Document:

Exhibit 10.1 HIV Barrel License, Marketing and Distribution Agreement

    
      
        
          

        

        
          
HIV
          Barrel License, Marketing and Distribution Agreement

        

          Execution
            Version

           

          

           

          

           

          

           

          

           

          

           

          

           

          

           

          

           

          HIV
            Barrel License, Marketing and Distribution Agreement

           

          Dated
            As Of

           

          September
            29, 2006

           

          Among

           

          Inverness
            Medical Innovations, Inc.

           

          And

           

          Chembio
            Diagnostic Systems, Inc.

           

          And

           

          StatSure
            Diagnostic Systems, Inc.

           

          

           

          

          
            
              
              

            

            
              
              

              
                

              

            

            
 

          

          Table
            of Contents

          
            
              	
                      1.
                         Definitions. 

                    	
                       
                        2

                    
	
                      1.1.
                         Certain
                        Definitions                 

                    	
                       
                        2

                    
	
                      1.2.
                         Additional
                        Definitions                    

                    	
                       
                        7

                    
	
                      2.
                         HIV
                        Barrel Product: Exclusive Licenses and Manufacturing and
                        Distribution
                        Arrangements.   

                    	
                       
                        8

                    
	
                      2.1.
                         Exclusive
                        Right to Manufacture                

                    	
                        8

                    
	
                      2.2.
                         Exclusive
                        Right to Purchase and Exploit     

                    	
                       
                        8

                    
	
                      2.3.
                         Exclusive
                        License to SDS Patents     

                    	
                      10

                    
	
                      2.4.
                         Exclusivity
                        an Essential Term     

                    	
                      10

                    
	
                      2.5.
                         Patent
                        Marking       

                    	
                      10

                    
	
                      2.6.
                         Treatment
                        of New HIV Barrel Product    

                    	
                      10

                    
	
                      2.7.
                         Inverness
                        Licenses  

                    	
                      11

                    
	
                      2.8.
                         Termination
                        of Licenses Upon Challenge of Validity  

                    	
                      11

                    
	
                      3.
                         Non-Competition;
                        Termination of Exclusivity.    

                    	
                      11

                    
	
                      4.
                         Limits
                        to Scope of Inverness Licenses     

                    	
                      13

                    
	
                      5.
                         Royalties
                        and Payments.       

                    	
                      13

                    
	
                      5.1.
                         Exclusive
                        Payment Arrangements     

                    	
                      13

                    
	
                      5.2.
                         Pricing
                        of HIV Products       

                    	
                      13

                    
	
                      5.3.
                         Inverness
                        Sale of HIV Barrel Products - Division of Net Sales  

                    	
                      14

                    
	
                      5.4.
                         Payment
                        of Cost of HIV
                        Products                      

                    	
                      14

                    
	
                      5.5.
                         Payment
                        by Inverness for Samples         

                    	
                      14

                    
	
                      5.6.
                         Royalties
                        Payable by Chembio on Inverness Lateral Flow Patents     

                    	
                      15

                    
	
                      5.7.
                         Reporting
                        and Calculation of Payments.     

                    	
                      15

                    
	
                      6.
                         Regulatory
                        and License Matters.      

                    	
                      17

                    
	
                      6.1.
                         Facility
                        Registration/Inspections      

                    	
                      17

                    
	
                      6.2.
                         Regulatory
                        Filings        

                    	
                      18

                    
	
                      6.3.
                         Authorization
                        for Sales in European Union    

                    	
                      18

                    
	
                      6.4.
                         Bio-Rad
                        Laboratories, Inc       

                    	
                      18

                    
	
                      7.
                         Manufacture
                        and Sale.       

                    	
                      19

                    
	
                      7.1 Chembio
                        Efforts        

                    	
                      19

                    
	
                      7.2 Forecasts         

                    	
                      19

                    
	
                      7.3 Purchase
                        Orders        

                    	
                      19

                    
	
                      7.4 Shipment
                        Terms        

                    	
                      19

                    
	
                      7.5 Acceptance         

                    	
                      20

                    
	
                      7.6 Sales
                        Effort         

                    	
                      20

                    
	
                      7.7 Inverness
                        Responsibilities; Rights      

                    	
                      20

                    
	
                      7.8 Marketing
                        Plans and Budgets      

                    	
                      20

                    
	
                      8.
                         Trademarks         

                    	
                      20

                    
	
                      8.1.
                         Trademark
                        License        

                    	
                      20

                    
	
                      8.2.
                         Compliance
                        with Law; Registration     

                    	
                      21

                    
	
                      8.3.
                         Termination         

                    	
                      21

                    
	
                      8.4.
                         Labeling         

                    	
                      21

                    
	
                      9.
                         Prosecution
                        and Enforcement of Licensed Intellectual Property. 

                    	
                      21

                    
	
                      9.1.
                         Prosecution         

                    	
                      21

                    
	
                      9.2.
                         Enforcement
                        of Licensed Patents      

                    	
                      21

                    
	
                      10.
                         Confidentiality.        

                    	
                      22

                    
	
                      10.1.
                         Limited
                        Disclosure and Use      

                    	
                      22

                    
	
                      10.2.
                         Exceptions         

                    	
                      22

                    
	
                      10.3.
                         Use
                        of Name; Disclosure of Terms of the Agreement   

                    	
                      22

                    
	
                      10.4.
                         Effect
                        of Termination       

                    	
                      23

                    
	
                      10.5.
                         Survival         

                    	
                      23

                    
	
                      11.
                         Representations;
                        Warranties.      

                    	
                      23

                    
	
                      11.1.
                         Corporate
                        Power        

                    	
                      23

                    
	
                      11.2.
                         No
                        Default or Violation       

                    	
                      23

                    
	
                      11.3.
                         Licensed
                        Intellectual Property      

                    	
                      23

                    
	
                      11.4.
                         Regulatory
                        Matters        

                    	
                      23

                    
	
                      11.5.
                         Product
                        Quality        

                    	
                      24

                    
	
                      11.6.
                         Exclusion
                        of Other Representations and Warranties   

                    	
                      24

                    
	
                      12.
                         Indemnification        

                    	
                      24

                    
	
                      12.1.
                         By
                        Manufacturers        

                    	
                      24

                    
	
                      12.2.
                         By
                        Sellers         

                    	
                      25

                    
	
                      12.3.
                         Notice
                        of Claims        

                    	
                      25

                    
	
                      12.4.
                         Disputes         

                    	
                      26

                    
	
                      13.
                         Term
                        and Termination.       

                    	
                      26

                    
	
                      13.1.
                         Term
                        of Agreement        

                    	
                      26

                    
	
                      13.2.
                         Material
                        Breach.        

                    	
                      26

                    
	
                      13.3.
                         Section
                        365(n); Agreement to Deliver Embodiments   

                    	
                      27

                    
	
                      13.4.
                         Effect
                        of Termination for Breach by Inverness    

                    	
                      28

                    
	
                      13.5.
                         Effect
                        of Termination for Breach by Chembio    

                    	
                      28

                    
	
                      13.6.
                         Sole
                        Remedy        

                    	
                      28

                    
	
                      13.7.
                         Survival         

                    	
                      28

                    
	
                      14.
                         Limitation
                        of Liability.       

                    	
                      29

                    
	
                      14.1.
                         Exclusion
                        of Liability for Certain Damages    

                    	
                      29

                    
	
                      14.2.
                         Limitation
                        on Liability for Direct Damages    

                    	
                      29

                    
	
                      15.
                         General.         

                    	
                      29

                    
	
                      15.1.
                         Waivers
                        and Amendments.      

                    	
                      29

                    
	
                      15.2.
                         Entire
                        Agreement        

                    	
                      30

                    
	
                      15.3.
                         Severability         

                    	
                      30

                    
	
                      15.4.
                         Relationship
                        of the Parties       

                    	
                      30

                    
	
                      15.5.
                         No
                        Election of Remedies       

                    	
                      30

                    
	
                      15.6.
                         Notices         

                    	
                      30

                    
	
                      15.7.
                         Governing
                        Law        

                    	
                      31

                    
	
                      15.8.
                         Dispute
                        Resolution        

                    	
                      31

                    
	
                      15.9.
                         Waiver
                        of Jury Trial        

                    	
                      31

                    
	
                      15.10.
                        Counterparts         

                    	
                      31

                    
	
                      15.11.
                        Assignment         

                    	
                      32

                    
	
                      15.12.
                        Force Majeure        

                    	
                      32

                    
	
                      15.13.
                        Further Assurances        

                    	
                      32

                    

            

          

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          HIV
            Barrel License, Marketing and Distribution Agreement

           

          PREAMBLE

           

          This
            HIV
            Barrel License, Manufacturing and Distribution Agreement (the “Agreement”)
            is
            made as of September 29, 2006 (“Effective
            Date”),
            between and among Chembio
            Diagnostic Systems, Inc.,
            a
Delaware
            corporation
            having its principal place of business at 3661 Horseblock Road, Medford,
            New
            York 11763, (“Chembio”),
            StatSure
            Diagnostic Systems, Inc.,
            a
            Delaware corporation having its principal place of business at One Clarks
            Hill,
            Framingham, MA 01702 (“SDS”),
            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, including HIV, and owns or
            has the
            right to grant licenses to a number of patents pertaining to HIV diagnosis,
            including the Inverness Lateral Flow Patents. Inverness asserts that
            the HIV
            Barrel Product is within the scope of the claims of the Inverness Lateral
            Flow
            Patents.

           

          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 the HIV Products (as herein
            defined) and has received approval of its 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.

           

          During
            the Term, Inverness wishes to be the exclusive worldwide marketer and
            distributor of the HIV Barrel Product and license the Inverness Lateral
            Flow
            Patents to Chembio for the purpose of manufacturing the HIV Barrel Product
            for
            sale by Inverness, and Chembio wishes to obtain such licenses to the
            extent such
            licenses are necessary.

           

          During
            the Term, Chembio also wishes to grant Inverness an exclusive worldwide
            license
            to market and sell the HIV Products, to the extent such license is required
            and,
            except as provided herein, to covenant not to manufacture the HIV Products
            for
            or sell the HIV Products to any Person other than Inverness in the applicable
            territory and Inverness wishes to obtain such license subject to such
            covenant.

           

          During
            the Term, SDS wishes to license the SDS Patents to Inverness on an exclusive
            basis for the sole purpose of allowing it to market and sell, to the
            extent such
            license is required, the HIV Barrel Product manufactured by Chembio exclusively
            for sale to Inverness and, except as otherwise provided herein, to covenant
            not
            to manufacture or sell products that compete with the HIV Barrel Product
            for
            diagnosis or detection of HIV infection for or to any Person and Inverness
            wishes to obtain such license subject to such covenant.

           

          
            
              
              

            

            
              1

              
                

              

            

            
              
              

            

          

          The
            Parties also intend to 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, including, but not limited to, a Joint
            Exploitation Agreement between SDS and Chembio pursuant to which SDS
            will grant
            a license to Chembio to manufacture HIV Barrel Products.

           

          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, SDS 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.

           

          (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)
            “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
            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 20 minutes, and (iv)
            is
            primarily designed to be used in a Point of Care environment or for self-testing
            by consumers.

           

          
            
              
              

            

            
              2

              
                

              

            

            
              
              

            

          

          (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 by, the use, sale, distribution, import
            or
            export of the HIV Products, whether now in existence or in the future,
            including
            but not limited to those as listed on Schedule A.

           

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

           

          (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.

           

          (j)
            “Costs”
            shall
            mean Chembio’s costs, calculated in accordance with GAAP and attributed on a
            per-unit-of-HIV Product basis, of manufacturing and shipping the HIV
            Products
            provided to Inverness hereunder, obtaining and maintaining regulatory
            approvals
            for the HIV Products to the extent set forth in Section 6.2,
            and
            obtaining and maintaining licenses from any Third Parties to manufacture,
            market, distribute or sell the HIV Products and the amortization over
            the period
            during which HIV 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 HIV Products are sold to Inverness. 

           

          (k)
            “Developing
            Countries”
shall
            mean those countries listed on Schedule O. 

           

          
            
              
              

            

            
              3

              
                

              

            

            
              
              

            

          

          (l)
            “Distributor”
shall
            mean any Third Party, other than an Affiliate of Inverness, to which
            Inverness
            grants a limited sublicense under the rights granted Inverness under
            Section 2.2
            and
2.3
            for the
            purpose of reselling or distributing HIV Products.

           

          (m)
            “Dual
            Path Platform”
shall
            mean Chembio’s technology as described in Schedule D.

           

          (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 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.

           

          (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)
            “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 E, together
            with
            any improvements thereto.

           

          (t)
            “HIV
            Cassette Product”
means
            the Chembio product currently known as HIV 1/2 STAT PAK(TM) as described
            in
            Chembio’s PMA on file with the FDA and further described in the HIV 1/2 STAT
            PAK(TM) package insert, Catalog #HIV 102, which is the subject of a Related
            Document.

           

          (u)
            “HIV
            Products”
means
            only any or all of the HIV Barrel Product and New HIV Barrel Product(s).
            

           

          (v)
            “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.
            

           

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

           

          
            
              
              

            

            
              4

              
                

              

            

            
              
              

            

          

          (x)
            “Inverness
            Trademarks”
shall
            mean the trademarks listed on Schedule G.

           

          (y)
            Net
            Sales.

           

          (i)
            “Net
            Sales”
shall
            mean, with respect to any HIV Product, the gross amount received by the
            seller
            or its Affiliates or Sublicensees on bona fide sales of such HIV 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 HIV 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 HIV 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
            HIV 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 amounts paid to Third Parties to allow the seller or its Affiliates
            or
            Sublicensees 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 HIV Product, its Affiliates and Sublicensees,
            maintained in accordance with GAAP, consistently
            applied.

