Document:

Exhibit
10.5.4

 

	
  TO:

  	
   

  	
  Tim O’Neil

  
	
   

  	
   

  	
  CFO

  
	
   

  	
   

  	
  LOUD Technologies Inc.

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Martin J. Coloson Jr.

  
	
   

  	
   

  	
  First Vice President

  
	
   

  	
   

  	
  Wachovia Capital Finance

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  May 11th, 2005

  
	
   

  	
   

  	
   

  
	
  Subject:

  	
   

  	
  US Bank Interest payment for April 2005

  

 

We understand that LOUD Technologies did not meet the Minimum Excess
Availability test as defined in the Second Amended and Restated Subordinated
Credit Agreement between US Bank and LOUD Technologies.  Specifically, LOUD’s minimum availability was
below the $2,000,000 minimum requirement on April 27, 2005.  LOUD is not required to make a cash interest
payment to US Bank for the month of April 2005, due to the Minimum Excess
Availability limitation.

 

LOUD Technologies wishes to avoid the default interest rate US Bank is
permitted to charge for failure to make the April 2005 interest payment.  Therefore, LOUD seeks consent from Wachovia
Capital Finance for LOUD to make the April monthly interest payment to US Bank.

 

Wachovia Capital Finance agrees to permit LOUD Technologies to make the
April interest payment.

 

Wachovia Capital Finance is only agreeing to this waiver for the month
of April 2005.

 

	
  Approved by:

  
	
   

  
	
   

  
	
  /s/ Martin J. Coloson Jr.

  	
   

  
	
  Martin J.
  Coloson Jr.

  
	
  Wachovia Capital FinanceExhibit 10.2

 

RULES OF THE INVERNESS MEDICAL
INNOVATIONS INC INLAND REVENUE

 

APPROVED OPTION PLAN

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                              Definitions

 

The words and expressions used in this Plan which have
capital letters have the meanings set out in the Appendix.

 

1.2                               Interpretation

 

The headings in the Rules are for
convenience and should be ignored when construing them.  Unless the context otherwise requires, words
in the singular include the plural and vice versa and words importing either
gender include both genders.

 

Reference in the Rules to any
statutory provisions are to those provisions as amended, extended or re-enacted
from time to time, and include any regulations 
or other subordinate legislation made under them.

 

2.                                      GRANT OF OPTIONS

 

2.1                               Grant of Options

 

The Grantor may at its discretion, grant to any
Eligible Employee an Option or Options at the Option Price over such whole
number of Shares as it decides.

 

2.2                              Period for granting Options

 

Options may be granted at any time that the Grantor thinks
appropriate.

 

2.3                               Conditions to be satisfied on the exercise of Options

 

An Option may be granted subject to such conditions as
the Grantor may decide being met before it can be exercised. Such conditions:

 

2.3.1                        must be
objective and stated in writing at the Date of Grant and approved in advance by
the Inland Revenue;

 

2.3.2                        may not be
waived or amended by the Grantor unless:

 

(i)            an event occurs which causes the Board to consider that a waiver of
or amendment to the conditions would be a fairer measure of performance; and

 

(ii)           the Board reasonably considers that a waiver of or amendment to the
conditions would not make the conditions more difficult to satisfy.

 

2.4                               Manner of grant and payment for Options

 

An Option will be granted so that it constitutes a
binding contract between the Grantor and the Participant. Each Participant will
be given an option certificate as evidence of the grant of an

 

1

 

Option.  There
will be no payment for the grant of an Option.

 

2.5                               An Option is subject to the Rules but may be renounced

 

An Option is granted incorporating and subject to the
Rules.  A Participant may renounce an
Option, in whole or in part, within 30 days following the Date of Grant and, to
the extent renounced, the Option will be treated as if it had never been
granted.

 

2.6                              An Option may be granted so as to be exercisable in separate parts

 

An Option may be granted so as to be first exercisable
in stages, each of which will occur on a different Specified Anniversary in
respect of a specific number of Shares. 
An Option granted under this Rule 2.6 shall be evidenced by a
separate Option certificate for each stage, each such certificate shall state
the number of Shares which will become exercisable for that stage and the
Specified Anniversary on which they will normally become exercisable, unless
otherwise provided in the Rules.  Where
an Option has been granted in accordance with this Rule 2.6, any reference
in the Rules to the exercise, exercisability or lapse of an Option will be
read, where necessary, as relating to the exercise or lapse of that Option in
respect of the number of Shares and with the Specified Anniversary referred to
in each separate applicable Option certificate.

