Exhibit
10.8


 


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
  Japan’s 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

  	
   

  



 


ii





















 


	
  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

  	
   

  



 


iii





















 


Exhibits and Schedules


 


	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  A

  	
  –

  	
  Activities
  of Buyer

  
	
  Exhibit
  B

  	
   

  	
  Manufacturing
  Support Services

  
	
  Exhibit C

  	
  –

  	
  Transition
  Services

  
	
  Exhibit D

  	
  –

  	
  Standard
  Labor and Overhead Cost and Standard Material Cost

  
	
  Exhibit E

  	
  –

  	
  Quality Agreement

  
	
  Exhibit F

  	
  –

  	
  Final Transition Services

  
	
   

  	
   

  	
   

  
	
  Schedules

  
	
   

  
	
  Schedule 1.1(a)

  	
   

  	
  –

  	
  Adjusted Price per Unit

  
	
  Schedule 1.1(b)

  	
   

  	
  –

  	
  Product Specifications

  



 





















 


MANUFACTURING SUPPORT SERVICES AGREEMENT


 


THIS MANUFACTURING SUPPORT SERVICES AGREEMENT
(this “Agreement”) is made this 30th 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.


 


3





















 


“Buyer
Trademarks” means Buyer’s trademarks, trade names, service marks and logos
and all derivations of the foregoing, including Buyer’s 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® 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.


 


4





















 


“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 Japan’s 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.


5





















 


“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 Authority’s 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 Buyer’s 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.


6





















 


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 Japan’s 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 Japan’s 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 Buyer’s 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


 


7





















 


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 Japan’s 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.


 


8





















 


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 labels bearing the
trademarks or trade names of both Seller and Inverness Japan without the prior
written consent of Seller.  Seller and
Inverness Japan shall discuss and mutually agree upon any changes to the
packaging artwork, labeling artwork, packaging and labeling specifications for
the Products during the Term.  Inverness
Japan shall be solely responsible for all costs and expenses associated with
implementing any such changes, including disposing of old packaging, materials,
labels, cartons or any other applicable items.


 










**** 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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ARTICLE 3

OCCUPANCY FEE AND OTHER CHARGES


 


3.1           Occupancy
Fee.  During the Term, Inverness
Japan shall pay to Abbott Japan as compensation for all the Manufacturing
Support Services performed by Abbott Japan pursuant to this Agreement a monthly
fixed-fee in the amount of (i) $59,000 plus any applicable Japanese Taxes, if
any, during the first 26 months of the Term, and (ii) $89,000 plus any
applicable Japanese Taxes, if any, during the remaining months of the Term (the
“Occupancy Fee”).


 


3.2           Payment.  Within 7 Business Days following the end of
each calendar month during the Term, Abbott Japan shall prepare and submit to
Inverness Japan an invoice for the Occupancy Fee for the prior calendar
month.  Inverness Japan shall pay the
Occupancy Fee so invoiced no later than 30 days after the date of such invoice.  For the avoidance of doubt, and solely for
illustrative purposes, the invoice required to be delivered within 7 Business
Days following the end of the month of August shall be for the Occupancy Fee
with respect to July, the prior calendar month.


 


3.3           Reimbursement
of Variances.  Inverness Japan shall
reimburse Abbott Japan for all Variances. 
Within 30 days following the end of each calendar month during the Term,
Abbott Japan shall prepare and submit to Inverness Japan an invoice in Dollars
for the Variances for the prior calendar month, which shall be subject to
Inverness Japan’s rights set forth in Section 3.6.  Inverness Japan shall pay the Variances so
invoiced no later than 30 days after the date of such invoice.  The Variances shall be calculated initially
using Japanese Yen and shall be converted into Dollars using the Monthly
Average Exchange Rate in effect during the respective calendar month.


 


3.4           Payment
of Material Cost Component of Inventory. 
If the Term extends beyond the termination of the Distribution Period,
immediately following each shipment of finished Products from the Manufacturing
Facility after the termination of the Distribution Period, Abbott Japan shall
prepare and submit an invoice in Dollars to Inverness Japan for an amount equal
to the Material Cost Component of Inventory sold during such prior calendar
month, plus the amount of any applicable Japanese Taxes, inbound freight and
handling costs, import duties, clearing costs and inbound quality assurance
costs attributed to the sub-components of the finished Products other than
those manufactured for the Humanitarian Program, which shall be subject to
Inverness Japan’s rights set forth in Section 3.6.  Inverness Japan shall pay the amount so
invoiced no later than 30 days after the date of such invoice.  The amounts of any Material Cost Component of
Inventory shall be calculated on a monthly basis initially using Japanese Yen


 


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and shall be
converted into Dollars using the Monthly Average Exchange Rate in effect for
each respective calendar month.


 


3.5           No
Security Interest.  Nothing in this
Agreement or in the relationship between the Parties shall create in or for the
benefit of Abbott Japan any kind of Encumbrance or other right in any finished
Products or any property provided or made available by Inverness Japan to
Abbott Japan hereunder in connection with Abbott Japan’s provision of the
Manufacturing Support Services.  Abbott
Japan shall not have or be entitled to have any financial interest in respect
of the sale of any Products or any property provided or made available by
Inverness Japan to Abbott Japan hereunder beyond the Occupancy Fee, the
Material Cost Component of Inventory and the Variances.


 


3.6           Reasonable
Access and Dispute Procedures. 
Seller agrees to provide Buyer or its designee or representative
reasonable access to the information (including internal schedules) from which
the calculations of amounts due under Sections 2.3, 3.3 and 3.4 hereof
are derived, as well as reasonable access to Seller’s personnel and
representative as is reasonably necessary in connection with Buyer’s review of,
and payment with respect to, any such amounts. 
If Buyer disagrees with the amount calculated by Seller under Section
2.3, 3.3 or 3.4, Buyer shall send a written notice to Seller stating the
specific reasons for its disagreement within 60 days of receiving the invoice
or similar request for payment with respect thereto.  If it fails to do so, the determinations made
by Seller in accordance with Section 2.3, 3.3 or 3.4 shall be final,
conclusive and binding on both Seller and Buyer.  If, however, Buyer makes such notification to
Seller, Seller and Buyer must attempt to reconcile their differences during the
3 weeks following such notification and if they are unable to do so, then,
Buyer shall have the right, during normal business hours and at Buyer’s
expense, to have an independent certified public accountant selected by Buyer
and reasonably acceptable to Seller, audit any amounts calculated pursuant to
said Sections 2.3, 3.3 or 3.4. 
The decision of the independent certified public accountant with respect
to the calculation of any such amounts shall be final and binding on Buyer and
Seller.  If, based upon the decision of
the independent certified public accountant, there has been an overstatement of
the amounts calculated by the Seller in Sections 2.3, 3.3 or 3.4, then
Seller shall (X) pay to Buyer the difference between the amount paid by Buyer
and the amount determined by the independent certified public accountant or (Y)
credit such difference against the amount owed by Buyer to Seller if the
amounts have not been previously paid, and (Z) if such overstatement is greater
than 10% of the original amount in Seller’s calculation under Sections 2.3,
3.3 or 3.4, Seller shall pay the fees of the independent public certified
accountant.  If, based upon the decision
of the independent certified public accountant, there has been an
understatement of the amounts calculated by the Seller in Sections 2.3, 3.3
or 3.4, then Buyer


 


11





















 


shall pay to
Seller the difference between the amount determined by the independent
certified public accountant and the amounts calculated by Seller under Sections
2.3, 3.3 or 3.4


 


ARTICLE 4

TRANSITION SERVICES


 


4.1           Transition
Services.  During the Term, at
Inverness Japan’s request, Abbott Japan shall provide to Inverness Japan and
its Affiliates any or all of the services identified in Exhibit C (the “Transition
Services”) in a professional and workmanlike manner which shall be no less
than the level of quality and commitment employed by Abbott Japan for the
Product Line before the Closing Date. As soon as feasible following the
execution of the Asset Purchase Agreement (but on or before the Closing Date),
the Parties shall meet to discuss and determine (a) whether Abbott Japan shall
provide any or all of the Transition Services,
(b) the scope of any such Transition Services to be provided by
Abbott Japan, (c) the term during which Abbott Japan shall provide the
Transition Services, and (d) the compensation to be paid by Inverness Japan to
Abbott Japan for the provision of such Transition Services, which such
compensation shall be equal to Abbott Japan’s **** cost of providing the
Transition Services plus ****%, plus all applicable Japanese Taxes, if
any.  Immediately following such
determination, the Parties shall prepare a schedule (which shall be attached to
this Agreement as Exhibit F) which lists those services from the
Transition Services that the Parties agree Abbott Japan shall provide to
Inverness Japan, the time period during which such Transition Services shall be
provided, and the fully-burdened actual cost of such Transition Services.  From time to time, the Parties shall meet to
review the contents of, and determine if any modifications are necessary to, Exhibit
F.  For the avoidance of doubt, in no
event shall Abbott Japan be obligated to provide any Transition Services that
Abbott Japan was not providing to the Product Line prior to the Closing Date.


 


4.2           Payment.  Within 30 days following the end of each
calendar month during the Term, Abbott Japan shall prepare and submit to
Inverness Japan an invoice in Dollars for the Transition Services charges for
the prior calendar month.  Inverness Japan
shall pay the Transition Services charges so invoiced no later than 30 days
after receipt of such invoice.  The
Transition Services charges shall be calculated initially using Japanese Yen
and shall be converted into Dollars using the Monthly Average Exchange Rate in
effect during the respective calendar month.


 










**** 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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ARTICLE 5

HUMANITARIAN PROGRAM


 


5.1           Supply
of Products for the Humanitarian Program. 
During the Term, subject to the terms and conditions set forth in this
Agreement, Seller shall obtain all of its requirements of Products for purposes
of the Humanitarian Program exclusively from Buyer and Buyer shall use
commercially reasonable efforts to provide such quantities of each Product as
may be ordered from time to time by Seller for purposes of the Humanitarian
Program.  Notwithstanding the foregoing,
nothing in this Agreement shall obligate Seller and its Affiliates to buy
during the Term any specific amount of Products for purposes of the
Humanitarian Program and Seller shall be obligated to purchase only those
quantities of Products included in the 4 binding
months of the rolling forecast then in effect. 
Buyer shall be solely responsible for any failure to provide to Seller
Products for purposes of the Humanitarian Program in accordance with Section
5.6.


 


5.2           Ordering
Procedure.  Seller shall place each
purchase order for the Products for purposes of the Humanitarian Program at
least 90 days prior to the delivery date specified in each respective purchase
order.  Each purchase order or any
acknowledgement thereof may be made electronically, in writing or verbally and
shall be governed by the terms of this Agreement and none of the provisions of
such purchase order or acknowledgment shall be applicable except for those
specifying quantity ordered, delivery dates, special shipping instructions and
invoice information.  Each purchase order
shall be deemed accepted upon receipt of such purchase order.  Inverness Japan shall use commercially
reasonable efforts to ensure 90-day delivery of Products for purposes of the
Humanitarian Program.


 


5.3           Forecasts.  Within 30 days following the Closing Date,
Seller shall issue to Buyer a written forecast of its anticipated monthly
requirements of Products for purposes of the Humanitarian Program during the
following 12 months.  Thereafter, Seller shall provide to Buyer monthly a rolling 12 month forecast of
requirements of Products for
purposes of the Humanitarian Program. 
The first 4 months of such forecast shall be binding on Seller and may not be cancelled or rescheduled
without the prior written agreement of Buyer. 
The remaining 8 months of such forecast shall be used by Buyer for
planning purposes only and shall not be considered firm orders.


 


5.4           Reporting.  Within 30 days following the end of each
calendar month during the Term, Seller shall deliver to Inverness Japan a
report (the “Report”) showing the actual units of Products sold or
donated for purposes of the Humanitarian Program for the prior calendar month.