           

          (ii)
            Bundling.
            In the
            event that any particular HIV Product is sold as part of a bundle or
            kit with
            products other than the HIV Product, the Net Sales allocated to such
            HIV 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 HIV 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 HIV Product (in each case as the average selling price is documented
            by
            Inverness 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 HIV Products shall be determined
            in a fair and equitable manner by mutual agreement of the parties.

           

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

           

          
            
              
              

            

            
              5

              
                

              

            

            
              
              

            

          

          (z)
            “New
            HIV Barrel Product”
means
            the patent pending HIV Barrel Product designed and developed by Chembio
            which
            contains absorbent material in the sample collection area and which is
            further
            described in Schedule H or any other new product in the Barrel Field
            for the
            diagnosis or detection of HIV antibodies.

           

          (aa)
            “New
            Chembio HIV Product”
shall
            mean any antibody detection assays designed or developed by Chembio that
            tests
            for HIV I or HIV II antibodies, including without limitation any HIV
            test
            incorporating the Dual Path Platform, but excluding any New HIV Barrel
            Product.

           

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

           

          (cc)
            “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.

           

          (dd)
            “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.

           

          (ee)
            “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.

           

          (ff)
            “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.

           

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

           

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

           

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

           

          
            
              
              

            

            
              6

              
                

              

            

            
              
              

            

          

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

           

          (kk)
            “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 or
            import of
            the HIV Barrel Products, whether in existence now or in the future, including
            but not limited to those listed in Schedule I.

           

          (ll)
            “SDS
            HIV Cassette Products”
shall
            mean any Point of Care diagnostic test for HIV antibodies that is outside
            the
            Barrel Field and is designed (i) to be read by the naked eye and (ii)
            primarily
            to be used in a Point of Care environment.

           

          (mm)
            “Specifications”
            shall
            mean the information contained in Schedule E regarding the HIV Barrel
            Product,
            together with any and all other related documentation or procedures in
            possession of Chembio that substantiate or support the information contained
            within Schedule E.

           

          (nn)
            “Sublicensee”
shall
            mean any sublicensee of any of the rights granted to Inverness under
            Section 2,
            other
            than an Affiliate or a Distributor.

           

          (oo)
            “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). 

           

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

           

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

           

          (rr)
            “Visual-Read
            HIV Test”
shall
            mean a rapid, non-digital diagnostic test for antibodies to HIV designed
            primarily to be read by the naked eye and to be used in a Point of Care
            environment. A “Visual-Read HIV Test” expressly excludes digital tests that
            include a reading device or integrated digital technology to aid in the
            interpretation or indication of the result.

           

          1.2.
            Additional
            Definitions

           

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

           

          
            
              
              

            

            
              7

              
                

              

            

            
              
              

            

          

          2.
            HIV
            Barrel Product: Exclusive Licenses and Manufacturing and Distribution
            Arrangements. 

           

          2.1.
            Exclusive
            Right to Manufacture

           

          .
            Inverness, on and subject to the terms and conditions contained herein,
            hereby
            grants to Chembio and Chembio hereby accepts from Inverness an exclusive
            worldwide license during the Term under the Inverness Lateral Flow Patents
            to
            manufacture the HIV Barrel Product solely for sale to Inverness. Chembio
            shall
            manufacture the HIV Barrel Product itself or may subcontract the manufacture
            of
            the HIV Barrel Product to the extent permitted by applicable law, but
            may not
            sublicense such manufacturing right.
            If
            Chembio subcontracts the manufacture of the HIV Barrel Product, Chembio
            shall
            enter into a written agreement with such manufacturer consistent with
            the terms
            of this Agreement and shall remain primarily liable for breach of this
            Agreement
            by the manufacturer.

           

          2.2.
            Exclusive
            Right to Purchase and Exploit

           

          .
            Chembio,
            on and subject to the terms and conditions contained herein, including,
            without
            limitation, Section 3(d)
            hereof,
            hereby grants to Inverness and Inverness hereby accepts from Chembio
            the
            exclusive right to purchase from Chembio and the exclusive right and
            license
            under any and all of the Chembio IP to Exploit, throughout the entire
            world,
            during the Term, the HIV Barrel Product and may do so 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.

           

          (a)
            Except as provided in Section 2.2(b),
            2.2(c),
            2.2(d),
            and
2.2(e),
            for so
            long as the right set forth in Section 2.2
            above
            remains exclusive, (i) each of Chembio and SDS shall not, by itself or
            with one
            or more Third Parties, manufacture, have manufactured or Exploit any
            consumable
            or other device, kit, composition or method that competes with the HIV
            Barrel
            Product; and (ii) Chembio shall not, by itself or with one or more Third
            Parties, manufacture, have manufactured or Exploit any consumable or
            other
            device, kit, composition or method that competes with any New Chembio
            HIV
            Product for which Inverness is granted the right of Exploitation pursuant
            to
            Section 2.2(c).
            This
            provision shall not be applicable to
            the
            HIV Cassette Product or the SDS HIV Cassette Product, both of which are
            the
            subject of a Related Document, nor does this provision restrict either
            Party in
            its product development activities. 

           

          (b)
            Inverness agrees that Chembio may engage in research and development
            efforts
            pertaining to a New HIV Barrel Product. In the event that Chembio wishes
            to
            otherwise Exploit a New HIV Barrel Product, Chembio shall offer to manufacture
            such New HIV Barrel Product for exclusive sale to Inverness and Inverness
            may,
            in its sole discretion, agree to include such New HIV Barrel Product
            as an HIV
            Barrel Product subject to this Agreement, in which event such New HIV
            Barrel
            Product will be treated as an HIV Barrel Product for all purposes of
            this
            Agreement. Chembio understands and agrees that should Inverness reject
            such
            inclusion of the New HIV Barrel Product, Chembio shall not Exploit the
            New HIV
            Barrel Product during the Term.

           

          
            
              
              

            

            
              8

              
                

              

            

            
              
              

            

          

          (c)
            In
            the event that Chembio wishes to Exploit a New Chembio HIV Product, Chembio
            shall provide Inverness with the first right of refusal on the right
            to market
            and distribute the New Chembio HIV Product worldwide. As such, Chembio
            shall not
            Exploit any New Chembio HIV Product unless Chembio has first provided
            Inverness
            with written notice of its desire to Exploit such Product. Such notice
            shall be
            accompanied by information relating to the New Chembio HIV Product reasonably
            necessary for Inverness to evaluate whether it wishes to market and distribute
            such product, including a product specification, performance data, and
            details
            of the cost and estimated availability for the New Chembio HIV Product.
            Within
            thirty (30) days after receipt of such notice, Inverness shall provide
            Chembio
            with written notice as to whether it wishes to negotiate marketing and
            distribution rights for the New Chembio HIV Product; if Inverness fails
            to
            provide such notice, Inverness’ right of first refusal shall lapse. If Inverness
            gives such notice, Chembio and Inverness shall negotiate in good faith
            for a
            period of at least 90 days (or such longer period as may be agreed in
            writing)
            and shall each use reasonable efforts to reach agreement as to the terms
            on
            which Inverness may market and distribute such New Chembio HIV Product.
            In the
            event that Inverness and Chembio fail to reach agreement by the end of
            such 90
            day period, Chembio may Exploit the New Chembio HIV Product itself, or
            may enter
            discussions with any Third Party for the purpose of allowing such Third
            Party to
            Exploit such New Chembio HIV Product, provided that Chembio shall not
            conclude
            any agreement with a Third Party for the Exploitation of a New Chembio
            HIV
            Product on terms that are materially more favorable than the terms offered
            to
            Inverness. If Chembio wishes to conclude such an agreement with a Third
            Party on
            materially more favorable terms, Chembio shall provide a written copy
            of such
            more favorable terms to Inverness. If, within 14 days after receipt of
            such more
            favorable terms Inverness provides written acceptance of such terms to
            Chembio,
            Chembio shall enter an agreement to Exploit the New Chembio HIV Product
            with
            Inverness on the more favorable terms. For the avoidance of doubt, Chembio’s
            right to Exploit the New Chembio HIV Product itself or with a Third Party
            pursuant to this paragraph (either because Inverness has allowed its
            first right
            of refusal to lapse or because the parties have failed to reach agreement
            on
            terms) shall not be construed, in the event that the New Chembio HIV
            Product
            infringes the Inverness Lateral Flow Patents, as a license to the Inverness
            Lateral Flow Patents.

           

          (d)
            Chembio represents and warrants that: (i) Chembio has previously granted
            licenses under the Chembio IP to, and/or entered into agreements regarding
            the
            HIV Barrel Product with, those companies and for those territories listed
            in
            Schedule K (the “Existing Chembio Agreements”); and (ii) complete and accurate
            copies of the Existing Chembio Agreements are set forth on Schedule K;
            and (iii)
            the Existing Chembio Agreements set forth the only licenses or rights
            Chembio
            has granted to any Third Party under the Chembio IP or related to the
            HIV Barrel
            Product. Subject to the truth of the foregoing representation and warranty,
            SDS
            and Inverness acknowledge the existence of the Existing Chembio Agreements.
            Chembio will use commercially reasonable efforts to terminate the Existing
            Chembio Agreements at the earliest time permitted thereunder without
            breach by
            Chembio.

           

          
            
              
              

            

            
              9

              
                

              

            

            
              
              

            

          

          (e)
            Inverness agrees that, for a period of up to one (1) year from the Effective
            Date, Chembio may manufacture the HIV Barrel Product and sell such HIV
            Barrel
            Product to Bio-Rad Laboratories, Inc. (“Bio-Rad”)
            for
            Exploitation of such product by Bio-Rad in Mexico, and only Mexico, and
            accordingly, Inverness hereby grants to Chembio a non-exclusive,
            royalty-bearing, license, under the Inverness Lateral Flow Patents, solely
            for
            the foregoing purpose, for a period of one (1) year from the Effective
            Date.
            Such license shall be subject to the payment of royalties by Chembio
            pursuant to
            Section 5.6.

           

          2.3.
            Exclusive
            License to SDS Patents

           

          .
            SDS,
            on
            and subject to the terms and conditions contained herein, including,
            without
            limitation, Sections 2.3(a) and 3(d)
            hereof,
            hereby grants to Inverness and Inverness hereby accepts a worldwide,
            exclusive
            (even with respect to SDS), royalty-bearing license, under any and all
            SDS
            Patents, to Exploit the HIV Barrel Products manufactured by Chembio
            hereunder.
            For
            clarity, no license is granted by SDS to Inverness to Exploit in any
            way any
            product other than the HIV Barrel Product manufactured by Chembio
            hereunder.

           

          (a)
            SDS
            represents and warrants that (i) SDS has previously granted licenses
            under the
            SDS Patents to those companies and for those territories listed in Schedule
            J
            (the “Existing
            SDS Agreements”);
            (ii)
            complete and accurate copies of the Existing SDS Agreements are set forth
            on
            Schedule J; and (iii) the Existing SDS Agreements are the only valid
            and
            existing licenses or rights SDS has granted to any Third Party under
            the SDS
            Patents that could be used for detection of HIV antibodies. Subject to
            the truth
            of the foregoing representation and warranty, Chembio and Inverness acknowledge
            the existence of the Existing SDS Agreements. SDS will use commercially
            reasonable efforts to terminate the Existing SDS Agreements at the earliest
            time
            permitted thereunder without breach by SDS.

           

          2.4.
            Exclusivity
            an Essential Term

           

          .
            Subject
            to Sections 2.2(d)
            and
2.3(a)
            hereof,
            the foregoing rights and licenses are exclusive to Inverness in connection
            with
            marketing, distributing and selling, and exclusive to Chembio in connection
            with
            manufacturing, and neither SDS nor Chembio shall utilize or practice,
            or grant
            any rights to any Third Party under the SDS Patents (in the case of SDS)
            or the
            Chembio IP (in the case of Chembio) in the Barrel Field. Chembio and
            SDS
            acknowledge and agree that such exclusivity is of critical importance
            to
            Inverness, and that without such exclusivity, Inverness would not have
            entered
            into this Agreement. 

           

          2.5.
            Patent
            Marking

           

          .
            Inverness
            will include the patent numbers of the SDS Patents and indicate SDS’s ownership
            of such patents on the packaging for all HIV Barrel Products, as set
            forth in
            Section 8.4.

           

          2.6.
            Treatment
            of New HIV Barrel Product

           

          .
            In the
            event that Inverness agrees to market a New HIV Barrel Product as an
            HIV Barrel
            Product as set forth in Section 2.2(b),
            SDS
            shall share in the revenues from such New HIV Barrel Product in accordance
            with
            Section 5.3
            on the
            same basis as the sharing of revenues from the HIV Barrel Product, provided
            that
            SDS either (i) acknowledges that the New HIV Barrel Product does not
            constitute
            an infringement of the SDS Patents, or (ii) agrees to include such New
            Barrel
            Product within the license granted to Inverness in Section 2.3
            and the
            license granted to Chembio in the Joint Exploitation Agreement.

           

          
            
              
              

            

            
              10

              
                

              

            

            
              
              

            

          

          2.7.
             Inverness
            Licenses

           

          .
            The
            parties acknowledge that contemporaneously herewith, Inverness is granting
            to
            each of SDS and Chembio, pursuant to separate agreements, a license with
            respect
            to the exploitation of the Inverness Lateral Flow Patents for certain
            uses other
            than HIV Barrel Products. It is understood that SDS and Chembio shall
            be
            entitled to receive copies of the agreements entered into by Inverness
            with the
            other Party and any amendments as if and when effected.