 

2.7                               Options personal to Participants

 

An Option is personal to the Participant to whom it is
granted. It may not, nor may any rights in respect of it, be transferred,
assigned, charged or otherwise disposed of to any Person other than, on the
death of a Participant, when it may be transmitted to his personal
representatives.

 

3.                                      OPTION PRICE

 

3.1                               The Grantor’s decision

 

The Grantor will decide the Option Price of an Option
which will be stated at the Date of Grant.

 

3.2                              Deciding the Option Price

 

The Option Price cannot be less than the higher of:

 

3.2.1                        the Market
Value of a Share as at the Date of Grant; and

 

3.2.2                        the nominal
value of a Share, if the Shares are to be subscribed,

 

but subject to any adjustment under Rule 7.

 

4.                                      PLAN LIMIT

 

4.1                               Limit imposed by the Inland Revenue

 

No option will be granted to an Eligible Employee if
it would, at the Date of Grant, result in:

 

4.1.1        the total Market Value of the Shares (as calculated under Rule 3.2.1)
which the Eligible Employee could acquire on exercise of the Option; and

 

4.1.2        the aggregate market values of the Shares which the Eligible
Employee could acquire on the exercise of any option(s) granted under the Plan
and any other

 

2

 

Discretionary Share Option Plan approved by the Inland
Revenue and established by the Company or by an Associated Company,

 

exceeding £30,000 or any other Inland Revenue limit
applicable from time to time.  In
determining the limits in this Rule 4.1, no account will be taken of any
Shares where the right to acquire them was released or has lapsed.

 

4.2                               Time when Market Value is calculated

 

Under Rule 4.1, Market Value is
calculated as at the date when the Option is granted.

 

4.3                               Grant of Options in excess of limits

 

If an Option is granted on terms which do
not comply with Rule 4.1, the number of Shares over which that Option has
been granted will be reduced automatically to the largest lower number as would
comply with the terms of Rule 4.1.

 

An adjusted Option will take effect from the Date of
Grant as if it had been granted on the adjusted terms.

 

4.4                               Adjustment to Shares to be taken into account

 

Where Shares which have been issued under the Plan or
any other Discretionary Share Option Plan are to be taken into account for the
purposes of the limit in Rule 4.1 and a Variation has taken place between
the date of issue of those Shares and the date on which the limit is to be
calculated, then the number of Shares taken into account for the purposes of
the limit will be adjusted in the manner the Grantor considers appropriate to
take account of the Variation.

 

5.                                      RIGHTS OF EXERCISE AND LAPSE OF OPTIONS

 

5.1                               General rules for exercise

 

An option may not be exercised at any time
when a Participant has, or within the preceding 12 months has had, a Material
Interest in a Close Company which is the Company, any company which has Control
of the Company or a Member of a Consortium which owns the Company.

 

An Option:

 

5.1.1        cannot be exercised earlier than the Specified Anniversary of the
Date of Grant or any later date determined by the Grantor at the Date of Grant,
except as provided in Rule 5.2;

 

5.1.2        may only be exercised by a Participant while he is a director or
employee of a Participating Company or of an Associated Company, except as
provided in Rule 5.3;

 

5.1.3        may only be exercised if any conditions imposed under Rule 2.3
and not waived have been fulfilled to the satisfaction of the Grantor, other
than following an exchange of options under Rule 8.

 

5.2                               Exercisability upon a change in Control of the Company

 

5.2.1        Subject to Rule 5.3 below, an Option shall become fully
exercisable, without regard to any Specified Anniversary, immediately
following:

 

3

 

(i)                                     shareholder
approval of the dissolution or liquidation of the Company;

 

(ii)                                  a Person obtaining Control of the Company through acquisition of
Shares or voting rights which result in that Person holding more than 50 per
cent of either the Company’s Shares or the combined voting rights of the
Company’s Shares;

 

(iii)                               the completion of a consolidation or 
merger of the Company, or a sale or other disposition of all or
substantially all the assets of the Company, unless at least 80% of the voting
shares of the successor entity arising from the relevant transaction would, immediately
following the transaction, be held by or on behalf of the same shareholders and
in the same proportions as those of the Company immediately before the
transaction;

 

(iv)          there ceasing to be a majority of the Incumbent Directors on the
Board for any reason.

