Exhibit 10.3

EIGHTH AMENDMENT AND CONSENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

EIGHTH AMENDMENT AND CONSENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of October 30, 2006 (this “Amendment”), to the Third Amended and
Restated Credit Agreement dated as of June 30, 2005 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among General Electric Capital Corporation, as Agent (in such capacity,
“Agent”), Inverness Medical Innovations, Inc. (“Innovations”), Wampole
Laboratories, LLC (“US Borrower”) and Inverness Medical (UK) Holdings Limited
(“European Borrower”, together with US Borrower, collectively, “Borrowers”), the
other Credit Parties signatory thereto, Merrill Lynch Capital, a division of
Merrill Lynch Business Financial Services Inc., as documentation agent and
co-syndication agent, and the lenders signatory thereto from time to time
(collectively, the “Lenders”).

W I T N E S S E T H

WHEREAS, Borrowers have informed Agent that Innovations and IVC Industries, Inc.
(“IVC”) have made arrangements to lease certain equipment (collectively, the
“Equipment”) pursuant to the lease amendments attached hereto as Exhibit A under
the Master Lease Agreement dated July 17, 2006 between Innovations, IVC and
Wachovia Financial Services, Inc. (“Wachovia”) attached hereto as Exhibit B (the
“Wachovia Lease Transaction”);

WHEREAS, IVC has made deposits against the purchase price of the Equipment which
will be refunded to IVC at such time as Wachovia makes payment in full to, and
takes title to the Equipment from, the respective vendors; and

WHEREAS, Borrowers have also requested that Agent and Requisite Lenders amend
the Credit Agreement, and Agent and Requisite Lenders have agreed to amend the
Credit Agreement, on the terms and subject to the conditions set forth herein.

NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1.             Definitions.  Capitalized terms not otherwise defined herein,
including in the recitals, shall have the meanings ascribed to them in the
Credit Agreement.

2.             Amendments to Credit Agreement.

(a)           Amendment to Section 6.2 of the Credit Agreement.  Section 6.2 of
the Credit Agreement is hereby amended, as of the Eighth Amendment Effective
Date (as hereinafter defined), by deleting clauses (g) and (h) therein in their
entirety and replacing them with following:

“(g) the Credit Parties may make investments permitted under Section 6.1 and any
Person joining the Credit Agreement as a Credit Party pursuant to Section 6.1 or
by consent of the Lenders may retain any investments held and

 

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disclosed prior to such acquisition and not made in contemplation of such
acquisition; (h) so long as no Default or Event of Default has occurred and is
continuing before and after giving effect to any investment or loan referred to
in this clause (h) and Administrative Borrower has provided Agent with at least
three (3) Business Days notice of such investment or loan, the Credit Parties
may make and hold additional investments and loans not otherwise permitted by
this Section 6.2, provided, that (i) the aggregate amount (the amount of each
investment or loan being measured at the time of the investment or loan) of such
investments and loans permitted by this clause (h) shall not exceed $15,000,000
(or the Equivalent Amount thereof) at any one time outstanding and (ii) the
Non-Stock Investments and Loans permitted by this clause (h) shall not exceed
$10,000,000 (or the Equivalent Amount thereof) at any time, and provided,
further, that if any investment under this clause (h) is in connection with the
purchase of equity, the Credit Parties shall, within thirty (30) days after such
purchase, provide Agent with (A) a pledge of the equity so purchased, together
with undated powers of transfer executed in blank and (B) upon request of Agent,
a legal opinion in respect of the pledge of such equity in form and substance
satisfactory to Agent;”

(b)           Amendment to Section 6.5 of the Credit Agreement.  Section 6.5 of
the Credit Agreement is hereby amended, as of the Eighth Amendment Effective
Date, by deleting the word “and” before clause “(y)” in subsection (b)(i) of
such Section and inserting at the end of clause (y) therein the following:

“, and (z) to the extent permitted by Section 6.2(h),”

(c)           Amendment to Section 6.20 of the Credit Agreement.  Section 6.20
of the Credit Agreement is hereby amended, as of the Eighth Amendment Effective
Date, by deleting the word “and” before clause “(x)” therein, renumbering clause
“(x)” therein to “(xii)”, and inserting directly before such clause a new clause
“(x)” and clause “(xi)” to read as follows:

“(x) the making of investments to the extent permitted by Section 6.2, and (xi)
the issuance of the Stock of Innovations to the extent permitted by Section 6.5,
and”

(d)           Amendment to Annex A of the Credit Agreement.  Annex A of the
Credit Agreement is hereby amended, as of the Eighth Amendment Effective Date,
by inserting the following new definition, in the applicable alphabetical order:

“‘Non-Stock Investments and Loans’ means investments and loans to the extent
made with consideration other than the common Stock of Innovations.”