           

          2.8.
            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) SDS and Chembio each agrees not to Challenge
            any Patent
            Rights of Inverness or its Affiliates in the Inverness Lateral Flow Patents
            listed on Schedule F; (b) Inverness and Chembio each agrees not to Challenge
            the
            Patent Rights in the SDS Patents licensed hereunder, and (c) Inverness
            and SDS
            each 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
            Patent Rights in the SDS Patents licensed hereunder or any Patent Rights
            in the
            Chembio Listed Patents, or in the event that either SDS or Chembio Challenge
            any
            Patent Right of Inverness or its Affiliates in the Inverness Lateral
            Flow
            Patents listed on Schedule F, or SDS Challenges any Patent Rights in
            the Chembio
            Listed Patents or Chembio Challenges any Patent Rights in the SDS Patents
            licensed hereunder, 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. In the event that such termination arises: (a) due
            to
            Challenge by Inverness, Section 13.4
            shall
            apply; (b) due to Challenge by Chembio, Section 13.5
            shall
            apply; and (c) due to Challenge by SDS, the license set forth in Section
            2.3
            shall
            automatically become perpetual, irrevocable, fully paid-up and royalty
            free, and
            SDS shall no longer be entitled to any share of Net Sales of HIV Products
            pursuant to Section 5.3,
            which
            share of Net Sales shall be split equally between Chembio and Inverness.
            Each
            Party shall cause its Affiliates to refrain from any Challenge that the
            Party
            agrees not to make and the consequences of a Challenge by a Party’s Affiliate
            shall be the same as a Challenge by the Party itself. 

           

          3.
            Non-Competition;
            Termination of Exclusivity.

           

          (a)
            Subject to Section 3(c), during the Term, Inverness and its Affiliates
            shall not
            Exploit any Visual-Read HIV Test that detects antibodies to HIV I and/or
            HIV II
            in the Barrel Field. Inverness acknowledges and agrees that the exclusivity
            resulting from this Section is of critical importance to SDS and Chembio
            and
            that without such agreement not to compete, SDS and Chembio would not
            have
            entered into this Agreement.

           

          (b)
            The
            Inverness covenant not to compete set forth in Section 33
            shall
            not prevent Inverness from licensing any Inverness Lateral Flow Patent
            to any
            Third Party for any purpose, nor from manufacturing any diagnostic device
            outside the Barrel Field on behalf of itself or any Third Party. 

           

          
            
              
              

            

            
              11

              
                

              

            

            
              
              

            

          

          (c)
            The
            Inverness covenant not to compete set forth in Section 33
            shall
            not prevent Inverness or its Affiliates from competing with any HIV Product
            by
            Exploiting any product that is not a Visual-Read HIV Test in the Barrel
            Field (a
“Permitted
            Competing Product”). Without
            limitation of the foregoing, any Visual-Read HIV Test that does not fall
            within
            the Barrel Field, whether or not Exploitation of such Visual-Read HIV
            Test by a
            Third Party would infringe the Inverness Lateral Flow Patents, is a Permitted
            Competing Product. Inverness shall give SDS and Chembio written notice
            of its
            intention to Exploit a Permitted Competing Product. Such notice shall
            be given
            by Inverness by the later of: (i) 60
            days
            before such Permitted Competing Product is first shipped by Inverness
            to a US
            customer or distributor, and (ii) the time that Inverness is first able
            to give
            such notice without violation of applicable law, regulation, agreement,
            or the
            rules of any securities exchange on which its securities are listed,
            taking into
            account that such notice would be Confidential Information of Inverness
            hereunder.
            SDS and
            Chembio specifically acknowledge that nothing in this Agreement shall
            be
            construed as limiting Inverness’ right to acquire, develop, import, sell and/or
            manufacture Permitted Competing Products. 

           

          (d)
            At
            any time after receipt of notice from Inverness pursuant to Section 3(c)
            or after
            First Commercial Sale of a Permitted Competing Product, Chembio and SDS
            may by
            joint written Non-Exclusivity Notice to Inverness (a “Non-Exclusivity
            Notice”),
            convert Inverness’s exclusive right to distribute the HIV Product into a
            non-exclusive right.
            In the
            event that Chembio and SDS validly exercise their right to issue a
            Non-Exclusivity Notice, with effect from the giving of such notice Inverness
            shall grant and agrees to grant to Chembio and SDS a perpetual, non-exclusive,
            royalty-bearing, worldwide license, under the Inverness Lateral Flow
            Patents, to
            manufacture or have manufactured, and Exploit the HIV Product, with royalties
            of
            eight and one-half percent (8.5%) of Net Sales in the United States and
            five
            percent (5%) of Net Sales in the Rest of the World. This license may
            not be
            sublicensed or delegated, but shall be deemed to include a grant to SDS
            and
            Chembio of the right and license to sell through any Affiliate of Chembio
            and/or
            SDS and through Distributors of Chembio and/or SDS.

           

          (e)
            Notwithstanding anything in this Section 3
            to the
            contrary, Inverness’s continued sales outside the United States of products
            outside the Barrel Field for which a First Commercial Sale has been made
            as of
            the Effective Date of this Agreement, and improvements to such products,
            that
            compete with the HIV Products (whether or not they constitute Visual-Read
            HIV
            Tests and/or are within the scope of the claims of any of the Inverness
            Lateral
            Flow Patents) shall not trigger Inverness’s loss of exclusivity
            hereunder.

           

          (f)
            For
            the avoidance of doubt, Inverness may right to acquire, develop, import,
            sell
            and/or manufacture any competing product (whether or not a Permitted
            Competing
            Product) without loss of its exclusivity pursuant to Section 3(d)
            if
            Chembio breaches its obligation to supply Inverness’ requirements for HIV
            Products hereunder, but only during the period that such breach remains
            uncured.

           

          
            
              
              

            

            
              12

              
                

              

            

            
              
              

            

          

          4.
            Limits
            to Scope of Inverness Licenses

           

          (a)
            The
            parties acknowledge that: (a) the HIV Products may be divided into the
            “Existing
            Products”,
            meaning the HIV Barrel Product as it exists on the Effective Date, and
            the
“Future
            Products”,
            meaning the New HIV Barrel Product and any modifications to, or future
            versions
            of, the HIV Barrel Product or New HIV Barrel Product 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 F; (ii) any continuations
            and divisionals of the patents and patent applications on Schedule F;
            (iii) any
            continuations-in-part of the patents and patent applications on Schedule
            F 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. 

           

          (b)
            The
            Parties acknowledge that any licenses to the Inverness Lateral Flow Patents
            are
            subject to the limitation that the Charlton Lateral Flow Patents (as
            described
            on Schedule F) 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).

           

          5.
            Royalties
            and Payments.

           

          5.1.
            Exclusive
            Payment Arrangements

           

          .
            This
            Article 5
            describes the manner in which the Parties will share revenues derived
            from the
            sale of HIV Barrel Products. Except as otherwise set forth in Section
            13.4,
            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. 

           

          5.2.
            Pricing
            of HIV Products

           

          .
            Subject
            to the limitations set forth in this Article 5,
            each
            Party that sells any HIV Products hereunder may set the prices at which
            it sells
            such HIV Products in its sole and absolute discretion. 

           

          
            
              
              

            

            
              13

              
                

              

            

            
              
              

            

          

          5.3.
            Inverness
            Sale of HIV Barrel Products - Division of Net Sales

           

          (a)
            The
            Parties shall share Net Sales of HIV Barrel Products in accordance with
            the
            formula set forth on Schedule M. 

           

          (b)
            Notwithstanding Schedule M, in no event shall Chembio be required to
            supply HIV
            Products where the total return to Chembio and SDS (Costs and profit
            share)
            would be less than 115% of Costs, unless all three Parties agree. 

           

          (c)
            Shares of Net Sales will be separately calculated and reported on a quarterly
            basis, and not on an order-by-order basis.

           

          5.4.
            Payments
            for HIV Products

           

          .
            Inverness shall pay Chembio and SDS in accordance with the following
            procedure:

           

          (a)
            From
            the
            Effective Date until the end of the second full calendar quarter after
            the
            Effective Date, the parties agree that the estimated per-unit amount
            representing Chembio’s Costs for HIV Products to be supplied by Chembio to
            Inverness (“Deemed
            Cost”)
            shall
            be the amount set forth on Schedule N, and the estimated per-unit amount
            representing Inverness’ Net Sales for HIV Products sold by Inverness
            (“Deemed
            Price”)
            shall
            be the amount set forth on Schedule N. For the remainder of the Term,
            the Deemed
            Cost and Deemed Price shall be adjusted each quarter based on the actual
            per-unit Cost of HIV Products, and the actual per-unit Net Sales for
            HIV
            Products, in the latest quarter for which actual Costs and Net Sales
            have been
            reported pursuant
            to Section 5.7.

           

          (b)
            Each
            shipment of HIV Products by Chembio shall be accompanied by an invoice,
            in a
            form reasonably satisfactory to Inverness, for the HIV 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 HIV Barrel Product
            shipped by Chembio in accordance with this Agreement, Inverness shall
            pay, for
            such HIV Barrel Products: (i) to Chembio the Deemed Cost of such HIV
            Barrel
            Products, and any additional amount due to Chembio pursuant to Schedule
            M, based
            on the then-current Deemed Cost and Deemed Price; and (ii) to SDS, any
            amount
            due to SDS pursuant to Schedule M, based on the then-current Deemed Cost
            and
            Deemed Price.

           

          (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
            5.7.
            For
            purposes of these calculations, Cost of HIV Product will be matched to
            sales on
            a FIFO basis. 

           

          5.5.
            Payment
            by Inverness for Samples

           

          .
            Provided
            that actual Costs do not differ unreasonably from the Deemed Cost set
            forth
            herein, Inverness shall pay Chembio 110% of the Costs associated with
            the
            manufacture by Chembio of HIV Products that are used by Inverness for
            demonstrations, testing, clinical trials, sample and compassionate or
            similar
            use.

           

          
            
              
              

            

            
              14

              
                

              

            

            
              
              

            

          

          5.6.
            Royalties
            Payable by Chembio on Inverness Lateral Flow Patents

           

          .
            With
            respect to sales made by Chembio and its Affiliates pursuant to Sections
            2.2(e),
            3(d),
            and
13.4,
            Chembio
            shall pay Inverness a royalty of five percent (5%) of Net Sales of HIV
            Products
            sold by Chembio and its Affiliates in Developing Countries, and eight
            and
            one-half percent (8.5%) of Net Sales of HIV Products sold by Chembio
            and its
            Affiliates in the Rest of the World excluding Developing Countries. For
            the
            purposes of this paragraph, HIV Products are “sold” 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 HIV Products to a purchaser located in
            a
            non-Developing Country and Inverness shall charge the lower royalty rate
            if
            Chembio can reasonably demonstrate that its Distributor or purchaser
            located in
            a non-Developing Country has purchased goods for sale or distribution
            in a
            Developing Country.

           

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

           

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

           

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

           

          (d)
            The
            above royalties on HIV Products are not payable by Chembio with respect
            to HIV
            Products distributed by Inverness, for which the revenue sharing arrangements
            set forth in Section 5.3
            are the
            sole and exclusive payment arrangements between the parties.

           

          5.7.
            Reporting
            and Calculation of Payments.

           

          (a)
            For
            any calendar quarter for which payments under Section 5.3
            are due
            to Chembio and SDS, Inverness shall deliver to Chembio and SDS, within
            sixty
            (60) days after the end of such calendar quarter, reasonably detailed
            written
            accountings of Net Sales of the HIV Products during such calendar quarter.
            Such
            report shall indicate Net Sales on a country-by-country and HIV Product-by-HIV
            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 and SDS a complete and accurate
            accounting of all Costs and a determination of the cost per unit for
            all HIV
            Products sold to Inverness pursuant to this Agreement. The Costs reflected
            shall
            be the basis for adjustments to payments of Cost to Chembio pursuant
            to Section
5.4
            and the
            payment of profit shares to Chembio and SDS by Inverness pursuant to
            Schedule M.
            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.

           

          
            
              
              

            

            
              15

              
                

              

            

            
              
              

            

          

          (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 and SDS a report showing the calculation of the amounts
            due to
            Chembio and SDS pursuant to Schedule M, and any payments to be made hereunder.
            Such payments may be payable from either Inverness, SDS or Chembio, depending
            on
            whether Chembio and SDS have been underpaid or overpaid pursuant to the
            procedure set forth in Section 5.4.
            The
            Party due to make such payments shall make them 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 any Party hereunder
            shall be
            made from the United States in United States dollars by transfer to such
            bank
            account as such Party may designate. 

           

          (d)
            For
            any calendar quarter for which payments are due under Section 13.4(c)
            to
            Inverness, the Party owing such payment (the “Payer”)
            shall
            deliver to Inverness (the “Payee”),
            within forty-five (45) days after the end of such calendar quarter, reasonably
            detailed written accountings of Net Sales of the applicable products
            during such
            calendar quarter. Such report shall indicate Net Sales on a country-by-country
            and HIV Product-by-HIV Product basis, and the calculation of the amounts
            due to
            Chembio and SDS pursuant to Schedule M or royalty due to Inverness (if
            applicable) and payments to be made hereunder, with the amounts due to
            Chembio
            pursuant to Schedule M to be reduced by the amounts already paid to Chembio
            as
            Deemed Costs of HIV Products pursuant to Section 5.4.
            When
            the Payer delivers such accountings, it shall also deliver all payments
            due
            under this Agreement to the Payee or Payees 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 any Payee hereunder shall be made from the United States
            in United
            States dollars by transfer to such bank account as the Payee (as applicable)
            may
            designate.

