EXHIBIT 10.2


 


CONFIDENTIAL
TREATMENT REQUESTED AS TO CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT 10.2
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


 


 


RESEARCH AND DEVELOPMENT AGREEMENT

among


ITI SCOTLAND LIMITED


and


INVERNESS MEDICAL INNOVATIONS, INC.


and


STIRLING MEDICAL INNOVATIONS LIMITED


and


INVERNESS MEDICAL SWITZERLAND, GMBH


25 February 2005


 


 





















 


CONTENTS


 


	
  Clause

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions and
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Conditions Precedent

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  IMI’s
  and Stirling’s Obligations and SwissCo’s Consent

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  The Research
  and Development Project

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Stirling’s
  Knowledge Management, Access and Reporting Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Financial Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Royalty Adjustment

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Intellectual Property

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Changes
  to the Research and Development Project

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Dispute Resolution

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Warranties and
  Indemnities

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Variation

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Assignation and
  Sub-Contracting

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Publicity

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Remedies not Exclusive

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Severance

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  Entire Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Governing Law

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SCHEDULE

  	
   

  
	
   

  	
   

  
	
  Part 1 Milestones

  	
   

  
	
   

  	
   

  
	
  Part 2A
  IMI Financial Contribution

  	
   

  
	
   

  	
   

  
	
  Part
  2B Stirling Minimum Expenditure

  	
   

  
	
   

  	
   

  
	
  Part
  3 Development Fee

  	
   

  
	
   

  	
   

  
	
  Part
  4 Royalty Adjustment Formula

  	
   

  
	
   

  	
   

  
	
  Part
  5 Expertise Profile

  	
   

  



 





















 


	
  Part
  6 Marketing Agreement Form

  	
   

  
	
   

  	
   

  
	
  Part
  7 Parent Company Guarantee

  	
   

  
	
   

  	
   

  
	
  SCHEDULE

  	
   

  
	
   

  	
   

  
	
  Notice

  	
   

  
	
   

  	
   

  
	
  Part
  8 Part 8A

  	
   

  
	
   

  	
   

  
	
  Legal Opinion regarding
  SwissCo

  	
   

  
	
   

  	
   

  
	
  Part 8 Part 8B

  	
   

  
	
   

  	
   

  
	
  Legal Opinion regarding IMI

  	
   

  



 


iii





















 


RESEARCH AND
DEVELOPMENT AGREEMENT


 


among


 


ITI SCOTLAND
LIMITED, incorporated in Scotland under the Companies Acts with registered
number SC251900 and having its registered office at 180 St. Vincent Street,
Glasgow, G2 5SG (“ITI”); and


 


INVERNESS  MEDICAL INNOVATIONS, INC. incorporated in the
State of Delaware,  United States of
America and having its principal place of business at 51 Sawyer Road, Suite
200, Waltham, MA 02453-3448, United States of America (“IMI”); and


 


STIRLING
MEDICAL INNOVATIONS LIMITED, formerly called “Cardiosure Limited”, having
changed its name conform to Certificate of Incorporation on Change of Name
dated 25 February 2005) incorporated in Scotland under the Companies Acts
with registered number SC277069 and having its registered office at 249 West
George Street, Glasgow, G2 4RB (hereinafter referred to as “Stirling”) and


 


INVERNESS
MEDICAL SWITZERLAND, GmbH, incorporated in Switzerland (Company Number
CH-170.4.003.523-4)) and having its principal place of business at Bundesplatz
1, 6300 Zug (“SwissCo”)


 


WHEREAS:


 


A             IMI has significant experience and expertise in developing
diagnostic products;


 


B             ITI wishes to fund a research and development project in the field
of microfluidics and the identification and development of Biomarkers and IMI
and Stirling have agreed to undertake such research and development; and


 


C             ITI, IMI, Stirling and SwissCo wish to enter into this Agreement to
govern their relationship in this matter.


 





















 


NOW THEREFORE
IT IS HEREBY AGREED as follows:-


 


 


1.             Definitions and Interpretation


 


1.1           In this Agreement, the
following words and expressions shall, unless the context otherwise requires,
bear the following meanings:


 


	
  “Agreement”

  	
   

  	
  means this agreement together with the Schedule;

  
	
   

  	
   

  	
   

  
	
  “Authorised Development Fee Expenditure”

  	
   

  	
  means Eligible Expenditure excluding capital
  expenditure;

  
	
   

  	
   

  	
   

  
	
  “Background Intellectual Assets”

  	
   

  	
  means any and all patents, patent applications and
  patent rights (i) owned by any Group Company as at the Commencement Date or
  licensed to any Group Company as at the Commencement Date or (ii) filed by a
  Group Company within 30 days after the Commencement Date in respect of
  inventions reduced to practice prior to the Commencement Date; and in each
  case which that Group Company has the right to license to ITI as at the
  Commencement Date and which are necessary for (i) research and/or development
  for the purposes of Commercial Exploitation and/or (ii) for Commercial
  Exploitation by ITI and its Sub-Licensees;

  
	
   

  	
   

  	
   

  
	
  “Background Intellectual Assets Licence”

  	
   

  	
  means
  the background intellectual assets licence among ITI and SwissCo dated of
  even date herewith;

  
	
   

  	
   

  	
   

  
	
  “Biomarkers”

  	
   

  	
  means
  a bio-molecule, substance or measurable parameter, which can be used to
  diagnose, monitor or treat a health or disease condition;

  
	
   

  	
   

  	
   

  
	
  “Business Day”

  	
   

  	
  means
  a day (other than a Saturday or a Sunday) on which branches of the major
  Scottish clearing banks are open for business in Scotland;

  
	
   

  	
   

  	
   

  
	
  “Certified Statement”

  	
   

  	
  means
  a statement which has been independently

  



 


2





















 


	
   

  	
   

  	
  verified
  by the firm of chartered accountants which are the relevant Party’s external
  auditors;

  
	
   

  	
   

  	
   

  
	
  “Change of Control”

  	
   

  	
  means
  the sale or other transfer of shares (or other voting stock) to a third party
  (not being a Group Company) directly or indirectly by operation of law or
  otherwise, which represent a majority of the voting power in a company;

  
	
   

  	
   

  	
   

  
	
  “Code”

  	
   

  	
  means
  the Scottish Ministers’ Code of Practice on the Discharge of Functions by
  Public Authorities under the Freedom of Information (Scotland) Act 2002 as
  the same may be amended, varied or replaced from time to time;

  
	
   

  	
   

  	
   

  
	
  “Commencement Date”

  	
   

  	
  means
  1 March 2005;

  
	
   

  	
   

  	
   

  
	
  “Commercial Exploitation”

  	
   

  	
  means
  the use, licensing and other exploitation of all or any of the Foreground
  Intellectual Assets for or in the design, manufacture, marketing, sale,
  supply, distribution or other exploitation of Products which are produced for
  commercial sale or supply;

  
	
   

  	
   

  	
   

  
	
  “Commercially Sensitive Information”

  	
   

  	
  (i)

  	
  all
  information comprised in the record of work to be maintained pursuant to
  Clause 4.4;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  all
  information comprised in the reports on expenditure to be provided pursuant
  to Clause 5.2;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  all
  information comprised in summaries of technical developments to be provided
  pursuant to Clause 5.1.2;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)

  	
  all
  information posted by a Group Company on the Project Extranet;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (v)

  	
  all
  information supplied by a Group Company which is comprised in the minutes of
  the

  



 


3





















 


	
   

  	
   

  	
   

  	
  Quarterly
  meetings to be taken pursuant to Clause 5.11;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (vi)

  	
  all
  information, correspondence, reports and other documentation relating to the
  creation or protection of Foreground Intellectual Assets (other than
  published patent applications) and the exploitation of the Foreground
  Intellectual Assets in the IMI Field;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (vii)

  	
  the
  Know-How, the Manufacturing Know-How and the Market Information;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (viii)

  	
  the
  statement of work set out in Part 1 of the Schedule; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ix)

  	
  the
  financial terms of this Agreement, except for (a) those disclosed in any
  jointly agreed press release and (b) the Development Fee;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Confidential Information”

  	
   

  	
  means
  any information which has been designated as confidential by any Party in
  writing or that ought to be considered as confidential (however it is
  conveyed or on whatever media it is stored) including information which
  relates to the business, affairs, property, assets, trading practices, goods,
  services, developments, trade secrets, intellectual property rights,
  know-how, personnel, customers and suppliers of a Party and, which shall, in
  respect of the obligations of confidentiality imposed on ITI, include the
  Commercially Sensitive Information;

  



 


4





















 


	
  “Development Fee”

  	
   

  	
  means
  the total sum payable by ITI to IMI in consideration for carrying out the
  Research and Development Project, as set out in Part 3 of the Schedule;

  
	
   

  	
   

  	
   

  
	
  “Division”

  	
   

  	
  means
  IMI’s cardiology division from time to time;

  
	
   

  	
   

  	
   

  
	
  “Eligible Expenditure”

  	
   

  	
  means all expenditure expended for the purpose of
  any part of the Research and Development Project, including research and
  development expenditure, all market research expenditure of any Group
  Company, all capital expenditure of any Group Company (including payments
  made to acquire Intellectual Property Rights) and all Stirling capital
  expenditure and operating costs, in each case as such expenditure relates to
  the Research and Development Project, but excluding any and all corporate
  management charges paid to any Group Company, any and all sales and marketing
  costs (other than market research expenditure relating to the Research and
  Development Project) and the costs of manufacturing Products for commercial
  sale;

  
	
   

  	
   

  	
   

  
	
  “Expertise Profile”

  	
   

  	
  means the expertise profile set out in Part 5 of the
  Schedule;

  
	
   

  	
   

  	
   

  
	
  “Exploitation Agreement”

  	
   

  	
  means the exploitation agreement among ITI, IMI,
  Stirling and SwissCo dated of even date herewith;

  
	
   

  	
   

  	
   

  
	
  “FOISA”

  	
   

  	
  means
  the Freedom of Information (Scotland) Act 2002 and any subordinate
  legislation made under this Act from time to time together with any guidance
  and/or codes of practice issued by the Scottish Information Commissioner in
  relation to such legislation;

  
	
   

  	
   

  	
   

  
	
  “Foreground Intellectual Assets”

  	
   

  	
  means any and all Intellectual Property and

  



 


5





















 


	
   

  	
   

  	
  Intellectual Property Rights and/or Market
  Information (but excluding the Know-How and the Manufacturing Know-How)
  created, or developed during the Period in the course of the Research and
  Development Project or any part of it, excluding (for the avoidance of doubt)
  all Background Intellectual Assets and excluding Market Information in the
  IMI Field of Use;

  
	
   

  	
   

  	
   

  
	
  “GLP”

  	
   

  	
  means good laboratory practices as defined in the
  U.S Food and Drug Administration guidelines from time to time;

  
	
   

  	
   

  	
   

  
	
  “GMP”

  	
   

  	
  means good manufacturing practices as defined in
  the U.S. Food and Drug Administration guidelines from time to time;

  
	
   

  	
   

  	
   

  
	
  “Group Company”

  	
   

  	
  means IMI, any parent undertaking of IMI and any
  subsidiary undertaking of IMI or of such parent undertaking all as defined in
  section 258 of the Companies Act 1985 (as amended) and includes (for the
  avoidance of doubt) Stirling and SwissCo;

  
	
   

  	
   

  	
   

  
	
  “IMI Field of Use”

  	
   

  	
  means the field of human healthcare, and for the
  avoidance of doubt, includes tools that support throughput screening for drug
  discovery and/or development;

  
	
   

  	
   

  	
   

  
	
  “IMI Financial Contribution”

  	
   

  	
  means the total sum to be contributed by the Group
  Companies in each Year to the Research and Development Project Expenditure,
  which contribution is set out in Part 2A of the Schedule, and which sum
  excludes (for the avoidance of doubt) the Development Fee;

  
	
   

  	
   

  	
   

  
	
  “IMI Income”

  	
   

  	
  has the meaning set out in the Exploitation
  Agreement;

  
	
   

  	
   

  	
   

  
	
  “Information”

  	
   

  	
  has the meaning given under section 73 of
  FOISA;

  



 


6





















 


	
  “Instalment”

  	
   

  	
  means the amount of the Development Fee set out in
  the third column of the table in Part 3 of the Schedule;

  
	
   

  	
   

  	
   

  
	
  “Instalment Date”

  	
   

  	
  means
  any date identified as such in Part 3 of the Schedule;

  
	
   

  	
   

  	
   

  
	
  “Intellectual Property”