 


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5.5           Purchase
Price.  During the Term, the purchase
price of the Products sold by Seller for purposes of the Humanitarian Program
shall be for an amount equal to the sum of (i) the **** Cost plus ****%, and
(ii) ****% of the **** Cost of the Products included in the Report (which, for
purposes of this subsection (ii), shall include the **** Costs of Reagents)
(the “Purchase Price”).  For the
avoidance of doubt, Seller and its Affiliates shall supply Reagents and other
raw materials for the manufacture of Products for purposes of the Humanitarian
Program at no cost. Promptly following the receipt of each Report, Inverness
Japan shall prepare and submit an invoice to Seller for an amount equal to (1)
the **** Cost plus ****%, and (2) ****% of the **** Cost of such Products
included in the Report (which, for purposes of this subsection (2) shall
include the **** Costs of Reagents). 
Seller shall pay the amount so invoiced no later than 30 days after the
date of such invoice; provided, however, that if Seller disagrees
with the amounts set forth in such invoice, Seller shall send a written notice
to Inverness Japan stating the specific reasons for its disagreement within 20
days of receiving such invoice.  If
Seller makes such notification to Inverness Japan, Seller and Inverness Japan
must attempt to reconcile their differences during 2 weeks and if they are
unable to do so, then, Seller shall have the right, during normal business
hours and at Seller’s expense, to have an independent certified public
accountant selected by Seller and reasonably acceptable to Inverness Japan,
audit any amounts calculated pursuant to this Section 5.5.  The decision of the independent certified
public accountant with respect to the calculation of such amounts shall be
final and binding on Inverness Japan and Seller.  If, based upon the decision of the
independent certified public accountant, there has been an overstatement of the
amount calculated and such difference is greater than 10% of the original
amount, Inverness Japan shall reimburse Seller for all the fees of the audit
conducted by the independent certified public accountant.  If Seller pays an amount invoiced by
Inverness Japan pursuant to this Section 5.5 without notifying Inverness
Japan of Seller’s disagreement of such amount, but later reasonably believes
that the amount so invoiced and paid by Seller was overstated by more than 10%,
Seller shall have the right, during normal business hours and at Seller’s
expense, to have an independent certified public accountant selected by Seller
and reasonably acceptable to Inverness Japan, audit such amount paid by Seller
to Inverness Japan.  The decision of the
independent certified public accountant with respect to the calculation of such
amount shall be final and binding on Inverness Japan and Seller.  If the amount previously paid by Seller to
Inverness Japan exceeds the amount determined by the independent certified
public accountant, within 30 days of the decision of the independent certified
public accountant, (i) Inverness Japan shall reimburse Seller the difference
between the amount paid by Seller and the amount determined by the independent
certified public accountant, and (ii) if such difference is greater than 10% of
the amount previously paid


 










**** 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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by Seller,
Inverness Japan shall reimburse Seller for all the fees of the audit conducted
by the independent certified public accountant. 
If the amount determined by the independent certified public accountant
exceeds the amount previously paid by Seller to Inverness Japan, within 30 days
of the decision of the independent certified public accountant, Seller shall
pay to Inverness Japan the difference between the amount determined by the
independent certified public accountant and the amount paid by Seller.  Failure to pay a disputed invoice shall not be
deemed a breach of this Agreement by Seller and shall not relieve Inverness
Japan from its commitment to continue to provide Products hereunder


 


5.6           Failure
to Provide.  If, for any reason,
conforming Products that were ordered by Seller for purposes of the
Humanitarian Program hereunder are not provided in compliance with a purchase
order and the forecasting process set forth in Sections 5.2 and 5.3 for
a period of 14 consecutive days or longer, immediately thereafter, Inverness
Japan and Seller shall meet to confer and develop a mutually acceptable
remedial plan outlining the actions to be taken by Inverness Japan to provide
the amount of conforming Products that were ordered by Seller for purposes of
the Humanitarian Program.  If Seller and
Inverness Japan fail to reach an agreement with respect to such remedial plan
within 14 days, or if Inverness Japan fails to comply with such remedial plan
within the timelines contemplated by such remedial plan, then Seller may elect
either of the following:  (i) that either
Inverness Japan (y) provides all quantities of the Products ordered by Seller
in order for Seller to fulfill all orders of Seller’s customers or distributors
prior to providing any Products ordered by any other customers or distributors
or (z) obtains a substitute rapid, point of care diagnostic test with a
comparable performance level to the Product from any supplier (which may
include an Affiliate of Inverness Japan) selected by Inverness Japan and
reasonably acceptable to Seller and provides such replacement product to Seller
at the same cost paid by Inverness Japan to the supplier, or (ii) that Seller
shall obtain a replacement product from one or more suppliers selected by
Seller and Inverness Switzerland must grant a license under the Patents and the
Know-How to Seller or its designee to make or have made the Products for
purposes of the Humanitarian Program, if so requested by Seller, such license
to expire, in the case of a license to Seller, upon Inverness Japan’s ability
to supply Products in accordance with this Agreement and, in the case of a
license to a designee of Seller, upon the later to occur of (a) expiration
of the term of any agreement entered into with such designee, or
(b) Inverness Japan’s ability to supply Products in accordance with this
Agreement.


 


5.7           Right
of First Negotiation and Right of First Refusal.  (a)  If
at any time during the Term, Seller intends to distribute any Alternative
Product or HIV Alternative Product for purposes of the Humanitarian Program
within the Territory, Seller shall provide a Right of First Negotiation to
Parent to manufacture such Alternative Product or HIV Alternative Product by


 


15





















 


sending a written
notice to Parent not less than 18 months before Seller’s intended commencement
of such project.  During the 3-month
period following Parent’s receipt of such written notice, Seller and Parent
shall negotiate in good faith regarding Parent’s manufacture of such
Alternative Product or HIV Alternative Product (including the terms of a
license with respect to any patents owned, held or licensed (with the right to
sublicense) held by Seller or its Affiliates which are required for the
manufacture of such Alternative Product or HIV Alternative Product, which such
license shall be ****); provided, however, that Parent provides
reasonable evidence to Seller of its ability to commence manufacturing such
Alternative Product or HIV Alternative Product no later than 18 months after
receipt of such notice at both a performance level and price comparable to any
other potential third-party manufacturer. 
In the event Parent and Seller reach a definitive agreement for the
manufacture of such Alternative Product or HIV Alternative Product , within 6
months of Parent’s receipt of the foregoing notice, Parent shall obtain any
license from third parties required to manufacture such Alternative Product or
HIV Alternative Product.  Seller shall
cooperate and assist Parent to obtain any license from any third party required
for the manufacture of the Alternative Product or HIV Alternative Product.  If Parent and Seller fail to negotiate terms
acceptable to both Parties for the manufacture of such Alternative Product or
HIV Alternative Product within 3 months after Parent’s receipt of such written
notice or Parent’s failure to obtain the third party license within such
6-month period, Seller shall be free to offer the manufacture of such
Alternative Product or HIV Alternative Product to any potential third-party
manufacturer; provided, however, that solely in the case of an
HIV Alternative Product (but not in the case of an Alternative Product), Seller
shall promptly pay to Parent the pro rata amount (up to a maximum of
$2,500,000) of the net book value of the Line 2 Equipment (based on 5 year
depreciation schedule, which such depreciation beginning when the first lot of
Product is manufactured for any purposes) attributable to the manufacturing of
Determine® HIV 1-2 for purposes of the Humanitarian Program of
Seller and its Affiliates, provided further, such pro rata amount shall
be calculated on the basis of a fraction, the numerator of which is the average
daily hours that Line 2 Equipment was used for the manufacturing of Determine®
HIV 1-2 for purposes of the Humanitarian Program during the entire period that
Line 2 Equipment was commissioned and the denominator of which is the average
daily hours that Line 2 Equipment was in use for the manufacturing of all
Products (regardless whether or not such Products were for commercial purposes
or for purposes of the Humanitarian Program) plus the average daily hours that
Line 2 Equipment was idle during the entire period that Line 2 Equipment was
commissioned, and provided further, that upon the receipt of such
amount, Inverness Japan shall


 










**** 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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(i) decommission
the Line 2 Equipment to the extent used, and only to the extent used, for the
production of Determine® HIV 1-2 for purposes of the Humanitarian
Program, and (ii) deliver prompt written notice to Seller or an Affiliate
nominated by Seller, certified by the manager of the manufacturing facility or
an officer responsible therefore, that affirms that the portion of the Line 2
Equipment capacity used for the production of Determine® HIV 1-2 for
purposes of the Humanitarian Program shall no longer be utilized in the
production of any products manufactured at the plant.  Parent shall (a) deliver to Seller, within 15
Business Days of the end of each calendar month a written statement that the
capacity has been decommissioned to the extent used for Determine®
HIV 1-2 for purposes of the Humanitarian Program, and (b) grant Seller the
right to review the books and records of Parent with respect to the
manufacturing output of the Line 2 Equipment to verify that such capacity has
been decommissioned.  If, at any time
following the decommission of Line 2 Equipment as described above, Parent
desires to initiate production using the capacity of the Line 2 Equipment
attributable to Determine® HIV 1-2 for purposes of the Humanitarian
Program, whether or not such products will be sold to Seller or an Affiliate
thereof, Seller and Inverness Japan shall negotiate in good faith to compensate
Seller or its Affiliate, at the fair market value at the time, for the right of
Inverness Japan to utilize capacity of the Line 2 Equipment attributable to
Determine® HIV 1-2 for purposes of the Humanitarian Program.


 


(b)           If,
at any time during the Term, Seller receives a written proposal from a third
party to supply to Seller for purposes of the Humanitarian Program one or more
products similar to the Products at a price per unit that, as of the date of
such written proposal, is (i) ****% or more lower than the Adjusted Price per
Unit and (ii) the Purchase Price exceeds the Adjusted Price per Unit, Seller
shall provide a right of first refusal to Parent to match such price reduction
by sending a written notice to Parent. 
Within 45 days of Parent’s receipt of such written notice, Parent shall
notify Seller if it wishes to match such improved terms and provide Seller with
a binding offer corresponding thereto. 
If Parent fails to respond to such notice from Seller within 45 days of
Parent’s receipt thereof or declines to match such improved terms, then Seller
shall be required to source no more than 50% of its requirements of the
Products from Buyer during the first 18 months thereafter, and following such
18-month period, shall be free to source all of its requirements of the
Products from any third-party supplier; provided, however, that,
if the product in question which will be supplied by the third party in
accordance with the provisions of this Section 5.7(b) is a product
similar to Determine® HIV 1-2 for purposes of the Humanitarian
Program, then Seller shall promptly pay to Parent the pro rata amount (up to a
maximum of $2,500,000) of the net book value of the Line 2 Equipment (based on
5 year depreciation schedule, which such depreciation beginning when the first
lot of Product is manufactured for


 










**** 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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any purposes)
attributable to the manufacturing of Determine® HIV 1-2 for purposes
of the Humanitarian Program of Seller and its Affiliates, provided further,
such pro rata amount shall be calculated on the basis of a fraction, the
numerator of which is the average daily hours that Line 2 Equipment was used
for the manufacturing of Determine® HIV 1-2 for purposes of the
Humanitarian Program during the entire period that Line 2 Equipment was
commissioned and the denominator of which is the average daily hours that Line
2 Equipment was in use for the manufacturing of all Products (regardless
whether or not such Products were for commercial purposes or for purposes of
the Humanitarian Program) plus the average daily hours that Line 2 Equipment
was idle during the entire period that Line 2 Equipment was commissioned, and provided
further, that upon the receipt of such amount, Inverness Japan shall (i)
decommission the Line 2 Equipment to the extent used, and only to the extent
used, for the production of Determine® HIV 1-2 for purposes of the
Humanitarian Program, and (ii) deliver prompt written notice to Seller or an
Affiliate nominated by Seller, certified by the manager of the manufacturing
facility or an officer responsible therefore, that affirms that the portion of
the Line 2 Equipment capacity used for the production of Determine®
HIV 1-2 for purposes of the Humanitarian Program shall no longer be utilized in
the production of any products manufactured at the plant.  Parent shall (a) deliver to Seller, within 15
Business Days of the end of each calendar month a written statement that the
capacity has been decommissioned to the extent used for Determine®
HIV 1-2 for purposes of the Humanitarian Program, and (b) grant Seller the
right to review the books and records of Parent with respect to the
manufacturing output of the Line 2 Equipment to verify that such capacity has
been decommissioned.  If, at any time
following the decommission of Line 2 Equipment as described above, Parent
desires to initiate production using the capacity of the Line 2 Equipment
attributable to Determine® HIV 1-2 for purposes of the Humanitarian
Program, whether or not such products will be sold to Seller or an Affiliate
thereof, Seller and Inverness Japan shall negotiate in good faith to compensate
Seller or its Affiliate, at the fair market value at the time, for the right of
Inverness Japan to utilize capacity of the Line 2 Equipment attributable to
Determine® HIV 1-2 for purposes of the Humanitarian Program.