           

          (e)
            Chembio shall keep complete and accurate records of the latest two (2)
            years of
            Costs of HIV Products sold to Inverness hereunder. For the sole purpose
            of
            verifying Costs to be reimbursed to Chembio, Inverness and SDS shall
            have the
            right once per calendar year to retain an independent certified public
            accountant, selected by Inverness and SDS 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 the Party requesting the Audit. Such
            Audit
            shall be completed within thirty (30) 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,
            SDS 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, the Party requesting the Audit shall be entitled
            to
            have Chembio pay the reasonable out-of-pocket costs incurred by SDS and/or
            Inverness to retain such independent certified public accountant to conduct
            such
            review.

           

          
            
              
              

            

            
              16

              
                

              

            

            
              
              

            

          

          (f)
            Each
            Payer shall keep complete and accurate records of the latest two (2)
            years of
            sales of HIV Products to which royalties or shares of Net Sales 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 thirty (30) 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 Payees. 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.

           

          5.8.
            Reimbursable
            Costs

           

          .
            During
            the term the Parties acknowledge that certain expenses may be incurred
            for which
            another Party has expressly assumed responsibility in this Agreement.
            In such
            circumstances, the responsible Party shall reimburse the Party that incurs
            the
            expenses within thirty (30) days after receipt of an invoice reflecting
            the
            amount of the expense incurred. The Parties will use their best efforts
            to
            quantify reimbursable expenses before they are incurred.

           

          6.
            Regulatory
            and License Matters.

           

          6.1.
            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 HIV 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 6.1
            shall
            relieve or diminish any of Chembio’s obligations hereunder.

           

          
            
              
              

            

            
              17

              
                

              

            

            
              
              

            

          

          6.2.
            Regulatory
            Filings

           

          .
            The
            parties agree to share responsibility for (1) obtaining and maintaining,
            and (2)
            paying for the obtaining and maintaining of, regulatory approvals required
            for
            the lawful distribution and sale of HIV Products in the applicable territories,
            as follows:

           

          (a)
            Chembio shall pay for all regulatory approvals in effect as at the Effective
            Date, including the costs of the CLIA waiver;

           

          (b)
            Chembio shall use commercially reasonable efforts to obtain, and shall
            pay for
            the costs of obtaining and maintaining, ISO 13.485 certification and
            CE marking
            for the HIV Products, provided that such costs of CE marking are commercially
            reasonable;

           

          (c)
            Inverness shall be responsible for obtaining and maintaining regulatory
            approvals (to the extent that such approvals have not already been obtained
            as
            at the Effective Date) for all countries other than the United States,
            provided
            that Chembio and SDS shall cooperate and provide supporting materials
            for such
            regulatory approvals as reasonably requested by Inverness, and Chembio
            and SDS
            shall bear their own costs of so doing;

           

          (d)
            the
            parties specifically acknowledge that they have not reached an agreement
            herein
            as to who shall be responsible for OTC regulatory costs, but do agree
            that they
            shall negotiate in good faith on the issue of which parties shall be
            responsible
            for obtaining and maintaining, and paying for the costs of obtaining
            and
            maintaining, regulatory approval for sale of HIV Products in the U.S.
            over-the-counter market.

           

          6.3.
            Authorization
            for Sales in European Union

           

          .
            Inverness,
            at its expense, with assistance of Chembio, shall use commercially reasonable
            efforts to prepare and submit an application for regulatory approval
            to
            distribute and sell the HIV Barrel Product in the European Union countries.
            Inverness shall seek similar authorization in the Rest of the World,
            to the
            extent Inverness deems such authorization appropriate in its reasonable
            commercial judgment, for the right to distribute and sell the HIV Barrel
            Product.

           

          6.4.
            Bio-Rad
            Laboratories, Inc.

           

          Inverness
            shall use reasonable commercial efforts to obtain and maintain licenses
            for any
            and all intellectual property necessary from Bio-Rad Laboratories Inc.
            to permit
            Inverness to Exploit the HIV Products, provided any license fees or royalties
            payable may be deducted from gross sales pursuant to sub-paragraph (vi)
            of the
            definition of “Net Sales” as set forth herein. Inverness is aware of the
            royalties requested by Bio-Rad Laboratories, Inc. and agrees that it
            will pay
            appropriate royalties if a license can be obtained.

           

          
            
              
              

            

            
              18

              
                

              

            

            
              
              

            

          

          7.
            Manufacture
            and Sale. 

           

          7.1 Chembio
            Efforts

           

          .
            Chembio
            shall use commercially reasonable efforts to manufacture the HIV Product
            and to
            supply all of Inverness’ requirements for such product, in accordance with the
            published specifications for each such HIV Product (the “Specifications”)
            and
            the supply requirements and limitations set forth in this Section 7.
            

           

          7.2  Forecasts

           

          .
            During
            the Term, Inverness shall provide Chembio, on a quarterly basis, with
            forecasts
            of Inverness’s anticipated orders for the HIV Barrel Product during the
            succeeding three (3) quarters. The initial forecast shall be produced
            and
            delivered by Inverness to Chembio by the later of 60 days after the Effective
            Date or 60 days after the CLIA waiver is obtained. 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. Chembio shall forward to SDS a copy of all
            forecasts received from Inverness within five (5) business days of receipt
            thereof.

           

          7.3 Purchase
            Orders

           

          .
            All
            sales
            and purchases of the HIV Barrel 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 HIV Barrel 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.
            Chembio
            shall forward to SDS a copy of all Purchase Orders or alternatives thereof
            within five (5) business days of receipt thereof. 

           

          7.4 Shipment
            Terms

           

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

           

          
            
              
              

            

            
              19

              
                

              

            

            
              
              

            

          

          7.5 Acceptance

           

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

           

          7.6 Sales
            Effort

           

          .
            Inverness shall use commercially reasonable efforts to launch, promote,
            develop
            a demand for the HIV Barrel Product, and to Exploit the HIV Barrel Products
            to
            the markets for which regulatory approvals have been obtained throughout
            the
            applicable territory and perform such responsibilities diligently, with
            the
            objective of maximizing the sales potential of those products and promoting
            the
            benefits thereof in the most commercially beneficial manner.

           

          7.7 Inverness
            Responsibilities; Rights

           

          .
            In
            connection with its responsibilities for distribution, marketing and
            sales of
            the HIV 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.

           

          7.8 Marketing
            Plans and Budgets

           

          .
            Inverness
            shall prepare proposed marketing and promotional plans for each of the
            HIV
            Products (as permitted in this Agreement), which shall include plans
            related to
            the prelaunch, launch, promotion and sales of the HIV Products and which
            shall
            include but not be limited to pricing strategy, sales targets, forecasts
            for the
            number of sales representatives, copies of promotional materials and
            a
            reasonably descriptive overview of the marketing and advertising campaigns
            proposed to be conducted (the "Marketing Plans"). Inverness shall review
            the
            proposed Marketing Plans with Chembio and SDS as soon as practicable
            after
            preparation and as frequently as may be required based upon Inverness’ usual
            marketing campaign cycles, but in no case less that once each calendar
            year
            during the Term. Inverness shall consider comments from Chembio and SDS
            on the
            Marketing Plans in good faith, but Chembio and SDS shall have no right
            of
            approval with respect to such Marketing Plans. Inverness shall meet with
            Chembio
            and SDS at their request but no more than on a quarterly basis to discuss
            sales
            activity and results in each market segment.

           

          8.
            Trademarks

           

          8.1.
            Trademark
            License

           

          .
            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
            HIV Products for sale to Inverness. All such use of the Inverness Trademarks
            shall inure to the benefit of Inverness. Chembio shall not use or alter
            such
            marks in a manner which may jeopardize or diminish Inverness’s rights to use
            them, and all notices of rights therein and all notices of any patent
            and/or
            patent pending rights to the HIV Products shall be clearly designated
            in all
            written materials in which such marks are used.

           

          
            
              
              

            

            
              20

              
                

              

            

            
              
              

            

          

          8.2.
            Compliance
            with Law; Registration

           

          .
            Chembio, in using Inverness’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.

           

          8.3.
            Termination

           

          .
            The
            license granted under Section 8.1
            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 HIV Products purchased prior to
            the
            termination of this Agreement.

           

          8.4.
            Labeling

           

          .
            Inverness
            shall develop, produce and provide all labeling for the HIV Products,
            subject to
            Chembio’s and SDS’ approval. All materials referring or relating to the HIV
            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 SDS Patents] owned by StatSure Diagnostic Systems, Inc.
            [address] and, if applicable, [patent no.s of Inverness Lateral Flow
            Patents]
            owned or licensed by Inverness Medical Innovations, Inc.” 

           

          9.
            Prosecution
            and Enforcement of Licensed Intellectual Property.

           

          9.1.
            Prosecution

           

          .
            The
            owner of Intellectual Property Rights (the “Patent
            Owner”)
            (for
            example, Inverness in the case of the Inverness Lateral Flow Patents,
            Chembio in
            the case of the Chembio IP and SDS in the case of the SDS Patents) 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.

           

          9.2.
            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 HIV 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.
            

           

          
            
              
              

            

            
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          10.
            Confidentiality.

           

          10.1.
            Limited
            Disclosure and Use

           

          .
            Each of
            Inverness, Chembio and SDS 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, 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. 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.

           

          10.2.
            Exceptions

           

          .
            The
            obligations set forth in Section 10.1
            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.

           

          10.3.
            Use
            of Name; Disclosure of Terms of the Agreement

           

          .
            Except
            as authorized in Section 8
            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 15.11),
            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.

           

          
            
              
              

            

            
              22

              
                

              

            

            
              
              

            

          

          10.4.
            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, provided, however, that each Party
            may
            retain copies of Confidential Information in which the Party has a licensed
            interest that survives termination (e.g., as provided in Section 13.4
            through
13.7).

           

          10.5.
            Survival

           

          .
            The
            confidentiality obligations set forth in this Section 10
            shall
            survive any termination or expiration of this Agreement in perpetuity
            .

           

          11.
            Representations;
            Warranties.

           

          11.1.
            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.

           

          11.2.
            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) except in the case of the Existing SDS Agreements and the Existing
            Chembio
            Agreements, 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.

           

          11.3.
            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. 

          

           

          11.4.
            Regulatory Matters

           

          .
            Chembio
            represents and warrants to Inverness that, at the time when HIV Products
            are
            delivered, it will have obtained regulatory approval under the Act which
            is
            required to permit Chembio to manufacture the HIV Products and sell the
            HIV
            Products to qualified customers in the United States professional market
            for use
            by such customers in accordance with and subject to the limitations contained
            within the information contained within Schedule E hereof and information
            related to the HIV Products that is listed by the FDA. Chembio represents
            and
            warrants that, with respect to the manufacture of the HIV Products, Chembio
            will
            comply with the requirements of the Act, and to the best of its knowledge,
            all
            other applicable federal and state laws.

           

          
            
              
              

            

            
              23

              
                

              

            

            
              
              

            

          

          11.5.
            Product
            Quality

           

          .
            Chembio
            represents and warrants that:

           

          (a)
            Each
            unit of HIV 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 HIV 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 HIV 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 HIV Product does not conform with a warranty
            set forth
            in Section 11.5(a)
            applicable thereto, Inverness or an Affiliate of Inverness may return
            such
            unit(s) of HIV 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 HIV 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 HIV Product, as the case
            may be,
            with an equivalent number of like unit(s) HIV Product, as the case may
            be,
            conforming with the applicable warranties set forth in Section 11.5(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.

           

          11.6.
            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.

           

          12.
            Indemnification

           

          12.1.
            By
            Manufacturers

           

          .
            Each
            Party that manufactures, either directly or through a contract manufacturer,
            any
            HIV Product hereunder (a “Manufacturer”)
            hereby
            agrees to indemnify, defend (using counsel selected by the Manufacturer
            which is
            reasonably acceptable to the other Parties) and hold harmless the other
            Parties,
            their 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 the
            Manufacturer contained in this Agreement; (ii) any Third Party claim
            of personal
            injury (including death) or property damage arising in connection with
            any HIV
            Product manufactured by or for the Manufacturer; (iii) any material failure
            by
            the Manufacturer to perform any of the covenants, agreements or obligations
            of
            the Manufacturer contained in this Agreement; or (iv) any Third Party
            claim
            alleging that the manufacture, use, sale, offer for sale, import or export
            of
            the HIV Products manufactured by or for the Manufacturer infringes the
            proprietary rights of the Third Party claimant.

           

          
            
              
              

            

            
              24

              
                

              

            

            
              
              

            

          

          12.2.
             By
            Sellers

           

          .
            Each
            seller of any HIV Product hereunder (a “Seller”)
            hereby
            agrees to indemnify, defend (using counsel selected by the Seller which
            is
            reasonably acceptable to the other Parties) and hold harmless the other
            Parties
            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 Parties 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 HIV Product,
            except to the extent covered by the Manufacturer’s defense and indemnification
            obligations under Section 12.1.

           

          12.3.
             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 12.3,
            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.

           

          
            
              
              

            

            
              25

              
                

              

            

            
              
              

            

          

          12.4.
            Disputes

           

          .
            In
            the
            event any Party to this Agreement makes a claim against another Party
            under this
            Section 12
            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 15.8.
            Upon
            resolution of any claim referred to in this Section 12,
            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.

           

          13.
            Term
            and Termination.

           

          13.1.
            Term
            of Agreement

           

          .
            Unless
            otherwise terminated as expressly provided herein, with respect to each
            HIV
            Product, the licenses granted and appointments made hereunder shall commence
            on
            the Effective Date and continue until May 31, 2016 (the “Term”),
            provided that any perpetual licenses granted herein shall continue for
            the
            duration of the Intellectual Property Rights in respect of which such
            licenses
            are granted.

