Manufacturing Support Services Agreement

CONFIDENTIAL TREATMENT REQUESTED AS TO CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT 10.8 AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.





MANUFACTURING SUPPORT SERVICES AGREEMENT



dated as of June 30, 2005



by and among



ABBOTT JAPAN CO., LTD.



(" Abbott Japan ");



ABBOTT LABORATORIES



(" Abbott Laboratories ");



INVERNESS MEDICAL INNOVATIONS, INC.



(" Parent ");



INVERNESS MEDICAL SWITZERLAND GmbH



(" Inverness Switzerland ");



and



INVERNESS MEDICAL JAPAN, LTD.



(" Inverness Japan ")








TABLE OF CONTENTS



Article 1 DEFINITIONS

1.1 Definitions

1.2 Performance of Obligations by Affiliates

Article 2 MANUFACTURING

2.1 Manufacturing of Products

2.2 Manufacturing Services

2.3 Raw Materials

2.4 Import of Raw Materials

2.5 Testing

2.6 Storage

2.7 Product Changes

2.8 Expiration Dating

2.9 Certificate of Conformance

2.10 Product Branding

Article 3 OCCUPANCY FEE AND OTHER CHARGES

3.1 Occupancy Fee

3.2 Payment

3.3 Reimbursement of Variances

3.4 Payment of Material Cost Component of Inventory

3.5 No Security Interest

3.6 Reasonable Access and Dispute Procedures

Article 4 TRANSITION SERVICES

4.1 Transition Services

4.2 Payment

Article 5 HUMANITARIAN PROGRAM

5.1 Supply of Products for the Humanitarian Program

5.2 Ordering Procedure

5.3 Forecasts

5.4 Reporting

5.5 Purchase Price









5.6 Failure to Provide

5.7 Right of First Negotiation and Right of First Refusal

Article 6 REGULATORY COMPLIANCE AND MEDICAL COMPLAINTS

6.1 Representatives

6.2 Regulatory Compliance

6.3 Quality Agreement

6.4 Procedure for Adverse Information

6.5 Reagents

6.6 Transfer Program

Article 7 PRODUCT ACTIONS

7.1 Product Actions

7.2 Administration of Product Actions

Article 8 PATENTS AND TRADEMARKS

8.1 Buyer Trademarks

8.2 Seller Trademarks

8.3 Patent Infringement Defense

8.4 Cooperation

8.5 Covenant to Use Commercially Reasonable Efforts to Secure Rights

Article 9 REPRESENTATIONS AND WARRANTIES

9.1 Product Representations and Warranties

9.2 Product Replacement

9.3 General Representation and Warranties

9.4 Limitation of Representation and Warranties

Article 10 GENERAL INDEMNIFICATION

10.1 Inverness Japan92s Indemnification of Abbott Japan

10.2 Abbott Japan Indemnification of Inverness Japan

10.3 Indemnification Procedures

10.4 Insurance

10.5 Limitation of Liability

10.6 Sunset Provision




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Article 11 TERM AND TERMINATION

11.1 Term

11.2 Early Termination

11.3 Termination for Cause

11.4 Accrued Obligations

11.5 Additional Remedies for Breach

Article 12 CONSEQUENCES OF TERMINATION

12.1 Confidential Information Return

12.2 Transfer of Raw Materials and Products

Article 13 MISCELLANEOUS

13.1 Guarantee of Performance

13.2 Force Majeure

13.3 Relationship of the Parties

13.4 Assignment

13.5 Public Disclosure; Confidentiality

13.6 Binding Effect

13.7 Entire Agreement

13.8 Compliance with Applicable Laws

13.9 Governing Law

13.10 Dispute Resolution

13.11 Notices

13.12 Severability

13.13 Interpretation

13.14 Waiver or Modification of Agreement

13.15 Survival

13.16 Counterparts

13.17 Mutual Drafting

13.18 Expenses

13.19 No Third Party Beneficiaries

13.20 Conflicts

13.21 Headings




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Exhibits and Schedules



Exhibits

Exhibit A 96 Activities of Buyer
Exhibit B Manufacturing Support Services
Exhibit C 96 Transition Services
Exhibit D 96 Standard Labor and Overhead Cost and Standard Material Cost
Exhibit E 96 Quality Agreement
Exhibit F 96 Final Transition Services