  	
   

  	
  means
  all ideas, concepts, inventions, discoveries, experience, drawings,
  documents, designs, models, computer programs and codes, texts, records,
  operating and testing procedures, instruction manuals, software, bills of
  materials, tables of operating conditions, specifications, data, databases,
  formulae, processes and process techniques, diagrams, recipes, reports, prototypes,
  and other technical information and data of any kind in whatever media
  recorded;

  
	
   

  	
   

  	
   

  
	
  “Intellectual Property Rights”

  	
   

  	
  means any and all intellectual property or
  industrial rights of any description anywhere in the world including without
  limitation to the foregoing generality any patents, registered designs,
  copyright (including without limitation to the foregoing generality rights in
  computer software, object and source code), rights in the nature of
  copyright, database rights, semi-conductor topography rights, unregistered
  design rights, and any analogous or similar right in any jurisdiction
  (whether any such rights referred to in this definition are registered,
  unregistered, registerable or not and any applications or rights to apply for
  registration of any of them together with any registered rights resulting
  from any such applications or rights to apply for registration), but
  excluding rights in and to trade names, trade

  



 


7





















 


	
   

  	
   

  	
  marks, business names, product names and logos;

  
	
   

  	
   

  	
   

  
	
  “ITI Field of Use”

  	
   

  	
  means
  any and all fields excluding the IMI Field of Use, and for the avoidance of
  doubt, the ITI Field of Use shall include: 

  (a) testing of the environment for human pathogens or allergens but not
  testing humans or samples from humans; and 

  (b) testing food and drink for human pathogens or allergens;

  
	
   

  	
   

  	
   

  
	
  “ITI Liaison Officer”

  	
   

  	
  means
  the person appointed by ITI pursuant to Clause 4.3;

  
	
   

  	
   

  	
   

  
	
  “ITI’s Absence”

  	
   

  	
  means
  the period from the date on which ITI terminates its involvement in the
  Research and Development Project pursuant to Clause 10.2.2 to the date on
  which ITI exercises its option under Clause 10.4, both dates inclusive;

  
	
   

  	
   

  	
   

  
	
  “Know How”

  	
   

  	
  means
  such knowledge and experience as is necessary for efficient and effective
  Commercial Exploitation and as is created or developed during the Period in
  the course of and relating to the Research and Development Project, but
  excluding Manufacturing Know-How;

  
	
   

  	
   

  	
   

  
	
  “Legal Opinions”

  	
   

  	
  means
  the opinion from IMI’s external US attorneys in the form set out in Part 8B
  of the Schedule and the opinion from SwissCo’s external Swiss attorneys
  in the form set out in Part 8A of the Schedule;

  
	
   

  	
   

  	
   

  
	
  “Manufacturing Know-How”

  	
   

  	
  has
  the meaning set out in the Exploitation Agreement;

  
	
   

  	
   

  	
   

  
	
  “Marketing Agreement Form”

  	
   

  	
  means
  the form, separate from this Agreement, which authorises a Party to carry out
  certain

  



 


8





















 


	
   

  	
   

  	
  marketing
  and public relations activities with particular reference to IMI and/or Stirling,
  an example of which is set out in Part 6 of the Schedule to this
  Agreement;

  
	
   

  	
   

  	
   

  
	
  “Market Information”

  	
   

  	
  means
  market surveys, sectoral and territorial Intellectual Property Rights
  analyses, competitor landscape, product and service trends, market demographics,
  market analyses, collaborators and collaborations, growth predictions and
  other market information and data of any kind in whatever media recorded;

  
	
   

  	
   

  	
   

  
	
  “Microfluidics Platform”

  	
   

  	
  means a system able to perform an assay on a sample
  volume of less than one millilitre;

  
	
   

  	
   

  	
   

  
	
  “Milestone”

  	
   

  	
  means a milestone identified as such in Part 1 of
  the Schedule;

  
	
   

  	
   

  	
   

  
	
  “Milestone Date”

  	
   

  	
  means any date identified as such in Part 1 of the
  Schedule;

  
	
   

  	
   

  	
   

  
	
  “Nominated Representative”

  	
   

  	
  means
  a representative nominated by IMI, Stirling or ITI and intimated to the other
  Parties to resolve disputes that arise between Stirling and ITI or between
  IMI and ITI;

  
	
   

  	
   

  	
   

  
	
  “Parent Company Guarantee”

  	
   

  	
  means
  the guarantee in the form set out in Part 7 of the Schedule;

  
	
   

  	
   

  	
   

  
	
  “Parties”

  	
   

  	
  means
  IMI, Stirling, SwissCo and ITI and “Party” shall be construed accordingly;

  
	
   

  	
   

  	
   

  
	
  “Payment Request”

  	
   

  	
  means
  a written request for the payment of an Instalment;

  
	
   

  	
   

  	
   

  
	
  “Period”

  	
   

  	
  means
  the period of 36 months from the Commencement Date or such other period arising
  pursuant to Clause 10.5 or by the written agreement of the Parties;

  
	
   

  	
   

  	
   

  
	
  “Products”

  	
   

  	
  has
  the meaning set out in the Exploitation

  



 


9





















 


	
   

  	
   

  	
  Agreement;

  
	
   

  	
   

  	
   

  
	
  “Project Extranet”

  	
   

  	
  means
  an extranet site on which certain information relating to the Research and
  Development Project will be posted by the Parties during the Period;

  
	
   

  	
   

  	
   

  
	
  “Project Premises”

  	
   

  	
  means
  Stirling’s premises in Scotland at which Stirling’s activities in respect of
  the Research and Development Project shall be undertaken pursuant to Clause
  4;

  
	
   

  	
   

  	
   

  
	
  “Quarter”

  	
   

  	
  means
  a period of three months commencing on a Quarter Day, with the exception of
  (i) the first Quarter, which shall be the period commencing on the
  Commencement Date and ending on 30 June 2005, and (ii) the last Quarter,
  which shall be the period commencing on 1 January 2008 and ending on the
  day before the third anniversary of the Commencement Date;

  
	
   

  	
   

  	
   

  
	
  “Quarter Day”

  	
   

  	
  means
  each of 1 January, 1 April, 1 July and 1 October;

  
	
   

  	
   

  	
   

  
	
  “Requests for Information”

  	
   

  	
  shall
  have the meaning set out in FOISA or any apparent request for information
  under FOISA, the Environmental Information Regulations or the Code;

  
	
   

  	
   

  	
   

  
	
  “Research and Development Project”

  	
   

  	
  means
  the research and development work to be undertaken by or on behalf of Group
  Companies to:

   

  (i)
  identify and develop a Microfluidics Platform, and

   

  (ii)
  identify and develop novel Biomarkers or new applications of Biomarkers,
  which can be used in a Microfluidics Platform or any other platform;

  
	
   

  	
   

  	
   

  
	
  “Research and Development Project

  	
   

  	
  means
  the Development Fee and the IMI Financial

  



 


10





















 


	
  Expenditure”

  	
   

  	
  Contribution
  for each Year together;

  
	
   

  	
   

  	
   

  
	
  “Schedule”

  	
   

  	
  means
  the schedule in 8 Parts annexed to and forming part of this Agreement;
  and

  
	
   

  	
   

  	
   

  
	
  “Stirling Minimum Expenditure”

  	
   

  	
  means the minimum amount which Stirling must expend
  on items of Eligible Expenditure in each Year, but expressly excluding
  amounts expended by Stirling on sub-contracting any part or parts of the
  Research and Development Project to any Group Company or any other party
  outside Scotland, which minimum amount is set out in Part 2B of the Schedule;

  
	
   

  	
   

  	
   

  
	
  “Stirling Project Manager”

  	
   

  	
  means an employee of Stirling appointed by Stirling
  as the project manager pursuant to Clause 4.2;

  
	
   

  	
   

  	
   

  
	
  “Year”

  	
   

  	
  means
  a period of four Quarters commencing on 1 January, with the exception of (i)
  the first year which shall be the period commencing on the Commencement Date
  and ending on 31 December 2005 and (ii) the last year which shall be the
  period commencing on 1 January 2008 and ending on the day before the
  third anniversary of the Commencement Date.

  
	
   

  	
   

  	
   

  



1.2           In this Agreement unless
the context otherwise requires:-


 


1.2.1              references to the
singular include the plural and vice versa;


 


1.2.2              reference to Clauses are
to clauses of this Agreement;


 


1.2.3              reference to any
statute, statutory instrument or regulation shall be construed as a reference
to that statute, statutory instrument or regulation as amended, replaced or
re-enacted after the date of this Agreement;


 


1.2.4              the headings to Clauses
are inserted for convenience only and shall not affect the construction or
interpretation of this Agreement; and


 


1.2.5              the words “include” or “including”
are to be construed as meaning without limitation.


 


11





















 


2.             Conditions Precedent


 


2.1           No Party shall be bound by
any of its undertakings or obligations under this Agreement unless and until
both the Exploitation Agreement and the Background Intellectual Assets Licence
have been properly executed by all parties thereto.


 


2.2           No Party shall be bound by
any of its undertakings or obligations under this Agreement unless and until a
properly executed Parent Company Guarantee has been delivered by IMI to ITI.


 


2.3           No Party shall be bound by
any of its undertakings or obligations unless and until Legal Opinions duly
executed by the relevant attorneys have been delivered by IMI to ITI.


 


 


3.             IMI’s and Stirling’s
Obligations and SwissCo’s Consent


 


3.1           IMI shall spend, or procure that other Group Companies spend, the
IMI Financial Contribution on the Research and Development Project. Where Group
Companies together spend more than the IMI Financial Contribution on the
Research and Development Project in any Year the amount of the overspend shall
be credited against the IMI Financial Contribution for the following Year or
Years as reasonably directed by IMI within 3 months after the end of the Year
in which such overspend occurred.


 


3.2           Stirling shall spend, as
Eligible Expenditure, the Stirling Minimum Expenditure and such Stirling
Minimum Expenditure will be part of the Research and Development Project
Expenditure.  Where Stirling spends more
than the Stirling Minimum Expenditure on the Research and Development Project
in any Year the amount of the overspend shall be credited against the Stirling
Minimum Expenditure for the following Year or Years as reasonably directed by
Stirling within 3 months after the end of the Year in which such overspend occurred.


 


3.3           For the Period, Stirling
shall procure that Stirling’s sole business is the carrying on and management
of the Research and Development Project and Stirling shall not carry out any
other work or carry on any other business during the Period.


 


3.4           Stirling shall:


 


3.4.1              within 3 months after
the Commencement Date, acquire and locate itself in Project Premises; and


 


12





















 


3.4.2              not, at any time within
5 years of the payment by ITI to IMI of the first Instalment of the Development
Fee, locate its principal research and development or manufacturing facility
outside of Scotland.


 


3.5           SwissCo hereby acknowledges
and consents to Stirling undertaking all of its obligations under Clause 8.


 


 


4.             The Research and Development
Project


 


4.1           Stirling shall itself or
through other Group Companies:


 


4.1.1              carry out and manage the
Research and Development Project in accordance with the terms of this
Agreement;


 


4.1.2              use reasonable
endeavours to achieve the Milestones by the Milestone Dates;


 


4.1.3              promptly notify ITI in
writing if any of the Milestones are, in its opinion, likely to be late or not
achieved or not achievable;


 


4.1.4              ensure that the Research
and Development Project shall be undertaken by appropriately skilled and
qualified employees or contractors and in accordance with GLP and GMP;


 


4.1.5              provide the facilities,
equipment, tools and materials which are necessary to carry out the Research
and Development Project;


 


4.1.6              provide such personnel
as may be necessary for the proper performance of the Research and Development
Project; and


 


4.1.7              comply with all relevant
statutes and regulatory requirements of any government or other competent
authority when carrying out the Research and Development Project.


 


4.2           Stirling will appoint a
Stirling Project Manager who shall co-ordinate Stirling’s contribution to the
Research and Development Project and who shall measure the progress of the
Milestones against the Milestone Dates. 
Stirling will ensure that a Research and Development Project manager is
appointed by IMI to oversee and manage the Research and Development Project.


 


4.3           ITI shall appoint an ITI
Liaison Officer in respect of the Research and Development Project.


 


4.4           Throughout the Research and
Development Project Stirling shall maintain a record of work carried out in
relation thereto and will manage, maintain and keep up to date all materials
and


 


13





















 


media incorporating Foreground Intellectual
Assets and Know-How in its possession, in whatever form it currently exists,
all in accordance with GLP and GMP.