3.             Waiver.  Notwithstanding anything to the contrary in Section 6.20
of the Credit Agreement, Agent and Requisite Lenders hereby waive, as of
September 29, 2006, any breach of Section 6.20 of the Credit Agreement resulting
from the purchase of common Stock and warrants to purchase common Stock of
Chembio Diagnostics, Inc. (“Chembio”) by Innovations pursuant to that certain
Securities Purchase Agreement dated as of September 29,

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2006 by and among Chembio and the purchasers thereto, in an aggregate amount of
$2,000,000 (the “Chembio Investment”).

4.             Acknowledgement Regarding Wachovia Lease Transaction.  Agent and
Requisite Lenders hereby acknowledge, based solely on the documentation
submitted to it by the Credit Parties to date, that the Wachovia Lease
Transaction is neither prohibited nor restricted in any way by Section 6.8 and
Section 6.12 of the Credit Agreement.

5.             Remedies.  This Amendment shall constitute a Loan Document.  The
breach by any Credit Party of any representation, warranty, covenant or
agreement in this Amendment shall constitute an immediate Event of Default
hereunder and under the other Loan Documents.

6.             Representations and Warranties.  To induce Agent and Requisite
Lenders to enter into this Amendment, the Credit Parties hereby, jointly and
severally, represent and warrant that:

(a)           The execution, delivery and performance by each Credit Party of
this Amendment and the performance of the Credit Agreement, as amended by this
Amendment (the “Amended Credit Agreement”): (i) are within such Person’s
corporate, company or partnership power; (ii) have been (or will be prior to
execution thereof) duly authorized by all necessary corporate, limited liability
company or limited partnership action; (iii) do not contravene any provision of
such Person’s charter, bylaws or equivalent constitutive documents or
partnership or operating agreement, as applicable; (iv) do not violate any law
or regulation, or any order or decree of any court or Governmental Authority;
(v) do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which such Person is a party or by which such Person or any of its
property is bound; (vi) do not result in the creation or imposition of any Lien
upon any of the property of such Person, other than a Lien in favor of Agent;
and (vii) do not require the consent or approval of any Governmental Authority
or any other Person except those which will have been duly obtained, made or
complied with prior to the Eighth Amendment Effective Date.

(b)           This Amendment has been duly executed and delivered by or on
behalf of each of the Credit Parties.

(c)           This Amendment and the Amended Credit Agreement constitutes a
legal, valid and binding obligation of each of the Credit Parties, enforceable
against each of them in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, fraudulent conveyance or transfer or other
laws affecting creditors’ rights generally or by equitable principals of general
applicability.

(d)           No Default or Event of Default has occurred and is continuing or
would result after giving effect to the provisions of this Amendment.

(e)           No action, claim or proceeding is now pending or, to the knowledge
of any Credit Party, threatened against such Credit Party, at law, in equity or
otherwise, before any court, board, commission, agency or instrumentality of any
foreign,

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federal, state, or local government or of any agency or subdivision thereof, or
before any arbitrator or panel of arbitrators, which (i) challenges any Credit
Party’s right or power to enter into or perform any of its obligations under
this Amendment or any other Loan Document to which it is or will be, a party, or
the validity or enforceability of this Amendment, the Amended Credit Agreement
or any Loan Document or any action taken thereunder, or (ii) has a reasonable
risk of being determined adversely to any Credit Party and that, if so
determined, could reasonably be expected to have a Material Adverse Effect after
giving effect to this Amendment.

(f)            The representations and warranties of the Credit Parties
contained in the Amended Credit Agreement and each other Loan Document shall,
after giving effect hereto, be true and correct on and as of (i) the date
hereof, and (ii) the Eighth Amendment Effective Date, in each case, with the
same effect as if such representations and warranties had been made on and as of
such date, except that any such representation or warranty which is expressly
made only as of a specified date need be true only as of such date.