 


(c)           If
during the Term, Parent or any of its Affiliates manufactures anywhere in the
world one or more immunoassay lateral flow products similar to the Products
(but expressly excluding nucleic acid testing products), Seller shall notify
Parent if it wishes to purchase from Parent or any of its Affiliates, for use
only in connection with the Humanitarian Program, such similar products at a
price equal to Parent’s **** cost plus ****% and its anticipated monthly
requirements of such similar products during the following 12 months.  In the event that Seller so requests to
purchase such products and Parent


 










**** REPRESENTS TEXT OMITTED
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does not then have the
necessary capacity to provide Seller with the amount of products that Seller
projects pursuant to rolling 12 month forecasts, Parent and Seller shall enter
into good faith negotiations in an effort to formulate a solution to the
capacity needs to produce the volume of products requested by Seller.  Any such agreement shall be set forth in a
subsequent supply agreement to be entered into between the Parties.


 


ARTICLE 6

REGULATORY COMPLIANCE AND MEDICAL COMPLAINTS


 


6.1           Representatives.  Within 30 days following the Closing Date,
each of Abbott Japan and Inverness Japan shall appoint a person within their
respective organizations whose responsibility shall be to facilitate an
effective exchange of information and cooperation in connection with the
activities of the Parties contemplated by this Agreement.


 


6.2           Regulatory
Compliance.  During the Term, Abbott
Japan shall be responsible for reporting any matters regarding the manufacture
of the Products to any Regulatory Authorities in the Territory in accordance
with Applicable Laws and for handling and responding to any such Regulatory
Authority’s inspections of the Manufacturing Facility and Inverness Japan shall
cooperate with and assist Abbott Japan to maintain the ISO certifications for
the Products.  During the Term, Inverness
Japan shall advise Abbott Japan without undue delay of any occurrences or
information arising out of Inverness Japan’s activities that have or could
reasonably be expected to have adverse regulatory compliance and all reporting
consequences concerning the Products. 
Inverness Japan shall provide to Abbott Japan all information requested
by any Regulatory Authority in the Territory with respect to the Products.  To the extent practicable in view of the
deadlines, Abbott Japan shall provide Inverness Japan with an opportunity to
review and provide comments on all regulatory submissions or communications
(including written responses to any Regulatory Authority’s questions regarding
the manufacture of the Products).  
Notwithstanding the foregoing, Abbott Japan shall determine the timing,
manner and content of any submission to or any communication with any
Regulatory Authority in the Territory. 
Abbott Japan shall provide Inverness Japan with copies of all written
communications between Abbott Japan and any Regulatory Authorities in the
Territory and any adverse finding or communication, oral or written, by any
such Regulatory Authorities in the Territory regarding the manufacture of the
Products to the extent that it has access to such information.  If the Manufacturing Facility is inspected by
any Regulatory Authority, Abbott Japan shall notify Inverness Japan without
undue delay, but in any event within a period not to exceed 24 hours, of any
written alleged violations or deficiencies relating to the Manufacturing
Facility and the corrective action to be taken. 
Inverness Japan shall as expeditiously as


 


19





















 


practicable use
commercially reasonable efforts to take any such corrective action with respect
to the Manufacturing Facility; provided, however, Abbott Japan
shall be responsible for any reporting matters regarding the manufacture of the
Products to any Regulatory Authorities in the Territory.


 


6.3           Quality
Agreement.  Within 60 days following
the Closing Date, the Parties shall mutually agree upon a quality agreement
which appropriately addresses regulatory, operational and quality
responsibilities, traceability of lots of Products, retention of samples and
records, Product complaints, return of Products and other matters in a form
substantially similar to Exhibit E hereto (the “Quality Agreement”).


 


6.4           Procedure
for Adverse Information.  Each Party
shall keep the other Party informed of information in or coming into its
possession or control concerning side effects, injury, and incidents of
severity thereof associated with commercial and clinical uses, studies,
investigations or tests of each Product in the Territory, whether or not
determined to be attributable to the Products. 
Within 3 months of the Closing Date, the respective groups of Inverness
Japan and Abbott Japan shall complete a mutually agreed upon process covering
adverse event information exchange and event reporting relating to the
Products.


 


6.5           Reagents.  (a) 
Buyer hereby covenants that it and each of its Affiliates will not (a)
transfer to the United States or sell within the United States any (i) Products
or (ii) other goods that (1) contain or are derivate of cell lines subject to
paragraph 4 of the Consent Decree or (2) contain any Reagents supplied by
Seller and its Affiliates that have not been created within the United States or
(3) contain the Reagent 84165 S Pan-1; Hollow Fiber Harvest (“Prohibited
Goods”) and (b) will use best efforts to prevent its representatives,
agents, successors and assigns from transferring Prohibited Goods to or selling
Prohibited Goods in the United States (including by the immediate termination
or expiration of sales to distributors to the extent necessary to comply
herewith); provided, however, that solely in the case of Products or
other goods that contain any Reagents supplied by Seller and its Affiliates
that have been created within the United States (other than Reagent 84165 S
Pan-1; Hollow Fiber Harvest) this covenant shall not prohibit the transfer to
or sale of such Products or other goods if (A) the FDA has first provided
confirmation reasonably satisfactory to Seller that transfer or sale in the
United States is acceptable to the FDA or (B) the restrictions imposed upon
Seller with respect to a particular Prohibited Good under the Consent Decree
has expired, lapsed or otherwise terminated. 
Buyer further acknowledges that because a breach, or failure to comply
with, this Section 6.5(a) will cause irreparable injury to Seller for
which there is no adequate remedy by Law and the exact


 


20





















 


amount of which
will be difficult to ascertain, if Buyer, or any Affiliate, representative,
agent successor or assign thereof, should in any way breach, or fail to comply
with, the terms of this Section 6.5(a), Seller shall be immediately
entitled to an injunction restraining such Person(s) from any such breach or
failure, without the necessity of proving injury or damages or engaging in the
alternative dispute resolution process set forth in the Asset Purchase
Agreement.  Resort of any such remedy
provided for by Law shall not preclude or bar the concurrent or subsequent
employment of any other appropriate remedy or remedies, or preclude the recover
by Seller of monetary damages and compensation.


 


(b)           Buyer
acknowledges and agrees that (i) those Reagents manufactured by Seller and its
Affiliates outside of the United States are not manufactured in accordance with
FDA standards and Seller and its Affiliates shall have no obligation to
modify their manufacturing processes in order for them to comply with FDA standards,
and (ii) Seller and its Affiliates have the right to move the manufacturing
location of the Reagents without obtaining Buyer’s consent.  If Seller or its Affiliates move the
manufacturing location of the Reagents, Seller and its Affiliates shall perform
and provide to Buyer, at Buyer’s request, internal equivalency studies which
evidence that such relocation does not impact the performance of the Products,
which Buyer agrees and acknowledges shall be Seller and its Affiliates’ sole
responsibility with respect to such relocation of the manufacturing of the
Reagents.  Seller acknowledges and agrees
that nothing in this Section 6.5 will limit Seller’s obligation to
supply the Reagents under this Agreement.


 


6.6           Transfer
Program.  Subject to the provisions
of Section 7.9(d) of the Asset Purchase Agreement, Abbott Japan covenants and
agrees that it shall use its commercially reasonable efforts to assist and
cooperate with Inverness Japan to establish its own manufacturing line for the
Product Line at a location other than the Manufacturing Facility prior to the
termination of this Agreement in order to enable Inverness Japan to obtain the
Manufacturing Site License to perform the entire manufacturing process for the
Products upon the termination of this Agreement.  The Parties shall negotiate in good faith and
agree on a transfer program for the transition of the manufacturing of the
Product Line from the Manufacturing Facility to another location by no later
than 1 year prior to the termination of this Agreement.


 


21





















 


ARTICLE 7

PRODUCT ACTIONS


 


7.1           Product
Actions.  If any Party’s or any
governmental or court action relating to the Products in the Territory results
in: (a) the recall, destruction or withholding from the market of any of the
Products (“Recall”); or (b) the institution of a field correction of any
Products by Inverness Japan with input from Abbott Japan (“Field Correction”),
then Inverness Japan shall be responsible for, and shall bear all the costs and
expenses of and associated with, such Recall or Field Correction (collectively “Product
Action”) involving any of the Products distributed by Seller and its
Affiliates (including Products distributed as part of the Humanitarian
Program), except to the extent that such Product Action is the result of
(a) any negligence or willful misconduct on the part of Seller and its
Affiliates, or (b) any action of Seller or its Affiliates or its designee with
respect to the storage, shipment or distribution of Products under the
Humanitarian Program arising after such Products have been delivered by or on
behalf of Inverness Japan, in which case such costs thereof shall be borne by
Abbott Japan.  Inverness Japan shall use
commercially reasonable efforts to provide Abbott Japan with information
relevant to any Product Action in a timely manner and shall, to the extent
permitted by Applicable Laws and Inverness Japan’s quality control and other
manufacturing procedures, permit Abbott Japan to participate in the Product Action
resolution process.


 


7.2           Administration
of Product Actions.  Abbott Japan
shall be responsible for maintaining a list of customers to be notified by
Abbott Japan in the event of a Product Action relating to sales of Products
during the Distribution Period, and shall effect the return of such Products
from customers in accordance with all applicable Regulatory Authority’s
communications and requests regarding any such Product Actions.


 


ARTICLE 8

PATENTS AND TRADEMARKS


 


8.1           Buyer
Trademarks.  Inverness Switzerland hereby grants to Seller and its Affiliates a
non-exclusive license to use the Buyer Trademarks in the Territory with respect
to the Products Seller and its Affiliates distribute pursuant to the Asset
Purchase Agreement, and for no other purpose. 
Subject to applicable Law, the final decision on any use of Buyer
Trademarks shall be made by Inverness Switzerland in its sole reasonable
discretion.  Any use of a Buyer Trademark
by Seller and its Affiliate shall conform to Inverness Switzerland’s guidelines
and shall be subject to Inverness Switzerland’s review prior to use in
accordance with this Section 8.1. 
Inverness Switzerland shall notify Seller in writing with respect to the


 


22





















 


particular proposed use of the Buyer Trademark is approved.  All rights based on Seller’s or its
Affiliates’ use of the Buyer Trademarks shall inure to the benefit of Inverness
Switzerland.  Seller or its Affiliates
shall immediately cease all use of the Buyer Trademarks upon the expiration or
termination of this Agreement, except to the extent necessary to sell its
remaining inventory of Products.  For the
avoidance of doubt, nothing in this Agreement shall prevent Inverness Switzerland
from licensing the Buyer Trademarks to any party which distributes any product
not constituting a Product.


 


8.1.1        Ownership
of and Restrictions on Uses of Buyer Trademarks.  Inverness Switzerland is the sole and exclusive owner of all right, title and interest in and to
the Buyer Trademarks.  All Buyer
Trademarks and the goodwill in the Buyer Trademarks are and shall remain the
property of Inverness Switzerland. 
Nothing contained in this Agreement shall be construed as an assignment
to Seller or its Affiliates of any right, title or interests relating to the
Buyer Trademarks, which rights are expressly reserved by Inverness Switzerland,
except as expressly granted hereunder. 
Seller and its Affiliates shall at all times before the expiration or
termination of this Agreement: (a) not raise or cause to be raised in any part
of the world any question concerning or any objection to the validity of any
Buyer Trademark or Inverness Switzerland’s ownership of the Buyer Trademarks,
nor directly or indirectly assist others to do so; or (b) not apply to register
any Buyer Trademark for any goods or services in any part of the world unless
requested to do so by Inverness Switzerland.