 

5.2.2                        For the purposes of Rule 5.2:

 

(i)                                     a
person will be deemed to have obtained Control of the Company if he and others
acting in concert  with him have together
obtained Control of it

 

(ii)                                  a change of Control will not be taken to have occurred by reason
only that the Company has acquired its own shares with the result that any
person becomes entitled to 50 per cent or more of the combined voting power of
all the company’s shares.

 

5.3                               Lapsing of Options

 

Options that are not exercisable as of the date of the
cessation of employment with a Participating Company or an Associated Company
will lapse as of the date of cessation of such employment.  Options that are otherwise exercisable by
their terms will lapse, to the extent not exercised, on the earliest of:

 

5.3.1             the
tenth anniversary of the Date of Grant;

 

5.3.2             the
first anniversary of the date of cessation of employment due to the death of
the Participant;

 

5.3.3             the
first anniversary of the date of cessation of employment due to the disability
of the Participant (as determined by the Grantor) or the expiry of any period
of exercise specified under Rule 5.4, provided that the death of the
Participant during the period provided in this Rule 5.3.3 shall extend
such period until the first anniversary of the date of death of the Participant
or the date described in Rule 5.3.1, if earlier;

 

5.3.4              the
expiry of ninety days following the date of cessation of employment for any
reason other than death, disability (as determined by the Grantor) or Cause,
unless Rule 5.4 applies, in which case the option will lapse on the expiry
of the period of exercise specified under Rule 5.4;

 

5.3.5            immediately
upon the cessation of employment of the Participant due to termination for
Cause;

 

5.3.6            immediately
as of the date the Participant is deprived of the legal or beneficial

 

4

 

ownership of the Option by operation of
law, or does or omits to do anything which causes him to be so deprived or
being declared bankrupt; and

 

5.3.7            immediately
as of the date the Participant attempts to breach Rule 2.7.

 

5.4                    Extension of
period for exercise

 

If a Participant ceases to hold office or employment
in the circumstances referred to in Rule 5.3.3 or 5.3.4, the Grantor may
extend the period of exercise so that, as to any Option otherwise exercisable
on the date the Participant no longer held office or employment, the
exercisable portion of the Option will remain exercisable from the date the
Participant ceases to hold office or employment until the later of:

 

5.4.1             the third anniversary of the Date of Grant; and

 

5.4.2             the third anniversary of the last occasion (if any) on which the
Participant exercised an option under a Discretionary Share Option Plan
approved by the Inland Revenue while holding office or employment with a
Participating Company or an Associated Company in circumstances which qualified
for relief from income tax.

 

Except that, no Option shall be exercisable as of the tenth anniversary
of the Date of Grant, or as of the first anniversary of the date of death of
the Participant.

 

5.5                               Cessation following pregnancy

 

For the purposes of Rule 5.3.4, a woman who
leaves employment because of pregnancy will be regarded as having left
employment on the day on which she indicates either that she does not intend to
return to work or that she will not be returning to work.  If she gives no indication, she will be
treated as having left employment on the day after the day on which maternity pay
under the Employment Rights Act 1996 ceases to be payable or, if later, any
other date specified in the terms of her employment, without her returning to
work.

 

6.                                      EXERCISE OF OPTIONS

 

6.1                               Exercise in whole or in part

 

An Option may be exercised in whole or in part.

 

6.2                               Manner of exercise

 

To exercise an Option, the Participant must deliver at
the address specified in the notice of exercise:

 

6.2.1        an option certificate covering at least all the Shares over which
the Option is then to be exercised;

 

6.2.2        the notice of exercise in the prescribed form properly completed and
signed by the Participant (or by his duly authorised agent); and

 

6.2.3        evidence to the satisfaction of the Company that it has received or
will receive as soon as practicable payment in full of the Exercise Price for
the Shares over which the Option is exercised.