 


 


5.             Stirling’s Knowledge
Management, Access and Reporting Obligations


 


5.1           Within 12 Business Days of
the end of each Quarter, Stirling shall provide ITI with a report which will
contain the following:


 


5.1.1              reports on expenditure
in terms of Clauses 5.2;


 


5.1.2              a summary of technical
developments (if any) made and patents filed in respect of Foreground
Intellectual Assets and Know-How (if any) created during the relevant Quarter;
and


 


5.1.3              patents granted (if any)
on any Foreground Intellectual Assets.


 


5.2           Stirling shall provide ITI
with an expenditure report showing (a) all Eligible Expenditure of the Group
Companies (being the spend that counts towards the calculation of the IMI
Financial Contribution), (b) all Eligible Expenditure of Stirling, (being the
spend that, with the exception of amounts expended  by Stirling on sub-contracting any part or
parts of the Research and Development Project to any Group Company or any other
party outside Scotland, counts towards the calculation of the Stirling Minimum
Expenditure) and (c) the amount of the Development Fee spent on Authorised
Development Fee Expenditure, during the relevant Quarter.


 


5.3           Stirling shall, throughout
the Period and for 36 months thereafter, keep and maintain true and accurate
records of Stirling’s expenditure
in relation to the Research and Development Project in accordance with
generally accepted United Kingdom accounting practices.


 


5.4           Within 2 months after the
end of each Year, Stirling shall or shall procure that IMI shall provide ITI
with an expenditure report showing (a) the total Eligible Expenditure of the
Group Companies, (b) the total Eligible Expenditure of Stirling, and (c) the amount
of the Development Fee spent on Authorised Development Fee Expenditure in each
case during the relevant Year.  In
addition to providing the expenditure report, as part of an annual audit
process Stirling or IMI, as the case may be, will provide ITI with a Certified
Statement confirming that the expenditure shown on the expenditure report for
that Year has been properly accounted for and that expenditure made using the
Research and Development Project Expenditure constitutes Eligible Expenditure
(and in the case of the Development Fee, Authorised Development Fee
Expenditure) in terms of this Agreement.


 


14





















 


5.5           Throughout the Period,
Stirling shall permit the ITI Liaison Officer, upon reasonable notice, reasonable
controlled access during normal office hours to the Project Premises and to all
other premises of Group Companies where the Research and Development Project is
being carried out, for the purpose of gaining sufficient technical knowledge
and insight to facilitate Commercial Exploitation within the ITI Field of Use,
provided that ITI agrees to be bound, and to procure that the ITI Liaison
Officer is bound, by all regulations or requirements, so far as made known to
them in writing by a Group Company, applicable to such premises.


 


5.6           Stirling shall give the ITI Liaison Officer
reasonable access, under supervision, to the records, materials and media
referred to in Clause 4.4, and make them available for inspection and review by
the ITI Liaison Officer (or their authorised representative) on reasonable
notice.  Stirling shall use reasonable
endeavours to ensure that electronic copies of all such records shall also be
lodged within the Project Extranet.


 


5.7           Without prejudice to Clauses 5.5, 5.6 and
5.10, throughout the Period, ITI shall be entitled to contact Stirling with
queries it has relating to the Research and Development Project and Stirling
shall ensure that Group Companies reply to such queries provided that (a) the
aggregate time spent by Stirling and the other Group Companies in responding to
such queries does not exceed 6 hours per month, and (b) all ITI queries are
directed to the Stirling Project Manager, who shall, at his reasonable
discretion, determine to whom within Stirling or any other Group Company ITI’s
query should be referred. The workings of the arrangements set out in this
Clause 5.7 shall be reviewed by the Parties in good faith at the Quarterly
meetings referred to in Clause 5.10 but neither ITI nor Stirling will be
obliged to agree any amendments or variations to such arrangements.


 


5.8           At all times during
the Period and for 5 years thereafter, Stirling will host the Project
Extranet for delivery of information concerning the Research and Development
Project.


 


5.9           Stirling shall give ITI access to the Project
Extranet and will ensure that ITI is able both to utilise and to contribute to
the Project Extranet at all times (subject to reasonable downtimes). For the
avoidance of doubt, it will be ITI’s responsibility to ensure that it has
appropriate communication and computer facilities necessary to access the
Project Extranet as advised in writing by Stirling.


 


5.10         The Stirling Project Manager
and the ITI Liaison Officer shall meet within 25 Business Days after the end of
each Quarter throughout the Period, unless otherwise agreed in writing by ITI,


 


15





















 


and within 3 months after the end of the
Period to review progress on the Research and Development Project generally and
to discuss and review:-


 


5.10.1            financial information
relating to the Research and Development Project;


 


5.10.2            technical developments
made and Foreground Intellectual Assets created (if any) during the relevant
Quarter; and


 


5.10.3            draft patent applications
(if any) in respect of the Foreground Intellectual Assets and any amendments
requested to these by ITI.


 


5.11         At the Quarterly meetings
referred to in Clause 5.10 or as necessary if the filing of a patent
application (a) is or becomes urgent, or (b) occurs after the last Quarter, the
Stirling Project Manager shall consult with the ITI Liaison Officer in relation
to any proposed patent application in respect of the Foreground Intellectual
Assets, reasonably in advance of any Group Company filing such patent application
(or in such circumstances as (a) above, as soon as practicable in the
circumstances) so as to afford ITI an opportunity to consult with Stirling in
good faith on the preparation, drafting and application for, and geographical
scope of, such patent and the inclusion of any claims relevant to the ITI Field
of Use and Stirling shall give due consideration to any and all views of and
requests from ITI in connection with same. 
ITI shall respond promptly to any request for consultation and shall not
unreasonably delay the filing of any patent application.  In addition to discussions at the Quarterly
meetings referred to in Clause 5.10, in relation to any particular Foreground
Intellectual Asset IMI shall use reasonable endeavours to accommodate any
written request by ITI that IMI should seek patent protection of that
Foreground Intellectual Asset in the ITI Field of Use (or any part of it, as
identified in ITI’s written request).


 


5.12         Stirling
shall ensure that appropriate Stirling personnel shall attend the meetings
required under Clause 5.10 to enable Stirling to report to ITI and to provide
ITI with sufficient information as ITI may reasonably require.  ITI shall ensure that appropriate ITI
personnel attend such meetings.


 


5.13         Stirling
shall take minutes in respect of each meeting held pursuant to Clause 5.10 and
within 5 Business Days following the date of each meeting, Stirling shall
deliver the minutes of the relevant meeting electronically to the ITI Liaison
Officer.  The ITI Liaison Officer shall
either approve the minutes in writing or suggest reasonable amendments to the
minutes.  Where the ITI Liaison Officer
notifies Stirling of amendments, Stirling shall have a further 5 Business Days
from the date of receiving such notification in which to make appropriate
amendments


 


16





















 


and re-deliver the minutes to the ITI
Liaison Officer for written approval.  If
the minutes have not been approved by the date of the next following meeting,
they shall be presented at that meeting for approval and if they are not
approved at that meeting the differences shall be noted.


 


5.14         Stirling will
ensure that each of the key scientist and project leaders employed or engaged
by Stirling to conduct the Research and Development Project completes an
Expertise Profile as soon as reasonably practicable following their employment
or engagement.


 


 


6.             Financial Provisions


 


6.1           In consideration for
Stirling carrying out and managing the Research and Development Project, ITI
shall pay to Stirling the Development Fee in twelve (12) Instalments, in
accordance with the provisions of this Clause 6.


 


6.2           Stirling shall submit a
Payment Request to ITI at least 15 days prior to each Instalment Date, with the
exception of the first Instalment Date where the Payment Request shall be
submitted by Stirling to ITI on the Commencement Date.


 


6.3           Following receipt of a
Payment Request pursuant to Clause 6.2, ITI shall then pay the relevant
Instalment to Stirling on the relevant Instalment Date or, where the relevant
Instalment Date is not a Business Day, on the next Business Day following that
Instalment Date.


 


6.4           In conjunction with the
Expenditure Report delivered under Clause 5.2, Stirling shall render a Value
Added Tax (“VAT”) invoice to ITI in respect of the amount of the previous
Instalment spent on Authorised Development Fee Expenditure as identified in the
Expenditure Report. Such VAT invoice shall be dated the last day of the
previous Quarter to which that previous Instalment relates and shall cover the
whole of the period of that Quarter, with the exception that in respect of the
last Instalment, Stirling shall render a VAT invoice to ITI which will cover
the whole of the period from 1 October 2007 to the date immediately before
the third anniversary of the Commencement Date and which shall be delivered to
ITI within 12 Business Days after the end of such period.


 


6.5           All payments due under this
Clause 6 shall be paid by ITI into a Stirling bank account notified in writing
to ITI.


 


6.6           The Development Fee shall
be exclusive of VAT which shall be payable in addition by ITI on receipt of the
appropriate VAT invoice in accordance with the provisions of Clause 6.4.  The


 


17





















 


Development Fee shall be used only for
Authorised Development Fee Expenditure and for no other purpose whatsoever. The
Development Fee shall be earned to the extent of incurred Authorised
Development Fee Expenditure.  If (i) on
termination of this Agreement pursuant to Clause 9, or (ii) on termination of
ITI’s involvement in the Research and Development Project pursuant to Clause
10, or (iii) on a date which is three months after the end of the Period, any
part of the Development Fee which has been paid by ITI to Stirling prior to
that date has not been spent on Authorised Development Fee Expenditure (and
therefore remains unearned by Stirling at that date), Stirling will repay that
part of the Development Fee to ITI within 15 Business Days. Save as set out in
this Clause 6.6, no part of the Development Fee paid to Stirling will be
repayable. For the avoidance of doubt this Clause 6.6 shall not preclude ITI
from claiming damages from Stirling in respect of a breach of this Agreement by
Stirling.


 


6.7           If ITI fails to pay any of
the Development Fee for a period of more than 60 days following its due date,
Stirling may require payment of that instalment with interest thereon at the
rate of 3% above the base lending rate from time to time of the Bank of
Scotland from the due date for payment until the actual date of payment in
full, without prejudice to any other rights or remedies it may have and the
Parties agree that this constitutes a substantial remedy under the Late Payment
of Commercial Debts (Interest) Act 1998.


 


6.8           If Stirling fails to repay
any of the Development Fee for a period of more than 15 Business Days following
its due date for repayment pursuant to Clause 6.6, ITI may require payment of
that amount with interest thereon at the rate of 3% above the base lending rate
from time to time of the Bank of Scotland from the due date for payment until
the actual date of payment in full, without prejudice to any other rights or
remedies it may have and the Parties agree that this constitutes a substantial
remedy under the Late Payment of Commercial Debts (Interest) Act 1998.


 


 


7.             Royalty Adjustment


 


7.1           If in any Year during the
Period, Stirling is in breach of its obligation under Clause 3.2 or IMI is in
breach of its obligation under Clause 3.1 of this Agreement, ITI may at its
sole option elect to waive its rights in respect of any such breach (including
any right it may have to terminate under Clause 9) for such Year and instead
elect by notice in writing to increase the royalty rate payable to it in
respect of IMI Income under the Exploitation Agreement in accordance with Part
4 of the Schedule.


 


18





















 


7.2           Stirling or IMI can remedy
a breach of its obligations under Clause 3.1 or 3.2 as the case may be by
expending the amount of any shortfall of the IMI Financial Contribution or the
Stirling Minimum Expenditure, as the case may be, in any relevant Year during
the Year immediately following the Year in which such shortfall occurred,
provided that the amount of IMI Financial Contribution or the Stirling Minimum
Expenditure, as the case may be, to be expended in the Year immediately
following the Year in which the shortfall occurred, is fully expended in
addition to the amount of the shortfall.


 


7.3           Where Stirling or IMI
remedies a breach of its obligations under Clause 3.1 or 3.2, as the case may
be, the royalty increase applied in respect of that particular breach shall be
removed with effect from the date on which such breach is remedied.


 


 


8.             Intellectual Property


 


8.1           The Parties agree that all
Background Intellectual Assets shall remain the property of the relevant Group
Company or the party who has granted a licence of such Background Intellectual
Assets to the relevant Group Company and, except as otherwise stated in this
Agreement, the Exploitation Agreement or the Background Intellectual Assets
Licence, ITI shall have no rights to such Background Intellectual Assets or any
other Intellectual Property Rights of any Group Company.