 


8.1.2        Additional
Restrictions on Use of Buyer Trademarks. 
During the Term, Seller and its Affiliates shall use reasonable
commercial efforts to preserve the value and validity of the Buyer Trademarks.


 


8.2           Seller
Trademarks.  Subject to the terms and
conditions of the Trademark License Agreement, Abbott Japan hereby grants to
Inverness Switzerland and its Affiliates the right to use the Product Licensed
Marks (as such term is defined in the Trademark License Agreement) and the
Inventory Packaging Materials (as such term is defined in the Trademark License
Agreement) with respect to the Products to market, promote, distribute and sell
the Products in the Territory during the Transition Period (as such term is
defined in the Trademark License Agreement).


 


8.3           Patent
Infringement Defense.  If any
allegation or claim be made that the manufacture, importation, use, sale or
offering for sale of the Products in the Territory infringes the Intellectual
Property Rights of any third party, then the following Subsections 8.3.1
and 8.3.2 shall apply.


 


23





















 


8.3.1        Notice.  The Party against whom such allegation or
claim shall have been made shall notify the other Party and provide all
necessary details relating thereto within 10 days after receipt of such
allegation or claim.  Inverness Japan
shall assume all responsibility and expense for defense of such claim.


 


8.3.2        Control
of Defense.  If Abbott Japan or one
of its Affiliates is named in the claim, Inverness Japan shall consult with
Abbott Japan in all significant matters concerning the defense, including
issues of strategy and settlement, and shall act in accordance with any
reasonable requests of Abbott Japan or one of its Affiliates.  If Abbott Japan or its Affiliates are named
in the claim, Abbott Japan, at its option, may join in such action with counsel
and at its expense.  If Abbott Japan or
its Affiliates are named in the claim, Inverness Japan shall not seek to settle
or compromise such claim without the written consent of Abbott Japan.


 


8.4           Cooperation.  The Parties shall consult with each other and
work together to resolve any allegation or claim of infringement made against
either Party relating to the Products.


 


8.5           Covenant
to Use Commercially Reasonable Efforts to Secure Rights.  In
the event that either (a) any Reagent is claimed or held to infringe any
intellectual property right of any Person, (b) any Reagent or the use thereof
is claimed or held to constitute or involve a misappropriation of any trade
secret of any Person and, in connection with the settlement of the applicable
claim or as a result of the applicable judgment or finding, Seller obtains a license, a covenant not to sue or
otherwise secures the right to make, use sell, offer for sale and/or import the
applicable Reagent or (c) Seller
otherwise concludes that it is reasonable or appropriate to acquire a license,
a covenant not to sue or other right to make, use, sell, offer for sale and/or
import the applicable Reagent and obtains such a license, covenant not to sue
or other right, then, during the Term, Seller will exercise commercially reasonable efforts with the applicable
licensor or Person to assist Buyer in obtaining for Buyer’s own behalf a license, a covenant not to sue or other
means to secure the right of Buyer to make, use sell, offer for sale and/or
import the applicable Reagent.


 


ARTICLE 9

REPRESENTATIONS AND WARRANTIES


 


9.1           Product
Representations and Warranties. 
Inverness Japan represents and warrants that each of the Products
delivered to Abbott Japan hereunder shall be:


 


24





















 


(a)           manufactured
in accordance with Applicable Laws, cGMPs, Product Specifications and any other
applicable requirements of Regulatory Authorities;


 


(b)           free
from defects in material and workmanship until the expiration of its shelf
life  as indicated on the packaging (the “Warranty
Period”); and


 


(c)           free
and clear of any third party Encumbrance.


 


9.2           Product
Replacement.  Inverness Japan shall
replace the Products returned during the Warranty Period that fail to meet any
warranty set forth in Section 9.1 (“Defective Products”).   This Section 9.2 sets forth Abbott
Japan’s sole remedy, and Inverness Japan’s sole obligation, with respect to any
breach of warranty in Section 9.1. 
For the avoidance of doubt, the Parties agree that the provisions of
this Section 9.2 shall not limit in any manner the right of Abbott Japan
and its Affiliates and their respective officers, directors and employees to be
indemnified by Buyer from any Claims pursuant to the provisions of Section
10.1 with respect to Products sold or donated by Seller and its Affiliates
after the Closing Date (regardless of whether or not such sale or donation of
the Products was made for the purposes of the Humanitarian Program or for
commercial purposes).


 


9.3           General
Representation and Warranties.  Each
Party represents and warrants to the other Party as of the Effective Date that:


 


(a)           It
is a corporation duly organized and validly existing under the laws of its
state or country of incorporation;


 


(b)           It
has the power and authority to execute and deliver this Agreement and to perform
its obligations thereunder; and


 


(c)           The
execution, delivery and performance by it of this Agreement and its compliance
with the terms and provisions thereof does not and shall not conflict with or
result in a breach of any other agreement or relationship.


 


9.4           Limitation
of Representation and Warranties. 
BUYER MAKES NO REPRESENTATIONS OR WARRANTIES REGARDING THE PRODUCTS
OTHER THAN THE EXPRESS REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT AND
THERE SHALL BE NO IMPLIED OR STATUTORY REPRESENTATIONS OR WARRANTIES,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.


 


25





















 


ARTICLE 10

GENERAL INDEMNIFICATION


 


10.1         Inverness
Japan’s Indemnification of Abbott Japan. 
Parent and Inverness Japan shall indemnify, defend and hold harmless
Abbott Japan and its Affiliates and their respective officers, directors and
employees from and against any and all claims, causes of action, suits, proceedings,
losses, damages, demands, fees, expenses, fines, penalties and costs (including
reasonable attorney’s fees) (hereinafter, “Claims”) to the extent that
such arise out of, are related to or in connection with: (a) products
liability, Product Actions (except as expressly stated in Section 7.1)
and government regulatory actions; (b) the breach of Inverness Japan’s
warranties, representations and covenants set forth in Article 9; (c)
the negligence or willful misconduct on the part of Inverness Japan’s employees,
agents or representatives; or (d) the alleged infringement of third party
Intellectual Property Rights by the Products. 
Notwithstanding the foregoing, Parent and Inverness Japan shall not be
obligated under this Agreement to indemnify any Person for any Excluded
Liabilities, as such term is defined in the Asset Purchase Agreement.


 


10.2         Abbott
Japan Indemnification of Inverness Japan. 
Abbott Japan shall indemnify, defend and hold harmless Parent and
Inverness Japan and its Affiliates and their officers, directors and employees
from and against any and all Claims to the extent that such arise out of, are
related to, or in connection with:  (a)
the breach of Abbott Japan’s warranties, representations and covenants set
forth in Article 9; (b) any breach of Section 8.1 above; (c) the
Distribution Activities subject to Section 4.6(b) of the Asset Purchase
Agreement; and (d) negligence or willful misconduct on the part of Abbott Japan’s
employees, agents or representatives.


 


10.3         Indemnification
Procedures.  Each Party’s obligation
to indemnify the other Party shall be subject to the indemnified party (a)
promptly notifying the other Party of any claim or potential claim covered by
the indemnification provisions of this Article 10, including sufficient information
to enable the indemnifying Party to assess the facts, (b) providing all
reasonable assistance to the indemnifying Party in the defense of all such
claims, and (c) not settling or compromising any such claim without the
indemnifying Party’s prior written consent, which consent shall not be
unreasonably withheld or delayed.


 


10.4         Insurance.  Inverness Japan shall procure and maintain
during the Term comprehensive general, products liability and errors and
omissions liability insurance with an aggregate annual limit of at least $****.  Inverness Japan shall cause Abbott Japan to
be named as an additional insured on such policies.  Inverness Japan shall provide Abbott Japan


 










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


 


26





















 


with not less than
30 days’ prior written notice of any cancellation or modification of coverage
under such policies.  During the Term, in
no event shall Inverness Japan’s insurance coverage be less than $****.


 


10.5         Limitation
of Liability.  NEITHER PARTY SHALL BE
LIABLE FOR CONSEQUENTIAL DAMAGES OR INDIRECT LOSS OF WHATEVER NATURE HEREUNDER
(OTHER THAN FOR LOST PROFITS TO THE EXTENT THEY ARE DIRECT RATHER THAN
CONSEQUENTIAL; PROVIDED; HOWEVER; THAT SUCH LIABILITY SHALL NOT
EXCEED $****), UNLESS SUCH DAMAGE WAS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE BREACHING PARTY OR OTHERS FOR WHOM THAT PARTY IS RESPONSIBLE.


 


10.6         Sunset
Provision.  The indemnity obligations
of the Parties under this Article 10 shall survive the termination,
expiration or completion of this Agreement for a period of 2 years.


 


ARTICLE 11

TERM AND TERMINATION


 


11.1         Term.  Subject to early termination as set forth in
this Article 11, this Agreement shall commence on the Effective Date and
shall continue until the end of the last day of the 30th month following the
Effective Date (such period, the “Initial Term”).  This Agreement may be renewed at the sole
election of Inverness Japan for up to 2 additional terms of 12 months each
(each, an “Additional Term”), provided that Inverness Japan
provides written notice of renewal to Abbott Japan at least 9 months prior to
the expiration of the Initial Term or the prior Additional Term (together, the
Initial Term and the Additional Term, the “Term”).


 


11.2         Early
Termination.  Notwithstanding
anything to the contrary in this Agreement, Inverness Japan may terminate this
Agreement at any time, subject to a 6 month advance written notification to
Abbott Japan.


 


11.3         Termination
for Cause.  Either Party may
terminate this Agreement for cause upon written notice to the other Party if
the other Party:  (a) appoints a
receiver, executes an assignment for the benefit of creditors or files or
otherwise becomes subject to bankruptcy or insolvency proceedings; or (b)
materially breaches this Agreement and fails to cure such breach within 60 days
after receipt of written notice of breach from the non-breaching Party.


 










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


 


27





















 


11.4         Accrued
Obligations.  Termination,
expiration, cancellation or abandonment of this Agreement through any means and
for any reason shall not relieve the Parties of any obligation accruing prior
thereto and shall be without prejudice to the rights and remedies of either
Party with respect to any antecedent breach of any of the provisions of this
Agreement.


 


11.5         Additional
Remedies for Breach.  Notwithstanding
the terms and conditions of Section 11.3, neither Party shall be
obligated to terminate this Agreement if the other Party materially breaches
this Agreement.


 


ARTICLE 12

CONSEQUENCES OF TERMINATION


 


12.1         Confidential
Information Return.  Within 60 days
of the date of expiration or early termination by any Party in accordance with Article
11, each Party shall, except as otherwise provided in this Agreement,
return or destroy (and certify to such destruction of), all Confidential
Information of any other Party; provided,
however, that the receiving Party may maintain one copy of the disclosing
Party’s Confidential Information for archival purposes solely to confirm
compliance with Section 13.5.


 


12.2         Transfer
of Raw Materials and Products.  In
the event of the termination or expiration of this Agreement, Abbott Japan
shall sell to Inverness Japan the raw materials (including labels and package
inserts), work-in-process and finished Products held by Abbott Japan at a price
equal to the Material Cost Component of Inventory on-hand.


 


ARTICLE 13

MISCELLANEOUS


 


13.1         Guarantee
of Performance.  Seller hereby
unconditionally guarantees to Buyer the prompt and complete performance of any
and all of the obligations of Abbott Japan under or related to this
Agreement.  Parent hereby unconditionally
guarantees to Seller the prompt and complete performance of any and all of the
obligations of Inverness Japan under or related to this Agreement.  Each guaranty is an absolute, present and
continuing guaranty of performance, and shall remain in full force and effect
until the termination of this Agreement.