7.             No Amendments/Waivers/Consents.  Except as expressly provided
herein (a) the Credit Agreement and the other Loan Documents shall be unmodified
and shall continue to be in full force and effect in accordance with their
terms, (b) the acknowledgements, consents and agreements of the Agent and
Requisite Lenders set forth herein shall be limited strictly as written and
shall not constitute an acknowledgement, consent or agreement to any transaction
not specifically described in connection with any such consent and/or agreement,
and (c) this Amendment shall not be deemed a waiver of any term or condition of
any Loan Document and shall not be deemed to prejudice any right or rights which
Agent or any Lender may now have or may have in the future under or in
connection with any Loan Document or any of the instruments or agreements
referred to therein, as the same may be amended from time to time.

8.             Affirmation of Obligations.  Each of the Credit Parties hereby
acknowledges, agrees and affirms (a) its obligations under the Credit Agreement
and the other Loan Documents, including, without limitation, its guaranty
obligations thereunder, (b) that such guaranty shall apply to the Obligations in
accordance with the terms thereof, (c) the grant of the security interest in all
of its assets pursuant to the Loan Documents and (d) that such liens and
security interests created and granted are valid and continuing and secure the
Obligations in accordance with the terms thereof.

9.             Outstanding Indebtedness; Waiver of Claims.  Each of Borrowers
and the other Credit Parties hereby acknowledges and agrees that as of October
30, 2006, (a) the outstanding balance of the European Revolving Loan is $0, (b)
the outstanding balance of the US Revolving Loan is $0, (c) the outstanding
balance of the US Term Loan is $44,887,500, and (d) the outstanding balance of
European Term Loan is $0.  Borrowers and each other Credit Party hereby waive,
release, remise and forever discharge Agent, Lenders and each other Indemnified
Person from any and all claims, suits, actions, investigations, proceedings or
demands arising out of or in connection with the Credit Agreement (collectively,
“Claims”), whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law of any kind or character,
known or unknown, which any Borrower or any other Credit Party ever had, now has
or might hereafter have against Agent or Lenders which relates, directly or
indirectly, to any acts or omissions of Agent, Lenders or any other Indemnified
Person on or prior to the Eighth Amendment Effective Date; provided, that no
Borrower nor any other Credit

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Party waives any Claim solely to the extent such Claim relates to Agent’s or any
Lender’s gross negligence or willful misconduct.

10.           Expenses.  Borrowers hereby reconfirm their obligations pursuant
to Section 11.3 of the Credit Agreement to pay and reimburse Agent for all
reasonable costs and expenses (including, without limitation, reasonable fees of
counsel) incurred in connection with the negotiation, preparation, execution and
delivery of this Amendment and all other documents and instruments delivered in
connection herewith.

11.           Effectiveness.  Upon satisfaction in full in the judgment of Agent
of each of the following conditions, this Amendment shall be deemed effective as
of October 30, 2006 (the “Eighth Amendment Effective Date”):

(a)           Amendment.  Agent shall have received four (4) original signature
pages to this Amendment, duly executed and delivered by Agent, Requisite
Lenders, and each of the Credit Parties.

(b)           Payment of Expenses.  Borrowers shall have paid to Agent all
costs, fees and expenses owing in connection with this Amendment and the other
Loan Documents and due to Agent (including, without limitation, reasonable legal
fees and expenses).

(c)           Representations and Warranties.  The representations and
warranties of or on behalf of each of the Credit Parties in this Amendment shall
be true and correct on and as of the date hereof.

(d)           Chembio Warrant.  Within ten (10) days of the date hereof, Agent
shall have received a pledge of the warrants issued by Chembio to Innovations,
together with undated powers of transfer executed in blank pursuant to the
Chembio Investment.

(e)           Chembio Opinion.  Agent shall have received a legal opinion in
respect of the pledge of Stock and warrants under the Chembio Investment in form
and substance satisfactory to Agent.

12.           GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

13.           Counterparts.  This Amendment may be executed by the parties
hereto on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first
written above.

BORROWERS

 

 

 

WAMPOLE LABORATORIES, LLC

 

INVERNESS MEDICAL (UK) HOLDINGS

 

LIMITED

 

 

 

 

By:

/s/ David Teitel

 

Name:

David Teitel

 

Title:

Vice President, Authorized Signatory

 

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AGENT AND LENDERS

 

 

 

GENERAL ELECTRIC CAPITAL

 

CORPORATION, as Agent and a Lender

 

 

 

 

By:

/s/ Andrew Moore

 

 

Duly Authorized Signatory

 

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MERRILL LYNCH CAPITAL, a division of

 

Merrill Lynch Business Financial Services Inc.,

 

as a Lender

 

 

 

 

By:

/s/ Illegible

 

