NON-EXCLUSIVE DISTRIBUTION AGREEMENT

1.

Products

(a)

Products Covered by this Agreement

The products covered by this Agreement are those products and accessories set forth in the attached Addendum A , together with the parts and components necessary for the repair and replacement thereof, and all modifications, improvements and developments pertaining thereto (collectively, the "Products"). Addendum A shall be amended automatically from time to time without any further act of the parties to delete any Products the sale of which has been generally discontinued by SUPPLIER. Products may also be added to this Agreement pursuant to Section 1(b) .

(b)

New Products

(1)

SUPPLIER shall submit to DISTRIBUTOR specifications and, where feasible, samples of each new product which SUPPLIER intends to manufacture. Within sixty (60) days after such submission, DISTRIBUTOR may acquire non-exclusive rights to promote, market, sell and distribute such new products, by advising SUPPLIER in writing that DISTRIBUTOR is electing to add such new products to the Products set forth in Addendum A.

(2)

Upon DISTRIBUTOR's election, in its sole discretion, not to promote, market, sell and distribute such new products on the terms and conditions of this Agreement, SUPPLIER shall be free to market such new products as it deems fit; provided, however, that SUPPLIER shall not at any time offer a third party the right to promote, market, sell and distribute new products on terms and conditions other than those set forth herein without first giving DISTRIBUTOR the opportunity, on sixty (60) days' prior notice, to accept such revised terms and conditions.

2.

Grant of Non-exclusive Distributorship

(a)

SUPPLIER hereby grants to DISTRIBUTOR, and DISTRIBUTOR hereby accepts, on the terms and conditions stated in this Agreement, the non-exclusive right during the term of this Agreement to promote, market, sell and distribute the Products throughout the United States.

(b)

Nothing in this Agreement shall prohibit DISTRIBUTOR from promoting, marketing, selling and distributing other articles, including ones that compete with the Products.

3.

Term and Renewal

The initial term of this Agreement shall begin on the date set forth on the signature page of this Agreement and shall continue for a period of thirty-six (36) months, and, unless earlier terminated as set forth in Section 12 or by either party at the expiration of the then current term upon not less than ninety (90) days' prior notice, shall thereafter renew automatically for additional and successive terms of one (1) year each.

4.

Price and Payment

The price to DISTRIBUTOR for the Products purchased pursuant to this Agreement shall be the applicable price for such Products as set forth in Addendum A. SUPPLIER may increase the prices for the Products no more than once in any calendar year by giving notice to DISTRIBUTOR at least ninety (90) days prior to the effective date of such change, which shall be on the first day of January; provided, that such price increases shall be limited to actual increases in SUPPLIER's costs; and provided further, that DISTRIBUTOR shall have the right to request and receive written explanation of the increased costs supporting such proposed price increases. Costing on new Products shall be determined based on SUPPLIER's cost, increased to reflect SUPPLIER's profit margin consistent with existing Products. Notwithstanding anything contained herein to the contrary, all pricing information regarding the Products shall be treated as "confidential" in accordance with Section 11 hereof.

5.

DISTRIBUTOR's Duties

DISTRIBUTOR shall:

(a)

Submit its order for Products on DISTRIBUTOR's standard purchase order form, via electronic data interchange or other method of electronic commerce. All purchase orders shall be governed only by the terms and conditions of this Agreement, notwithstanding any inconsistent preprinted terms or conditions appearing elsewhere on any other DISTRIBUTOR or SUPPLIER document.

(b)

Pay all invoiced amounts within thirty (30) days of receipt of the Products; provided, that DISTRIBUTOR shall be given a two percent (2%) discount thereon if all invoiced amounts are paid within ten (10) days of receipt.

(c)

Communicate to SUPPLIER any modifications, design changes or improvements respecting the Products suggested by any customer in writing.

(d)

Advertise, promote, market, sell and distribute the Products by methods which in the Supplier's and DISTRIBUTOR's sole judgment are best suited for the sale of the Products.

6.

SUPPLIER's Duties

(a)

Ship all Products as directed by DISTRIBUTOR in accordance with the following:

(1)

All Products shipped by SUPPLIER to DISTRIBUTOR, if applicable, shall be shipped FOB DiaSys US or DiaSys UK Destination, freight prepaid; via DISTRIBUTOR's specified carriers in accordance with DISTRIBUTOR's most recently published routing guides and shipping instructions. UPS or similar parcel-like shipments shall be shipped by SUPPLIER to DISTRIBUTOR via UPS Consignee Billing.

(2)

All Products shipped by SUPPLIER directly to DISTRIBUTOR's customers at DISTRIBUTOR's request; and where DISTRIBUTOR pays freight, shall be shipped in accordance with DISTRIBUTOR's most recently published routing guides and shipping instructions.

(3)

For all shipments, any applicable UPS accessorial charges shall be borne by the Distributor, per published UPS Tariffs.

(4)

Title and risk of loss of all Products will pass to DISTRIBUTOR upon SUPPLIER's delivery of such Products either directly to DISTRIBUTOR or DISTRIBUTOR's customers. Proof of delivery will be required upon DISTRIBUTOR's request.

(5)

SUPPLIER shall coordinate with DISTRIBUTOR or DISTRIBUTOR's customers in pursuing claims for loss or damage to Products in transit.

(6)

Any deviation from the delivery terms in this Section 6(a) must be agreed upon in writing by authorized representatives of both SUPPLIER's and DISTRIBUTOR's Transportation departments, respectively, prior to shipment. Failure by SUPPLIER to comply with DISTRIBUTOR's most recent published routing guides and shipping instructions may result in freight and administrative chargebacks.

(b)

Transfer good and marketable title to the Products, free and clear of any liens or encumbrances.