 


8.2           The Parties agree that all
Foreground Intellectual Assets developed, created or acquired by any Group
Company shall be the sole property of ITI and, subject to Clause 8.3, Stirling
hereby assigns to ITI on Stirling’s own behalf and as agent for all other Group
Companies involved in creating the Foreground Intellectual Assets, its and
their whole right, title and interest in the Foreground Intellectual Assets by
way of present assignation of future Intellectual Property Rights.  To the extent that Foreground Intellectual Assets
come into existence following the Commencement Date and are not capable of
being assigned to ITI by way of present assignation of future Intellectual
Property Rights, and subject to Clause 8.3, Stirling hereby assigns to ITI on
Stirling’s behalf and as agent for all other Group Companies involved in
creating the Foreground Intellectual Assets its and their whole right, title
and interest in and to the Foreground Intellectual Assets with effect from the
date of their creation. To the extent that Foreground Intellectual Assets come
into existence during ITI’s Absence, and subject to Clause 8.3, Stirling hereby
agrees to assign to ITI on Stirling’s behalf and as agent for all other Group
Companies involved in creating the Foreground Intellectual Assets


 


19





















 


its and their whole right, title and
interest in and to the Foreground Intellectual Assets with effect from the date
on which ITI exercises its option under Clause 10.4.  Stirling undertakes to ITI on Stirling’s own
behalf and as agent for all other Group Companies involved in creating the
Foreground Intellectual Assets that no Group Company, nor any of their
employees shall have any Intellectual Property Rights in the Foreground
Intellectual Assets following the date of assignation, save as provided for in
Clauses 8.3 or 8.4 or under the Exploitation Agreement.


 


8.3           Where Stirling or any other
Group Company has instructed or used the services of any third party (not being
a Group Company) in carrying out the Research and Development Project, Stirling
shall use reasonable endeavours to ensure that all right, title and interest in
and to any Foreground Intellectual Assets created by such third party shall
vest in Stirling or such other Group Company to enable the assignation provided
for in Clause 8.2 to be effective in respect of all of the Foreground
Intellectual Assets.  To this end,
Stirling shall use reasonable endeavours to require any such third party to
sign an appropriately worded assignation in favour of Stirling or such other
Group Company.  ITI shall be entitled to
inspect any agreement reached by Stirling or any Group Company with third
parties pursuant to this Clause to the extent it relates to any Foreground
Intellectual Assets.


 


8.4           If the assignation referred
to in Clause 8.3 cannot be obtained by Stirling, Stirling will inform ITI of
this as soon as practicable, introduce ITI to such third party and use
reasonable endeavours to facilitate discussions between ITI and such third
party so as to enable ITI to obtain (at ITI’s own cost) such licence rights as
ITI may require.


 


 


9.             Termination


 


9.1           Subject to Clause 9.6, ITI
may terminate this Agreement with immediate effect by notice in writing in any
of the following events:-


 


9.1.1              if either IMI or
Stirling commits a material breach  of this
Agreement, which breach has not been cured within 21 days after written notice
is given to either IMI or Stirling , as the case may be, specifying the breach;
or


 


9.1.2              if IMI or Stirling
commits a material breach of this Agreement which breach is not capable of
being remedied; or


 


9.1.3              if IMI or Stirling
enters into a deed of arrangement or compounds with its creditors or if any
order is made or a resolution is passed for the winding-up of either IMI or


 


20





















 


Stirling (other than a solvent amalgamation
or reconstruction) or an administrator is appointed to manage either IMI’s or
Stirling’s affairs, business and property or if a receiver is appointed over
any of IMI’s or Stirling’s assets or undertaking or if circumstances arise
which entitle the Court or a creditor to appoint a receiver or manager or which
entitle the Court to make a winding-up order or if either IMI or Stirling takes
or suffers any similar or analogous action in consequence of debt in or under
any jurisdiction to which it is subject.


 


9.2           Subject to Clause 9.6, IMI
or Stirling may terminate this Agreement with immediate effect by notice in
writing in any of the following events:-


 


9.2.1              if ITI commits a
material breach of this Agreement, which default has not been cured within 21
days after written notice is given to ITI specifying the breach; or


 


9.2.2              if ITI commits a
material breach of this Agreement which breach is not capable of being
remedied;


 


9.2.3              if ITI enters into a
deed of arrangement or compounds with its creditors or if any order is made or
a resolution is passed for the winding-up of ITI (other than a solvent
amalgamation or reconstruction) or an administrator is appointed to manage ITI’s
affairs, business and property or if a receiver is appointed over any of ITI’s
assets or undertaking or if circumstances arise which entitle the Court or a
creditor to appoint a receiver or manager or which entitle the Court to make a
winding-up order or if ITI takes or suffers any similar or analogous action in
consequence of debt.


 


9.3           This Agreement shall
terminate if the Exploitation Agreement is terminated for any reason.


 


9.4           Subject to Clause 9.6, ITI shall be entitled, at its sole discretion, to
terminate this Agreement forthwith, if at any time
within 5 years of the payment by ITI to IMI of the first instalment of the
Development Fee,
Stirling locates its principal research and development or manufacturing
facility outside of Scotland.


 


9.5           On termination of this
Agreement howsoever caused the Foreground Intellectual Assets shall comprise
only those Foreground Intellectual Assets in existence on the date of
termination.


 


9.6           If any dispute is referred
to the procedure set out in Clause 11, no Party may exercise its rights under
Clause 9 until the dispute resolution procedure is complete.


 


9.7           Termination of this
Agreement shall be without prejudice to any accrued rights or liabilities of
the Parties and to the continuation in force of all provisions which are
expressed to or by


 


21





















 


implication remain in force following
termination or which would be intended by the Parties to continue beyond
termination including Clauses 1, 5.3, 5.4, 5.8, 5.9, 5.10, 5.11, 6.4, 6.6, 6.7,
6.8, 7, 8, 9, 10.4, 10.5 and 11 – 22 inclusive.


 


 


10.          Changes to the Research and
Development Project


 


10.1         IMI and Stirling shall
periodically, throughout the Period, review the progress of the Research and
Development Project.  If, as a result of
any such review, IMI and Stirling determine any of the following:


 


(i)             that no Group Company is
achieving technical results of sufficient quality in relation to the
development of the Microfluidics Platform as to warrant further research and
development work in respect of such Microfluidics Platform; or


 


(ii)            that market forces no
longer justify continued investment in research and development into a
Microfluidics Platform; or


 


(iii)           in the event that the scope
and/or focus of the Research and Development Project has already been changed
pursuant to Clause 10.1, that no Group Company is achieving technical results
of sufficient quality in relation to such altered Research and Development
Project as to warrant further research and development,


 


and, as a result of such determination, IMI
and Stirling decide that they wish to change the scope and/or focus of the
Research and Development Project, IMI or Stirling will promptly notify ITI of
this in writing, giving full details of the proposed change and the reasons for
it, together with details of any changes (if any) to the Research and
Development Project Expenditure and IMI Financial Contribution.


 


10.2         Within 60 days of receipt of
such written notice, ITI shall notify IMI or Stirling, as the case may be,
either:


 


10.2.1            that ITI wishes to continue
its involvement in the Research and Development Project, as amended in light of
the change of scope and focus notified to it under Clause 10.1, in which case
this Agreement shall continue unaffected (except insofar as the definition of
the Research and Development Project has to be amended) always provided that if
the IMI Financial Contribution towards the redefined Research and Development
Project has decreased, the Development Fee and the Stirling Minimum Expenditure
shall be reduced proportionally.  ITI
shall in no circumstances be obliged to increase the Development Fee in the


 


22





















 


event that the scope and/or focus of the
Research and Development Project is changed; or


 


10.2.2            that ITI wishes to terminate
its involvement in the Research and Development Project, in which case ITI
shall be so entitled to terminate its involvement and the Parties shall have no
further rights or obligations under this Agreement, save for those set out in
Clauses 9.7, 10.4 and 10.5.


 


10.3         If ITI fails to notify IMI or
Stirling pursuant to Clause 10.2.1 or 10.2.2 within 60 days of receipt of the
written notice to be given pursuant to Clause 10.1, then, at the end of such 60
day period ITI shall be deemed to have terminated its involvement in the
Research and Development Project in terms of Clause 10.2.2.  Where ITI has terminated its involvement in
the Research and Development Project the Foreground Intellectual Assets shall
comprise only those Foreground Intellectual Assets in existence on the date of
termination.


 


10.4         If, at any time during the
period from the date on which ITI’s involvement in the Research and Development
Project is terminated pursuant to Clause 10.2.2 and 1 March 2009, Stirling
(whether itself or through any other Group Company), or any other Group Company
carries out, directly or indirectly, or commissions research into or
development of a Microfluidics Platform, Stirling shall offer ITI the option to
participate in the Research and Development Project, such option being open for
acceptance for a period of 60 days from ITI’s receipt of written notice to this
effect from Stirling.


 


10.5         If ITI exercises its option
under Clause 10.4 it shall be as though there had never been a break in ITI’s
involvement in the Research and Development Project and ITI will not require to
pay any more than that part of the Development Fee which had yet to be paid
prior to the termination of ITI’s involvement in the Research and Development
Project pursuant to Clause 10.2.2 together with any amount repaid under Clause
6.6, and the Period the Milestone Dates and Instalments Dates shall be adjusted
accordingly.


 


 


11.          Dispute Resolution


 


11.1         All disputes arising out of
or relating to this Agreement shall be referred, by any Party, to its and the
other Parties’ Nominated Representatives for resolution.


 


11.2         If the dispute cannot be
resolved by the Parties’ Nominated Representatives within a maximum of ten (10)
days after it has been referred under Clause 11.1 the dispute may be


 


23





















 


referred by a Party to mediation in
accordance with the Centre for Effective Dispute Resolution (“CEDR”) Model
Mediation Procedure.


 


11.3         Work and activity to be
carried out, and in particular the carrying out of the Research and Development
Project and payment of the Development Fee under this Agreement shall not cease
or be delayed by any referral by a Party of a dispute to this dispute
resolution procedure.


 


11.4         The Parties acknowledge that
notwithstanding the provisions of this Clause 11, nothing in this Agreement
shall prevent a Party from bringing proceedings in any court of competent
jurisdiction for any interim or interlocutory relief or to protect the
Foreground Intellectual Assets or Confidential Information.


 


 


12.          Confidentiality


 


12.1         The Parties agree and
undertake that during the term of this Agreement and thereafter they will keep
confidential and will not use for their own purposes except for the performance
of this Agreement nor, without the prior written consent of the Party who
discloses the relevant Confidential Information, disclose to any third party
any Confidential Information provided to them, in the case of ITI, by Stirling,
IMI or SwissCo, or in the case of Stirling, IMI and/or SwissCo, by ITI, unless:


 


12.1.1            the receiving Party can
show such information is public knowledge or already known to the receiving
Party at the time of disclosure, or subsequently becomes public knowledge other
than by breach of this Agreement; or


 


12.1.2            the receiving Party can
show that such information subsequently comes lawfully into the possession of
the receiving Party from a third party without an obligation of
confidentiality; or


 


12.1.3            Clauses 12.7 to 12.10
apply to such information, to the extent only as permitted by these Clauses.


 


12.2         Any Confidential Information
disclosed by any Party to any other Party prior to the execution of this
Agreement and/or the Commencement Date shall be considered as having been
disclosed under this Agreement.


 


12.3         To the extent necessary to
implement the provisions of this Agreement or to progress Commercial
Exploitation in the IMI Field of Use, Stirling, IMI or SwissCo may disclose the Confidential
Information of ITI to any Group Company and such of
their employees, agents or


 


24





















 


representatives as may be reasonably
necessary or desirable provided that before any such disclosure Stirling shall
and shall ensure that IMI or Swiss Co (as appropriate) shall make the Group Companies
and such of their employees, agents and representatives aware of that Party’s
obligations of confidentiality under this Agreement, and shall ensure that any
such Group Company or third party employee and their agent or representative
has agreed in writing, whether through a contract of employment or otherwise,
to obligations of confidentiality commensurate with the requirements of this
Agreement.


 


12.4         To the extent necessary to
implement the provisions of this Agreement (including where a Group Company
uses the services of a third party in carrying out the Research and Development
Project) or to progress Commercial Exploitation in the IMI Field of Use, a
Group Company may disclose
the Confidential Information of ITI to a third party,
provided that Stirling shall and shall procure that any other relevant Group
Company shall ensure that such third party firstly agrees in writing to
obligations of confidentiality no less onerous than those set out in this
Clause 12.


