Document:

Exhibit 10.4 Form of Option (Non-Qualified)

     

    
      
        
          

        

        
          

        

        Exhibit
          10.4 Form of Option (Non-Qualified)

        

          THE
            SECURITIES REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN REGISTERED WITH
            THE
            UNITED STATES
            SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933,
            AS
            AMENDED (THE “1933 ACT”), AND ARE “RESTRICTED SECURITIES” AS THAT TERM IS
            DEFINED IN RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED
            FOR
            SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
            STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
            UNDER THE 1933 ACT. 

           

          CHEMBIO
            DIAGNOSTICS, INC. 

           

          STOCK
            OPTION AGREEMENT

          (Directors’
            Non-Qualified Stock Option)

           

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

           

          WITNESSETH:

           

          WHEREAS,
            the Optionee has received a non-qualified option to purchase shares of
            the
            Company’s common stock, par value $0.01 per share (the “Common Stock”), pursuant
            to the Company’s 1999 Stock Option Plan (the “Plan”) in order to provide the
            Optionee with an opportunity for investment in the Company and additional
            incentive to pursue the success of the Company, and this option is to
            be for the
            number of shares, at the price per share and on the other terms and conditions
            set forth in this Agreement; and

           

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

           

          NOW,
            THEREFORE, the parties agree as follows:

           

          1. Grant
            Of Option.
            The
            Company hereby grants to the Optionee the right and option (the “Option”) to
            purchase all or any part of an aggregate of ______________
            (________________)
            shares of the authorized and unissued Common Stock (the “Option Shares”)
            pursuant to the terms and conditions set forth in this Agreement and
            the Plan.
            In the event that the terms and conditions in this Agreement are inconsistent
            with the terms and conditions in the Plan, the terms and conditions in
            the Plan
            shall control.

           

          2. Option
            Price.
            At any
            time that shares are to be purchased pursuant to the Option, the purchase
            price
            for each Option Share shall be $________
            (the
“Option Price”), subject to adjustment as provided in this
            Agreement.

           

          3. Exercise
            Period.
            Unless
            terminated earlier as provided in this Agreement, each portion of the
            Option
            will expire and terminate, if not exercised sooner, at 5:00pm, New York
            City,
            New York time, on __________________________ (MM/DD/YY). Notwithstanding
            the
            foregoing, to the extent not earlier terminated, the Option shall terminate
            three months after the date the Optionee no longer serves on the Board
            of
            Directors of the Company.

           

          4. Vesting
            of Option. _________________
            (fraction) of the Options (the right to purchase ________________ Option
            Shares)
            shall be immediately exercisable and __________________
            (fraction) of the Options shall become exercisable on _____________ (MM/DD)
            of
            each of __________ (YYYY) and _____________ (YYYY).

           

          5. Exercise
            Of Option.

           

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

           

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

           

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

           

          7. Securities
            Laws Requirements.
            No
            Option Shares shall be issued unless and until, in the opinion of the
            Company,
            there has been full compliance with, or an exemption from, any applicable
            registration requirements of the Securities Act of 1933, as amended (the
“1933
            Act”), any applicable listing requirements of any securities exchange on
            which
            stock of the same class has been listed, and any other requirements of
            law or
            any regulatory bodies having jurisdiction over such issuance and delivery,
            or
            applicable exemptions are available and have been complied with. Pursuant
            to the
            terms of the Notice And Agreement Of Exercise Of Option (Exhibit A) that
            shall
            be delivered to the Company upon each exercise of the Option, the Optionee
            shall
            acknowledge, represent, warrant and agree as follows:

           

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

           

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

           

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

           

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

           

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

           

          (f) Optionee
            confirms that all documents, records and books pertaining to an investment
            in
            the Option and the Option Shares that have been requested by Optionee
            have been
            made available or delivered to Optionee. Without limiting the foregoing,
            Optionee has received and reviewed the Company’s periodic reports as filed with
            the Securities and Exchange Commission, and Optionee has had the opportunity
            to
            discuss the acquisition of the Option and the Option Shares with the
            Company,
            and Optionee has obtained or been given access to all information concerning
            the
            Company that Optionee has requested;