Schedules

Schedule 1.1(a) 96 Adjusted Price per Unit
Schedule 1.1(b) 96 Product Specifications









MANUFACTURING SUPPORT SERVICES AGREEMENT



THIS MANUFACTURING SUPPORT SERVICES AGREEMENT (this " Agreement ") is made this 30 th day of June 2005 (the " Effective Date "), by and among Abbott Japan Co., Ltd., a Japanese corporation (" Abbott Japan "); and Abbott Laboratories, an Illinois corporation (" Abbott Laboratories " and together with Abbott Japan, " Seller "), on the one hand, and Inverness Medical Innovations, Inc., a Delaware corporation (" Parent "); Inverness Medical Switzerland GmbH, an entity organized under the laws of Switzerland (" Inverness Switzerland ") and Inverness Medical Japan, Ltd., an entity organized under the laws of Japan (" Inverness Japan " and, together with Parent and Inverness Switzerland, " Buyer "), on the other hand.





W I T N E S S E T H:



WHEREAS, Seller, Abbott Cardiovascular and Buyer have executed an asset purchase agreement, pursuant to which Seller shall sell and assign to Buyer, and Buyer shall purchase and assume from Seller, certain assets and liabilities relating to the design, development, manufacturing, registration, marketing, distribution and sale of the Product Line (the " Asset Purchase Agreement ");





WHEREAS, in accordance with the Asset Purchase Agreement, at the Closing Abbott Japan shall transfer the Japanese Employees dedicated to the manufacturing of the Product Line and the Equipment to Inverness Japan;





WHEREAS, due to the requirements of the regulatory Laws of Japan and for other commercial reasons, Inverness Japan cannot be the responsible legal entity for the manufacturing of the Product Line as of the Closing Date; and





WHEREAS, in order to facilitate a smooth transition of the manufacturing of the Products at a different manufacturing location within a reasonable time period, Abbott Japan is willing to continue to be the responsible entity under the terms of the Manufacturing Site License and to perform certain manufacturing support services and transition services for Inverness Japan.





NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and upon the terms and subject to the conditions set forth below, Seller and Buyer hereby agree as follows:








ARTICLE 1
DEFINITIONS



1.1 Definitions . All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Asset Purchase Agreement. The following words and phrases, when used herein with initial capital letters, shall have the meanings set forth or referenced below:



" Additional Term " has the meaning set forth in Section 11.1 .



" Adjusted Price per Unit " means the price per unit set forth in Schedule 1.1(a) as adjusted annually by the CPI.



" Affiliate " means, with respect to any Person, any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person; provided , however , that for the avoidance of doubt and subject to the following sentence, the term "Affiliate" shall exclude, with respect to Abbott Japan, TAP Pharmaceuticals Inc., a Delaware corporation, TAP Finance Inc., a Delaware corporation and TAP Pharmaceuticals Products Inc., a Delaware corporation and, with respect to Buyer, PBM-Selfcare LLC, a Delaware limited liability company. For purposes of this definition, a Person shall be deemed to control another Person if it owns or controls more than 50% of the voting equity of the other Person (or other comparable ownership if the Person is not a corporation).



" Alternative Product " means the design, development, manufacturing, registration, marketing, distribution and sale of single use disposable test strips to test for Additional Assay Capabilities.



" Applicable Law " means each provision of any currently existing federal, state, local or foreign, civil and criminal law, statute, ordinance, order, code, rule, regulation or common law, promulgated or issued by any Governmental Authority, as well as any judgments, decrees, injunctions or agreements issued or entered into by any Governmental Authority.



" Business Day " means any day other than a day, which is Saturday or Sunday, or other day on which commercial banks in Tokyo, Japan are authorized or required to remain closed.



" Buyer Intellectual Property Rights " means all Intellectual Property Rights and other information used to conduct the manufacturing of the Products and the Distribution Activities which are owned or licensed by, or to which Buyer otherwise has rights, as well as all know-how and trade secrets relating to the use, sale or importation of the Products.