           

          13.2.
            Material
            Breach.

           

          (a)
            If a
            Party:

           

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

           

          (ii)
            materially breaches this Agreement in a manner that can be cured and
            such 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

           

          (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 a substantial part of the Party’s assets, and such petition,
            assignment or appointment, if involuntary, is not dismissed or vacated
            within
            ninety (90) days (each an “Insolvency
            Event”),

           

          
            
              
              

            

            
              26

              
                

              

            

            
              
              

            

          

          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 14
            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 the rights of the breaching Party hereunder
            upon
            written notice to 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 15.8,
            and the
            cure period set forth in Section 13.2(a)(ii),
            which
            shall be reduced to 30 days, shall only commence upon a decision pursuant
            to
            Section 15.8
            that
            such breach has occurred. Notwithstanding the foregoing, if Chembio shall
            be
            enjoined from supplying HIV Products to Inverness because of a lawsuit
            regarding
            Intellectual Property Rights of a Third Party, or Inverness shall be
            enjoined
            from selling HIV 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. Notwithstanding
            the
            foregoing, the obligations of the breaching Party, including the licenses
            granted and appointments made hereunder to the non-breaching Parties
            shall
            continue unless both non-breaching Parties agree that such licenses and
            appointments shall terminate.

           

          (b)
            In
            the event of a material breach by Chembio, SDS shall have the right to
            cure such
            breach, and Chembio will fully cooperate with SDS, at its own cost, in
            such
            cure. 

           

          13.3.
            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. Chembio
            agrees during the term of this Agreement to create and maintain current
            copies
            or, if not amenable to copying, detailed descriptions or other appropriate
            embodiments, of all intellectual property and Technology used in the
            manufacture
            of the HIV Products (“Escrow
            Materials”).
            Chembio hereby grants to Inverness, with effect from the Effective Date,
            a
            non-exclusive, royalty-free, perpetual license under the Chembio IP to
            use the
            Escrow Materials to Exploit the HIV Products, and, if Chembio fails to
            supply
            HIV Products to Inverness as required by this Agreement, to manufacture
            and have
            manufactured the HIV Products; provided however that Inverness shall
            not
            exercise such license unless Chembio suffers an Insolvency Event. In
            the event
            that Inverness obtains the right to manufacture the HIV Products in accordance
            with this Agreement, Inverness shall be entitled to copies of all Escrow
            Materials. All rights, powers and remedies of the Inverness provided
            under this
            Section 13.3
            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 Chembio. 

           

          
            
              
              

            

            
              27

              
                

              

            

            
              
              

            

          

          13.4.
             Effect
            of Termination for Breach by Inverness

           

          .
            Upon
            any
            termination made in accordance with Section 13.2(a)(i)
            or
            (ii) by SDS or Chembio for breach by Inverness, including without limitation
            for
            breach of the non-competition obligation set forth in Section 3:

           

          (a)
            The
            license grants contained in Sections 2.2
            and 2.3,
            and the non-compete obligations in Section 2.2(a)
            and 3,
            shall terminate; 

           

          (b)
            Inverness may sell any inventory of HIV Products in its possession or
            control at
            the effective date of termination, but shall have no further right to
            Exploit
            the HIV Products; and

           

          (c)
            SDS
            and Chembio shall have a joint perpetual, irrevocable, non-transferable,
            non-exclusive, worldwide, license under the Inverness Lateral Flow Patents
            to
            Exploit the HIV Barrel Product themselves or through agreements with
            Third
            Parties, at a royalty of 8.5%
            of Net
            Sales in the United States and 5%
            of
            Net
            Sales in the Rest of the World, subject to the royalty payment limitations
            set
            forth in Section 5.6(a),
            5.6(b),
            and
5.6(c). 

           

          13.5.
            Effect
            of Termination for Breach by Chembio

           

          .
            Upon
            any
            termination made in accordance with Section 13.2(a)(i)
            and (ii) by Inverness for breach by Chembio:

           

          (a)
            The
            license grants contained in Sections 2.2
            shall
            automatically be expanded to permit Inverness to manufacture or have
            manufactured the HIV Product; such licenses in Section 2.2
            (as
            expanded as set forth in this Section 13.5(a))
            shall continue after termination and shall be perpetual and irrevocable,
            subject
            always to payment to SDS of its profit share in an amount equivalent
            to that set
            forth in Schedule M ((with “Cost” redefined to be Inverness’ costs as otherwise
            set forth in Section 1.1(j),
            and
            retention of such Cost by Inverness instead of payment of Cost to Chembio),
            and
            to payment to Chembio of royalties on HIV Products at a royalty of 8.5%
            of Net
            Sales in the United States and 5% of Net Sales in the Rest of the World;
            and

           

          (b)
            Chembio shall, at the written request of Inverness and at no cost to
            Inverness,
            provide copies of the Escrow Materials and all other technical information,
            including all Technology in the Chembio IP, reasonably necessary for
            Inverness
            to manufacture, have manufactured and Exploit the HIV Products.

           

          13.6.
            Sole
            Remedy

           

          .
            The
            parties acknowledge that the remedies set forth in Section 13.4
            shall be
            Inverness’ sole and exclusive liability, and Chembio’s and SDS’ sole and
            exclusive remedy, for any breach of Section 3
            by
            Inverness.

           

          13.7.
            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 2.8,
            3(d),
            5.7,
            8.3,
            9,
            10,
            12,
            13.3,
            13.4,
            13.5,
            13.6,
            14
            and
15 
            shall survive and shall continue in full force and effect in accordance
            with
            their respective terms.

           

          
            
              
              

            

            
              28

              
                

              

            

            
              
              

            

          

          14.
            Limitation
            of Liability.

           

          14.1.
            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 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. THIS SECTION 14
            SHALL
            NOT BE CONSTRUED TO LIMIT ANY PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION
12
            HEREOF.

           

          14.2.
            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 12
            HEREOF,
            EACH PARTY’S MAXIMUM AGGREGATE LIABILITY TO ALL OTHER PARTIES 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. 

           

          15.
            General.

           

          15.1.
            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.

           

          
            
              
              

            

            
              29

              
                

              

            

            
              
              

            

          

          15.2.
            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.

           

          15.3.
            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.

           

          15.4.
            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. 

           

          15.5.
            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.

           

          15.6.
            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

           

          
            
              
              

            

            
              30

              
                

              

            

            
              
              

            

          

          (b)
            if to
            SDS, to:

           

          StatSure
            Diagnostic Systems, Inc.

          One
            Clark’s Hill

          Framingham,
            MA 01702

          Attention:
            Chief Executive Officer

          Telecopier
            No.: (508) 872-2728

           

          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

          

          (c)
            if to
            Inverness, to: 

           

          Inverness
            Medical Innovations, Inc.

          51
            Sawyer
            Road,

          Waltham
            MA 02454 

          Attention:
            General Counsel’s office 

          

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

           

          15.7.
            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. 

           

          15.8.
            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  L to this Agreement. 

           

          15.9.
            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.

           

          15.10.
            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.

           

          
            
              
              

            

            
              31

              
                

              

            

            
              
              

            

          

          15.11.
            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.

           

          15.12.
            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.

           

          15.13.
            Further
            Assurances

           

          .
            Each
            Party hereto will, upon the request of any 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]

           

          

          
            
              
                

              

              
              

            

            
              32

              
                

              

            

            
              
              

              
              

            

          

          *
            *
            *

          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: 

           

          Inverness
            Medical Innovations, Inc.

           

          By: 

          Title: 

           

          [Signature
            page to HIV Barrel Marketing and Distribution Agreement]Exhibit 10.2 HIV Cassette License, Marketing and Distribution Agreement

    
      
        
          
            

          

          
            

          

          
            
              HIV
                Cassette License, Marketing and Distribution Agreement

            

          

          
            
              

                Execution
                  Version

                 

                

                 

                

                 

                HIV
                  Cassette 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. 

                            	
                               
                                2

                            
	
                              1.1.
                                Certain Definitions 

                            	
                               
                                2

                            
	
                              1.2.
                                Additional Definitions 

                            	
                               
                                7

                            
	
                              2.
                                HIV Cassette Product: Exclusive Licenses and Manufacturing
                                and
                                Distribution Arrangements. 

                            	
                               
                                7

                            
	
                              2.1.
                                Exclusive Right to Manufacture for United States
                                Sale 

                            	
                               
                                7

                            
	
                              2.2.
                                Exclusive Right to Purchase and Exploit in the United
                                States 

                            	
                               
                                7

                            
	
                              2.3.
                                Non-Exclusive License under Inverness Lateral Flow
                                Patents 

                            	
                               
                                8

                            
	
                              2.4.
                                Patent Marking 

                            	
                               
                                8

                            
	
                              2.5.
                                SDS Access 

                            	
                               
                                8

                            
	
                              2.6.
                                Termination of Licenses Upon Challenge of Validity 

                            	
                               
                                8

                            
	
                              3.
                                Termination of Exclusivity in event of Competition. 

                            	
                               
                                9

                            
	
                              4.
                                Limits to Scope of Inverness Licenses 1

                            	
                              10

                            
	
                              5.
                                Royalties and Payments. 

                            	
                              10

                            
	
                              5.1.
                                Exclusive Payment Arrangements 

                            	
                              10

                            
	
                              5.2.
                                Pricing of HIV Cassette Products 

                            	
                              10

                            
	
                              5.3.
                                Inverness Sale of HIV Cassette Products - Division
                                of Net
                                Sales 

                            	
                              11

                            
	
                              5.4.
                                Payment Mechanism for HIV Cassette Products Sold
                                by Inverness 

                            	
                              11

                            
	
                              5.5.
                                Royalties Payable by Chembio on Inverness Lateral
                                Flow Patents 

                            	
                              11

                            
	
                              5.6.
                                Payment by Inverness for Samples 

                            	
                              12

                            
	
                              5.7.
                                Reporting and Calculation of Payments.

                            	
                              12

                            
	
                              6.
                                Regulatory and License Matters. 

                            	
                              14

                            
	
                              6.1.
                                Facility Registration/Inspections 

                            	
                              14

                            
	
                              6.2.
                                Regulatory Filings 

                            	
                              14

                            
	
                              6.3.
                                Bio-Rad Laboratories, Inc 

                            	
                              15

                            
	
                              7.
                                Manufacture and Sale. 

                            	
                              15

                            
	
                              7.1 Chembio
                                Efforts 

                            	
                              15

                            
	
                              7.2 Forecasts 

                            	
                              15

                            
	
                              7.3 Purchase
                                Orders 

                            	
                              16

                            
	
                              7.4 Shipment
                                Terms 

                            	
                              16

                            
	
                              7.5 Acceptance 

                            	
                              16

                            
	
                              7.6 Sales
                                Effort 

                            	
                              16

                            
	
                              7.7 Inverness
                                Responsibilities; Rights 

                            	
                              16

                            
	
                              7.8 Marketing
                                Plans and Budgets 

                            	
                              17

                            
	
                              8.
                                Trademarks 

                            	
                              17

                            
	
                              8.1.
                                Trademark License 

                            	
                              17

                            
	
                              8.2.
                                Compliance with Law; Registration 

                            	
                              17

                            
	
                              8.3.
                                Termination 

                            	
                              17

                            
	
                              8.4.
                                Labeling 

                            	
                              17

                            
	
                              9.
                                Prosecution and Enforcement of Licensed Intellectual
                                Property. 

                            	
                              18

                            
	
                              9.1.
                                Prosecution 

                            	
                              18

                            
	
                              9.2.
                                Enforcement of Licensed Patents 

                            	
                              18

                            
	
                              10.
                                Confidentiality. 

                            	
                              18

                            
	
                              10.1.
                                Limited Disclosure and Use 

                            	
                              18

                            
	
                              10.2.
                                Exceptions 

                            	
                              19

                            
	
                              10.3.
                                Use of Name; Disclosure of Terms of the Agreement 

                            	
                              19

                            
	
                              10.4.
                                Effect of Termination 

                            	
                              19

                            
	
                              10.5.
                                Survival 

                            	
                              19

                            
	
                              11.
                                Representations; Warranties. 

                            	
                              20

                            
	
                              11.1.
                                Corporate Power 

                            	
                              20

                            
	
                              11.2.
                                No Default or Violation

                            	
                              20

                            
	
                              11.3.
                                Licensed Intellectual Property 

                            	
                              20

                            
	
                              11.4.
                                Regulatory Matters 

                            	
                              20

                            
	
                              11.5.
                                Product Quality 

                            	
                              20

                            
	
                              11.6.
                                Exclusion of Other Representations and Warranties 

                            	
                              21

                            
	
                              12.
                                Indemnification 

                            	
                              21

                            
	
                              12.1.
                                By Manufacturer 

                            	
                              21

                            
	
                              12.2.
                                By Sellers 

                            	
                              22

                            
	
                              12.3.
                                Notice of Claims 

                            	
                              22

                            
	
                              12.4.
                                Disputes 

                            	
                              23

                            
	
                              13.
                                Term and Termination

                            	
                              23

                            
	
                              13.1.
                                Term of Agreement

                            	
                              23

                            
	
                              13.2.
                                Material Breach 

                            	
                              23

                            
	
                              13.3.
                                Section 365(n); Agreement to Deliver Embodiments 

                            	
                              24

                            
	
                              13.4.
                                Effect of Termination for Breach by Inverness 

                            	
                              24

                            
	
                              13.5.
                                Effect of Termination for Breach by Chembio 

                            	
                              25

                            
	
                              13.6.
                                Survival 

                            	
                              25

                            
	
                              14.
                                Limitation of Liability

                            	
                              25

                            
	
                              14.1.
                                Exclusion of Liability for Certain Damages 

                            	
                              25

                            
	
                              14.2.
                                Limitation on Liability for Direct Damages 

                            	
                              26

                            
	
                              15.
                                General. 

                            	
                              26

                            
	
                              15.1.
                                Waivers and Amendments. 

                            	
                              26

                            
	
                              15.2.
                                Entire Agreement 

                            	
                              26

                            
	
                              15.3.
                                Severability 

                            	
                              26

                            
	
                              15.4.
                                Relationship of the Parties 

                            	
                              26

                            
	
                              15.5.
                                No Election of Remedies 

                            	
                              27

                            
	
                              15.6.
                                Notices 

                            	
                              27

                            
	
                              15.7.
                                Governing Law 

                            	
                              27

                            
	
                              15.8.
                                Dispute Resolution 

                            	
                              28

                            
	
                              15.9.
                                Waiver of Jury Trial 

                            	
                              28

                            
	
                              15.10.
                                Counterparts 

                            	
                              28

                            
	
                              15.11.
                                Assignment 

                            	
                              28

                            
	
                              15.12.
                                Force Majeure 

                            	
                              28

                            
	
                              15.13.
                                Further Assurances 

                            	
                              29

                            

                    

                  

                

                
                  
                    
                    

                  

                  
                    
                    

                    
                      

                    

                  

                  
                    
                    

                  

                

                

                 

                HIV
                  Cassette License, Marketing and Distribution Agreement

                 

                PREAMBLE

                 

                This
                  HIV
                  Cassette 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, including HIV, and
                  owns or has
                  rights to grant licenses to a number of patents pertaining to HIV
                  diagnosis,
                  including the Inverness Lateral Flow Patents. Inverness asserts
                  that the HIV
                  Cassette Product is within the scope of the claims of the Inverness
                  Lateral Flow
                  Patents.