 


13.2         Force
Majeure.  Neither Party shall be held
in breach of this Agreement for failure to perform any of its obligations
hereunder (except the payment of money) and the time required for performance
shall be extended for a period equal to the period of such delay; provided,
that such delay has been caused by or is a result of circumstances beyond the
reasonable control of


 


28





















 


the Party so
affected, including without limitation, any acts of God; acts of the public
enemy; civil strife; wars declared or undeclared; actual acts of terrorism;
embargoes; labor disputes, including strikes, lockouts, job actions or
boycotts; fires; explosions; floods; and national shortages of material or
energy. The Party so affected shall: (a) give prompt written notice to the
other Party of the nature and date of commencement of the force majeure event
and its expected duration; and (b) use commercially reasonable efforts to
relieve the effect of such cause as rapidly as possible.


 


13.3         Relationship
of the Parties.  The relationship of
the Parties under this Agreement is that of independent contractors.  Nothing contained in this Agreement shall be
construed so as to constitute the Parties as partners, joint venturers or
agents of the other.  Neither Party or
its Affiliates has any express or implied right or authority under this
Agreement to assume or create any obligations or make any representations or
warranties on behalf of or in the name of the other Party or its Affiliates.


 


13.4         Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors and
assigns; provided, however, that neither this Agreement, nor any
rights or obligations hereunder, may be assigned without the prior written
consent of the other Party; provided, further, however,
that (a) either Party may assign its rights and obligations under this
Agreement to an Affiliate of such Party; and (b) may assign its rights and
obligations in conjunction with the sale of substantially all of the assets
related to this Agreement; further provided, if Inverness Japan and its
Affiliates sell substantially all of its assets related to Products hereunder,
Inverness Japan must assign its rights and obligations hereunder (and provide
Abbott Japan with notice thereof) and, in such case, within 60 days of such
notice, Abbott Japan may terminate this Agreement upon 30 days’ written notice.
No assignment under this Section 13.4 shall relieve the Party to this
Agreement from its obligations under this Agreement.


 


13.5         Public
Disclosure; Confidentiality.  The public disclosure provisions set forth in
Section 11.2 of the Asset Purchase Agreement and the confidentiality provisions
set forth in Section 11.3 of the Asset Purchase Agreement are each incorporated
herein by reference.


 


13.6         Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of each Party and its successors and
permitted assigns.


 


13.7         Entire
Agreement.  This Agreement including
the Schedules, which are incorporated herein by reference, together with the
Asset Purchase Agreement, the Other Agreements and the Confidentiality
Agreement executed by Seller and Parent and all documents


 


29





















 


delivered in
connection therewith, set forth the entire understanding of the Parties
concerning the subject matter hereof and supersedes all written or oral prior
agreements or understandings with respect thereto.


 


13.8         Compliance
with Applicable Laws.  In performing
this Agreement, each Party shall comply with all Applicable Laws and shall not
be required to perform or omit to perform any act required or permitted under
this Agreement if such performance or omission would violate the provisions of
any Applicable Laws.


 


13.9         Governing
Law.  This Agreement and the legal
relations between the Parties hereunder shall be construed, interpreted and
governed by the law of the State of Illinois, United States of America, without
regard to its conflict of laws principles.


 


13.10       Dispute
Resolution.  Any controversy or claim
arising out of or relating to this Agreement, or the breach of thereof, but
excluding any dispute relating to the validity or infringement of any Buyer
patent or patent application, shall be resolved through the binding alternate
dispute resolution procedure described in Exhibit K of the Asset Purchase
Agreement. Notwithstanding the foregoing, either Party may seek interim
injunctive relief for alleged breaches of confidentiality pursuant to Section
12.1 from any court of competent jurisdiction.


 


13.11       Notices.  All communications, notices and consents
provided for herein shall be in writing and be given in person or by means of
telex, facsimile or other means of wire transmission (with request for
assurance of receipt in a manner typical with respect to communications of that
type), by overnight courier or by mail, and shall become effective: (a) on
delivery if given in person; (b) on the date of transmission if sent by telex,
facsimile or other means of wire transmission; (c) 1 Business Day after
delivery to the overnight service; or (d) 4 Business Days after being deposited
in the United States mails, with proper postage and documentation, for
first-class registered or certified mail, prepaid.


 


Notices shall
be addressed as follows:


 


If to any Buyer entity, to:


 


Inverness Medical Innovations, Inc.

51 Sawyer Road, Suite 200

Waltham, MA 02453

Attention: General Counsel

Facsimile Number:  (781) 647-3939


 


30





















 


with copies (which shall not constitute notice) to:


 


Goodwin Procter LLP

Exchange Place

Boston, MA 02109

Attention:  Scott F. Duggan

Facsimile Number:  (617) 523-1231


 


If to Abbott Japan, to:


 


Abbott Laboratories

100 Abbott Park Road

Building AP6C, Department 0392

Abbott Park, Illinois 60064-6020

Attn:  President, Abbott Diagnostics
Division

Facsimile Number: (847) 938-6277


 


with copies (which shall not constitute notice) to:


 


Abbott Laboratories

100 Abbott Park Road

Building AP6D, Department 322

Abbott Park, Illinois 60064-6020

Attn:  Divisional Vice President,
International Legal Operations

Facsimile Number: (847) 938-1342


 


provided, however,
that if any Party shall have designated a different address by notice to the
others, then to the last address so designated.


 


13.12       Severability.  If any provision of this Agreement for any
reason shall be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision hereof, and this Agreement shall be interpreted and construed as if
such term or provision, to the extent the same shall have been held to be
invalid, illegal or unenforceable, had never been contained herein.


 


13.13       Interpretation.  When a reference is made in this Agreement to
Sections or Schedules, such references shall be to a Section or Schedule to
this Agreement unless otherwise indicated. 
The words “include,” “includes” and “including” when used herein shall
be deemed in each case to be followed by the words “without limitation.”  Any table of contents and headings contained
in this Agreement have been inserted for convenience of reference only and
shall not be relied upon in construing this Agreement.  Use of any gender herein to refer to any
Person shall be deemed to comprehend masculine, feminine and neuter unless the
context clearly


 


31





















 


requires
otherwise.  Use of the singular includes
the plural vice versa, unless the content clearly indicates otherwise.


 


13.14       Waiver
or Modification of Agreement.  No waiver
or modification of any of the terms of this Agreement shall be valid unless in
writing and signed by authorized representatives of both Parties.  Failure by either Party to enforce any of its
rights under this Agreement shall not be construed as a waiver of such rights
nor shall a waiver by either Party in one or more instances be construed as
constituting a continuing waiver or as a waiver in other instances.


 


13.15       Survival.  Expiration or early termination of this
Agreement shall not relieve either Party of its obligations incurred prior to
such expiration or early termination. 
The following provisions shall survive expiration or early termination
of this Agreement: Article 3, Section 6.4, Article 7, Section
8.1, Section 8.2, Section 9.1, Section 9.2, Section
9.4, Section 10.1, Section 10.2, Section 10.3, Section
10.5, Section 11.4, Article 12; Section 13.7; Section
13.9, Section 13.10, Section
13.11; Section 13.12
and this Section 13.15.


 


13.16       Counterparts.  This Agreement may be executed in any number
of original counterparts, each of which shall be deemed an original, but both
of which together shall constitute on and the same instrument.


 


13.17       Mutual
Drafting.  This Agreement is the
joint product of the Parties, and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of the Parties and their
respective legal counsel and advisers and any rule of construction that a
document shall be interpreted or construed against the drafting Party shall not
be applicable.


 


13.18       Expenses.  Except as otherwise expressly provided
herein, each Party shall bear its own expenses with respect to the transactions
contemplated by this Agreement.


 


13.19       No
Third Party Beneficiaries.  This
Agreement is solely for the benefit of the Parties and, to the extent set forth
herein, their respective Affiliates and the other Indemnified Parties and no
provision of this Agreement shall be deemed to otherwise confer upon third
parties any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.


 


13.20       Conflicts.  In the case of a conflict between the
provisions of this Agreement and the provisions of the Quality Agreement, the
provisions of this Agreement shall prevail.


 


32





















 


13.21       Headings.  The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.


 


[Signature Page
Follows]


 


33





















 


IN WITNESS WHEREOF, each Party has caused
this Agreement to be executed by its duly authorized officer on the date below
written.


 


	
   

  	
  INVERNESS MEDICAL INNOVATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Paul T. Hempel

  	
   

  
	
   

  	
  Name:

  	
  Paul T. Hempel

  
	
   

  	
  Title:

  	
  Secretary and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  INVERNESS MEDICAL JAPAN, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Paul T. Hempel

  	
   

  
	
   

  	
  Name:

  	
  Paul T. Hempel

  
	
   

  	
  Title:

  	
  Representative Director

  
	
   

  	
   

  	
   

  
	
   

  	
  INVERNESS MEDICAL SWITZERLAND GmbH

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Paul T. Hempel

  	
   

  
	
   

  	
  Name:

  	
  Paul T. Hempel

  
	
   

  	
  Title:

  	
  Geschaeftsfuehrer

  
	
   

  	
   

  	
   

  
	
   

  	
  ABBOTT JAPAN CO., LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Isao Ikeda

  	
   

  
	
   

  	
  Name:

  	
  Isao Ikeda

  
	
   

  	
  Title:

  	
  Representative Director and Chairman of

  
	
   

  	
   

  	
  the Board and President

  
	
   

  	
   

  	
   

  
	
   

  	
  ABBOTT LABORATORIES

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Sean Murphy

  	
   

  
	
   

  	
  Name:

  	
  Sean Murphy

  
	
   

  	
  Title:

  	
  Vice President, Global Licensing/New

  
	
   

  	
   

  	
  Business Development

  
						



 





















 


Exhibit
A


 


Activities of Buyer


 


Manufacturing personnel


Finishing Equipment


Product Manufacturing


mQA


Supervisory personnel


Payroll and Employee Benefits


HR related matters


Communication of Product Changes (to Abbott Japan to communicate to
regulatory body since we hold the product license).


Intellectual Property


Clinical Programs


New product development


Ongoing Post-Market
Surveillance


Communication with Regulatory
Authorities on New Product Development


IQA for incoming materials


 


2





















 


Exhibit
B


 


Manufacturing Support Services


 


Water/HVAC Services


Other Building Services
(Cafeteria, Parking, Rest Rooms, Maintenance/Housekeeping, Easements)


Environmental Safety and Health


Security


Medical/Nursing Services


Emergency Control Force


Manufacturing floorspace,
including  Staging/Quarantine areas


Warehouse floorspace


Manufacturing Site License


Information Technology system
related to costs accounting and quality


Solutions Prep Equipment


 


3





















 


Exhibit
C


 


Transition Services


 


1. During the entire Term


 


Glassware Service


Regulatory Support


Cost Accounting Personnel – Matsudo


Processing of Purchase Orders


Receiving


Warehousing


Inventory control (cycle counting, disposing, etc.)