(c)

Pack, package, mark and otherwise prepare all Products for shipment in a manner which is in accordance with the standards of the International Safe Transit Association and good commercial practice, acceptable to common carriers for shipment, and adequate to insure their safe arrival at the named destination. SUPPLIER shall mark all containers with necessary lifting, handling and shipping information, purchase order number, date of shipment and the names of SUPPLIER and DISTRIBUTOR.

(d)

Promptly furnish to DISTRIBUTOR, when reasonably requested from time to time and at no cost, reasonable quantities of original factory outer cartons and packaging materials.

(e)

Submit invoices to DISTRIBUTOR with each shipment of Products which shall include: [purchase order numbers, Product numbers, descriptions of Products, quantities, unit price and complete bill to address for the Products so delivered.]

(f)

Properly and courteously resolve billing disputes with DISTRIBUTOR and provide DISTRIBUTOR with such information or assistance as DISTRIBUTOR may reasonably require to resolve billing disputes with its customers or freight claims with carriers.

(g)

Except as otherwise agreed, deliver Products to DISTRIBUTOR having at least six (6) months of shelf-life remaining from the date of delivery to their expiration dates.

(h)

Provide the warranties as set forth in Section 9.

(i)

Promptly refer to DISTRIBUTOR any inquiries or orders SUPPLIER may receive respecting the promotion, sale, marketing or distribution of the Products which are reasonably identifiable as having been generated by DISTRIBUTOR's advertising or sales promotion efforts.

(j)

During the term of this Agreement and for a period of [three (3)] years following its termination or expiration, procure and maintain, at its sole cost and expense, with insurers reasonably acceptable to DISTRIBUTOR, general comprehensive liability insurance covering each occurrence of bodily injury and property damage in an amount of not less than $2,000,000 combined single limit (or such other higher limits as DISTRIBUTOR may reasonably request) with endorsements for product and completed operations, blanket contractual liability, and broad form vendor's liability. Such policy of insurance shall name DISTRIBUTOR as an additional insured thereunder. SUPPLIER shall furnish to DISTRIBUTOR before shipment of any Products a certificate of insurance evidencing the foregoing endorsements, coverages and limits, and providing that such insurance shall not be cancelable or materially changed without at least thirty (30) days' prior written notice to DISTRIBUTOR.

(k)

Timely furnish DISTRIBUTOR, at no cost, with material safety data sheets and any other documentation reasonably necessary to enable DISTRIBUTOR to comply with any then prevailing applicable federal, state, municipal or local law, rule or regulation (collectively, "Laws") relating to the Products, reasonable quantities of SUPPLIER's sales literature, product insert sheets and customer instruction manuals and catalogs for each Product, and, upon request, suitable copy and photographs for use by DISTRIBUTOR in advertising and cataloging.

(l)

Comply (or cause compliance) in all material respects with any Laws applicable to the conduct of SUPPLIER's business or the manufacture, packaging, labeling and sale to DISTRIBUTOR of Products pursuant to this Agreement including, but not limited to, the following:

(1)

Immediately notifying DISTRIBUTOR upon becoming aware of any defect or condition (actual or alleged) which in any way may. alter the specifications or quality of any Products, render any Products in violation of any Laws including, without limitation, the Federal Food, Drug and Cosmetic Act, as amended from time to time, and the regulations issued thereunder (the "Act"), cause revocation of any regulatory approval with respect to any Products or their sale, give rise to a claim against DISTRIBUTOR by any third party, or otherwise negatively affect the salability of any Products.

(2)

Promptly notifying DISTRIBUTOR of any Products affected by holds or recalls, and reimburse DISTRIBUTOR for the full price paid for any Products returned to DISTRIBUTOR by a customer, or to SUPPLIER by DISTRIBUTOR, due to a

recall or other manufacturing defect, plus all taxes, transportation and other costs and expenses incurred by DISTRIBUTOR in the return thereof.

(m)

Assist DISTRIBUTOR's promotion activities including, without limitation, having SUPPLIER's personnel accompany DISTRIBUTOR's sales personnel on sales presentations at such times, at such places and with expenses allocated as may be agreed upon from time to time by DISTRIBUTOR and SUPPLIER. SUPPLIER's assistance shall focus particularly in promoting the technical features, capabilities and benefits of the Products. SUPPLIER shall also provide DISTRIBUTOR's customers from time to time with reasonable quantities of sample Consumable Products at no charge, and make demonstration Products owned by SUPPLIER available from time to time for demonstrations at the facilities of DISTRIBUTOR's customers, with not less than 30 days advance notice.

(n)

Develop and conduct training programs for DISTRIBUTOR's employees with respect to the Products at such times and places as may be agreed upon from time to time by DISTRIBUTOR and SUPPLIER, to be held in group presentations only.

(o)

Make any claims for unpaid invoices in writing within one (1) year of the date of SUPPLIER's first invoice for such amount. DISTRIBUTOR shall not be obligated to make payments for, or investigate, claims which are dated more than one (1) year prior to SUPPLIER's written claim or request for investigation.

(p)

During the term of this Agreement and for a period of three (3) years following its termination or expiration, keep and maintain in accordance with GAAP complete and accurate records, books of account, reports and other data related to SUPPLIER's sales of Products to DISTRIBUTOR during the prior three (3) year period.

(q)

Issue return goods authorizations without any restocking charges for Products purchased by DISTRIBUTOR as part of DISTRIBUTOR's initial stocking order, if such Products remain unsold by DISTRIBUTOR after a period of one (1) year from the date of SUPPLIER's invoice based upon written notification from Distributor.

(r)

Notify DISTRIBUTOR, in writing and no less than thirty (30) days prior to renewal, whenever SUPPLIER reduces DISTRIBUTOR's margin on Special Price Quotation (SPQ's) renewals.

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