                 

                Chembio,
                  among other things, is in the business of developing, marketing
                  and selling
                  products used to diagnose various diseases, including HIV, and
                  has designed and
                  developed the HIV Cassette Product, and has received approval of
                  its pre-market
                  application to the FDA for the HIV Cassette 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.

                 

                During
                  the Term, Inverness wishes to be the exclusive United States marketer
                  and
                  distributor of the HIV Cassette Product and to license the Inverness
                  Lateral
                  Flow Patents to Chembio for the purpose of manufacturing the HIV
                  Cassette
                  Product for sale by Inverness in the United States and to allow
                  Chembio to
                  manufacture, market and sell the HIV Cassette Product outside the
                  United States,
                  and Chembio wishes to obtain such licenses to the extent such licenses
                  are
                  necessary.

                 

                During
                  the Term, Chembio also wishes to grant Inverness an exclusive United
                  States
                  license to market and sell the HIV Cassette Products, to the extent
                  such license
                  is required and, as provided herein, to covenant not to manufacture
                  the HIV
                  Cassette Products for, or sell the HIV Cassette Products to, any
                  Person other
                  than Inverness in the United States and Inverness wishes to obtain
                  such license
                  subject to such covenant.

                 

                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

                    
                      

                    

                  

                  
                    
                    

                  

                

                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, such audit to be conducted
                  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 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 20 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
                  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.

                 

                
                  
                    
                    

                  

                  
                    2

                    
                      

                    

                  

                  
                    
                    

                  

                

                (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 by, the use, sale, distribution,
                  import or
                  export of the HIV Cassette Products, whether now in existence or
                  in the future,
                  including but not limited to those as listed on Schedule A.

                 

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

                 

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

                 

                (i)
                  “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.

                 

                (j)
                  “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.

                 

                (k)
                  “Costs”
                  shall
                  mean Chembio’s costs, calculated in accordance with GAAP and attributed on a
                  per-unit-of-HIV Cassette Product basis, of manufacturing and shipping
                  the HIV
                  Cassette Products provided to Inverness hereunder, obtaining and
                  maintaining
                  regulatory approvals for the HIV Cassette Products to the extent
                  set forth in
                  Section 6.2,
                  and
                  obtaining and maintaining licenses from any Third Parties to manufacture,
                  market, distribute or sell the HIV Cassette Products and the amortization
                  over
                  the period during which HIV Cassette 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 HIV Cassette Products are sold to Inverness.
                  

                 

                (l)
                  “Developing
                  Countries” means
                  those countries listed on Schedule J.

                 

                (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 2.3
                  for the
                  purpose of reselling or distributing HIV Cassette 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 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.

                 

                
                  
                    
                    

                  

                  
                    3

                    
                      

                    

                  

                  
                    
                    

                  

                

                (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)
                  “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, which is the subject of a Related
                  Document.

                 

                (t)
                  “HIV
                  Cassette Product”
means
                  the Chembio product currently known as HIV 1/2 STAT PAK(TM) as
                  described in
                  Chembio’s PMA on file with the FDA and further described in the HIV 1/2
                  STAT
                  PAK(TM) package insert, Catalog #HIV 102, attached hereto as Schedule
                  E,
                  together with any improvements thereto.

                 

                (u)
                  “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.

                 

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

                 

                (w)
                  “Inverness
                  Trademarks”
are
                  the
                  trademarks listed on Schedule F.

                 

                (x)
                  Net
                  Sales.

                 

                (i)
                  “Net
                  Sales”
shall
                  mean, with respect to any HIV Cassette Product, the gross amount
                  received by the
                  seller or its Affiliates or Sublicensees on bona fide sales of
                  such HIV Cassette
                  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 HIV Cassette
                  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 HIV Cassette 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 HIV Cassette 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 amounts paid to Third Parties
                  to
                  allow the seller or its Affiliates or Sublicensees 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 HIV Cassette Product, its Affiliates
                  and
                  Sublicensees, maintained in accordance with GAAP, consistently
                  applied.

                 

                
                  
                    
                    

                  

                  
                    4

                    
                      

                    

                  

                  
                    
                    

                  

                

                (ii)
                  Bundling.
                  In the
                  event that any particular HIV Cassette Product is sold as part
                  of a bundle or
                  kit with products other than the HIV Cassette Product, the Net
                  Sales allocated
                  to such HIV Cassette 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
                  HIV Cassette 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 HIV Cassette Product (in
                  each case as the
                  average sellling 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 HIV Cassette Products shall be determined in a fair
                  and equitable
                  manner by mutual agreement of the parties.

                 

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

                 

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

                 

                (z)
                  “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.

                 

                (aa)
                  “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.

                 

                (bb)
                  “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.

                 

                
                  
                    
                    

                  

                  
                    5

                    
                      

                    

                  

                  
                    
                    

                  

                

                (cc)
                  “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.

                 

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

                 

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

                 

                (ff)
                  “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 Non-Exclusive License, Marketing and Distribution
                  Agreement
                  between Chembio and Inverness, and the HIV Barrel License, Marketing
                  and
                  Distribution Agreement between Chembio and Inverness.

                 

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

                 

                (hh)
                  “Specifications”
                  shall
                  mean the information contained in Schedule D regarding the HIV
                  Cassette 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 E .

                 

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

                 

                (jj)
                  “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). 

                 

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

                 

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

                 

                
                  
                    
                    

                  

                  
                    6

                    
                      

                    

                  

                  
                    
                    

                  

                

                (mm)
                  “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.

                 

                (nn)
                  “Visual-Read
                  HIV Test”
shall
                  mean a rapid, non-digital diagnostic test for antibodies to HIV
                  designed
                  primarily to be read by the naked eye and to be used in a Point
                  of Care
                  environment. A “Visual-Read HIV Test” expressly excludes digital tests that
                  include a reading device or integrated digital technology to aid
                  in the
                  interpretation or indication of the result.

                 

                1.2.
                  Additional
                  Definitions

                 

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

                 

                2.
                  HIV
                  Cassette Product: Exclusive Licenses and Manufacturing and Distribution
                  Arrangements. 

                 

                2.1.
                  Exclusive
                  Right to Manufacture for United States Sale

                 

                .
                  Inverness, on and subject to the terms and conditions contained
                  herein, hereby
                  grants to Chembio and Chembio hereby accepts from Inverness an
                  exclusive license
                  during the Term under the Inverness Lateral Flow Patents to manufacture
                  the HIV
                  Cassette Product solely for sale to Inverness pursuant to this
                  Agreement.
                  Chembio shall manufacture the HIV Cassette Product itself or may
                  subcontract the
                  manufacture of the HIV Cassette Product to the extent permitted
                  by applicable
                  law, but may not sublicense such manufacturing right. In the event
                  Chembio
                  subcontracts its manufacturing right, Chembio shall enter a written
                  agreement
                  with such contractor consistent with the terms of this Agreement,
                  and Chembio
                  shall remain primarily liable for performance of this Agreement.

                 

                2.2.
                  Exclusive
                  Right to Purchase and Exploit
                  in the United States

                 

                .
                  Chembio,
                  on and subject to the terms and conditions contained herein, including,
                  without
                  limitation, Section 2.2(b)
                  hereof,
                  hereby grants to Inverness and Inverness hereby accepts from Chembio
                  the
                  exclusive right to purchase from Chembio and the exclusive right
                  and license
                  under any and all of the Chembio IP to Exploit, throughout the
                  United States,
                  during the Term, the HIV Cassette Product and may do so 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.

                 

                (a)
                  Subject
                  to Section 2.2(b)
                  hereof,
                  the foregoing rights and licenses are exclusive (even as to Chembio)
                  to
                  Inverness in connection with marketing, distributing and selling
                  in the United
                  States, and Chembio shall not itself Exploit, or grant any rights
                  to any Third
                  Party to Exploit, the HIV Cassette Product in the United States.
                  Chembio
                  acknowledges and agrees that such exclusivity is of critical importance
                  to
                  Inverness, and that without such exclusivity, Inverness would not
                  have entered
                  into this Agreement. 

                 

                (b)
                  Chembio represents and warrants that Chembio has not as at the
                  Effective Date
                  granted licenses under the Chembio IP with respect to, and/or entered
                  into
                  agreements regarding, the Exploitation of the HIV Cassette Product
in
                  the
                  United States.

                 

                
                  
                    
                    

                  

                  
                    7

                    
                      

                    

                  

                  
                    
                    

                  

                

                2.3.
                  Non-Exclusive
                  License under Inverness Lateral Flow Patents

                 

                .
                  Inverness,
                  on and subject to the terms and conditions contained herein, hereby
                  grants to
                  Chembio and Chembio hereby accepts a non-exclusive, royalty-bearing
                  license
                  during the Term, under the Inverness Lateral Flow Patents, to manufacture
                  and to
                  Exploit the HIV Cassette Products in the Rest of the World.
                  This
                  license: (i) may not be sublicensed or otherwise delegated without
                  Inverness’
prior written consent, which consent shall not be unreasonably
                  withheld; (ii)
                  includes the right for Chembio to subcontract the manufacture of
                  the HIV
                  Cassette Product, subject to the provisions of Section 2.1;
                  and
                  (iii) shall be deemed to include a grant to Chembio of the right
                  and license to
                  sell through any Affiliate of Chembio and through Distributors
                  of Chembio or of
                  any Affiliate of Chembio. 

                 

                (a)
                  Inverness and Chembio acknowledge that the license in this Section
2.3
                  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).

                 

                2.4.
                  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 HIV Cassette Products, as set forth in Section 8.4.

                 

                2.5.
                  SDS
                  Access

                 

                .
                  It
                  is
                  understood by the Parties that SDS shall not be entitled to receive
                  copies of
                  this agreement and any amendments as if and when effected.

                 

                2.6.
                  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 any 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 Patent Rights in the Chembio Listed Patents,
                  or Chembio
                  Challenges any Patent Rights in the 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.
                  In the
                  event that such termination arises: (a) due to Challenge by Inverness,
                  Section
13.4
                  shall
                  apply; (b) due to Challenge by Chembio, Section 13.5
                  shall
                  apply. Each Party shall cause its Affiliates to refrain from any
                  Challenge that
                  the Party agrees not to make and the consequences of a Challenge
                  by a Party’s
                  Affiliate shall be the same as a Challenge by the Party itself.

                 

                
                  
                    
                    

                  

                  
                    8

                    
                      

                    

                  

                  
                    
                    

                  

                

                3.
                  Termination
                  of Exclusivity in Event of Competition.

                 

                (a)
                  Chembio acknowledges that Inverness may Exploit any product that
                  competes with
                  the HIV Cassette Product, other than a Visual-Read HIV Test in
                  the Barrel Field
                  (a “Permitted
                  Competing Product”). Without
                  limitation of the foregoing, any Visual-Read HIV Test that does
                  not fall within
                  the Barrel Field, whether or not Exploitation of such Visual-Read
                  HIV Test by a
                  Third Party would infringe the Inverness Lateral Flow Patents,
                  is a Permitted
                  Competing Product. Inverness shall give Chembio written notice
                  of its intention
                  to Exploit a Permitted Competing Product. Such notice shall be
                  given by
                  Inverness by the later of: (i) 60 days before such Permitted Competing
                  Product
                  is first shipped by Inverness to a US customer or Distributor,
                  and (ii) the time
                  that Inverness is first able to give such notice without violation
                  of applicable
                  law, regulation, agreement, or the rules of any securities exchange
                  on which its
                  securities are listed.
                  Chembio
                  specifically acknowledge that nothing in this Agreement shall be
                  construed as
                  limiting Inverness’ right to acquire, develop, import, sell and/or manufacture
                  Permitted Competing Products. 