           

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

           

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

           

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

           

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

           

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

           

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

           

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

           

          “THE
            SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH
            THE
            UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES
            ACT
            OF 1933, AS AMENDED (THE “1933 ACT”), AND ARE ‘RESTRICTED SECURITIES’ AS THAT
            TERM IS DEFINED IN RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT
            BE
            OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
            EFFECTIVE
            REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION
            FROM
            REGISTRATION UNDER THE 1933 ACT.”

           

          The
            restrictions described in this Section 6, or notice thereof, may be placed
            on
            the certificates representing the Option Shares purchased pursuant to
            the
            Option, and the Company may refuse to issue the certificates or to transfer
            the
            shares on its books unless it is satisfied that no violation of such
            restrictions will occur.

           

          8. Adjustment
            By Stock Split, Stock Dividend, Etc.
            If at
            any time the Company increases or decreases the number of its outstanding
            shares
            of common stock, or changes in any way the rights and privileges of such
            shares,
            by means of the payment of a stock dividend or the making of any other
            distribution on such shares payable in its common stock, or through a
            stock
            split or subdivision of shares, or a consolidation or combination of
            shares, or
            through a reclassification or recapitalization involving its common stock,
            the
            numbers, rights and privileges of the shares of common stock included
            in the
            Option shall be in-creased, decreased or changed in like manner as if
            such
            shares had been issued and outstanding, fully paid and nonassessable
            at the time
            of such occurrence and the Option Price shall be correspondingly decreased,
            increased or otherwise changed. Whenever the number or kind of shares
            comprising
            the Option Shares or the Option Price is adjusted, the Company shall
            promptly
            give written notice to each holder of record of the outstanding Options,
            stating
            that such an adjustment has been effected and setting forth the number
            and kind
            of shares purchasable and the amount of the then-current Option Price,
            and
            stating in reasonable detail the facts requiring such adjustment and
            the
            calculation of such adjustment. 

           

          9. Reorganization
            And Reclassification.
            In case
            of any capital reorganization or any reclassification of the capital
            stock of
            the Company while the Options remain outstanding, the holder of the Options
            shall thereafter be entitled to purchase pursuant to the Options (in
            lieu of the
            kind and number of shares of Common Stock comprising Option Shares that
            such
            holder would have been entitled to purchase or acquire immediately before
            such
            reorganization or reclassification) the kind and number of shares of
            stock of
            any class or classes or other securities or property for or into which
            such
            shares of Common Stock would have been exchanged, converted, or reclassified
            if
            the Option Shares had been purchased immediately before such reorganization
            or
            reclassification. In case of any such reorganization or reclassification,
            appropriate provision (as determined by resolutions of the Board of Directors
            of
            the Company) shall be made with respect to the rights and interest thereafter
            of
            the holder of the Options, to the end that all the provisions of this
            Option
            Agreement (including adjustment provisions) shall thereafter be applicable,
            as
            nearly as reasonably practicable, in relation to such stock or other
            securities
            or property.

           

          10. Registration
            Rights.
            Optionee shall have no registration rights unless otherwise agreed by
            the
            Company.

           

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

           

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

           

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

           

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

           