 


2. During the first 6 months of the Term


 


Planning


Manufacturing Support Personnel


 


4





















 


Exhibit
D


 


Standard Labor and Overhead Cost and Standard
Material Cost


 


	
   

  	
   

  	
   

  	
   

  	
  Material

  	
   

  	
  Labor

  	
   

  	
  Overhead

  	
   

  	
  Total Labor

  & Overhead

  	
   

  	
  Total Cost

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2312

  	
   

  	
  DETERMINE
  HIV-1/2 20TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2313

  	
   

  	
  DETERMINE
  HIV-1/2 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2318

  	
   

  	
  DETERMINE
  HIV-CHA 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2323

  	
   

  	
  Dainascreen HIV-1/2
  100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2326

  	
   

  	
  DETERMINE
  HIV-1/2 CE 20T/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2327

  	
   

  	
  DETERMINE
  HIV-1/2 CE 100T/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2513

  	
   

  	
  DETERMINE
  HBSAG 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2523

  	
   

  	
  Dainascreen HBSAG
  2 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2413

  	
   

  	
  DETERMINE
  SYPHILIS 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2423

  	
   

  	
  Dainascreen
  TPAB100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2211

  	
   

  	
  CHASE BUFFER
  100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2291

  	
   

  	
  Dainascreen
  TPAB Diluent 15ML/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1B7501

  	
   

  	
  Dainascreen
  HEMO 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  1B7502

  	
   

  	
  Dainascreen
  HEMO 1000TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  



 










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


 


5





















 


	
  1B7401

  	
   

  	
  Dainascreen
  AUSAB 96TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1B7450

  	
   

  	
  Dainascreen
  Ausab Diluent 15ML/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  007D22-021

  	
   

  	
  DETERMINE
  CAP TUB

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  007D22-031

  	
   

  	
  DETERMINE
  LANCETS

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  007D22-051

  	
   

  	
  DETERMINE
  PIPETTE

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  007D22-061

  	
   

  	
  DETERMINE
  PIPET T

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B73070

  	
   

  	
  SPX
  U-PLATE 10

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B73071

  	
   

  	
  SPX
  U-PLATE 100

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B74030

  	
   

  	
  SPX
  AUSAB DROPPER

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75051

  	
   

  	
  SAMPLING
  BOTTLE 100T

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75052

  	
   

  	
  SAMPLING
  BOTTLE 1000T

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75053

  	
   

  	
  SAMPLE
  BOTTLE ID1

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75054

  	
   

  	
  SAMPLE
  BOTTLE ID2

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75055

  	
   

  	
  SAMPLING
  BOTTLE 1000T Y

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75059

  	
   

  	
  SPX
  FOBT SMPL SHEET (1)

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75060

  	
   

  	
  SPX
  FOBT SMPL SHEET (2)

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  



 










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


 


6





















 


Exhibit E


 


Quality
Agreement


 


See attached


 


7





















 


	
  Abbott
  Diagnostics Division (ADD)

  	
  Operating Procedure

  	
   

  



 


	
  Document
  No:

  	
  DFP06.OEM001

  	
  Issue Date:

  	
  18 Feb 2004

  	
  Supersedes Date:

  	
  01 Aug 2003

  
	
  Effective Date:

  	
  01 Apr 2004

  	
  Edition No:

  	
  002

  	
   

  	
   

  
	
  Name:

  	
  OEM QUALITY AGREEMENT TEMPLATE

  
							



 


OEM
Quality Agreements


 


Purpose


 


A Quality Agreement
defines the roles and responsibilities between a supplier and Abbott
Laboratories in addressing the Quality Assurance requirements for the
outsourced activity.


 


This document describes
Original Equipment Manufacturer (OEM) Quality Agreements, which are Division
Function Procedures (DFPs) that document agreement between Abbott Diagnostics
Division (ADD) and a specified OEM, in order to


 


•      delineate
quality responsibilities


•      assure product
meets ADD specifications, and


•      assure product
meets applicable government regulations and standards.


 


This document provides a
template for OEM Quality Agreements.  As
appropriate, the responsible parties


 


•      extract the
template portion of this DFP


•      populate it
with the required information, and


•      rename it per
specifications below.


 


Requirements


 


All OEM suppliers shall
have a Quality Agreement with Abbott Laboratories.


 


Exceptions:  Excluded, but optional, are


 


•      distributors


•      suppliers of
services that support manufacturing activities, and


•      suppliers of
products included as part of the final/finished Abbott product, such as


 


•         raw
materials


•         commodities


•         components,
or


•         off-the-shelf
products.


 










# - Indicates latest
revision


 


Production


 


1





















 


Implementation
Plan #


 


A divisional plan,
approved by Quality Assurance, will address the implementation of quality
agreements for existing OEM suppliers.


 


Scope #


 


This document applies to
OEM Quality Agreements only.


 


It applies to all ADD
sites and Division functions with OEM suppliers.


 


Security
caveat


 


This DFP may be shared
with the OEM, or potential OEM, with whom the Quality Agreement is being
written.  Information in a draft or
completed OEM Quality Agreement is confidential and may only be shared with the
specific OEM company.


 


Responsibility


 


ADD Division Quality
Assurance is the owner of this document (DFP06.OEM001).  Other functional areas required to be trained
on this document, at a minimum, include:


 


•      Supplier
Quality/Purchased Materials Quality Assurance (PMQA)


•      Product Quality
Assurance (PQA)


•      Research and
Development Quality Assurance (R&D QA), and


•      Original
Equipment Manufacturer (OEM) Operations.


 


Completed OEM Quality
Agreement documents, DFP06.OEM002 and higher, are owned by the functional group
or individual who compiles the Agreement in conjunction with the OEM.


 


Supporting
documents #


 


The following documents
support this procedure.


 


•      CRQS Policy A4-01  Quality Assurance Program
for Contract Manufacturers and Packagers


•      DFP05.002  Creating and Revising a
Division QSM; Policy; Process; or OP


•      Form 04055  OEM Evaluation Checklist


•      Q06  Purchasing Policy


•      Q06.01  Supplier Evaluation
Process


•      Q06.03  Original Equipment
Manufacturer (OEM) Contract Review


•      Q06.04  Process for Commercializing
Products Manufactured for or Distributed by Abbott Diagnostics Division


•      Q06.04.001  OEM and Distribution
Product Project Plan Procedure


 


2





















 


Content #


 


The table below lists the
topics in this document.


 


	
  Topic

  	
   

  	
  See Page

  	
   

  
	
  OEM Quality Agreements

  	
   

  	
  1

  	
   

  
	
  OEM Quality Agreements Template

  	
   

  	
  6

  	
   

  



 


General
Ownership Items #


 


Below is
a list of General Ownership Items to be addressed, where applicable, in the
OEM-specific DFP.  If an item is not
applicable, the section should appear in the Agreement identified as “not
applicable.”


 


	
  Number

  	
   

  	
  Ownership Items - General

  
	
  1

  	
   

  	
  Quality
  Systems/GMP Attestation

  
	
  2

  	
   

  	
  Auditing and
  Monitoring

  
	
  3

  	
   

  	
  Third Party
  Inspection Notification

  
	
  4

  	
   

  	
  Product
  Requirements/ Specifications

  
	
  5

  	
   

  	
  Software
  detailed design specifications

  
	
  6

  	
   

  	
  Design History
  File (DHF)

  
	
  7

  	
   

  	
  Design Control/
  Design Control Changes

  
	
  8

  	
   

  	
  Verification and
  Validation

  
	
  9

  	
   

  	
  Submission

  
	
  10

  	
   

  	
  Regulatory
  issues for countries in which product is distributed

  
	
  11

  	
   

  	
  Lot Number
  Assignment

  
	
  12

  	
   

  	
  Device History
  Record (DHR) - includes record retention requirements

  
	
  13

  	
   

  	
  Device Master
  Record (DMR) - includes record retention requirements

  
	
  14

  	
   

  	
  Labeling
  (content, claims, translations, specifications, packaging, printing,
  inspection, etc. Includes promotional material)

  
	
  15

  	
   

  	
  Process and
  Material Control – Manufacturing Changes

  
	
  16

  	
   

  	
  Final product
  release, in-process, and raw material testing

  
	
  17

  	
   

  	
  Notification of
  nonconforming final product

  
	
  18

  	
   

  	
  Stability

  
	
  19

  	
   

  	
  Sample Retention

  
	
  20

  	
   

  	
  Storage and
  distribution

  
	
  21

  	
   

  	
  Shipping

  
	
  22

  	
   

  	
  Warranty

  
	
  23

  	
   

  	
  Customer
  certificate

  
	
  24

  	
   

  	
  Disposition of
  returned goods

  
	
  25

  	
   

  	
  Training

  
	
  26

  	
   

  	
  Adverse
  Experiences (Medical Device Reporting), Customer Support and Complaints

  
	
  27

  	
   

  	
  Customer
  Interventions- recalls

  
	
  28

  	
   

  	
  Other

  



 


3





















 


In Vitro
Diagnostic Directive #


 


Below is
a listing of Ownership Items specific to the In Vitro Diagnostic Directive
(IVDD) to be addressed, where applicable, in the OEM-specific DFP.  If an item, or this section, is not
applicable, it should appear in the Agreement identified as “not applicable.”


 


	
  Number

  	
   

  	
  Ownership Items - IVDD

  
	
  1

  	
   

  	
  IVDD
  Certification

  
	
  2

  	
   

  	
  Labeling and
  language requirements per IVDD

  
	
  3

  	
   

  	
  Technical Files

  
	
  4

  	
   

  	
  Declaration of
  Conformity

  
	
  5

  	
   

  	
  Risk Analysis

  
	
  6

  	
   

  	
  Essential
  Requirements

  
	
  7

  	
   

  	
  Management of
  Notified Body review and approval

  
	
  8

  	
   

  	
  Legal
  Manufacturer Defined

  
	
  9

  	
   

  	
  Other

  



 


4





















 


Changes
and Approvals


 


Initial approval and
changes to OEM Quality Agreements require approval of both companies.


 


Abbott and OEM approval
consists of, minimally


 


•      ADD Quality
Assurance and Regulatory Affairs management, and


•      authorized OEM
management representative(s).


 


It is recommended that a
Quality Assurance representative review completed OEM Quality Agreements
annually; however, the document may be updated as frequently as is necessary to
make certain that appropriate communication is maintained.  In all cases, the time between consecutive
reviews shall not exceed 3 years.


 


Changes to Appendix I of
the completed Quality Agreement require Document Owner approval only.


 


Completed OEM Quality
Agreements may change for reasons such as:


 


•      Required
Periodic Review by the Document Owner


•      New
Requirements, as expressed in amendments to the ADD master OEM Quality
Agreement DFP (DFP06.OEM001)


•      Contractual
Changes / Renewals


•      Product
Realization Milestones (such as Product Launch)


•      Third Party or
ADD Quality Audits


•      Quality History


•      Management
Review


•      Product Change
Control


•      Submission Updates


•      Project Plans
(see Q06.04.001)


 


Note:
Changes to items in this template could require changes
to Appendix I of Process Q06.03.


 


Template


 


The remainder of this
document is the required template for OEM Quality Agreements.


 


Completed OEM Quality Agreements
should be formatted in accordance with DFP05.002.


 


Important:  The DFP06.OEM002 through DFP06.OEM199 series
of documents are sequentially reserved for completed OEM Quality Agreements.


 


5





















 


OEM Quality Agreements Template


 


Executive
Summary


 


[Input Executive Summary
here. It serves as a high level overview of the ADD-OEM partnership. The
typical source of this information is from the company press releases and/or
the OEM Project Plan.]


 


OEM
Approval Signature  #  name/title/date


 


Authorized signature
below indicates Approval of the [enter OEM name here]
Quality Agreement.


 


6





















 


The
recommended Purpose section is listed below:


 


Purpose #


 


A Quality Agreement is a
document that defines the roles and responsibilities between a supplier and
Abbott Laboratories in addressing the Quality Assurance requirements for the
outsourced activity.


 


This document is the
Original Equipment Manufacturer (OEM) Quality Agreement between Abbott
Diagnostics Division (ADD) and [enter OEM name here].  It serves to


 


•      delineate
quality responsibilities


•      assure product
meets ADD specifications, and


•      assure product
meets applicable government regulations and standards.


 


Information in a draft or
completed OEM Quality Agreement is confidential and may only be shared with [enter OEM name here].


 


Caution:
This document


 


•      is not a
restatement nor a compilation of all of the applicable regulations, global
expectations and requirements; but is a listing of the responsibility for key
specific quality requirements outlined in the agreement between the two
companies.


•      does not
modify, amend, or thereby affect the terms and conditions set forth in the
approved contract.


 


The
recommended Scope section is listed below:


 


Scope


 


The scope of this
document is only for  [enter OEM name here] products under
contractual agreement with Abbott.


 


7





















 


The
required Responsibility section is listed below:


 


Responsibility
#


 


The owner of this
document is [fill in appropriate Abbott functional group
or individual who compiles this agreement].


 


The
required Supporting documents section is listed below:


 


Supporting
documents  #


 


The following documents
support this procedure.


 


[list
the supporting documents (using bullet text) for the OEM-specific quality
agreement or “not applicable”, as appropriate.]