 

5

 

6.3                               Option Exercise Date

 

If any conditions must be fulfilled before an Option
may be exercised, the Option will not be validly exercised unless and until the
Grantor is satisfied that those conditions have been fulfilled.  Otherwise, the Option Exercise Date will be
the date of receipt of the items referred to in Rule 6.2.

 

6.4                               Issue or transfer of Shares

 

Subject to Rule 6.5, the Grantor will procure the
delivery of any Shares to a Participant (or his nominee) pursuant to the
exercise of an Option within 30 days following the Option Exercise Date.

 

6.5                               Consents

 

The delivery of any Shares under the Plan will be
subject to obtaining any necessary approval or consent.

 

6.6                               Ranking of Shares

 

Shares acquired by a Participant under the
Plan will rank equally in all respects with the Shares then in issue, except
that they shall not rank for any right attaching to them by reference to a
record date preceding the Option Exercise Date.

 

7.                                      ADJUSTMENT OF OPTIONS

 

7.1                               Variation in equity share capital

 

If there is a Variation in the equity share capital of
the Company:

 

7.1.1        the number and/or the nominal value of Shares over which an Option
is granted; and

 

7.1.2        the Option Price; and

 

7.1.3        where an Option has been exercised but on the date of the Variation
no Shares have been delivered pursuant to that exercise, the number of Shares
which may be delivered and the price at which they may be acquired,

 

will be adjusted in the manner the Grantor determines
so that (as nearly as may be without involving fractions of a Share or an
Option Price calculated to more than two decimal places) the Exercise Price
will remain unchanged.

 

7.2                               Nominal value of Shares

 

Apart from under this Rule 7.2, no adjustment
under Rule 7.1 can reduce the Option Price to less than the nominal value
of a Share.  Where an Option subsists
over both issued and unissued Shares, an adjustment may only be made if the
reduction of the Option Price in respect of both the issued and the unissued
Shares can be made to the same extent. 
Any adjustment made to the Option Price of Options over unissued Shares
will only be made if and to the extent that the Board is authorised to:

 

7.2.1        capitalise from the reserves of the Company a sum equal to the
amount by which the nominal value of the Shares in respect of which the Option
is exercisable exceeds the adjusted Exercise Price; and

 

6

 

7.2.2        apply that sum in paying up the Shares so that on exercise of the
Option the Board will capitalise that sum and apply it in paying up the Shares.

 

8.                                      EXCHANGE OF OPTIONS

 

8.1                               The Acquiring Company

 

If any company (“the Acquiring Company”):

 

8.1.1              obtains Control of the Company as a result of making a general offer
to acquire:

 

(i)                           the whole of the issued ordinary share capital of the Company which
is made on condition such that if it is satisfied the Acquiring Company will
have Control of the Company; or

 

(ii)                        all the shares in the Company which are of the same class as the
Shares,

 

in either case ignoring any Shares which are already
owned by it or a member of the same group of companies; or

 

8.1.2              obtains Control of the Company in pursuance of a compromise or
arrangement sanctioned by the court under section 425 of the Companies Act
1985; or

 

8.1.3              becomes entitled to acquire Shares under sections 428 to 430F of
that Act,

 

any Participant may, at any time within the
Appropriate Period, by arrangement with the Acquiring Company, release any
Option which has not lapsed (“the Old Option”) in consideration of the grant to
him of an Option (“the New Option”) which (for the purposes of paragraph 15 of Schedule 9)
is equivalent to the Old Option but relates to shares in a different company
(whether the Acquiring Company itself or some other company falling within
paragraph 10(b) or (c) of Schedule 9).

 

8.2                    The New Option

 

The New Option will not be regarded as equivalent to
the Old Option unless the conditions set out in paragraph 15(3) of Schedule 9
are satisfied, but so that the provisions of the Plan will for this purpose be
construed as if the New Option were an option granted under the Plan at the
same time as the Old Option except for the purpose of the definition of “Participating
Company” in the Appendix, and as if the reference to Inverness Medical
Innovations Inc in the definition of the “Company” in the Appendix were a
reference to the different company mentioned in Rule 8.1.