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" Buyer Trademarks " means Buyer92s trademarks, trade names, service marks and logos and all derivations of the foregoing, including Buyer92s proprietary designations for the Products.



" cGMP " means the manufacture of the Products in accordance with the quality systems and good manufacturing practices for medical devices required by the Regulatory Authority in which the Manufacturing Facility is located.



" Claims " has the meaning set forth in Section 10.1 .



" CPI " means the yearly average Consumer Price Index (CPI) published by the Ministry of Internal Affairs and Communications of Japan in December of each calendar year.



" Defective Products " has the meaning set forth in Section 9.2 .



" Field Correction " has the meaning set forth in Section 7.1 .



" HIV Alternative Product " means the design, development, manufacturing, registration, marketing, distribution and sale of single use disposable test strips that test for HIV 1-2 along with new strains of HIV not tested by the Products as of the Closing Date.



" Humanitarian Program " means (i) a sale or donation of Determine ae HIV 1-2 or, subject to the provisions of Sections 2.9 and 2.10 of the Supply of Products for the Humanitarian Program Agreement and Sections 5.6 and 5.7 , any similar test products that operate in a Rapid Manner for the detection of any infectious diseases (including HIV and hepatitis) in any of the Least Developed Countries for humanitarian purposes by Seller and its Affiliates provided that such product is not bundled with other products of Seller and its Affiliates other than for humanitarian purposes or sold as a loss leader or as an inducement to purchase other products of Seller and its Affiliates, or (ii) any research and development conducted by Seller, an Affiliate of Seller or any other Person relating to the operation of test products that operate in a Rapid Manner for the detection of infectious diseases (including HIV and hepatitis) for use in any of the Least Developed Countries, in each case as part of the Global Care Initiatives and HIV surveillance programs of Seller and its Affiliates. Notwithstanding the foregoing, for the period from the Closing Date through the 5th anniversary of the Closing Date (or, if not enforceable in any country for such period or for any other reason, for the period or otherwise to the maximum extent as shall be enforceable in such country), Seller and its Affiliates shall not engage in any filing or submission necessary or appropriate to obtain any technical, medical, scientific, labeling or similar license, registration, authorization, permit or approval for the Products outside the Least Developed Countries under the Humanitarian Program.



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" Initial Term " has the meaning set forth in Section 11.1 .



" Intellectual Property Rights " means all US and foreign invention disclosures, patents, pending patent applications, including all continuations, continuations-in-part, divisions, reissues, reexaminations, additions, substitutions, extensions, whether US or foreign, including all registrations, pending applications or common law rights, whether US or foreign equivalents, all trademarks, all trade names and trade dress, and all copyrights, all works of authorship, all trade secrets and all know-how whether or not registered and all inventions.



" Line 2 Equipment " means that equipment on any second line of manufacture which Inverness Japan adds to its manufacturing plant dedicated to the manufacture of the Products following the Closing Date.



" Manufacturing Facility " means the approximately 19,250 square feet of primary space located in Abbott Japan92s MP II manufacturing facility in Matsudo.



" Manufacturing Support Services " has the meaning set forth in Section 2.2 .



" Material Cost Component of Inventory " means the value of units of inventory on-hand, used in production or sold, multiplied by the standard cost of its component raw materials, labels and packaging materials valued at the standard as per the BPCS system in Matsudo, Japan as of December 1, 2004; provided , however , that during the Term, Seller and its Affiliates shall supply Reagents at a price equal to the **** Costs per unit plus ****%.



" Occupancy Fee " has the meaning set forth in Section 3.1 .



" Party " means Abbott Laboratories, Abbott Japan, Parent, Inverness Switzerland or Inverness Japan; and " Parties " means Abbott Laboratories, Abbott Japan, Parent, Inverness Switzerland and Inverness Japan.



" Product Action " has the meaning set forth in Section 7.1 .



" Products " means those products identified on Schedule 1.1(p) of the Asset Purchase Agreement (and for the avoidance of doubt does not mean specific units thereof).