 


12.5         ITI may disclose Confidential
Information of IMI or Stirling to third parties to the extent necessary to
progress Commercial Exploitation in the ITI Field of Use and to Scottish
Enterprise and Highlands and Islands Enterprise, provided that prior to any
such disclosure ITI shall ensure that the party to whom disclosure is made
firstly agrees in writing to obligations of confidentiality no less onerous
than those set out in this Clause 12 and, in particular, that that party to
whom disclosure is made shall not be entitled to disclose such Confidential
Information to any other third party without placing on such other third party
obligations of confidentiality no less onerous than those set out in this
Clause 12.


 


12.6         Notwithstanding any other
provision of this Clause 12, ITI hereby reserves the right, at its sole
discretion, to disclose to any third party through any medium at any time, full
details of the Development Fee and the timings of payment of the Development
Fee under this Agreement and each of IMI, Stirling and SwissCo hereby irrevocably
consents to such disclosure and waives any rights it may have to prevent or
restrict disclosure on grounds of commercial confidentiality or otherwise.


 


12.7         Any Party may disclose
Confidential Information to the extent it is required to do so by a statutory,
legal, regulatory or parliamentary obligation placed upon the Party making the
disclosure (including, in the case of ITI, its obligations to Audit Scotland
and any successor body to Audit Scotland), provided, to the extent practicable,
that the Party obliged to make the


 


25





















 


disclosure will provide the Party to whom
the Confidential Information belongs with a reasonable opportunity to make
representations to the body compelling such disclosure as to the nature and
extent of the disclosure required and the procedures for maintaining
confidentiality of the Confidential Information to be disclosed. This Clause
12.7 shall not apply to the requirements for disclosure under FOISA, the Code,
or the Environmental Information Regulations, the procedure for which is set
out in Clauses 12.8 to 12.10.


 


12.8         In the event that ITI
receives a Request for Information that would involve a disclosure of any
Commercially Sensitive Information:


 


12.8.1            ITI will as soon as
reasonably practicable notify IMI of the Request for Information and shall
afford IMI the opportunity to make representations about any such disclosure to
ITI within 5 Business Days of receiving such notification and before making any
disclosure;


 


12.8.2            Unless otherwise agreed in
writing by IMI, such consent not to be unreasonably withheld or delayed, ITI
will refuse to disclose such Commercially Sensitive Information to the third
party who has made the Request for Information;;


 


12.8.3            Where that decision is
referred to the Scottish Information Commissioner by the third party making the Request for Information, ITI
will not disclose the Commercially Sensitive Information unless and to the
extent it is compelled to do so by the Scottish Information Commissioner; and


 


12.8.4            to the extent practicable,
ITI will provide IMI’s
representations to the Scottish Information Commissioner as to the
confidentiality of the Commercially Sensitive Information and the likelihood of
the commercial interests of the Group Companies being substantially prejudiced
by the disclosure of the Commercially Sensitive Information.


 


12.9         In the event that any Request
for Information is received by Stirling, Stirling shall transfer the Request
for Information to ITI as soon as practicable after receipt and in any event
within five Business Days of receiving a Request for Information, whereupon
Clause 12.8 shall apply.


 


12.10       In the
event that, pursuant to a request which ITI has received under FOISA, it is
required to disclose any Confidential Information of a Group Company falling
outside the definition of “Commercially Sensitive Information”, it will notify
IMI promptly and consult with IMI prior to disclosing such Confidential
Information.


 


26





















 


13.          Warranties and Indemnities


 


13.1         In supplying information to
each other, the Parties undertake to use reasonable endeavours to ensure the
accuracy thereof.  In the event of any
error in such information being notified by a Party, that Party shall promptly
use all reasonable endeavours to remedy such error.


 


13.2         IMI and Stirling (i) jointly
and severally warrant to ITI on the Commencement Date, and (ii) undertake to
ensure on the dates on which any assignation of Foreground Intellectual Assets
to ITI becomes effective under Clause 8.2, that:


 


13.2.1            there are and will be no
liens, charges, encumbrances or restrictions anywhere in the world which affect
or will affect Stirling’s ability to grant the assignations contained herein or
its ability to provide that the Foreground Intellectual Assets shall vest in
ITI in accordance with this Agreement; and


 


13.2.2            no Group Company will
knowingly  infringe or violate any
Intellectual Property Rights of any third party in performing its obligations
pursuant to this Agreement; and


 


13.2.3            the Foreground
Intellectual Assets assigned to ITI will (i) be the original works of a Group
Company or other entity instructed by any of them, having been created by
employees of a Group Company in the course of their employment, or by an entity
instructed by  a Group Company, (ii) not
have been created jointly with any third party other than one with whom a Group
Company has a contractual arrangement governing the ownership or licensing of
the resultant Intellectual Property Rights, and (iii) have not been copied
knowingly from, or knowingly based on, the works of any third party.


 


13.3         IMI and Stirling jointly and
severally warrant to ITI on the Commencement Date that:


 


13.3.1            all consents and
authorisations necessary to allow IMI and Stirling to enter into and perform
this Agreement and necessary for the validity and enforceability of this
Agreement have been obtained by IMI and Stirling and are in full force and
effect; and


 


13.3.2            no Group Company has
achieved any of Milestones 3 to 11 with respect to a home cardiology product
prior to the Commencement Date.


 


13.4         IMI and Stirling jointly and
severally warrant that, as at the Commencement Date, so far as they are aware,
no third party has infringed or threatened to infringe or is infringing or
threatening to infringe the Foreground Intellectual Assets and neither IMI nor
Stirling has any


 


27





















 


information or knowledge of any nature,
without having made any specific enquiries, that a third party will infringe or
attempt to infringe the Foreground Intellectual Assets or to indicate any risk
of such infringement.


 


13.5         Stirling undertakes to notify
ITI immediately should it become aware of any infringement, attempted
infringement, threatened infringement or other violation of the Foreground
Intellectual Assets in the ITI Field of Use.


 


13.6         ITI warrants to IMI and
Stirling on the Commencement Date that all consents and authorisations
necessary to allow ITI to enter into and perform this Agreement and necessary
for the validity and enforceability of this Agreement have been obtained by ITI
and are in full force and effect.


 


13.7         ITI shall indemnify and hold
harmless Stirling and IMI and IMI and Stirling shall indemnify and hold harmless
ITI and each of their respective officers, directors, employees, agents,
representatives and assignees from and against any and all legal liability
(including expenses) arising out of claims or suits brought against the
indemnified Party as a direct result of the injury to or death of any employee,
agent or representative of that Party while engaged in connection with the
Research and Development Project or otherwise under this Agreement, where such
injury or death is due to the negligent act or omission of the indemnifying
Party, its employees, agents or representatives.


 


13.8         ITI shall indemnify and hold
harmless Stirling and IMI and Stirling and IMI shall indemnify and hold
harmless ITI from and against damage to or loss of the property of the indemnified
Party to the extent that such damage is caused by the negligent act or omission
of the indemnifying Party, its employees, agents or representatives.


 


13.9         The indemnities granted under
this Clause 13 shall not apply unless the Party seeking an indemnity notifies
the indemnifying Party as soon as is reasonably practicable of any matters in
respect of which the indemnity may apply and gives the indemnifying Party full
opportunity to control the response to and the defence of such claim including,
without limitation, the right to accept or reject settlement offers and to
participate in any litigation provided that in no event shall the
non-indemnifying Party be liable for any settlement or compromise made without
its consent, such consent not to be unreasonably withheld or delayed.


 


13.10       Each Party shall maintain in
force during the continuance of this Agreement such insurance with a reputable
insurer as is required by law. If requested by another Party, that Party shall


 


28





















 


provide written evidence of the maintenance
of such insurance and the payment of relevant premiums.


 


13.11       Subject to Clauses 13.11 and
13.12, and other than in respect of death and personal injury caused by a Party’s
negligence, or in relation to any liability which by law may not be limited or
excluded:


 


13.11.1          the cumulative liability of IMI, Stirling and SwissCo taken
together, and the cumulative liability of ITI, with regard to any matter,
aspect, fact or thing arising from or relating to this Agreement shall in no
event exceed 125% of the amount of the Development Fee actually paid by ITI to
Stirling; and


 


13.11.2          no Party shall be liable for any indirect or consequential loss
including loss of profit, business, data, revenue, goodwill or anticipated
savings insofar as each of these is an indirect or consequential loss, which
arises out of or in connection with this Agreement.


 


13.12       Clause 13.10 will not limit or
exclude ITI’s obligation to pay the Development Fee or (where applicable)
Stirling’s obligation to repay any part of the Development Fee pursuant to
Clause 6.6 (and, where applicable, any interest thereon) in accordance with
this Agreement.


 


13.13       Clause 13.10 will not limit or
exclude either (i) IMI’s obligation under Clause 3.1, or (ii) Stirling’s
obligation under Clause 3.2.


 


 


14.          Variation


 


This Agreement shall not be amended and no variation to its terms shall
be effective unless such amendment or variation is in writing and is signed by
an authorised signatory on behalf of each of the Parties.


 


 


15.          Assignation and
Sub-Contracting


 


15.1         IMI and Stirling may assign
or transfer this Agreement or its rights and obligations under this Agreement
(in whole but not in part) without the consent of ITI, where such assignation
or transfer (a) is to a Group Company, or (b) as part of the sale to a third
party of all or substantially all of the Division, or (c) in accordance with
Clause 15.2 but shall not otherwise assign or transfer its rights or
obligations under this Agreement without the prior written consent of ITI.


 


29










 













 


15.2         Without prejudice to Clauses
8.3 and 8.4, IMI, Stirling and the other Group Companies, as the case may be,
may sub-contract parts of the Research and Development Project, provided always
that IMI or Stirling, as the case may be, remains responsible for all acts or
omissions of its sub-contractors.


 


15.3         ITI may assign or transfer
this Agreement or its rights and obligations under this Agreement (in whole but
not in part) to any public sector body without the consent of IMI, SwissCo or
Stirling but ITI shall not assign or transfer its rights or obligations under
this Agreement to any party which is or which is part of a group which has an
entity or operations which are competitive with any Group Company in the IMI
Field of Use without the prior written consent of SwissCo, Stirling and IMI.


 


15.4         Following a Change of Control
of Stirling, Stirling shall ensure that the Eligible Expenditure occurring
after the date of the Change of Control shall be reasonably expended in the
circumstances.


 


 


16.          Waiver


 


The failure of a Party to exercise or enforce any right conferred upon
it by this Agreement shall not be deemed to be a waiver of any such right or
operate so as to bar the exercise or enforcement of such right at any time or
times thereafter.  No waiver or discharge
shall be valid unless in writing and signed by the relevant Party against whom
such waiver or discharge is sought to be enforced or unless given by ITI
pursuant to Clause 7.1.


 


 


17.          Publicity


 


17.1         Stirling and IMI shall be
entitled to publish marketing materials or otherwise engage in marketing or
public relations activities regarding IMI’s and/or Stirling’s involvement with
ITI, subject to obtaining ITI’s consent through the execution of a Marketing
Agreement Form or in such other manner as the parties agree.  For the avoidance of doubt, if there is any
conflict between the terms of the Marketing Agreement Form and this Agreement
the terms of the Marketing Agreement Form shall prevail.


 


17.2         ITI shall be entitled to
publish marketing materials or otherwise engage in marketing or public
relations activities regarding ITI’s involvement with IMI or Stirling, subject
to obtaining IMI’s or Stirling’s consent, as the case may be, through the
execution of a Marketing Agreement Form or in such other manner as the parties
agree. For the avoidance of doubt, if there is any


 


30





















 


conflict between the terms of the Marketing
Agreement Form and this Agreement the terms of the Marketing Agreement Form
shall prevail.


 


 


18.          Notices


 


18.1         Notices under this Agreement
shall be given by courier or by recorded delivery mail, posted prepaid and
addressed to the addresses of the respective post holders as follows:.


 


ITI:


 


Director of Intellectual Asset Management


 


ITI Life Sciences


 


Innovation House


 


17 Luna Place


 


Dundee Technology Park


 


Dundee DD2 1TP


 


United Kingdom


 


Stirling:


 


Company Secretary


 


249 West George Street


 


Glasgow G2 4RB


 


United Kingdom


 


IMI:


 


General Counsel


 


Inverness Medical Innovations, Inc


 


51 Sawyer Road


 


Suite 200


 


Waltham


 


MA 02453-3448


 


United States of America


 


SwissCo:


 


General Counsel


 


Inverness Medical Switzerland, GmbH


 


Bundesplatz 1


 


6300 Zug


 


31





















 


Switzerland


 


18.2         Where ITI gives a notice to
Stirling, ITI shall copy that notice to IMI and where ITI gives a notice to
IMI, ITI shall copy that notice to Stirling.