                 

                (b)
                  At
                  any time after receipt of notice from Inverness pursuant to Section
3(a),
                  or
                  after First Commercial Sale of a Permitted Competing Product ,
                  Chembio may
                  either:

                 

                (i)
                  by
                  written Non-Exclusivity Notice to Inverness (a “Non-Exclusivity
                  Notice”),
                  convert Inverness’s exclusive right to distribute the HIV Cassette Product in
                  the United States into a non-exclusive right,
                  in
                  which case the non-exclusive, royalty-bearing license set forth
                  in Section
2.3
                  shall
                  automatically be expanded to allow Chembio to manufacture the HIV
                  Cassette
                  Product for sale in the United States, and to appoint Third Party
                  Distributors
                  to Exploit the HIV Cassette Product in the United States, subject
                  to payment of
                  royalties as set forth in Section 5.5;
                  or

                 

                (ii)
                  by
                  written notice to Inverness, terminate the Cassette Agreement,
                  such termination
                  to take effect 60 days after written notice of termination is given,
                  in which
                  case Section 13.4
                  shall
                  apply.

                 

                (c)
                  Notwithstanding anything in this Section 3
                  to the
                  contrary, Inverness’s continued sales outside the United States of products for
                  which a First Commercial Sale has been made as of the Effective
                  Date of this
                  Agreement, and improvements to such products, that compete with
                  the HIV Cassette
                  Products (whether or not they constitute Visual-Read HIV Tests,
                  are in a
                  cassette format, and/or are within the scope of the claims of any
                  of the
                  Inverness Lateral Flow Patents) shall not trigger Inverness’s loss of
                  exclusivity hereunder.

                 

                (d)
                  For
                  the avoidance of doubt, Inverness will have the right to acquire,
                  develop,
                  import, sell and/or manufacture any competing product (whether
                  or not a
                  Permitted Competing Product) without loss of its exclusivity pursuant
                  to Section
3(b)
                  if
                  Chembio breaches its obligation to supply Inverness’ requirements for HIV
                  Cassette Products hereunder, but only for so long as any breach
                  remains
                  uncured.

                 

                
                  
                    
                    

                  

                  
                    9

                    
                      

                    

                  

                  
                    
                    

                  

                

                4.
                  Limits
                  to Scope of Inverness Licenses

                 

                (a)
                  The
                  parties acknowledge that: (a) the HIV Products may be divided into
                  the
“Existing
                  Products”,
                  meaning the HIV Cassette Product as it exists on the Effective
                  Date, and the
“Future
                  Products”,
                  meaning any modifications to, or future versions of, the HIV Cassette
                  Product
                  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 F; (ii) any
                  continuations
                  and divisionals of the patents and patent applications on Schedule
                  F; (iii) any
                  continuations-in-part of the patents and patent applications on
                  Schedule F 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.

                 

                (b)
                  The
                  Parties acknowledge that any licenses to the Inverness Lateral
                  Flow Patents are
                  subject to the limitation that the Charlton Lateral Flow Patents
                  (as described
                  on Schedule F) 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).

                 

                5.
                  Royalties
                  and Payments.

                 

                5.1.
                  Exclusive
                  Payment Arrangements

                 

                .
                  This
                  Article 5
                  describes the manner in which the Parties will share revenues derived
                  from the
                  sale of HIV Cassette Products. Except as set forth in Section 13.4,
                  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.

                 

                5.2.
                  Pricing
                  of HIV Cassette Products

                 

                .
                  Subject
                  to the limitations set forth in this Article 5,
                  each
                  Party that sells any HIV Cassette Products hereunder may set the
                  prices at which
                  it sells such HIV Cassette Products in its sole and absolute
                  discretion. 

                 

                
                  
                    
                    

                  

                  
                    10

                    
                      

                    

                  

                  
                    
                    

                  

                

                5.3.
                  Inverness
                  Sale of HIV Cassette Products - Division of Net Sales

                 

                (a)
                  The
                  Parties shall share Net Sales of HIV Cassette Products in accordance
                  with the
                  formula set forth in Schedule K.

                 

                (b)
                  In
                  the event that the Chembio Profit Share (the amount identified
                  by (iii) on
                  Schedule K) is less than 15% of Costs no sale shall occur unless
                  both parties
                  consent.

                 

                (c)
                  Shares of Net Sales will be separately calculated and reported
                  on a quarterly
                  basis, and not on an order-by-order basis.

                 

                5.4.
                  Payment
                  Mechanism for HIV Cassette Products Sold by Inverness

                 

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

                 

                (a)
                  For
                  the six months following the Effective Date, the parties agree
                  that the
                  estimated per-unit amount representing Chembio’s Costs for HIV Cassette Products
                  to be supplied by Chembio to Inverness (“Deemed
                  Cost”)
                  shall
                  be the amount set forth on Schedule L, and the estimated per-unit
                  amount
                  representing Inverness’ Net Sales for HIV Cassette Products sold by Inverness
                  (“Deemed
                  Price”)
                  shall
                  be the amount set forth on Schedule L. For the remainder of the
                  Term, the Deemed
                  Cost and Deemed Price shall be adjusted each quarter based on the
                  actual
                  per-unit Cost of HIV Cassette Products, and the actual per-unit
                  Net Sales for
                  HIV Cassette Products, in the latest quarter for which actual Costs
                  and Net
                  Sales have been reported pursuant to Section 5.7.

                 

                (b)
                  Each
                  shipment of HIV Cassette Products by Chembio shall be accompanied
                  by an invoice,
                  in a form reasonably satisfactory to Inverness, for the HIV Cassette
                  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 HIV Cassette
                  Product
                  shipped by Chembio in accordance with this Agreement, Inverness
                  shall pay
                  Chembio, for such HIV Cassette Products, the Deemed Cost of such
                  HIV Cassette
                  Products, and any additional amount due to Chembio pursuant to
                  Schedule K, based
                  on the then-current Deemed Cost and Deemed Price.

                 

                (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
5.7.
                  For
                  purposes of these calculations, Cost of HIV Cassette Product will
                  be matched to
                  sales on a FIFO basis. 

                 

                5.5.
                  Royalties
                  Payable by Chembio on Inverness Lateral Flow Patents

                 

                .
                  Chembio
                  shall pay Inverness royalties of: (a) five percent (5%) of Net
                  Sales of HIV
                  Cassette Products sold by Chembio and its Affiliates in Developing
                  Countries;
                  and (b) eight and a half percent (8.5%) of Net Sales of HIV Cassette
                  Products
                  sold by Chembio and its Affiliates in the Rest of the World excluding
                  Developing
                  Countries. For the purposes of this paragraph, HIV Cassette Products
                  are “sold”
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 HIV
                  Cassette
                  Products to a purchaser located in a non-Developing Country, and
Inverness
                  shall charge the lower royalty rate if Chembio can reasonably demonstrate
                  that
                  its Distributor or purchaser located in a non-Developing Country
                  has purchased
                  goods for sale or distribution in a Developing Country.

                 

                
                  
                    
                    

                  

                  
                    11

                    
                      

                    

                  

                  
                    
                    

                  

                

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

                 

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

                 

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

                 

                (d)
                  The
                  above royalties on HIV Cassette Products are not payable by Chembio
                  with respect
                  to HIV Cassette Products distributed by Inverness, for which the
                  revenue sharing
                  arrangements set forth in Section 5.3
                  are the
                  sole and exclusive payment arrangements between the parties.

                 

                5.6.
                  Payment
                  by Inverness for Samples

                 

                .
                  Inverness
                  shall pay Chembio 110% of the Costs associated with the manufacture
                  by Chembio
                  of HIV Cassette Products that are used by Inverness for demonstrations,
                  testing,
                  clinical trials, sample and compassionate or similar use.

                 

                5.7.
                  Reporting
                  and Calculation of Payments.

                 

                (a)
                  For
                  any calendar quarter for which payments under Section 5.3
                  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 HIV Cassette Products during such calendar quarter.
                  Such report
                  shall indicate Net Sales on a country-by-country and HIV Cassette
                  Product-by-HIV
                  Cassette 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 HIV
                  Cassette 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 Schedule K.
                  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 Schedule K, 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 5.4,
                  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.

                 

                
                  
                    
                    

                  

                  
                    12

                    
                      

                    

                  

                  
                    
                    

                  

                

                (d)
                  For
                  any calendar quarter for which payments are due under Section 5.5
                  or
                  Section 13.4(c)
                  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 HIV Cassette Products during such calendar quarter. Such
                  report shall
                  indicate Net Sales on a country-by-country and HIV Cassette Product-by-HIV
                  Cassette 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.

                 

                (e)
                  Chembio shall keep complete and accurate records of the latest
                  two (2) years of
                  Costs of HIV Cassette 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.

                 

                
                  
                    
                    

                  

                  
                    13

                    
                      

                    

                  

                  
                    
                    

                  

                

                (f)
                  Each
                  Party due to make payments based on Net Sales hereunder (“Payer”) shall keep
                  complete and accurate records of the latest two (2) years of sales
                  of HIV
                  Cassette Products to which royalties or shares of Net Sales attach
                  hereunder.
                  For the sole purpose of verifying payments due to the payee Party
                  (“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.

                 

                6.
                  Regulatory
                  and License Matters.

                 

                6.1.
                  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 HIV Cassette 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 6.1
                  shall
                  relieve or diminish any of Chembio’s obligations hereunder.

                 

                6.2.
                  Regulatory
                  Filings

                 

                .
                  Subject
                  to sub-paragraph (a) immediately below, 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 HIV
                  Cassette Products in the applicable territories, including the
                  costs of the CLIA
                  waiver for the HIV Cassette Product in the United States, provided
                  however that
                  Inverness acknowledges that Chembio is under no obligation to obtain
                  approval
                  for Over-The-Counter sales of the HIV Cassette Product in the United
                  States.

                 

                
                  
                    
                    

                  

                  
                    14

                    
                      

                    

                  

                  
                    
                    

                  

                

                (a)
                  In
                  the event that the FDA issues a regulation providing for the lawful
                  sale of the
                  HIV Cassette Product for Over-The-Counter uses in the United States,
                  Chembio may
                  issue Inverness a written notice requiring Inverness to decide
                  whether or not
                  Inverness wishes to pursue obtaining FDA approval to sell the HIV
                  Cassette
                  Product for Over-The-Counter uses in the United States, with costs
                  for obtaining
                  such approval to be shared equally between Inverness and Chembio.
                  Inverness
                  shall have until the last to occur of (i) 12 months after the FDA
                  formally
                  promulgates the relevant regulation, and (ii) three (3) months
                  after such notice
                  is given by Chembio (“Notice Response Period”), to respond to such notice by
                  informing Chembio whether it wishes to pursue such approval. If
                  Inverness fails
                  within the Notice Response Period to notify Chembio that it wishes
                  to pursue
                  Over-The-Counter approval for the HIV Cassette Product, Chembio
                  may pursue such
                  approval itself, at its own cost, and may Exploit the HIV Cassette
                  Product in
                  the Over-The-Counter market itself or through any Third Party Distributor;
                  in
                  such event, the Over-The-Counter market shall be excluded from
                  the exclusive
                  license granted by Chembio in Section 2.2,
                  and the
                  license granted by Inverness in Section 2.3
                  shall be
                  expanded to include the Over-The-Counter market in the United States,
                  subject
                  always to payment by Chembio of royalties as set forth in Section
5.5.

                 

                6.3.
                  Bio-Rad
                  Laboratories, Inc

                 

                .
                  Inverness
                  shall use reasonable commercial efforts to obtain and maintain
                  licenses for any
                  and all intellectual property necessary from Bio-Rad Laboratories
                  Inc. to permit
                  Inverness to Exploit the HIV Cassette Products in the United States,
                  provided
                  any license fees or royalties payable may be deducted from gross
                  sales pursuant
                  to sub-paragraph (vi) of the definition of “Net Sales” as set forth herein.
                  Inverness is aware of the royalties requested by Bio-Rad Laboratories,
                  Inc. and
                  agrees that it will pay appropriate royalties if a license can
                  be
                  obtained.

                 

                7.
                  Manufacture
                  and Sale. 

                 

                7.1 Chembio
                  Efforts

                 

                .
                  Chembio
                  shall use commercially reasonable efforts to manufacture the HIV
                  Cassette
                  Product and to supply all of Inverness’ requirements for such product, in
                  accordance with the published specifications for each such HIV
                  Cassette Product
                  (the “Specifications”)
                  and
                  the supply requirements and limitations set forth in this Section
7.
                  

                 

                7.2  Forecasts

                 

                .
                  During
                  the Term, Inverness shall provide Chembio, on a quarterly basis,
                  with forecasts
                  of Inverness’s anticipated orders for the HIV Cassette Product during the
                  succeeding three (3) quarters. The initial forecast shall be produced
                  and
                  delivered by Inverness to Chembio by the later of 60 days after
                  the Effective
                  Date or 60 days after the CLIA waiver is obtained. 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.

                 

                
                  
                    
                    

                  

                  
                    15

                    
                      

                    

                  

                  
                    
                    

                  

                

                7.3 Purchase
                  Orders

                 

                .
                  All
                  sales
                  and purchases of the HIV Cassette 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 HIV Cassette 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.

                 

                7.4 Shipment
                  Terms

                 

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

                 

                7.5 Acceptance

                 

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

                 

                7.6 Sales
                  Effort

                 

                .
                  Inverness shall use commercially reasonable efforts to launch,
                  promote, develop
                  a demand for the HIV Cassette Product, and to Exploit the HIV Cassette
                  Products
                  to the markets for which regulatory approvals have been obtained
                  in the United
                  States and perform such responsibilities diligently, with the objective
                  of
                  maximizing the sales potential of those products and promoting
                  the benefits
                  thereof in the most commercially beneficial manner.

                 

                7.7 Inverness
                  Responsibilities; Rights

                 

                .
                  In
                  connection with its responsibilities for distribution, marketing
                  and sales of
                  the HIV Cassette 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.