 

Duly Authorized Signatory

 

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LASALLE BANK NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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MARATHON SPECIAL OPPORTUNITY CLO I,

 

LTD.,as a Lender

 

 

 

 

By:

Marathon Asset Management, LLC, its

 

 

Portfolio Manager and Authorized Signatory

 

 

 

 

By:

/s/ Lois T. Hanover

 

Name:

Lois T. Hanover

 

Title:

Authorized Signatory

 

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DRYDEN IV - LEVERAGED LOAN CDO 2003,

 

as a Lender

 

 

 

 

By:

Prudential Investment Management, Inc.,

 

 

as Collateral Manager

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

DRYDEN V - LEVERAGED LOAN CDO 2003, as

 

a Lender

 

 

 

 

By:

Prudential Investment Management, Inc.,

 

 

as Collateral Manager

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

DRYDEN VII - LEVERAGED LOAN CDO 2004,

 

as a Lender

 

 

 

 

By:

Prudential Investment Management, Inc.,

 

 

as Collateral Manager

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

DRYDEN VIII - LEVERAGED LOAN CDO 2005,

 

as a Lender

 

 

 

 

By:

Prudential Investment Management, Inc.,

 

 

as Collateral Manager

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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The following Persons are signatories to this Amendment in their capacity as
Credit Parties and not as Borrowers.

INVERNESS MEDICAL INNOVATIONS, INC.

 

APPLIED BIOTECH, INC.

 

ADVANTAGE DIAGNOSTICS CORPORATION

 

FOREFRONT DIAGNOSTICS, INC.

 

INVERNESS MEDICAL INTERNATIONAL

 

HOLDING CORP.

 

INVERNESS MEDICAL INTERNATIONAL

 

HOLDING CORP. II

 

INVERNESS MEDICAL, INC.

 

INNOVATIONS RESEARCH, LLC

 

ISCHEMIA TECHNOLOGIES, INC.

 

IVC INDUSTRIES, INC.

 

INNOVACON, INC.

 

OSTEX INTERNATIONAL, INC.

 

SELFCARE TECHNOLOGY, INC.

 

BINAX, INC.

 

INVERNESS MEDICAL — BIOSTAR, INC.

 

UNIPATH ONLINE, INC.

 

RICH HORIZONS INTERNATIONAL LIMITED

 

CAMBRIDGE DIAGNOSTICS IRELAND

 

LIMITED

 

DMD, DIENSTLEISTUNGEN & VERTRIEB FÜR

 

MEDIZIN UND DIAGNOSTIK GMBH

 

INVERNESS MEDICAL CANADA, INC.

 

INVERNESS MEDICAL EURASIA LIMITED

 

INVERNESS MEDICAL FRANCE SAS

 

INVERNESS MEDICAL GERMANY GMBH

 

SCANDINAVIAN MICRO BIODEVICES APS

 

STIRLING MEDICAL INNOVATIONS LIMITED

 

INVERNESS MEDICAL SWITZERLAND GMBH

 

UNIPATH DIAGNOSTICS GMBH

 

INVERNESS MEDICAL DEUTSCHLAND

 

GMBH

 

INVERNESS MEDICAL JAPAN, LTD.

 

INVERNESS MEDICAL IBERICA, S.A.

 

INVERNESS MEDICAL SPAIN, S.L.U.

 

UNIPATH LIMITED

 

IVD MANAGEMENT LIMITED

 

INVERNESS MEDICAL INVESTMENTS, LLC

 

 

 

 

 

 

 

By:

/s/ David Teitel

 

Name:

David Teitel

 

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Title:

Vice President — Finance, Vice President —

 

 

Finance, Vice President — Finance, Vice

 

 

President — Finance, President, President,

 

 

Vice President — Finance, Vice President —

 

 

Finance, Vice President — Finance, Vice

 

 

President — Finance, Vice President —

 

 

Finance, Vice President — Finance, Vice

 

 

President — Finance, Vice President —

 

 

Finance, Vice President — Finance, Vice

 

 

President — Finance, Vice President,

 

 

Authorized Person, Authorized Person,

 

 

Authorized Person, Authorized Person,

 

 

Authorized Person, Authorized Person,

 

 

Authorized Person, Authorized Person,

 

 

Authorized Person, Authorized Person

 

 

Authorized Person, Authorized Person,

 

 

Authorized Person, Authorized Person,

 

 

Authorized Person, Authorized Person,

 

 

 Manager, respectively

 

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