 


18.3         If a Party or a post holder
changes its address for notification purposes, then it shall give the other
Parties prior written notice of the new address and the date on which it shall
become effective.


 


18.4         Notices served by courier or
mail shall be deemed to be delivered 72 hours after the time of delivery into
the hands of a courier or of posting.


 


18.5         For the avoidance of doubt, service
of any process or any writ or document in relation to any court proceedings
which may be taken hereunder in relation to IMI may be served at care of DLA
Piper Rudnick Gray Cary Scotland LLP, Rutland Square, Edinburgh EH1 2AA, United
Kingdom (or such other address in Scotland as notified to ITI by IMI from time
to time). For the avoidance of doubt, such service shall be in addition to, and
not in substitution for, service on IMI at its own address for service.


 


 


19.          Remedies not Exclusive


 


No remedy conferred by any of the provisions of this Agreement is
intended to be exclusive of any other remedy, except as expressly provided in
this Agreement and each and every remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement now or hereafter
existing in law.


 


 


20.          Severance


 


If any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:-


 


(a)           the legality, validity or enforceability in that jurisdiction of any
other provision of this Agreement; or


 


(b)           the legality, validity or enforceability in any other jurisdiction
of that or any other provision of this Agreement.


 


 


21.          Entire Agreement


 


This Agreement, together with the Exploitation Agreement and the
Background Intellectual Assets Licence, constitutes the entire agreement and
understanding among the Parties in


 


32





















 


relation to its subject matter and supersedes all previous agreement
and arrangements among the Parties in relation to its subject matter.  No Party shall be entitled to rely on any
oral or written representations, understandings or agreements among the Parties
which are not fully expressed in this Agreement, the Exploitation Agreement and
the Background Intellectual Assets Licence, and each Party expressly excludes
any liability therefor, except for any such misrepresentations which are made
fraudulently.


 


 


22.          Governing Law


 


This Agreement shall be governed by and interpreted in accordance with
the laws of Scotland, and subject to Clause 11 the parties hereby submit to the
exclusive jurisdiction of the Scottish Courts in respect of any dispute arising
hereunder.


 


IN WITNESS WHEREOF these
presents consisting of this and the preceding 32 pages together with the Schedule in 8 Parts annexed
hereto are executed in four originals as follows:-


 


 


	
  They
  are subscribed for and on behalf of ITI

  	
   

  
	
  Scotland
  Limited by John Chiplin,

  	
   

  
	
  an
  authorised signatory,

  	
   

  
	
  at
  Edinburgh

  	
   

  
	
  on 25
  February 2005

  	
   

  
	
  Before
  this witness:

  	
  Signatory:

  	
  /s/
  John Chiplin

  
	
  /s/
  Joanna Susan Boag-Thomson

  	
   

  	
  Witness

  	
  Full
  Name: John Chiplin

  	
   

  
	
  Joanna
  Susan Boag-Thomson

  	
  Full
  Name

  	
   

  
	
  241
  Nithsdale Road

  	
  Address

  	
   

  
	
  Glasgow

  	
   

  
						



 


33





















 


	
  They
  are subscribed for and on behalf of Inverness

  	
   

  
	
  Medical
  Innovations, Inc. by    David Scott.,

  	
   

  
	
  an
  authorised signatory, at        Edinburgh

  	
   

  
	
  on 25
  February 2005. before this witness:

  	
   

  
	
   

  	
  Signatory:

  	
  /s/
  David Scott

  
	
   

  	
  Full
  Name: David Scott

  	
   

  
	
   

  	
   

  
	
  /s/
  Ian Bryson McCarlie

  	
   

  	
  Witness

  	
   

  	
   

  
	
  Ian
  Bryson McCarlie

  	
  Full Name

  	
   

  	
   

  
	
  Rutland
  Square Edinburgh

  	
  Address

  	
   

  	
   

  
	
   

  	
   

  
	
  They
  are subscribed for and on behalf of Stirling

  	
   

  
	
  Medical
  Innovations, Inc. by   David Scott.,

  	
   

  
	
  an
  authorised signatory, at      Edinburgh

  	
   

  
	
  on 25
  February 2005. before this witness:

  	
  Signatory:

  	
  /s/
  David Scott

  
	
   

  	
  Full
  Name: David Scott

  	
   

  
	
   

  	
   

  
	
  /s/
  Ian Bryson McCarlie

  	
   

  	
  Witness

  	
   

  	
   

  
	
  Ian
  Bryson McCarlie

  	
  Full Name

  	
   

  	
   

  
	
  Rutland
  Square Edinburgh

  	
  Address

  	
   

  	
   

  
	
   

  	
   

  
	
  They
  are subscribed for and on behalf of Inverness

  	
   

  
	
  Medical
  Switzerland GmbH by

  	
   

  
	
  Steve
  Howell                      ,
  as attorney for Inverness

  	
   

  
	
  Medical
  Switzerland GmbH, at Edinburgh                on

  	
   

  
	
      25
  February 2005.

  	
  Signatory:

  	
  /s/
  Steve Howell

  
	
  before
  this witness:

  	
  Full
  Name: Steve Howell

  	
   

  
	
  /s/
  John Christopher McKinley

  	
   

  	
  Witness

  	
   

  	
   

  
	
  John
  Christopher McKinley

  	
  Full Name

  	
   

  	
   

  
	
  7
  Queens Avenue

  	
  Address

  	
   

  	
   

  
	
  Edinburgh

  	
   

  
											



 


34





















 


This is the Schedule referred to in the foregoing
Research and Development Agreement among ITI SCOTLAND LIMITED,  INVERNESS MEDICAL INNOVATIONS, INC., STIRLING
MEDICAL INNOVATIONS LIMITED and INVERNESS MEDICAL SWITZERLAND GmbH


 


SCHEDULE


 


Part 1



Milestones


 


 


	
  Milestones

  	
   

  	
  Milestone Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  



 










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


 


35





















 


	
  Milestones

  	
   

  	
  Milestone Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  
	
   

  	
   

  	
   

  
	
  ****

  	
   

  	
  ****
  months from Commencement Date

  



 










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


 


36





















 


Part 2A


 


IMI Financial Contribution


 


Part 2A


 


IMI Financial Contribution


 


	
  Year

  	
   

  	
  IMI Financial
  Contribution

  
	
  1

  	
   

  	
  £7,500,000
  (of which £3,000,000 is the Stirling Minimum Expenditure)

  
	
  2

  	
   

  	
  £11,500,000
  (of which £7,000,000 is the Stirling Minimum Expenditure)

  
	
  3

  	
   

  	
  £14,000,000
  (of which £11,000,000 is the Stirling Minimum Expenditure)

  
	
  4

  	
   

  	
  £4,500,000
  (of which £3,000,000 is the Stirling Minimum Expenditure)

  



 


37





















 


Part 2B




Stirling Minimum Expenditure


 




	
  Year

  	
   

  	
  Stirling Minimum
  Expenditure

  	
   

  
	
  1

  	
   

  	
  £

  	
  3,000,000

  	
   

  
	
  2

  	
   

  	
  £

  	
  7,000.000

  	
   

  
	
  3

  	
   

  	
  £

  	
  11,000,000

  	
   

  
	
  4

  	
   

  	
  £

  	
  3,000,000

  	
   

  






 


38





















 


Part
3


 


Development Fee


 


	
  Instalment

  	
   

  	
  Instalment Date

  	
   

  	
  Development Fee

  	
   

  
	
  1.

  	
   

  	
  5
  Business Days after the Commencement Date

  	
   

  	
  £

  	
  5,000,000

  	
   

  
	
  2.

  	
   

  	
  1 July 2005

  	
   

  	
  £

  	
  2,500,000

  	
   

  
	
  3.

  	
   

  	
  1 October 2005

  	
   

  	
  £

  	
  2,500,000

  	
   

  
	
  4.

  	
   

  	
  1 January 2006

  	
   

  	
  £

  	
  2,500,000

  	
   

  
	
  5.

  	
   

  	
  1 April 2006

  	
   

  	
  £

  	
  2,500,000

  	
   

  
	
  6.

  	
   

  	
  1 July 2006

  	
   

  	
  £

  	
  2,500,000

  	
   

  
	
  7.

  	
   

  	
  1 October 2006

  	
   

  	
  £

  	
  2,500,000

  	
   

  
	
  8.

  	
   

  	
  1 January 2007

  	
   

  	
  £

  	
  2,500,000

  	
   

  
	
  9.

  	
   

  	
  1 April 2007

  	
   

  	
  £

  	
  2,500,000

  	
   

  
	
  10.

  	
   

  	
  1 July 2007

  	
   

  	
  £

  	
  2,500,000

  	
   

  
	
  11.

  	
   

  	
  1 October 2007

  	
   

  	
  £

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
  Total

  	
   

  	
  £

  	
  30,000,000

  	
   

  



 


39





















 


Part 4


 


Royalty Adjustment Formula


 


	
  IMI Financial

  Contribution

  	
   

  	
  0 -10%

  Shortfall

  	
   

  	
  10 - 20%

  Shortfall

  	
   

  
	
  Year 1 -
  £7,500,000

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  Year 2 -
  £11,500,000

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  Year 3 -
  £14,000,000

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  Year 4 –
  £4,500,000

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  



 


	
  Stirling Minimum

  Expenditure

  	
   

  	
  0 - 10%

  Shortfall

  	
   

  	
  10 - 20%

  Shortfall

  	
   

  
	
  Year 1 -
  £3,000,000

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  Year 2 -
  £7,000,000

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  Year 3 -
  £11,000,000

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  Year 4 -
  £3,000,000

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  



 


NB - Royalty increases are either 0–10% shortfall or 10-20%
shortfall not both.  If both IMI and
Stirling are in material breach in any Year ITI may apply the relevant increase
in respect of each such breach.  By way
of example only, if IMI has had a 10% shortfall and Stirling has a 21%
shortfall in Year 2, the total amount of the increase would be ****%.


 










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


 


40





















 


Part 5


 


Expertise Profile


 


To meet ITI
Scotland’s objective of creating ‘communities of expertise’, there is a need to
proactively seek out individuals or become aware of individuals who may be willing
to contribute their ‘expertise-in-context’ to assist the ITIs and to
participate in future Programmes and Projects.


 


The aim of
completing an expertise profile is to capture knowledge about individuals, with
this knowledge being placed in context within an area of the ITI’s business, to
create networks of expert individuals and communities of practice and expertise
across Scotland.


 


 


	
  Field Name

  	
   

  	
  Comments

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  First Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Last Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Work Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Town/County

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Country

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Postal/Zip Code

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Work Telephone (Daytime)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Work Email

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Job Title/Position

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ITI Context

  	
   

  	
  Description of any experience obtained by individual
  working on other ITI projects.

  



 


41





















 


	
  Education

  	
   

  	
  Description of Education and qualifications.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Professional

  Memberships/Associations

  	
   

  	
  Details of any Professional Memberships or Associations.

  
	
   

  	
   

  	
   

  
	
  Academic Positions

  	
   

  	
  Description of any academic positions held by individual.

  
	
   

  	
   

  	
   

  
	
  Current Research Areas of Interest

  	
   

  	
  Description of current research areas of interest.

  
	
   

  	
   

  	
   

  
	
  Commercial Experience

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Commercial Positions Held

  	
   

  	
  Description of any commercial positions held.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Any other relevant information

  	
   

  	
   

  



 


42





















 


Part 6


 


Marketing Agreement Form


 


Marketing Agreement Form


 


Please
complete this form to record ITI Life Sciences’/Inverness Medical Innovations,
Inc’s/Stirling Medical Innovations Limited’s
[Delete as appropriate] approval to take part in mutually beneficial
marketing and PR opportunities.


 


Each individual opportunity/article will be passed to ITI Life
Sciences/Inverness Medical Innovations, Inc./Stirling
Medical Innovations Limited’s [Delete as appropriate]for
review or approval prior to publication and will be drafted in line with the
terms and conditions already in place between us.