          14. Notices.
            All
            notices, requests, demands, directions and other communications (“Notices”)
            concerning this Agreement shall be in writing and shall be mailed or
            delivered
            personally or sent by telecopier or facsimile to the applicable party
            at the
            address of such party set forth below in this Section 13. When mailed,
            each such
            Notice shall be sent by first class, certified mail, return receipt requested,
            enclosed in a postage prepaid wrapper, and shall be effective on the
            fifth
            business day after it has been deposited in the mail. When delivered
            personal-ly, each such Notice shall be effective when delivered to the
            address
            for the respective party set forth in this Section 13, provided that
            it is
            delivered on a business day and further provided that it is delivered
            prior to
            5:00 p.m., local time of the party to whom the notice is being delivered,
            on
            that business day; otherwise, each such Notice shall be effective on
            the first
            business day occurring after the date on which the Notice is delivered.
            When
            sent by telecopier or facsimile, each such Notice shall be effective
            on the day
            on which it is sent provided that it is sent on a business day and further
            provided that it is sent prior to 5:00 p.m., local time of the party to
            whom the Notice is being sent, on that business day; otherwise, each
            such Notice
            shall be effective on the first business day occurring after the date
            on which
            the Notice is sent. Each Notice shall be addressed to the party to be
            notified
            as shown below:

           

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

          3661
            Horseblock Road  

          Medford,
            New York, 11763

          Facsimile
            No. (631)
            924-6033

          Attention:
            Larry Siebert

           

          (b) if
            to the
            Optionee:  
______________________

           
            ______________________

           
            ______________________

          

          

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

           

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

           

          IN
            WITNESS WHEREOF, the parties have executed this Agreement on the dates
            set forth
            below to be effective on the date set forth in the first paragraph of
            this
            Agreement.

          

          CHEMBIO
            DIAGNOSTICS, INC.

          

          

          Date:
            ____________________    By:
            ___________________________

          

          ______________________________

          Name
            and
            Title

          

          OPTIONEE

          

          

          Date:
            ____________________    ______________________________

          Signature

          

          

          ______________________________

          Name
            and
            Title

          

          

          ______________________________

          Address

          

          

          ______________________________

          City,
            State and Zip Code

          

          

          
            
               

              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          EXHIBIT
            A

          (To
            Chembio Diagnostics, Inc.

          Stock
            Option Agreement)

           

          CHEMBIO
            DIAGNOSTICS, INC.

           

          NOTICE
            AND AGREEMENT OF EXERCISE OF OPTION

           

          The
            undersigned, ________________
            (the
“Optionee”), hereby exercises the Optionee’s Option pursuant to the Stock Option
            Agreement (the “Option Agreement”) dated as of _________________
            between
            Optionee and Chembio Diagnostics, Inc. (the “Company”) as to ________ shares of
            the $.01 par value common stock (the “Option Shares”) of the Company at a
            purchase price of $_________
            per
            share. The total exercise price for these Option Shares is
            $________.

           

          Enclosed
            is the payment specified in Section 4 of the Option Agreement.

          

          The
            Optionee understands that no Option Shares will be issued unless and
            until, in
            the opinion of the Company, there has been full compli-ance with, or
            an
            exemption from, any applicable registration requirements of the Securi-ties
            Act
            of 1933, as amended (the “1933 Act”), any applicable listing requirements of any
            securities exchange on which stock of the same class is then listed,
            and any
            other requirements of law or any regulatory bodies having jurisdiction
            over such
            issuance and delivery. The undersigned Optionee hereby acknowledges represents
            warrants and agrees to and with the Company as follows:

           

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

           

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

           

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

           

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

           

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

           

          (f) Optionee
            confirms that all documents, records and books pertaining to an investment
            in
            the Option Shares that have been requested by Optionee have been made
            available
            or delivered to Optionee. Without limiting the foregoing, Optionee has
            received
            and reviewed the Company’s periodic reports as filed with the Securities and
            Exchange Commission, and Optionee has had the opportunity to discuss
            the
            acquisition of the Option and the Option Shares with the Company, and
            Optionee
            has obtained or been given access to all information concerning the Company
            that
            Optionee has requested;

           

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

           

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

           

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

           

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

           

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

           

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

           

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

           

          “THE
            SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH
            THE
            UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES
            ACT
            OF 1933, AS AMENDED (THE “1933 ACT”), AND ARE ‘RESTRICTED SECURITIES’ AS THAT
            TERM IS DEFINED IN RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT
            BE
            OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
            EFFECTIVE
            REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION
            FROM
            REGISTRATION UNDER THE 1933 ACT.”