                 

                
                  
                    
                    

                  

                  
                    16

                    
                      

                    

                  

                  
                    
                    

                  

                

                7.8 Marketing
                  Plans and Budgets

                 

                .
                  Inverness
                  shall prepare proposed marketing and promotional plans for the
                  HIV Cassette
                  Products (as permitted in this Agreement), which shall include
                  plans related to
                  the prelaunch, launch, promotion and sales of the HIV Cassette
                  Products and
                  which shall include but not be limited to pricing strategy, sales
                  targets,
                  forecasts for the number of sales representatives, copies of promotional
                  materials and a reasonably descriptive overview of the marketing
                  and advertising
                  campaigns proposed to be conducted (the "Marketing Plans"). Inverness
                  shall
                  review the proposed Marketing Plans with Chembio as soon as practicable
                  after
                  preparation and as frequently as may be required based upon Inverness’ usual
                  marketing campaign cycles, but in no case less that once each calendar
                  year
                  during the Term. Inverness shall consider comments from Chembio
                  on the Marketing
                  Plans in good faith, but Chembio shall have no right of approval
                  with respect to
                  such Marketing Plans. Inverness shall meet with Chembio at their
                  request but no
                  more than on a quarterly basis to discuss sales activity and results
                  in each
                  market segment.

                 

                8.
                  Trademarks

                 

                8.1.
                  Trademark
                  License

                 

                .
                  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 in
                  connection with any advertisement and promotion of the HIV Cassette
                  Products
                  authorized hereunder. 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 HIV Cassette Products for
                  sale to
                  Inverness. 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
                  HIV Cassette Products shall be clearly designated in all written
                  materials in
                  which such marks are used.

                 

                8.2.
                  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.

                 

                8.3.
                  Termination

                 

                .
                  The
                  licenses granted under Section 8.1
                  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 HIV Cassette Products purchased
                  prior to
                  the termination of this Agreement.

                 

                8.4.
                  Labeling

                 

                .
                  Inverness
                  shall develop, produce and provide all labeling for the HIV Cassette
                  Products,
                  subject to Chembio’s approval. All materials referring or relating to the HIV
                  Cassette 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.”. 

                 

                
                  
                    
                    

                  

                  
                    17

                    
                      

                    

                  

                  
                    
                    

                  

                

                9.
                  Prosecution
                  and Enforcement of Licensed Intellectual Property.

                 

                9.1.
                  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.

                 

                9.2.
                  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 HIV Cassette 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.
                  

                 

                10.
                  Confidentiality.

                 

                10.1.
                  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.

                 

                
                  
                    
                    

                  

                  
                    18

                    
                      

                    

                  

                  
                    
                    

                  

                

                10.2.
                  Exceptions

                 

                .
                  The
                  obligations set forth in Section 10.1
                  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.

                 

                10.3.
                  Use
                  of Name; Disclosure of Terms of the Agreement

                 

                .
                  Except
                  as authorized in Section 8
                  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 15.11),
                  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.

                 

                10.4.
                  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, provided, however, that each
                  Party may
                  retain copies of Confidential Information in which the Party has
                  a licensed
                  interest that survives termination (e.g., as provided in Section
13.4
                  through
13.6).

                 

                10.5.
                  Survival

                 

                .
                  The
                  confidentiality obligations set forth in this Section 10
                  shall
                  survive any termination or expiration of this Agreement in perpetuity
                  .

                 

                
                  
                    
                    

                  

                  
                    19

                    
                      

                    

                  

                  
                    
                    

                  

                

                11.
                  Representations;
                  Warranties.

                 

                11.1.
                  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.

                 

                11.2.
                  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.

                 

                11.3.
                  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 of the Effective
                  Date will be
                  valid and enforceable. 

                 

                11.4.
                  Regulatory Matters

                 

                .
                  Chembio
                  represents and warrants to Inverness that, at the time when HIV
                  Cassette
                  Products are delivered, it will have obtained regulatory approval
                  under the Act
                  which is required to permit Chembio to manufacture the HIV Cassette
                  Products and
                  sell the HIV Cassette Products to qualified customers in the United
                  States
                  professional market for use by such customers in accordance with
                  and subject to
                  the limitations contained within the information contained within
                  Schedule D
                  hereof and information related to the HIV Cassette Products that
                  is listed by
                  the FDA. Chembio represents and warrants that, with respect to
                  the manufacture
                  of the HIV Cassette Products, Chembio will comply with the requirements
                  of the
                  Act, and to the best of its knowledge, all other applicable federal
                  and state
                  laws.

                 

                11.5.
                  Product
                  Quality

                 

                .
                  Chembio
                  represents and warrants that:

                 

                (a)
                  Each
                  unit of HIV Cassette 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 HIV Cassette 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
                  HIV Cassette
                  Product, at the time of delivery to Inverness, be an article which
                  may not,
                  under the Act, be introduced into interstate commerce. 

                 

                
                  
                    
                    

                  

                  
                    20

                    
                      

                    

                  

                  
                    
                    

                  

                

                (b)
                  In
                  the event any unit(s) of HIV Cassette Product does not conform
                  with a warranty
                  set forth in Section 11.5(a)
                  applicable thereto, Inverness or an Affiliate of Inverness may
                  return such
                  unit(s) of HIV Cassette 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 HIV
                  Cassette 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
                  HIV Cassette Product, as the case may be, with an equivalent number
                  of like
                  unit(s) HIV Cassette Product, as the case may be, conforming with
                  the applicable
                  warranties set forth in Section 11.5(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.

                 

                11.6.
                  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.

                 

                12.
                  Indemnification

                 

                12.1.
                  By
                  Manufacturer

                 

                .
                  Each
                  Party that manufactures, either directly or through a contract
                  manufacturer, any
                  HIV Cassette Product hereunder (a “Manufacturer”)
                  hereby
                  agrees to indemnify, defend (using counsel selected by the Manufacturer
                  which is
                  reasonably acceptable to the other Party) and hold harmless the
                  other Party, 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 the
                  Manufacturer contained in this Agreement; (ii) any third party
                  claim of personal
                  injury (including death) or property damage arising in connection
                  with any HIV
                  Cassette Product manufactured by or for the Manufacturer; (iii)
                  any material
                  failure by the Manufacturer to perform any of the covenants, agreements
                  or
                  obligations of the Manufacturer contained in this Agreement; or
                  (iv) any third
                  party claim alleging that the manufacture, use, sale, offer for
                  sale, import or
                  export of the HIV Cassette Products manufactured by or for the
                  Manufacturer
                  infringes the proprietary rights of the third party claimant.

                 

                
                  
                    
                    

                  

                  
                    21

                    
                      

                    

                  

                  
                    
                    

                  

                

                12.2.
                   By
                  Sellers

                 

                .
                  Each
                  seller of any HIV Cassette 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
                  HIV Cassette
                  Product, except to the extent covered by the Manufacturer’s defense and
                  indemnification obligations under Section 12.1.

                 

                12.3.
                   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 12.3,
                  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.

                 

                
                  
                    
                    

                  

                  
                    22

                    
                      

                    

                  

                  
                    
                    

                  

                

                12.4.
                  Disputes

                 

                .
                  In
                  the
                  event any party to this Agreement makes a claim against another
                  Party under this
                  Section 12
                  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 15.8.
                  Upon
                  resolution of any claim referred to in this Section 12,
                  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.

                 

                13.
                  Term
                  and Termination.

                 

                13.1.
                  Term
                  of Agreement

                 

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

                 

                13.2.
                  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, if involuntary, is not dismissed or
                  vacated within
                  ninety (90) days (each an “Insolvency
                  Event”),

                 

                
                  
                    
                    

                  

                  
                    23

                    
                      

                    

                  

                  
                    
                    

                  

                

                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 14
                  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 the rights of the breaching Party licensed
                  hereunder
                  upon written notice to breaching Party. Notwithstanding the foregoing,
                  the
                  obligations of the breaching Party, including the licenses granted
                  and
                  appointments made hereunder to the non-breaching Parties shall
                  continue unless
                  the non-breaching Party agrees that such licenses and appointments
                  shall
                  terminate. Notwithstanding
                  the foregoing, if Chembio shall be enjoined from supplying HIV
                  Cassette Products
                  to Inverness because of a lawsuit regarding Intellectual Property
                  Rights of a
                  Third Party, or Inverness shall be enjoined from selling HIV Cassette
                  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.

                 

                13.3.
                  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.
                  Chembio
                  agrees during the term of this Agreement to create and maintain
                  current copies
                  or, if not amenable to copying, detailed descriptions or other
                  appropriate
                  embodiments, of all intellectual property and Technology used in
                  the manufacture
                  of the HIV Cassette Products (“Escrow
                  Materials”).
                  Chembio
                  hereby grants to Inverness, with effect from the Effective Date,
                  a
                  non-exclusive, royalty-free, perpetual license under the Chembio
                  IP to use the
                  Escrow Materials to Exploit the HIV Products, and, if Chembio fails
                  to supply
                  HIV Products to Inverness as required by this Agreement, to manufacture
                  and have
                  manufactured the HIV Products; provided however that Inverness
                  shall not
                  exercise such license unless Chembio suffers an Insolvency Event.
In
                  the
                  event that Inverness obtains the right to manufacture the HIV Cassette
                  Products
                  in accordance with this Agreement, Inverness shall be entitled
                  to copies of all
                  Escrow Materials. All rights, powers and remedies of the Inverness
                  provided
                  under this Section 13.3
                  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 Chembio. 

                 

                13.4.
                   Effect
                  of Termination for Breach by Inverness

                 

                .
                  Upon
                  any
                  termination made in accordance with Section 3(b)(ii)
                  by
                  Chembio for sale of a Permitted Competing Product, or in accordance
                  with Section
13.2(a)
                  or
13.2(b)
                  by
                  Chembio for breach by Inverness:

                 

                (a)
                  The
                  license grants contained in Section 2.2,
                  and the
                  non-compete obligations in Section 3, shall terminate; 

                 

                
                  
                    
                    

                  

                  
                    24

                    
                      

                    

                  

                  
                    
                    

                  

                

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

                 

                (c)
                  on
                  and subject to the limitations set forth in this Agreement, Chembio
                  shall have a
                  perpetual, irrevocable, non-transferable, non-exclusive, license,
                  without right
                  to sub-license, under the Inverness Lateral Flow Patents to Exploit
                  the HIV
                  Cassette Product in the United States itself or through Third parties,
                  at a
                  royalty of 8.5% of Net Sales in the United States, subject to the
                  royalty
                  payment limitations set forth in 5.5(a),
                  5.5(b)
                  and
5.5(c).
                  

                 

                13.5.
                   Effect
                  of Termination for Breach by Chembio

                 

                .
                  Upon
                  any
                  termination made in accordance with Section 13.2(a)
                  or
13.2(b)
                  by
                  Inverness for breach by Chembio:

                 

                (a)
                  The
                  license grant contained in Sections 2.2
                  shall
                  automatically be expanded to permit Inverness to manufacture or
                  have
                  manufactured the HIV Cassette Product, and such licenses shall
                  continue after
                  termination and shall be perpetual and irrevocable, subject to
                  payment of
                  royalties of five percent (5%) of Net Sales in Developing Countries,
                  and eight
                  and a half percent (8.5%) of Net Sales in the Rest of the World
                  excluding
                  Developing Countries; and

                 

                (b)
                  Chembio shall, at the written request of Inverness and at no cost
                  to Inverness,
                  provide copies of all technical information, including all Technology
                  in the
                  Chembio IP, reasonably necessary for Inverness to manufacture,
                  have manufactured
                  and Exploit the HIV Cassette Products.

                 

                13.6.
                  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 5.7,
                  9,
                  10,
                  11.5(b),
                  12,
                  13.3,
                  13.4,
                  13.5,
                  13.6,
                  14
                  and
15 
                  shall survive and shall continue in full force and effect in accordance
                  with
                  their respective terms.

                 

                14.
                  Limitation
                  of Liability.

                 

                14.1.
                  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 14
                  SHALL
                  NOT BE CONSTRUED TO LIMIT ANY PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION
12
                  HEREOF.

                 

                
                  
                    
                    

                  

                  
                    25

                    
                      

                    

                  

                  
                    
                    

                  

                

                14.2.
                  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 12
                  HEREOF,
                  EACH PARTY’S MAXIMUM AGGREGATE LIABILITY TO THE OTHER PARTY SHALL IN NO EVENT
                  EXCEED THE AMOUNT OF $1 MILLION, WHETHER SUCH DAMAGES ARISE IN
                  CONTRACT, TORT
                  (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE. 

                 

                15.
                  General.

                 

                15.1.
                  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.

                 

                15.2.
                  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.

                 

                15.3.
                  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.

                 

                15.4.
                  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. 

                 

                
                  
                    
                    

                  

                  
                    26

                    
                      

                    

                  

                  
                    
                    

                  

                

                15.5.
                  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.

                 

                15.6.
                  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

                 

                (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.

                 

                15.7.
                  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. 

                 

                
                  
                    
                    

                  

                  
                    27

                    
                      

                    

                  

                  
                    
                    

                  

                

                15.8.
                  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  H to this Agreement. 

                 

                15.9.
                  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.

                 

                15.10.
                  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.

                 

                15.11.
                  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 other Party, which consent shall not
                  be
                  unreasonably withheld or delayed, provided,
                  however, that without
                  the consent of Chembio, 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.

                 

                15.12.
                  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.

                 

                
                  
                    
                    

                  

                  
                    28

                    
                      

                    

                  

                  
                    
                    

                  

                

                15.13.
                  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.

                 

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                  of this page intentionally left blank]

                 

                

                
                  
                    
                      

                    

                    
                    

                  

                  
                    29

                    
                      

                    

                  

                  
                    
                    

                    
                    

                  

                

                *
                  *
                  *

                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 HIV Cassette License, Marketing and Distribution Agreement]

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