" Product Specifications " means those product, labeling and performance specifications for the Products set forth on Schedule 1.1(b) , as they may be amended from time to time (i) by the written agreement of the Parties or (ii) as required by the Regulatory Authorities.






**** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

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" Prohibited Goods " has the meaning set forth in Section 6.5(a) .



" Purchase Price " has the meaning set forth in Section 5.5 .



" Quality Agreement " has the meaning set forth in Section 6.3 .



" Reagent " has the meaning set forth in the Reagent Supply Agreement.



" Recall " has the meaning set forth in Section 7.1 .



" Regulatory Approval " means the applicable Regulatory Authority92s approvals, submissions and recordings of the Products and Product registrations required to sell such Product in such place.



" Regulatory Authority " means any Governmental Authority that is responsible for issuing any technical, medical, and scientific licenses, registrations, authorizations and/or approval that are required for the manufacture, assembly, labeling, packaging, handling, quality control and storing of the Products in accordance with Applicable Laws.



" Report " has the meaning set forth in Section 5.4 .



" Right of First Negotiation " means the obligation of Abbott Laboratories to enter into good faith negotiations with Parent with respect to Buyer92s manufacture of the Alternative Product or HIV Alternative Product upon terms and conditions reasonably acceptable to both parties.



" **** Cost" means the portion of Products that consists of the **** cost valued at the standard per the BPCS system in Matsudo, Japan as of December 1, 2004 as listed in Exhibit D .



" **** Cost " means the portion of Products that consists of the ****costs valued at the standard per the BPCS system in Matsudo, Japan as of December 1, 2004 as listed in Exhibit D .



" Term " has the meaning set forth in Section 11.1 .



" Transition Services " has the meaning set forth in Section 4.1 .



" Variances " means variances, which may be positive or negative, related to the Material Cost Component of Inventory used in production or sold, including purchase price variances,






**** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

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yield variances and material usage variances generated from the purchase of inventory or during the production for each month of the Term and inventory loss due to obsolescence, damage, loss or theft at the Manufacturing Facility, unless such loss is due to Abbott Japan92s gross negligence, recklessness or willful misconduct.



" Warranty Period " has the meaning set forth in Section 9.1(b) .



1.2 Performance of Obligations by Affiliates . Any obligation of Abbott Japan under or pursuant to this Agreement may be satisfied, met or fulfilled, in whole or in part, at Abbott Japan92s sole and exclusive option, either by Abbott Japan directly or by any Affiliate or designee of Abbott Japan that Abbott Japan causes to satisfy, meet or fulfill such obligation, in whole or in part. The obligations of any Buyer under or pursuant to this Agreement may be satisfied, met or fulfilled, in whole or in part, at Buyer92s sole and exclusive option, either by Buyer directly or by any Affiliate or designee of Buyer that Buyer causes to satisfy, meet or fulfill such obligation, in whole or in part. With respect to any particular action, the use of the words "Abbott Japan shall" also means "Abbott Japan shall cause" the particular action to be performed, and the use of the words "Buyer shall" also means "Buyer shall cause" the particular action to be performed. Each of the Parties guarantees the performance of all actions, agreements and obligations to be performed by any Affiliates of such Party under the terms and conditions of this Agreement.



ARTICLE 2
MANUFACTURING



2.1 Manufacturing of Products . During the Term, subject to the provisions of Section 6.2 , Inverness Japan shall be responsible for (i) the manufacture, safety testing, quality, packaging and labeling of the Products, (ii) any product liability arising from the manufacture of the Products, and (iii) all other activities identified in Exhibit A . The Products shall be manufactured at the Manufacturing Facility using the Equipment owned by Buyer and the services of the Japanese Employees in accordance with the provisions of the Master Secondment Agreement. The Products shall be manufactured at all times in full compliance with Applicable Laws, cGMPs, Product Specifications and any other applicable requirements of the Regulatory Authorities and shall maintain all records as are necessary and appropriate to demonstrate full compliance with the foregoing.



2.2 Manufacturing Services . During the Term, in accordance with the reasonable instructions of Inverness Japan, Abbott Japan shall provide to Inverness Japan the manufacturing support services identified in Exhibit B hereto (the " Manufacturing Support Services "). Abbott Japan shall exercise commercially reasonable efforts in providing the Manufacturing Support



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Services in a professional and workmanlike manner at a level of quality and commitment at least equal to that employed by Abbott Japan in performing such Manufacturing Support Services before the Closing Date.