 


The
required Content section is listed below:


 


Content  #


 


The table below lists the
topics in this document. [* fill in page numbers
from OEM-specific DFP quality agreement]


 


	
  Topic

  	
   

  	
  See Page

  	
   

  
	
  Changes and Approval

  	
   

  	
  *

  	
   

  
	
  Quality Agreement Overview

  	
   

  	
  *

  	
   

  
	
  Ownership Items - General

  	
   

  	
  *

  	
   

  
	
  Ownership Items - In Vitro Diagnostic Directive
  (IVDD)

  	
   

  	
  *

  	
   

  
	
  Definitions

  	
   

  	
  *

  	
   

  
	
  Appendix I: Key Contacts Matrix

  	
   

  	
  *

  	
   

  



 


[Note:  An actual quality agreement document will
begin with an “Overview” (Infomapping “map title”), which will contain the
following sections (Infomapping “block titles”):


 


•      Executive
Summary


•      OEM Approval
Signature


•      Purpose


•      Scope


•      Responsibility


•      Supporting
documents


•      Content


•      General


•      In Vitro
Diagnostic Directive


 


Do
not repeat this Note in the  OEM-specific
DFP quality agreement.]


 


8





















 


General #


 


Below is
a list of General Ownership Items to be addressed within the agreement.


 


	
  Number

  	
   

  	
  Ownership Items - General

  
	
  1

  	
   

  	
  Quality
  Systems/GMP Attestation

  
	
  2

  	
   

  	
  Auditing and
  Monitoring

  
	
  3

  	
   

  	
  Third Party
  Inspection Notification

  
	
  4

  	
   

  	
  Product
  Requirements/ Specifications

  
	
  5

  	
   

  	
  Software detailed
  design specifications

  
	
  6

  	
   

  	
  Design History
  File (DHF)

  
	
  7

  	
   

  	
  Design Control/
  Design Control Changes

  
	
  8

  	
   

  	
  Verification and
  Validation

  
	
  9

  	
   

  	
  Submission

  
	
  10

  	
   

  	
  Regulatory
  issues for countries in which product is distributed

  
	
  11

  	
   

  	
  Lot Number
  Assignment

  
	
  12

  	
   

  	
  Device History
  Record (DHR) - includes record retention requirements

  
	
  13

  	
   

  	
  Device Master
  Record (DMR) - includes record retention requirements

  
	
  14

  	
   

  	
  Labeling
  (content, claims, translations, specifications, packaging, printing,
  inspection, etc. Includes promotional material)

  
	
  15

  	
   

  	
  Process and
  Material Control – Manufacturing Changes

  
	
  16

  	
   

  	
  Final product
  release, in-process, and raw material testing

  
	
  17

  	
   

  	
  Notification of
  nonconforming final product

  
	
  18

  	
   

  	
  Stability

  
	
  19

  	
   

  	
  Sample Retention

  
	
  20

  	
   

  	
  Storage and
  distribution

  
	
  21

  	
   

  	
  Shipping

  
	
  22

  	
   

  	
  Warranty

  
	
  23

  	
   

  	
  Customer
  certificate

  
	
  24

  	
   

  	
  Disposition of
  returned goods

  
	
  25

  	
   

  	
  Training

  
	
  26

  	
   

  	
  Adverse
  Experiences (Medical Device Reporting), Customer Support and Complaints

  
	
  27

  	
   

  	
  Customer
  Interventions- recalls

  
	
  28

  	
   

  	
  Other

  



 


9





















 


In Vitro
Diagnostic Directive #


 


Below is
a list of Ownership Items specific to the In Vitro Diagnostic Directive (IVDD)
to be addressed within the agreement.


 


	
  Number

  	
   

  	
  Ownership Items - IVDD

  
	
  1

  	
   

  	
  IVDD
  Certification

  
	
  2

  	
   

  	
  Labeling and
  language requirements per IVDD

  
	
  3

  	
   

  	
  Technical Files

  
	
  4

  	
   

  	
  Declaration of
  Conformity

  
	
  5

  	
   

  	
  Risk Analysis

  
	
  6

  	
   

  	
  Essential
  Requirements

  
	
  7

  	
   

  	
  Management of
  Notified Body review and approval

  
	
  8

  	
   

  	
  Legal
  Manufacturer Defined

  
	
  9

  	
   

  	
  Other

  



 


10





















 


The
required Changes and Approval section is listed below:


 


Changes
and Approval  #


 


Initial approval and
changes to OEM Quality Agreements require approval of both companies.


 


Abbott and OEM approval
consists of, minimally


 


•      ADD Quality
Assurance and Regulatory Affairs management, and


•      authorized OEM
management representative(s).


 


Note:  Abbott approval is electronic.


 


11





















 


The
required Quality Agreement Overview section is listed below:


 


Agreement
Type  #


 


[Briefly describe the the
agreement type and overview.  The typical
source of this information is the contract and/or the OEM Project Plan.


 


Topics for consideration
include:


 


•       Category of
agreement.  Examples include:


 


•         distribution-only


•         contract
manufacturing


•         co-development


 


•       Primary
complaint handling responsibility.


•       Legal
manufacturer and primary company name on the product(s).]


 


12





















 


The
required Ownership Items - General section is listed below:


 


#


 


The following paragraphs
identify the owner of specific tasks, and provide a brief explanation of the
responsibility.


 


Quality
Systems/GMP Attestation


 


[Describe which company
shall be designated the FDA Approved Facility. 
Manufacturing shall be conducted in accordance with all applicable laws,
rules, regulations and regulatory approvals including Quality System
Regulations (QSR), utilizing a quality control program consistent with the QSR
and other governing laws or regulations, such as ISO-9001.


 


The owner of the Approved
Facility must notify the other company of any plans to relocate the Approved
Facility at least 60 days prior to relocation. 
This notification is to be followed with a confirming document issued on
the date of relocation.  Relocation may
be grounds for re-qualifying the OEM supplier.]


 


Auditing
and Monitoring


 


[Describe:


 


•      whether [enter OEM name here]shall obtain “Approved”,
or other ADD supplier status rating (Certified, Conditional, Restricted,
Inactive, or Disapproved).


•      if it is
specified that Abbott shall accept only product which was manufactured at a
facility that has passed an Abbott Supplier Quality audit.


•      if Abbott shall
be entitled to perform an annual audit or additional audits due to facility
relocation, compliance follow-up, or FDA request.  Explain that prior written notice is required
and that audits are performed during normal business hours.


•      if [enter OEM name here] can audit
Abbott facilities and define the scope.]


 


Third
Party Inspection Notification and Sharing of Findings


 


[Describe:


 


•      if [enter OEM name here]must
notify Abbott of any action by the FDA in regard to the products or facilities
covered in the agreement.


•      if [enter OEM name here] is audited or inspected by some
specified third party such as FDA or ISO, does Abbott want [enter OEM name here] to


•            send a
copy of the audit report/findings?


•            notify
Abbott if the audit/inspection causes follow-on actions?


•            notify
Abbott when such audits or inspections are taking place?]


 


13





















 


Product
Requirements/ Specifications


 


[Describe which company
has responsibility.


 


Additional topics for
consideration:


 


•      Product,
testing, and manufacturing specification development


•      Document
issuance, distribution, approval, and retention


•      Change control,
including communication between companies]


 


Software
detailed design specifications (if applicable)


 


[Describe which company
has responsibility.


 


Additional topics for
consideration:


 


•      Specification
development and validation


•      Document
issuance, distribution, approval, and retention


•      Change control,
including communication between companies]


 


Design
History File (DHF)


 


[Describe which company
has responsibility.


 


Additional topics for
consideration:


 


•      Product,
testing, and manufacturing specification development


•      Document
issuance, distribution, approval, and retention


•      Change control,
including communication between companies]


 


Design
Control/ Design Control Changes


 


[Describe which company
has responsibility.


 


If OEM, describe
whether [enter OEM name here]
shall notify Abbott of changes as described in the Process and Material
Control-Manufacturing Changes section.


 


Additional topics for
consideration:


 


•      Product,
testing, and manufacturing specification development


•      Document
issuance, distribution, approval, and retention


•      Change control,
including communication between companies]


 


14





















 


Verification
and Validation


 


[Describe which company
has responsibility for:


 


•      creating the
Validation Master Plan


•      determining how
it is to be approved, and


•      deciding where
copies of it are to be retained.


 


Additional topics for
consideration:


 


•      Process,
product, software, environmental monitoring, equipment, facility, and test
method


•      Change control,
including communication between companies]


 


Submission


 


[Describe which company
has responsibility and ownership of any licenses, clearances, patents, and
registrations.  Identify the company
responsible for any required filings (and fees) for licenses, clearances,
patents, and registrations.


 


Note:  It may be appropriate to reference the
contract and use this paragraph for any explicit clarifications.


 


Additional topics for
consideration:


 


•      Deficiency
letters and responses


•      Periodic
reviews and reports]


 


Regulatory
issues for countries in which product is distributed #


 


[Describe which company
has responsibility to comply with regulatory requirements of destination
countries.]


 


Additional topic for
consideration:


 


•      If product is
currently licensed in Canada or will be licensed in Canada, describe which
company is the legal manufacturer.


 


15





















 


Lot
Number Assignment


 


[Describe which company
has responsibility.


 


Additional topics for
consideration:


 


•      Issuance,
distribution, and approval


•      Product list
number, lot number, and expiration date format


•      Retention of
on-line retrieval and traceability capability (e.g. how long is it kept, where
is it kept, turn-around time to retrieve data)


•       What happens
to lot number assignment data when it “ages” off the supplier’s management
information systems]


 


Device
History Record (DHR)


 


[Describe which company
has responsibility.


 


Additional topics for
consideration:


 


•      Content


•      Suitability of
electronic records - if electronic refer to applicable electronic recordkeeping
requirements


•      Review,
approval, retention]


 


Device
Master Record (DMR)


 


[Describe which company
has responsibility for the compilation of records containing the procedures and
specifications for a finished device.]


 


16





















 


Labeling


 


[Labeling includes
content, claims, translations, specifications, printing, inspection, etc.
(including promotional material).


 


Describe:


•      if the outside
packaging labeling will have [enter OEM name here]
trade dress with “Distributed by Abbott” or other labeling.


•      if the outside
labeling is to include regulatory compliance labels, such as CE mark or
Nationally Recognized Test Laboratory (NRTL) designations.


•      on-the-device
label requirements. (per applicable FDA and other regulations)


•      approval and
retention process of all labeling.


•      the process for
promotional material review and approval.


•      that Abbott
must approve any and all label changes if the label responsibility is shared.


•       whether Abbott
ADD Labeling Control functional expertise will be utilized on behalf of the OEM
supplier.]


 


17





















 


Process
and Material Control – Manufacturing Changes 
#


 


[Enter OEM name here] shall notify Abbott, in
advance, of any changes in its manufacturing process which could potentially
affect the safety or efficacy, or materially affect the fit, form or function
of the products. This includes any changes that affect


•      written quality
plans for production


•      written quality
procedures, as well as


•      changes outside
the validated level or procedure in manufacturing


•         procedures


•         component,
part, or raw material suppliers


•         manufacturing
sites, or


•         batch sizes.


 


Upon the request of
Abbott, [enter OEM name here] shall
provide to Abbott, representative samples of changed products in reasonable
quantities to analyze in advance.


 


[Identify the functional
group at Abbott to notify for planned changes. 
[Enter appropriate Abbott department/area.]  The change notification and any applicable
data will be stored by [enter appropriate Abbott
department/area.]


 


Important:  In addition to change notification, when the
OEM is a contract manufacturer for Abbott, the following may apply:


 


[Enter OEM name here] shall obtain a quality
approval from [enter appropriate Abbott quality
department/area here] when


 


•      a correction
involving rework of critical components or finished kits was used to ensure
conformity of the material/ product, or


•      a status of
accept-for-use (or similar use-as-is status) is assigned for nonconforming
deviating material/ product.


 


Additional topics for
consideration:


•      Reworking


•      Batch
adjustments


•      Calibration
monitoring and preventive maintenance


•      Supplier
evaluation


•      Environmental
monitoring and results]


 


18





















 


Final
product release, in-process, and raw material testing  #


 


[Describe which company
performs which type of testing in accordance with its quality control program.]  Test data and/ or performance specifications
must exist in order to make an independent determination that products are safe
and effective for their intended use.