 


	
  Company
  Name:

  	
   

  	
   

  	
   

  	
  Name
  & Job Title:

  	
   

  	
   

  
	
  email
  Address:

  	
   

  	
   

  	
   

  	
  Tel
  No:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I
  confirm that the following information can be used by ITI Life
  Sciences/Inverness Medical Innovations, Inc./Stirling Medical Innovations
  Limited’s [Delete as appropriate]
  for the following marketing purposes: [Insert
  details of information]

  



 


 


	
  o

  	
  PRESS RELEASE

  	
  o

  	
  TESTIMONIAL

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Quote/comment
  about ITI

  Life Sciences/Inverness Medical

  Innovations, Inc./Stirling Medical

  Innovations Limited [Delete as

  appropriate

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Newsletter

  	
  o

  	
  Case Study

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Article feature
  in

  internal publications

  or other appropriate

  media

  	
   

  	
  Description
  of Programme

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Website

  	
  o

  	
  Use of Name

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  News
  feature or Press Release on

  website

  	
   

  	
  e.g.
  published client list

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Logo

  	
  o

  	
  Images

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Use
  of ITI Life Sciences’/Inverness Medical

  Innovations, Inc.’s/[Stirling Medical
  Innovations

  Limited’s ] [Delete as

  appropriate] logo in marketing material

  	
   

  	
  Use
  of images in marketing

  



 


43





















 


Further
comments (please state here any exceptions or restrictions)


 


 


Please return
form to:


 


1)             Lynn Murphy, Marketing
& Communications Director:


email:   lynn.murphy@itilifesciences.com


Tel:      +44 (0)1382 568 067; or


 


2)             [Insert details of IMI marketing contact]; or


 


3)             [Insert details of Stirling Medical Innovations Limited’s marketing
contact required].


 


[Delete as appropriate]


 


44





















 


Part
7


 


Parent Company Guarantee


 


 


PARENT COMPANY GUARANTEE


 


INVERNESS MEDICAL INNOVATIONS INC.


as Guarantor


 


ITI SCOTLAND LIMITED


as Company


 


25 February 2005


 


45





















 


AGREEMENT


 


between


 


(1)           INVERNESS MEDICAL INNOVATIONS INC., a
company incorporated in the State of Delaware and having its principal place of
business at 51 Sawyer Road, Suite 200, Waltham, MA 02453 — 3448, USA (“Guarantor”)


 


(2)           ITI SCOTLAND LIMITED, a company
incorporated in Scotland under the Companies Acts (Company Number SC251900) and
having its registered office at 180 St Vincent Street, Glasgow G2 5SG and its permitted assignees and permitted
transferees from time to time (“Company”)


together the “parties”


 


BACKGROUND


 


(A)          The Guarantor is the ultimate parent company of (i) Inverness
Medical Switzerland GmbH, incorporated in Switzerland (company number
CH-170.4.003.523-4) and having its principal place of business at Bundesplatz
1, 6300 Zug (“Swissco”) and (ii)
Stirling Medical Innovations Limited (formerly called “Cardiosure Limited”
having changed its name conformed to a Certificate of Incorporation on Change
of Name dated 25 February 2005), a company incorporated under the
Companies Acts (Company Number SC277069) and having its registered office at
249 West George Street, Glasgow, G2 4RB (“Stirling”).


 


(B)           This Guarantee is ancillary to (i) a research and development
agreement between inter alia the
Guarantor, Stirling and the Company dated on or around the date hereof (“R&D Agreement”) under the terms of
which Stirling has incurred certain payment obligations  to the Company (ii) an exploitation agreement
between and amongst the Guarantor, Stirling, the Company and Swissco (“Exploitation Agreement”) under the terms
of which Stirling and Swissco have incurred certain payment obligations to the
Company and (iii) a background intellectual assets licence between the Company
and Swissco (“BIA Licence”) under
the terms of which Swissco has incurred certain payment obligations to the
Company


 


(C)           The Guarantor has agreed with the Company, subject to the terms of
this Guarantee, to guarantee:


 


(i)                   the said payment
obligations under the R&D Agreement of (1) Stirling and (2) any party to whom Stirling’s
obligations under the R&D Agreement are transferred (whether by
assignation, novation or otherwise) (the “R&D
Principal”); and


 


46





















 


(ii)                  the said payment
obligations under the Exploitation Agreement of (1) Stirling and/or Swissco as
the case may be and/or (2) any
party to whom Stirling’s or Swissco’s obligations under the Exploitation
Agreement have been transferred (whether by assignation, novation or otherwise)
(the “Exploitation Principals”);
and


 


(iii)                 the said payment
obligations under the BIA Licence of (1) Swissco and (2) any party to whom Swissco’s obligations under the BIA Licence
are transferred (whether by assignation, novation or otherwise) (the “BIA Licence Principal”).


 


IT IS HEREBY AGREED:


 


 


1.             Guarantor Obligations


 


1.1           The Guarantor guarantees
irrevocably and unconditionally, to the Company:


 


1.1.1              the observance by the
R&D Principal of its Payment Obligations to the Company under the terms of
the R&D Agreement (“R&D Payment
Obligations”); and


 


1.1.2              the observance by the
Exploitation Principals of their Payment Obligations to the Company under the
terms of the Exploitation Agreement (“Additional
Payment Obligations”).


 


1.1.3              the observance by the
BIA Licence Principal of its Payment Obligations to the Company under the terms
of the BIA Licence (“BIA Licence Payment
Obligations”);


 


1.2           The parties agree that each
of :


 


1.2.1              an order made by a court
to pay damages; and


 


1.2.2              a settlement agreed by
the R&D Principal pursuant to which the R&D Principal agrees to pay a
sum of money to the Company in respect of a dispute under the R&D
Agreement; and


 


1.2.3              a settlement agreed by
the Exploitation Principals pursuant to which the Exploitation Principals agree
to pay a sum of money to the Company in respect of a dispute under the
Exploitation Agreement; and


 


1.2.4              a settlement agreed by
the BIA Licence Principal pursuant to which the BIA Licence Principal agrees to
pay a sum of money to the Company in respect of a dispute under the BIA
Licence;


 


47





















 


shall constitute “Payment Obligations”
of the R&D Principal under the R&D Agreement and/or the Exploitation
Principals under the Exploitation Agreement and/or  the BIA Licence Principal under the BIA
Licence.


 


1.3           For the purpose of Clause
1.2.1 above, “an  order made by a court” shall mean an order
by a court having competent jurisdiction over the Guarantor which has not been
appealed and the time for appeal has expired or from which no appeal can be
taken.


 


 


2.             Discharge of Payment Obligations


 


On the occurrence of the non-performance by


 


(a)           the
R&D Principal of the R&D Payment Obligations,


 


(b)           the
Exploitation Principals of the Additional Payment Obligations, or


 


(c)           the
BIA Licence Principal of the BIA Licence Payment Obligations


 


the Guarantor as primary obligant irrevocably and unconditionally
undertakes to meet in full the R&D Payment Obligations due by the R&D
Principal to the Company under the terms of the R&D Agreement, and/or the
Additional Payment Obligations due by the Exploitation Principals to the
Company under the terms of the Exploitation Agreement, and/or the BIA Licence
Payment Obligations due  by the BIA
Licence Principal to the Company under the terms of the BIA Licence, such
payments to be made by the Guarantor on demand, subject to the terms of this
Guarantee, by the Company.


 


 


3.             Notice of Default


 


The Guarantor shall not be liable under this Guarantee if, having been
called upon to do so by the Company by a notice in writing (in a form substantially
in the terms of the notice referred to in the Schedule hereto) (“Notice”), the R&D Principal or where
applicable the Exploitation Principals, or where applicable the BIA Licence
Principal have within twenty one days of the date of receipt of such Notice,
rectified the breach or failure in respect of any R&D Payment Obligations
and/or Additional Payment Obligations and/or BIA Licence Payment Obligations
specified in the Notice (as appropriate). 
A copy of the Notice to the R&D Principal or (where applicable) the
Exploitation Principals or (where applicable) the BIA Licence Principal shall
be sent to the Guarantor at the same time as it is sent to the R&D
Principal or (where applicable) the Exploitation Principals or (where
applicable) the BIA Licence Principal. 
If the R&D Principal or (where applicable) the Exploitation
Principals or (where applicable) the BIA


 


48





















 


Licence Principal fail to rectify the breach or failure within twenty
one days of the date of receipt of the Notice, the Company will so inform the
Guarantor by notice in writing and the Guarantor will, to the extent that
appropriate action has not already been taken by the R&D Principal, or
(where applicable) the Exploitation Principals or (where applicable) the BIA
Licence Principal  take appropriate
action hereunder to forthwith rectify the relevant breach or failure.


 


 


4.             Continuing Security


 


This Guarantee shall be a continuing security and accordingly it shall:


 


4.1           not be discharged by any
partial satisfaction (except to the extent of such partial satisfaction) by the
R&D Principal of its R&D Payment Obligations and/or the Exploitation
Principals of their Additional Payment Obligations and/or the or the BIA
Licence Principal of its BIA Licence Payment Obligations ;


 


4.2           not be discharged or
impaired by any time or indulgence (subject to a maximum period of 25 Business
Days) granted by the Company to the R&D Principal in respect of the R&D
Payment Obligations and/or the Exploitation Principals in respect of their
Additional Payment Obligations and/or the BIA Licence Principal in respect of
their BIA Licence Payment Obligations;


 


4.3           not be discharged or
impaired by any amendment to the terms of the R&D Agreement and/or the
Exploitation Agreement and/or the BIA Licence (save for any amendment which
removes the requirement to provide a guarantee on the terms hereunder); and


 


4.4           extend to cover the
unperformed part of the R&D Payment Obligations of the R&D Principal
and/or Additional Payment Obligations of the Exploitation Principals and/ or
BIA Licence Payment Obligations of the BIA Licence Principal from time to time.


 


 


5.             Warranties


 


The Guarantor warrants that:


 


5.1           it is duly incorporated and
validly existing under the laws of its country of incorporation;


 


5.2           it has full and
unrestricted power and authority to enter into this Guarantee and that all
corporate or other action required to authorise the entering into of this
Guarantee, or any matter ancillary thereto, has been taken;


 


5.3           the execution, delivery and
performance by the Guarantor of this Guarantee does not:


 


49





















 


5.3.1              require any consent or
approval of any shareholder of the Guarantor, or any other person, which it has
not duly obtained;


 


5.3.2              violate any provision of
any laws in any jurisdiction applicable to the Guarantor;


 


5.3.3              result in a breach of,
or constitute a default under, any security, agreement, or other document or
instrument, or any other obligation or undertaking, to which the Guarantor is a
party or by which it or any material part of its property or assets may be
bound or affected, including without limitation any loan covenant;


 


5.3.4              result in, or require
the creation or imposition of any lien (or similar security or obligation) upon
any material part of the property or assets owned or controlled by the
Guarantor;


 


5.4           it is not in default under
or in breach of any law or security, agreement, or other document or instrument
which default or breach could have a materially adverse effect on its ability
to perform its obligations under this Guarantee.


 


 


6.             Limitation of Liability


 


The Guarantor’s liability under this Guarantee shall not exceed (a)
that of the R&D Principal under the R&D Agreement or of the Exploitation
Principals under the Exploitation Agreement or the BIA Licence Principal under
the BIA Licence, determined on the basis that the R&D Agreement, the
Exploitation Agreement and BIA Licence are valid, enforceable and have full
force and effect., together with (b) any interest payable by the Guarantor
pursuant to Clause 8.1 and (c) any costs, charges and expenses payable by the
Guarantor pursuant to Clause 8.2.


 


 


7.             Winding Up


 


None of the liabilities or obligations of the Guarantor shall be
released or discharged by the winding up, amalgamation, reconstruction or
reorganisation of the R&D Principal or the Exploitation Principals or the
BIA Licence Principal (or the commencement of any of the foregoing or of any
proceedings therefor).


 


 


8.             Interest & Expenses


 


8.1           To the extent that the
Guarantor’s obligations of payment hereunder (if any) are not paid when due
following demand hereunder, interest at a rate of 3% per annum above the base


 


50





















 


lending rate of The Governor and Company of
the Bank of Scotland shall accrue on a daily basis (in substitution for any
rate then applying to the R&D Payment Obligations and/or the Additional
Payment Obligations and/or the BIA Licence Payment Obligations so that, for the
avoidance of doubt, there shall be no double counting of interest) until
payment of such sums is made in full.


 


8.2           The Guarantor shall pay all costs, charges and
expenses reasonably and properly incurred by the Company in the enforcement,
preservation of rights under, exercise of rights under or decision as to
whether to exercise its rights under, assignation, release or discharge of this
Guarantee which costs, charges and expenses shall be payable within 10 Business
Days of written demand by the Guarantor.


 


 


9.             Assignation


 


9.1           The Guarantor shall not,
without the prior written consent of the Company (such consent not to be
unreasonably withheld or delayed), assign or transfer to any entity its rights
or obligations under this Guarantee.


 


9.2           The Company may at any time
without the consent of the Guarantor assign or transfer any part of its rights
under this Guarantee to any party to whom the Company has assigned its rights
under the R&D Agreement and/or the Exploitation Agreement and/ or the BIA
Licence.