           

          (k) The
            Optionee shall report all sales of Option Shares to the Company in writing
            on a
            form prescribed by the Company;

           

          (l) The
            Optionee will not sell or dispose of Optionee’s Option Shares in violation of
            the 1933 Act, or of any other applicable federal or state securities
            laws;
            and

          

          (m) The
            Optionee agrees that the Company may, without liability for its good
            faith
            actions, place legend restrictions upon Optionee’s Option Shares and issue “stop
            transfer” instructions requiring compliance with applicable securities laws and
            the terms of the Option Agreement.

           

          (n) If
            and so
            long as Optionee is subject to reporting requirements under Section 16(a)
            of the
            Securities Exchange Act of 1934, as amended (the “1934 Act”), Optionee
            recognizes that any sale by Optionee or Optionee’s immediate family of the
            Company’s $.01 par value common stock may create liability for Optionee under
            Section 16(b) of the 1934 Act (“Section 16(b)”). Therefore, Optionee has
            consulted with Optionee’s counsel regarding the application of Section 16(b) to
            this exercise of Optionee’s Option.

          

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

           

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

           

          

           

                                                      

          (Print
            Your Name)    Signature
            of Optionee

          

          

          

                                                      

          (Optionee
            - Print Name of Spouse  Address

          if
            you
            wish joint registration)   

          

                                                          

                                  City,
            State and Zip
            CodeConverted by EDGARwiz

	 
	 
	

	 
	AMENDED TECHNOLOGY PURCHASE AGREEMENT

	 
	This Agreement made this  19th  day of May, 2004

	                                  And amended this 17th day of November 2005

	 
	BETWEEN:

	 
	EMPIRICAL VENTURES LTD., a British Columbia corporation having a Registered and Records Office located at: 700-625 Howe Street, Vancouver BC, V6C 2T6

	 
	(hereinafter referred to as the "Purchaser")

	OF THE FIRST PART

	 
	AND:                           3493734 MANITOBA, LTD. A Manitoba corporation

	 having a place of business located at:

	196 Tache Avenue, Winnipeg, Manitoba

	Canada, R2H 1Z6

	 
	(hereinafter collectively referred to as the "Vendor")

	 
	OF THE SECOND PART

	 
	 
	WHEREAS the Vendor has developed certain information, expertise, know-how, 

	show-how related to a proprietary Soft Ware Program, marketed under the trade 

	name “Darrwin”.  (collectively referred to as the “Technology”).

	 
	AND WHEREAS the Vendor has utilized the Technology to develop and market 

	this Soft Ware Program/ Travel Reservation Service.

	 
	AND WHEREAS the Vendor wishes to sell and the Purchaser wishes to 

	                       purchase the Technology and related Software programs.

	 
	 
	NOW THEREFORE this Agreement witnesses that in consideration of the 

	premises, and of the mutual covenants and agreements herein contained and other 

	good and valuable consideration, the receipt and sufficiency of which is hereby 

	acknowledged the parties hereto have agreed to and do hereby agree as follows:

	 
	 
	1.

DEFINITIONS

	 
	1.1

In this Agreement, unless a contrary intention appears, the following words and phrases 

	            shall mean:

	 
	a.

“Technology” means and shall include any Patents and all of the information, data, schematics blueprints, drawings, registered and unregistered trademarks, trade-names, copyrights, designs expertise, and know-how of every nature and kind related to this Soft Ware Program, held by the Vendor either directly or indirectly and shall include any improvements modifications or variations thereto.

	 
	            b. "Net Sales Revenue" shall have the meaning as set out in Schedule "A"

	 

	2.

PURCHASE AND SALE OF ASSETS

	 
	0.1

     Upon the terms and subject to the conditions hereof, the Purchaser agrees to 

	              purchase, and the Vendor agrees to sell, assign and transfer to the Purchaser the 

	              Technology. 

	 
	0.1

the parties shall, enter into such further agreements and execute any and all 

	            documents as may be necessary and reasonably required to ensure that ownership of the 

	            Technology vests and remains with the Purchaser. 

