invalid or unenforceable by a court
            of
            competent jurisdiction, such provision shall be enforced to the maximum
            extent
            permissible by law and the other provisions of this Agreement shall remain
            in
            full force and effect.

           

          10.4 Relationship
            of the Parties.
            This
            Agreement shall not constitute either Party the agent or legal representative
            of
            the other Party for any purpose whatsoever, and neither Party shall hold
            itself
            out as an agent of the other Party. This Agreement creates no relationship
            of
            joint venturers, partners, associates, employment or principal and agent
            between
            the Parties and each of the Parties is acting as an independent contractor.
            Neither Party is granted herein any right or authority to, and shall
            not attempt
            to, assume or create any obligation or responsibility for or on behalf
            of the
            other Party. Neither Party shall have any authority to bind the other
            Party to
            any contract, whether of employment or otherwise, and each Party shall
            bear all
            of its respective expenses for its operations, including, without limitation,
            the compensation of its employees and salespersons and the maintenance
            of its
            offices, service and warehouse facilities. Each Party shall each be solely
            responsible for its own employees and salespersons and for their acts
            and the
            things done by them. 

           

          10.5 No
            Election of Remedies.
            The
            rights and remedies accorded herein are cumulative and in addition to
            those
            provided by law, and may be exercised separately, concurrently, or
            successively.

           

          10.6 Notices.
            All
            notices and other communications hereunder shall be in writing and shall
            be
            deemed given if delivered personally, telecopied (with confirmation)
            or mailed
            by registered or certified mail (return receipt requested) or delivered
            by
            recognized courier service providing evidence of delivery to the Parties
            at the
            following addresses:

           

          If
            to
            Chembio, to:

           

          Chembio
            Diagnostic Systems, Inc.

          3661
            Horseblock Road

          Medford,
            New York 11763

          Attention:
            Lawrence A. Siebert, President

          Telecopier
            No.: (631) 924-6033

          

          with
            a
            copy to:

          

          Ruskin
            Moscou Faltischek, P.C.

          1425
            Reckson Plaza

          15th
            Floor,
            East Tower

          Uniondale,
            New York 11556

          Attention:
            Michael L. Faltischek, Esq,

          Telecopier
            No.: (516) 663-6640

          

          If
            to
            SDS, to:

          

          StatSure
            Diagnostic Systems, Inc.

          One
            Clark’s Hill

          Framingham,
            MA 01702

          Attention:
            Chief Executive Officer

          Telecopier
            No.: 

          

          with
            a
            copy to:

          

          Mintz,
            Levin, Cohn, Ferris,

          Glovsky
            and Popeo, P.C.

          One
            Financial Center

          Boston,
            MA 02111

          Attention:
            Jeffrey M. Wiesen, Esq.

          Telecopier
            No.: 617-542-2241

          

           

          or
            at
            such other address for a Party as shall be specified by like
            notice.

           

          10.7 Governing
            Law.
            This
            Agreement shall be governed by, and construed and enforced in accordance
            with,
            the substantive laws of the State of New York , without giving effect
            to its
            conflicts of laws rules. 

           

          10.8 Dispute
            Resolution.
            In
            the
            event of any dispute or disagreement between the Parties as to the
            interpretation of any provision of this Agreement or the performance
            of any
            obligations hereunder, the matter, upon written request of either Party,
            shall
            be referred to [mediation
            and]
            arbitration in accordance with the procedures set forth in Schedule F
            to this
            Agreement. 

           

          10.9 Waiver
            of Jury Trial.
            The
            Parties each hereby irrevocably and unconditionally waives all rights
            to trial
            by jury in any legal action, proceeding or counterclaim with respect
            to any
            matter whatsoever arising out of or in connection with or related to
            this
            Agreement or the enforcement thereof. 

           

          10.10 Counterparts.
            This
            Agreement may be executed in two or more counterparts, all of which shall
            be
            considered one and the same agreement and shall become effective when
            two or
            more counterparts have been signed by both of the Parties and delivered
            to the
            other Party, it being understood that both Parties need not sign the
            same
            counterpart. Facsimile execution and delivery of this Agreement by either
            Party
            shall be legal, valid and binding execution and delivery of such document
            for
            all purposes.

           

          10.11 Assignment.
            This
            Agreement is personal to each of the Parties, and neither Party shall
            assign any
            of its rights or delegate any of its obligations hereunder without the
            prior
            written consent of the other Party, which consent may be withheld for
            any
            reason, provided,
            however, that without
            the consent of the other Party, each Party may (i) assign its rights
            under this
            Agreement and delegate its obligations hereunder, in whole or in part,
            to any
            Person that shall acquire the business of such Party to which this Agreement
            relates, or to any Affiliate of such Party, if the assignee shall assume
            such
            Party’s obligations hereunder in writing, and (ii) assign this Agreement in
            connection with a sale or transfer of substantially all of the assets
            of, or a
            majority interest in the voting shares of, such Party or its corporate
            parent
            to, or the merger or consolidation of such Party or its corporate parent
            with or
            into, any other Person.

           

          10.12 Force
            Majeure.
            Neither
            Party shall be liable for failure to perform any of its obligations under
            this
            Agreement when such failure is due to fire, flood, strikes, labor troubles
            or
            other industrial disturbances, legal restriction, riot, insurrection,
            or any
            other cause beyond the reasonable control of the Party affected
            thereby.

           

          

           

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          *
            *
            *

           

          IN
            WITNESS WHEREOF, the Parties have executed, or caused their duly authorized
            representatives to execute, this Agreement under seal as of the date
            first
            written above.

           

          Chembio
            Diagnostic Systems, Inc.

           

          By: 

           

          Title: 

           

          StatSure
            Diagnostic Systems, Inc.

           

          By: 

           

          Title:

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