 


 


10.          Notices


 


10.1         Any notice required to be
given or served under or pursuant to this Guarantee shall be sufficiently given
or served if delivered by hand or sent by pre-paid recorded delivery letter to
the address of the relevant party stated below or to such other address as the
relevant party may most recently have directed by written notice to the other
parties and, if delivered by hand, shall be deemed to have been received on the
date of delivery or, if sent by post, shall be deemed to have been received on
the third business day following the posting thereof (and proof that an
envelope containing the same was properly addressed, pre-paid and posted as
aforesaid shall be conclusive evidence that the notice was given).


 


51





















 


	
  10.2

  	
   

  	
  The address of the Company is:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  	
  Innovation
  House

  
	
   

  	
   

  	
   

  	
   

  	
  17
  Luna Place

  
	
   

  	
   

  	
   

  	
   

  	
  Dundee
  Technology Park

  
	
   

  	
   

  	
   

  	
   

  	
  Dundee
  DD2 1TP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For
  the attention of:

  	
   

  	
  Director
  of Intellectual Asset Management

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.3

  	
   

  	
  The address of the Guarantor is:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  	
  51
  Sawyer Road

  
	
   

  	
   

  	
   

  	
   

  	
  Suite
  200

  
	
   

  	
   

  	
   

  	
   

  	
  Waltham

  
	
   

  	
   

  	
   

  	
   

  	
  MA
  02453-3448

  
	
   

  	
   

  	
   

  	
   

  	
  United
  States of America

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For
  the attention of:

  	
   

  	
  General
  Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.4

  	
   

  	
  The address of Stirling is:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  	
  249
  West George Street

  
	
   

  	
   

  	
   

  	
   

  	
  Glasgow
  G2 4RB

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For
  the attention of:

  	
   

  	
  Company
  Secretary

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.5

  	
   

  	
  The address of Swissco is:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  	
  Bundesplatz
  1

  
	
   

  	
   

  	
   

  	
   

  	
  6300
  Zug

  
	
   

  	
   

  	
   

  	
   

  	
  Switzerland

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For
  the attention of :

  	
   

  	
  General
  Counsel

  



 


 


11.          General


 


11.1         If any provision of this
Guarantee is held invalid or unenforceable for any reason by any Court of
competent jurisdiction, such provision shall be severed and the remainder of
the provisions hereof shall continue in full force and effect as if this
Guarantee had been executed with the invalid, illegal or unenforceable
provision eliminated.


 


11.2         For the avoidance of any
doubt, service of any process or any writ or document in relation to any court
proceedings which may be taken hereunder may be served on the Guarantor at c/o
DLA Piper Rudnick Gray Cary Scotland LLP, Rutland Square, Edinburgh, EH1 2AA
(or such other address in Scotland as notified to the Company hereunder from
time to time).  For the


 


52





















 


avoidance of doubt, such service of such
process, writ or document shall at the same time be made to the Guarantor.


 


 


12.          Governing Law


 


This Guarantee shall be governed by and construed in accordance with
the law of Scotland, and any dispute which may arise between the parties
concerning this Guarantee shall be determined by the exclusive jurisdiction of
the Scottish Courts:  IN WITNESS WHEREOF these presents
consisting of this and the eight preceding pages together with the Schedule annexed
hereto are executed as follows:


 


 


	
  They
  are subscribed for and on behalf of

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Inverness
  Medical Innovations Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  at

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  on

  	
  2005

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  by

  	
  , Director

  	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
  in
  the presence of the following witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Witness

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  They
  are subscribed for and on behalf of ITI

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Scotland
  Limited by
                                               ,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  an
  authorised signatory, at

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  on

  	
   

  	
  Signatory:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  before
  this witness:

  	
   

  	
  Full
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Full Name

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  	
   

  
								



 


53





















 


This is the Schedule to
the foregoing Parent Company Guarantee between Inverness Medical Innovations
Inc. and ITI Scotland Limited


 


SCHEDULE


 


Notice


 


Notice to [the
R&D Principal] or [the Exploitation Principals] or [BIA Licence Principal]*
to Rectify a Breach/Failure of a [Payment Obligation] [Additional Payment
Obligation]  [BIA Licence Payment
Obligation]* under the [R&D Agreement] or [Exploitation Agreement] or  [BIA Licence]* served in accordance with the
Parent Company Guarantee


 


Date:


 


Address of
[the R&D Principal ] or [the Exploitation Principals] or [BIA Licence
Principal]* for Service of Notice:


 


TAKE
NOTICE that unless within twenty one days of
the date of this Notice the breach identified below is rectified, Inverness
Medical Innovations Inc. (“Parent Company”)
will be required to rectify the breach in accordance with the Guarantee (“Parent Company Guarantee”) which was
granted by Inverness Medical Innovations Inc. in favour of ITI Scotland Limited
on [• ].  This Notice is being copied to the Parent
Company in terms of the Parent Company Guarantee.


 


Description of Breach in respect of a [Payment Obligation]
[Additional Payment Obligation] [BIA Licence Payment Obligation]* which
required rectification:


 


Request to Parent Company to make good the default or
non-performance of [Stirling] or [Swissco]* in accordance with the Parent
Company Guarantee


 


 


	
  To

  	
  (Name
  of Parent Company)

  
	
   

  	
   

  
	
  Address
  (being the registered office of the Parent

  Company):

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date

  



 










* Delete as
appropriate


 


54





















 


The above
Notice was served on [the R&D Principal] or [the Exploitation Principals]
or [the BIA Licence Principal]* on the date specified in the Notice.  TAKE NOTICE that
if, within twenty one days of the date of the Notice, [the R&D Principal]
or [the Exploitation Principals] or the [BIA Licence Principal]* has failed to
rectify the breach identified in the Notice under the terms of the Parent
Company Guarantee, ITI Scotland Limited requires the Parent Company, without
further notice, pursuant to the Parent Company Guarantee, to rectify the
breach.


 


 


Signed on
behalf of the Company


 


	
  Dated:

  	
   

  	
   

  



 


 


55





















 


Part
8


 


Part 8A


 


Legal Opinion regarding SwissCo


 


The Directors


ITI Scotland
Limited


180 St.
Vincent Street


Glasgow


G2 5SG


 


Zurich, February 25th
2005


ML/DK


 


Inverness
Medical Switzerland GmbH / Legal Opinion


 


Dear Sirs


 


You have asked
for our opinion concerning the legal effect under the laws of Switzerland and
the laws of the Canton of Zug (being the Canton in which Inverness Medical
Switzerland GmbH has its legal domicile and being the Canton of incorporation
of Inverness Medical Switzerland GmbH) of the Research and Development
Agreement and of the Exploitation Agreement each of which is among Inverness
Medical Switzerland GmbH, Inverness Medical Innovations, Inc, ITI Scotland
Limited and Cardiosure Limited as well as the Background Intellectual Assets
Licence Agreement between Inverness Medical Switzerland GmbH and ITI Scotland
Limited, copies of which are attached to this Opinion (the “Agreements”).


 


We confirm
that we have sufficient knowledge of all relevant aspects of such law and are fully qualified to give this Opinion.


 


We have
examined the Agreements and also all other documents that we consider necessary
for the purposes of giving this Opinion and have made such enquiries, as we
consider necessary.


 


We confirm as
follows:


 


1.   Inverness Medical Switzerland GmbH is a corporation duly organised,
validly existing and in good standing under the laws of Switzerland and
Inverness Medical Switzerland GmbH has appropriate power and authority to own
its property and assets and carry on its business as now conducted.


 


2.   Inverness Medical Switzerland GmbH has appropriate power and
authority to grant and comply with its obligations under the Agreements.


 


3.   The Agreements have been validly executed in accordance with
Inverness Medical Switzerland GmbH’s organisational documents and the laws of
Switzerland and have been executed by a duly authorized attorney and
representative of Inverness Medical Switzerland GmbH, whose execution binds
Inverness Medical Switzerland GmbH.


 


4.   No permit, licence, approval or authorisation of any governmental,
judicial or other authority or other third party
is required or desirable in connection
with the execution, performance, validity or enforceability of the Agreements.


 


5.   Under the laws of Switzerland and the Canton of Zug the Agreements
constitute legal, valid and binding obligations upon Inverness Medical
Switzerland GmbH, enforceable against Inverness Medical Switzerland GmbH in
accordance with the terms of the Agreements.


 


6.   Any final judgment which you obtain from a Scottish court against
Inverness Medical Switzerland GmbH in relation to
the Agreements can be enforced in the Canton of Zug by bringing separate
proceedings in the courts of Zug founded on the Scottish judgment and the
courts of Zug will


 


56





















 


 


recognise, accept and enforce the Scottish judgment without any retrial
or examination of the merits of the case.


 


7.   It is not necessary or advisable in order to ensure the validity,
effectiveness, performance and enforceability of the Agreements that the
Agreements be filed, registered or recorded in any public office or elsewhere
nor that any other instrument relating thereto be executed, filed, registered
or recorded.


 


8.   No stamp, registration, documentary or other tax is or will be payable
in Switzerland in respect of the execution, performance or enforcement of the
Agreements nor to render the Agreements admissible in evidence, except for the
regular court costs and fees.


 


9.   No other formalities are considered requisite or desirable for the
validity and enforceability of the Agreements.


 


This Opinion
is limited to the laws of Switzerland and of the Canton of Zug.


 


Yours
sincerely,


 


 


Marco
Lanter/Charlotte Good


 


57





















Part 8


 


Part 8B


 


Legal Opinion regarding IMI


 


February 25,
2005


The Directors


ITI Scotland
Limited


180 St Vincent
Street


Glasgow


G2 5SG


 


Re:          Inverness
Medical Innovations, Inc. – Parent Company Guarantee


 


Ladies and
Gentlemen:


 


We have acted
as counsel for Inverness Medical Innovations, Inc., a Delaware corporation (the
“Guarantor”), in connection with the authorization and execution of the Parent
Company Guarantee, dated February      , 2005
(the “Guarantee”), by and between the Guarantor and ITI Scotland Limited.  Capitalized terms used but not defined herein
shall have the meanings set forth in the Guarantee, unless the context requires
otherwise.


 


We have
examined such documents and made such other investigation as we have deemed
appropriate to render the opinions set forth below.  As to matters of fact material to our
opinions, we have relied, without independent verification, on certificates and
other inquiries of officers of the Guarantor.


 


Our opinions
below are subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws of general application affecting the rights
and remedies of creditors and to general principles of equity.


 


The opinions
expressed below are limited to the laws of the Commonwealth of Massachusetts,
the Delaware General Corporation Law and the federal laws of the United
States.  We note that the Guarantee
provides that it is to be governed by the law of Scotland.  We are rendering the opinions expressed in
paragraph 5 below regarding the validity, binding effect and enforceability of
the Guarantee as though it were governed by the internal law of Massachusetts,
and subject to the assumption that each of the Payment Obligations are valid,
binding and enforceable obligations of Cardiosure and Swissco, as the case may
be, and their permitted assigns.


 


Based upon
the foregoing and subject to the additional qualifications set forth below, we
are of the opinion that:


 


1.           The Guarantor is validly existing as a
corporation and in good standing under Delaware law.


 


2.           The Guarantor has the corporate power to
conduct its business as presently conducted as described in the Guarantor’s
most recent report on Form 10-Q filed with the United States Securities and
Exchange Commission, and to execute and deliver the Guarantee and to perform
its obligations thereunder.


 


3.           The Guarantor has duly authorized and
executed the Guarantee.  David Scott,
Ph.D. has been duly authorized by the Guarantor to execute the Guarantee on its
behalf.


 


4.           No consent, approval, license or
exemption by, or order or authorization of, or filing, recording or
registration with, any Massachusetts or federal governmental authority is
required to be


 


58





















 


obtained
by the Guarantor in connection with the execution and delivery of the Guarantee
or the performance by it of its obligations thereunder.


 


5.           The Guarantor’s obligations set forth in Section 1
of the Guarantee constitute the valid and binding obligations of the Guarantor,
enforceable against the Guarantor in accordance with their terms.


 


This opinion
shall be interpreted in accordance with the Legal Opinion Principles issued by
the Committee on Legal Opinions of the American Bar Association’s Business Law Section as
published in 53 Business Lawyer 831 (May 1998).


 


This opinion
is being furnished only to you for your use solely in connection with the
transaction described above and may not be relied on without our prior written
consent for any other purpose or by anyone else.


 


Very truly
yours


 


Goodwin
Procter LLP


 


59