	 
	3.

PURCHASE PRICE

	0.1

      The Vendor agrees to sell and the Purchaser agrees to purchase the Technology from the 

	             Vendor for the following consideration:

	 
	a.

The sum of FIVE THOUSAND USD ($5,000) as a non-refundable deposit, and 

	a.1 The sum of THREE THOUSAND USD ($3,000)  Payable upon execution of  

	      this agreement, in consideration for additional legal expenses and opportunity

	      costs as a result of these amendments; and 

	 
	b.

  The sum of TEN THOUSAND USD ($10,000) Payable

	March 16, 2006; and

	 
	c.

 A royalty of TWO (2%) PERCENT calculated on the Net Sales Revenue of any product that uses all or any portion of the Technology until, development costs incurred to date have been recovered to a maximum of USD TWO HUNDRED FIFTY THOUSAND ($250,000) DOLLARS. After which the royalty shell be reduced to ONE (1%) PERCENT; and

	       

	                        d..  TWO HUNDRED FORTY FIVE THOUSAND USD ($245,000)

	In additional Software development costs to be managed and led

	By the vendor as outlined In Schedule B

	 
	 
	a.1

      The royalty shall be paid quarterly in arrears following the first commercial sale 

	             of products incorporating the Technology. 

	

	4.

TAXATION

	 
	a.1

The Purchaser and the Vendor shall take such steps and execute such documents, and 

	            certifies and makes such elections pursuant to the Canada Customs and Revenue Agency 

	            (CCRA) as may be required in order to affect the transfer of the Technology in a tax 

	             efficient manner such that the minimum tax liability will accrue to the parties.

	 
	5. CLOSING 

	 
	5.01

The closing of the transaction of sale and purchase hereunder will take place on  May 19, 2004 by trust closing between attorneys, by correspondence on this date or such later date as is practicable.(the "Closing Date").

	 
	6.

REPRESENTATIONS AND WARRANTIES

	 
	a.1

The Vendor represents and warrants to the Purchaser (and acknowledges that the 

	             Purchaser has relied upon such representations and warranties in entering into this 

	             Agreement) that except as disclosed herein:

	 
	a.

the Vendor has the power and capacity to own and dispose of the assets and to enter into this Agreement and to carry out its terms to the full extent;

	 
	b.

there are no actions, suits, judgments, litigation proceedings or investigations outstanding, pending or to the knowledge of the Vendor threatened against the technology , nor does the Vendor know  or have any reasonable grounds or know of any basis for any such actions, suits, litigation proceedings or investigations;

	 
	c.

all material transactions of the business have been properly and promptly recorded or filed in or with its respective books and records and the minute books of the business contain complete records of all meetings and proceedings of the Shareholders and Directors;

	 
	d.

the execution and delivery of this Agreement and the completion of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Vendor, and this Agreement constitutes a legal, valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms except as may be limited by laws of general application effecting the rights of creditors and by general principals of equity;

	 
	e.

the Vendor warrants and represents that the Vendor has good and marketable title to the Technology and the Technology is free and clear of all liens, mortgages, charges, pledges, security interests, encumbrances or other claims whatsoever, other than leases and encumbrances disclosed herein;

	 
	f. 

the Vendor has taken all necessary and proper steps to register and to keep the patent in good standing and the vendor is not aware of any conflicting claims or patent applications .

	 
	g.

the Vendor is the sole owner of any copyright, patent, trademark, etc. and no other person(s) or party has advanced a claim of ownership or claiming an interest in the product, nor is any claim likely to be made in the future to the knowledge of the Vendor and there have been no legal proceedings or threats of legal proceedings of which involving the product of which the vendor is aware.

	 
	h.

neither the execution nor delivery of this Agreement nor the completion of the transactions contemplated hereby shall;

	                      

	i.