 


Shipment of products from
[enter OEM name here] to Abbott shall
be accompanied by a certificate of analysis or compliance from [enter OEM name here] Quality
Assurance department, indicating the final release values, acceptance ranges,
and that the products have passed all the quality control parameters developed
by [enter OEM name here].


 


[Enter
OEM name here] will inform Abbott Product Quality when new lots
of the OEM product is significantly different from the previous lot sent to the
customer.  Abbott Product Quality
determines if the new lot is different to the extent that customers may have to
recalibrate and/or re-establish assay control ranges and/ or change patient
ranges.  Abbott Product Quality reserves
the right to communicate this significant lot-to-lot difference to the
customer.


 


[Additional topics for
consideration:


 


•      Use of currrent
specifications


•      Sampling plans


•      Use of current
test methods


•      Laboratory
reference standards (assay standardization)


•      Out of
specification procedures


•      Test records
and document retention]


 


Notification
of nonconforming final product


 


[Describe the process for
product nonconformance notification in the following manner:]


1.     [Enter OEM name here] shall notify
Abbott of any material design or manufacturing problems.


2.     [Enter OEM name here] shall
notify Abbott as soon as practicable and no later than X business days after
the discovery of any batch failure that could result in [enter
OEM name here] inability to meet Abbott’s requested delivery
dates.


3.     [Enter OEM name here] shall notify
Abbott as soon as practicable and no later than X business days after the
discovery of any failure of a released batch of products distributed to Abbott.


 


19





















 


Important:


•      The functional
group at Abbott to notify is the [enter appropriate Abbott department].


•      The change
notification and any applicable data will be stored by the [enter appropriate Abbott department/area].


 


Stability


 


[Describe:


•      the expected
shelf life as “at least _XX__ months from the date of shipment”.


•      which company
will have responsibility for performing additional real time stability studies
on production lots, and


•      who has
responsibility for conducting “on-market” stability testing yearly on
production lots following Standard Operating Procedures (SOPs) for on-market
stability.


 


Additional topics for
consideration:


•      Stability
procedure, protocol, and specifications


•      Stability trend
analysis


•      Out of
specification procedures]


 


Sample
retention


 


[Describe:


•      which company
shall retain a sufficient quantity of each batch of the products to allow
investigation of complaints and confirmation of product shelf life.


•      which company
shall maintain file samples of each batch of product in a suitable storage
facility beyond expiration date or as may be required by law, regulation, or
rule.


•      the amount of
time that samples must be retained.]


 


Storage
and distribution


 


[Describe:


•      which company
has the responsibility for establishing storage and shipping conditions.


•      if storage and
distribution of kits shall be shared by both companies.


•       if the supplier
may “drop ship” product or replacement parts directly to a final customer or to
downstream product distributors.


Example:  An example of a distribution-only agreement
would state: “For purposes of the agreement, [enter OEM name here] will distribute
product to Abbott while Abbott will distribute product to customers.”


 


Additional topic for consideration:  Packaging instructions]


 


20





















 


Shipping


 


[Describe who has
responsibility for making sure that the products are suitably packed for
shipment in standard containers.]


 


Warranty


 


[Describe or reference
the warranty statement found in the signed contract].


 


Customer
certificate


 


[Describe which company
shall provide all certificates for products.]


 


Disposition
of returned goods


 


[Describe the terms and
conditions for returning nonconforming product.


 


Example:  If inspection results confirm that the
products do not conform with the warranty, and the nonconformance did not arise
from misuse, mishandling, improper storage, neglect, modification or unusual
chemical or physical stress after delivery to the carrier, Abbott shall return
the products to [enter OEM name here at] [enter OEM name here] expense.


 


Additional topics for
consideration:


 


•      Returned goods
procedure


•      Inspection,
redressing, and restocking


•      Destruction


•      Evaluation and
assessment for potential complaints or CAPA


•      Requirements
for trending and for notification of trend results


•       What to do if
the returned good may have been involved in an adverse event, such as MDR,
customer complaint, or recall]


 


Training


 


[Describe the
responsibilities for training internal personnel as well as customers.


 


Additional topic for
consideration:


 


•      Promotional
material]


 


21





















 


Adverse
Experiences (Medical Device Reporting), Customer Support and Complaints  #


 


[Describe:


•      how any adverse
experience information obtained by either company shall be communicated and
reported.


•      which
functional group at Abbott is appropriate to notify.


•      in detail, the
overall process of customer complaint handling.


 


Important:  Include which company’s toll-free number is
the primary complaint handling number.


 


•      who is
responsible for which types of complaints.


•      which company
deals directly with customers or FDA over which types of complaints.


•      who has the
responsibilities for


•         complaint
files.


•         complaint
investigation and closure using structured problem solving techniques to obtain
root cause.


•         regulatory
agency reporting.


•         tracking and
trending.


 


•      whether the OEM shall provide Abbott reasonable access to customer
complaint evaluations for the products in the agreement.


 


Additional topic for
consideration:


 


•      Based on the
distribution plan, are there other standards that need to be referenced, such
as:


•            EU
Vigilance


•            Standards
of Japan


•            Standards
of Canada


•            Other
Standards]


 


22





















 


Customer
Interventions- recalls


 


[Describe:


•      the
responsibilities to implement any required recall, field correction or field
report.


 


Important:  List the functional group at Abbott to
notify.


 


•      who will make
all contacts with the FDA.


•      who shall be
responsible for coordinating all activities in connection with the recall.


•       who is
responsible for maintaining a customer database sufficient to permit timely
notifications.]


 


Other


 


[In this section, include
any other quality, regulatory, or compliance items that did not fit in the
above categories.]


 


23





















 


The
required Ownership Items - IVDD section is listed below:


 


IVDD
Certification #


 


[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]


 


Labeling
and language requirements per IVDD


 


[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]


 


Technical
Files


 


[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]


 


Declaration
of Conformity


 


[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]


 


Risk
Analysis


 


[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]


 


Essential
Requirements


 


[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]


 


Management
of Notified Body review and approval


 


[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]


 


Legal
Manufacturer Defined


 


[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]


 


24





















 


The
required Definitions section is listed below:


 


Agreement  #


 


The contract between the
two companies.


 


In
Vitro Diagnostic Device (IVD)


 


Any medical device which
is a


 


•      reagent,


•      reagent
product,


•      calibrator,


•      control
material,


•      kit,


•      instrument,


•      apparatus,


•      equipment, or


•      system, whether
used alone or in combination, intended by the manufacturer to be used in vitro for the examination of specimens, including blood
and tissue donations, derived from the human body, solely or principally for
the purpose of providing information:


 


•      concerning a
physiological or pathological state,


•      concerning a
congenital abnormality,


•      to determine
the safety and compatibility with potential recipients, or


•      to monitor
therapeutic measures.


 


In
Vitro Diagnostic Directive (IVDD)


 


The European Community
legislation that establishes regulations of in vitro
diagnostic medical devices.


 


Original
Equipment Manufacturer (OEM)


 


Supplier which produces a
finished in vitro diagnostic device for distribution by ADD when ADD is the
legal manufacturer or when ADD appears on the device label.  OEM production requires the performance of
design, development and manufacture, either wholly or in part.


 


Exclusion:  An OEM does not include manufacturers of
components or accessories of in vitro devices


 


25





















 


The
required Appendix I: Key Contacts Matrix section is listed below:


 


Note:  Only Document Owner
approval is required to change this Appendix.


 


Abbott
list numbers and commodity numbers


 


[Include
the applicable final product list numbers here.]


 


 


 


[Insert
the appropriate functional areas and names, phone numbers, and e-mail addresses
in the tables.]


 


KEY CONTACTS 
@  ABBOTT LABORATORIES


 




	
  Functional Area

  	
   

  	
  Name

  	
   

  	
  Phone Number

  	
   

  	
  E-mail Address

  	
   

  
	
  Purchased Materials Quality Assurance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Product Quality Assurance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OEM Operations

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Demand Management

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Corporate Purchasing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Division Quality

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  






 


KEY CONTACTS 
@  [enter OEM
name here]


 




	
  Functional Area

  	
   

  	
  Name

  	
   

  	
  Phone Number

  	
   

  	
  E-mail Address

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  






 


End of Document


 


26





















 


Exhibit F


 


Final
Transition Services


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Yen)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Yen)

  	
   

  	
  (Yen)

  	
   

  	
  Monthly

  	
   

  
	
   

  	
   

  	
  Headcount

  	
   

  	
  Monthly

  	
   

  	
  Hourly

  	
   

  	
  Monthly

  	
   

  	
  Charge

  	
   

  
	
   

  	
   

  	
  Equivalents

  	
   

  	
  House

  	
   

  	
  Charge

  	
   

  	
  Charge

  	
   

  	
  w/Mark-up

  	
   

  
	
  Monthly Flat Fee:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cost Accounting Personnel – Matsudo

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Purchasing/Supply Chain Management

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Material Handling:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Receiving

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Warehousing                                        }

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  Inventory control

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Complaint Handling

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Product Safety

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ****

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  



 


	
  As Used:

  	
   

  	
   

  
	
  Regulatory Support

  	
   

  	
   

  
	
  }

  	
   

  	
  Charged base don
  actual hours incurred at a rate of Yen **** plus The ****% mark-up.

  
	
  Chase Buffer Fill/Label

  	
   

  



 


General Description of
Services:


 


Cost
Accounting – General financial support as currently provided
for the product line. Activities include:


 


•      Monthly actual
closing


•      Monthly actual
reporting


•      Cycle counting
/ physical inventory


•      Ad hoc
financial support


•      Semi-annual
planning/budgeting


 










 


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


 


8





















 


Purchasing/Supply
Chain Management – Planning and procuring material for manufacturing.
Activities include:


 


•      Inventory
planning to support manufacturing schedule


•      General
Purchasing Administration


•      Issuing
purchase orders


•      Receiving
Invoices and entering receipts into BPCS


•      Purchase
Specification/Contracting/Vendor Approval


•      Purchasing
management


 


•      Warehousing/Receiving


•      Material/Commodity
Receiving and inspection


•      BPCS
entry


 


Material
Handling  -


 


•      Key material
receiving


•      Inspection for
shipment damage/claim processing


•      Movement of
receipts into appropriate storage area


•      Logging
receipts into BPCS system


•      Raw material
labeling and general stock control


 


Complaint
Handling – reviewing world-wide level II complaint detail and
characterizing data for trending and analysis.


 


Product
Safety for MAH – Good Vigilance Practice primarily involving
post market surveillance for the Japanese market (external CAPA). Activities
include:


 


•      Data collection
and analysis


•      Approving
labeling and product inserts


•      Issuing
Customer Letters


•      Approving
promotional materials


•      Risk Evaluation


•      CAPA ORB –
Provide monthly statement


 


9





















 


Schedule 1.1(a)


 


Adjusted
Price per Unit


 


Adjusted Price per Unit
is calculated as follows:


 


Amounts provided in
Columns “A” and “B” represent Seller’s standard cost per unit per the BPCS
System in Matsudo, Japan as of December 1, 2004


 


Column “C” is adjusted
annually for the CPI and becomes the Adjusted Price Per Unit then in effect


 


All Costs Are Per Test in
Yen


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  “B”

  	
   

  	
  “C”

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  “A”

  	
   

  	
  Rare

  	
   

  	
  Cost

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Total

  	
   

  	
  Reagent

  	
   

  	
  w/o Rare

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Cost

  	
   

  	
  Cost

  	
   

  	
  Reagent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2312

  	
   

  	
  DETERMINE HIV-1/2
  20TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2313

  	
   

  	
  DETERMINE HIV-1/2
  100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2318

  	
   

  	
  DETERMINE
  HIV-CHA 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2323

  	
   

  	
  DAINASCREEN HIV-1/2
  100TEST//KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2326

  	
   

  	
  DETERMINE HIV-1/2
  CE 20T/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2327

  	
   

  	
  DETERMINE HIV-1/2
  CE 100T/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  



 










 


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


 


10





















 


Schedule 1.1(b)


 


Product
Specifications


 


****


 










 


**** REPRESENTS 24 PAGES
OF TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN FILED
SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION


 


11