2.3 Raw Materials . The Products shall be manufactured at the Manufacturing Facility using raw materials (including Reagents), packaging and labels owned and ordered by Abbott Japan from third parties and/or its Affiliates on behalf of and as directed by Inverness Japan; provided , however , that Inverness Japan shall only direct Abbott Japan to order such raw materials, packing and labels to be used for the purpose of manufacturing the Products and provided , further , unless Inverness Japan agrees to advance Abbott Japan the amounts required to fund such orders, Abbott Japan shall only be required to order and own such quantities of raw materials, packaging and labels that are reasonably required to support production of the Products in the Ordinary Course of Business. For the avoidance of doubt, Inverness Japan shall have the sole responsibility for determining the amount and timing of ordering raw materials, packaging and labels. Any such raw materials, packaging and labels shall comply with the quality standards for such raw materials, packaging and labels as specified by Inverness Japan.



2.4 Import of Raw Materials . Abbott Japan shall obtain any and all import certificates or similar permits required to import any raw materials (including Reagents), packaging and labels used by Buyer in providing the Products. Abbott Japan shall act as the representative of Buyer for the completion and filing of the documentation relating to such importation with the appropriate administrative agencies and warehousing firms. Abbott Japan shall pay any Taxes and other governmental charges (including, without limitation, Taxes, customs duties, customs brokerage fees, and similar charges) applicable to the import of such raw materials, and Inverness Japan shall promptly reimburse Abbott Japan for such charges; provided , however , that no such charges which are reimbursed in accordance with this sentence shall be included in any additional cost ( e.g. , cost of materials incurred) paid by or charged to Inverness Japan.



2.5 Testing . At any time during the Term, Abbott Japan may inspect and test, or cause to be inspected and tested, any of the lots of Products for conformity to the Product Specifications and in accordance with Abbott Japan92s normal quality assurance procedures.



2.6 Storage . Abbott Japan shall provide warehousing space for the raw materials, packaging, labels and the finished Products ordered by Abbott Japan on behalf of, and as directed by Inverness Japan, in accordance with this Agreement.



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2.7 Product Changes . Inverness Japan shall notify Abbott Japan in writing of any proposed changes in the Product Specifications (including final product performance specifications), manufacturing process or quality procedures to any Products (including Products which shall be sold or donated by Seller for purposes of the Humanitarian Program) that: (a) would materially affect the fit, form, function or clinical performance; (b) would require changes to or an additional Japan Product Marketing Approval or Marketing Registrations; or (c) changes in the raw materials, packaging or labels or in the third party suppliers of such raw materials, packaging or labels. Upon such notice of any proposed change, except for changes that are required by any Regulatory Authority or by Applicable Laws, Abbott Japan may evaluate and communicate to Inverness Japan its approval or disapproval of such proposed change within 30 days of receipt of the notice, provided , however , that Abbott Japan shall not unreasonably withhold or delay its approval or disapproval of any such proposed change. Inverness Japan may only incorporate such proposed changes upon notice of written approval from Abbott Japan.



2.8 Expiration Dating . Each unit of Product provided to Seller and its Affiliates under this Agreement for purposes of the Humanitarian Program shall have a shelf life at the time of delivery to Seller and its Affiliates of at least ****% of the maximum shelf life for that unit of Product, as determined at the time of the assignment of its expiration date.



2.9 Certificate of Conformance . All Products provided under this Agreement shall be delivered with a document that certifies that the specified lot(s) of Products delivered to Seller and its Affiliates, regardless of whether such lot(s) shall be used by Seller and its Affiliates for purposes of the Humanitarian Program or for commercial distribution to third parties, conform with the applicable Product Specifications and labeling claims. Full batch documentation, including batch production records and manufacturing and analytical records shall be available for review by Seller upon reasonable notice from Seller.



2.10 Product Branding . During the Term, Inverness Japan cannot use any hybrid packaging materials and l ...