Violate any of the terms and provisions of any order, decree, statute, by- 

	            law or regulation agreement, covenant or restriction applicable to the 

	            Vendor;

	 
	j.

the Vendor represents and warrants to the Purchaser and acknowledges that the Purchaser has relied upon same that the Vendor owns and has full and clear title to the Technology;

	 
	 
	 
	i.1

the Purchaser represents and warrants to The Vendor (and acknowledges that the 

	            Purchaser has relied upon such representations and warranties in entering into this 

	           Agreement) that except as disclosed herein:

	 
	(a)

the  company is duly organized, existing, in good standing and has the power, authority, and capacity to enter into this Agreement and to carry out the transactions contemplated by this Agreement, all of which have been duly and validly authorized by all requisite corporate proceedings

	 
	 
	i.2

From the date hereof until the closing the Vendor shall diligently and in the manner of a 

	            prudent business person in the ordinary course of business and will use its best efforts to 

	            preserve the Technology.

	 
	 
	7.

INDEMNIFICATION CLAUSE

	 
	.1

The Vendor covenants and agrees to indemnify and hold harmless the Purchaser 

	                        from and against:

	 
	a.

any and all losses, damages or deficiencies resulting from any misrepresentation, breach of warranty or non-fulfilment of any covenant on the part of the Vendor under this Agreement or from any misrepresentation or omission from any certificate or other instrument, furnished or to be furnished from the Company hereunder; and

	 
	b.

all actions, suits, proceedings, demands, assessments, judgments, costs and legal and other expenses incidental to any of the foregoing, the cause of action, subject matter, or basis of which arose prior to March 1, 2004

	 
	                         and the Purchaser may, on notice in writing to the Vendor, settle such claims and 

	                         make any payment in relation thereof as the Purchaser sees fit.

	 
	.2

The Purchaser covenants and agrees to indemnify and hold harmless the Vendor from and against:

	 
	a.

any and all losses, damages or deficiencies resulting from any misrepresentation, breach of warranty or non-fulfilment of any covenant on the part of the Purchaser under this agreement, or from any misrepresentation in or mission from any certificate or other instrument, furnished or to be furnished from the Company hereunder; and

	 
	b.

all actions, suits, proceedings, demands, assessments, judgments, costs and legal and other expenses incidental to any of the foregoing, the cause of action, subject matter, or basis of which arose after May 1, 2004.

	 
	                            

	                            and the Vendor may, on notice in writing to the Purchaser, settle such claims 

	                            and make any payment in relation thereof as the Vendor sees fit.

	 
	8.

SURVIVAL

	 
	.1

Notwithstanding any enquiry or investigation by the Purchaser, the representation and 

	            warranties of the Vendor contained in this agreement shall survive its closing of the 

	            transactions contemplated by this agreement and shall continue in full force for the 

	            benefit of the Purchaser thereafter.

	 
	9.

NON-COMPETITION

	 
	9.01

The Vendor shall not, for a period of Three (3) years from the Closing Date, individually or in partnership or jointly or in conjunction with any company / person as principal, agent, employee, contractor, landlord, consultant, supplier, lender, financier, shareholder, or in any other manner, directly or indirectly, engage in, carry on or provide services to, be employed by or have an interest in, or otherwise be concerned with any other business in Canada and the United States of America which offers services or sells products that compete with the services and products resulting from the Technology whatsoever.

	 
	10.                  TERMINATION 

	 
	a.

For Cause

	 
	       The Purchaser may terminate this agreement with out notice if the Vendor is involved in any  

	       offence of a civil or criminal nature  involving fraud, misrepresentation, misstatement, or 

	      dishonesty resulting in prosecution or litigation.

	 
	b.

By Default

	 
	The Vendor may terminate this agreement with 14 days notice if the Purchaser fails to meet any specified milestone with respect to development of the project or payment of royalties as outlined in Schedule A or Schedule B. Upon a default by the Purchaser any development of the project completed or in progress will revert back to the Vendor as penalty for the default. Extensions may be granted by the Vendor at the discretion of the Vendor in the amount of 30 days per extension. Upon such a default, ownership of the technology will revert back to the Vendor with out any requirement to refund any monies paid to it hereunder.

	 
	       c.             Voluntary

	 
	        The Purchaser may terminate the agreement on a voluntary basis with 14 days notice due to 

	        the fact that the purchaser can no longer proceed with the development of the project due to 

	        lack of financing or due to feasibility. In the case of lack of funding or feasibility any 

	        development completed or in progress will revert back to the Vendor as penalty for this 

	        voluntary termination. Additionally, the Vendor shall retain sole ownership of the 

	        technology with out any requirement to refund any monies paid to it hereunder.

	 
	11.

ENTIRE AGREEMENT

	 
	11.01

This agreement constitutes the entire agreement between the parties hereto relating to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no general or specific warranties, representations or other agreements by or among the parties in connection with the entering into of this agreement or the subject matter thereof except as specifically set forth herein.

	 
	 
	 
	 
	 
	12.

SEVERABILITY

	 
	12.01 If any provisions of this agreement are held unenforceable or invalid by a Court of competent jurisdiction, the parties hereto acknowledge and agree that the enforceability or validity of the remaining provisions shall not be affected thereby.

	 
	13.

JURISDICTION

	 
	13.01

This agreement shall be governed by and in construed accordance with the laws of the State of Nevada and the parties hereto hereby submit to the jurisdiction of the Courts of the State of Nevada.

	 
	14.

TIME OF THE ESSENCE

	 
	14.01 Time shall be of the essence in this agreement.

	 
	14.02 This agreement may be executed in counterpart and by facsimilie

	 
	15.

ENUREMENT

	 
	15.01

This agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

	 
	IN WITNESS WHEREOF THE PARTIES have hereunto set their hands and Corporate Seals, duly attested to be the hands of their properly authorized officers in their behalf on the day and year first above written.

	 
	Signed for and on behalf of

	3493734 MANITOBA LTD.

	By its authorized signatory

	 
	Per: 

	/S/ LARRY CHERRETT

	Authorized Signatory

	 
	SIGNED, SEALED AND DELIVERED

)

	By EMPIRICAL VENTURES, LTD. in the presence of:)

	)

	)

	Name

)

	)

	Address

)         Per: 

	)

/S/DEREK WARD

	Occupation

)

Derek Ward, President

	 
	 
	SCHEDULE "A"

	 
	 
	 
	"Net Sales Revenue":  all revenues, receipts, monies and the fair market value of all other considerations, directly or indirectly collected or received, whether by way of cash or credit or any barter, benefit, advantage, or concession received by the Company or its affiliate companies from marketing, manufacturing, sale, or distribution of the products that incorporate all or a portion of the Technology, world wide less the following:

	 
	(i)

trade and quantity discounts actually given to the purchasers thereof to a maximum discount of 60%;

	 
	(ii)

all government taxes customs and excise, sales and value added taxes and other charges or governmental fees of every nature or kind (except for taxes on or measured by income);

	 
	(iii)

transportation and insurance charges and commissions in connection with the sale of Products; and

	 
	(iv)

credit allowances or refunds given on account of returned goods, up to a maximum of 5% of Net Sales Revenue.

	 
	 
	 
	 
	 
	                                                      SCHEDULE “B”

	 
	 
	 
	Migrate all code from Windows 2000 to XP Professional and Longhorn

	 
	 
	150 hours                                                                       $52,500

	 
	 
	Upgrade Billing System

	 
	 
	100 hours                                                                       $35,000

	 
	 
	Upgrade Hotel Booking System

	 
	 
	200 hours                                                                      $70,000

	 
	 
	Upgrade Hotel and Event Conformation System

	 
	100 hours                                                                      $35,000

	 
	 
	Upgrade Airline Interconnect

	 
	 
	100 hours                                                                     $35,000

	 
	Enhance System Interface

	 
	 
	50 hours                                                                      $17,500

	 
	 
	Total Upgrades and New Programming                   $245,000

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