 

8.3                    Exchange in similar circumstances

 

The exchange of Options as permitted under this Rule 8
may also apply on the occurrence of an event similar to any of those described
in Rules 8.1.1, 8.1.2 or 8.1.3 above, provided that the Inland Revenue
shall have first agreed to this.

 

9.                                      ADMINISTRATION

 

9.1                               Administration of the Plan

 

The Plan will be administered by the Grantor.  The Grantor has full authority, consistent
with the Plan, to administer the Plan, including authority to interpret and
construe any provision of the Plan and to adopt any regulations for administering
the Plan and any documents it thinks

 

7

 

necessary or appropriate.  The Grantor’s decision on any matter
concerning the Plan will be  final and
binding.

 

9.2                               Costs of introducing and administering the Plan

 

The costs of introducing and administering the Plan
will be borne by the Company.  However,
the Company may require any Subsidiary of the Company to enter into an
agreement which obliges that Subsidiary to reimburse the Company for any costs
borne by the Company,   directly or
indirectly, in respect of the Subsidiary’s officers or employees.  The Company may also enter into a similar
agreement with any Participating Company or Associated Company which is not a
Subsidiary of the Company.

 

10.                               AMENDING THE PLAN

 

10.1                        The Board’s power to amend the Plan

 

Subject to the provisions of Rule 10, the Board
can at any time amend any of the provisions of the Plan in any respect.

 

10.2                       Participants’ approval

 

No amendment will be made under Rule 10.1 which
would abrogate or adversely affect the subsisting rights of a Participant
unless it is made with the Participant’s consent.

 

10.3                        Prohibited amendment

 

No amendment will be made to the Plan if, as a result
of the amendment, it would cease to be an Employees’ Share Plan.

 

10.4                        Inland Revenue approval

 

While the Plan is to remain approved by the Inland
Revenue, no amendment made after it has been approved by the Inland Revenue
will have effect until the amendment has been approved by the Inland Revenue.

 

11.                               GENERAL

 

11.1                        Rights of Participants and Eligible Employees

 

Nothing in the Plan will give any officer or employee
of any Participating Company or Associated Company any right to participate in
the Plan.  The rights and obligations of
any individual under the terms of his office or employment with a Participating
Company or Associated Company will not be affected by his participation in the
Plan nor any right which he may have to participate under it.  A Participant holding an Option will not have
any rights of a shareholder of the Company with respect to that Option or the
Shares subject to it.

 

11.2                        No rights to compensation or damages

 

A Participant waives all and any rights to
compensation or damages for the termination of his office or employment with a
Participating Company or Associated Company for any reason whatsoever insofar
as those rights arise or may arise from his ceasing to have rights under or to
be entitled to exercise any Option under the Plan as a result of that
termination or from the loss or diminution in value of such rights or
entitlements.  Nothing in the Plan or in
any document executed under it will give any Person any right to continue in
employment or will affect the right of the Company, any Subsidiary of the
Company or any Associated Company

 

8

 

to terminate the employment of any Participant without
liability at any time, with or without Cause, or will impose on the Company,
any Participating Company, the Grantor or their respective agents and employees
any liability in connection with the loss of a Participant’s benefits or rights
on the exercise of a discretion under the Plan for any reason as a result of
the termination of his employment.

 

11.3                        The Benefits of Rule 11.1 and 11.2

 

The benefit of Rules 11.1 and 11.2 is given for
the Company, for itself and as trustee and agent of all its Subsidiaries and
Associated Companies.  The Company will
hold the benefit of these Rules on trust and an agent for each of them and
may assign the benefit of this Rule 11.3 to any of them.

 

11.4                        Constitutional documents

 

Any Shares acquired on the exercise of Options shall
be subject to the constitutional documents of the Company.

 

11.5                        Severability

 

The invalidity or non-enforceability of one or more
provisions of the Plan will not affect the validity or enforceability of the
other provisions of the Plan.

 

11.6                        Governing law

 

These Rules will be governed by and construed in
accordance with the law of the state of Delaware.

 

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APPENDIX:  DEFINITIONS

 

	
   

  	
  Appendix

  	
  this appendix which forms part of the Rules;

  
	
   

  	
   

  	
   

  
	
   

  	
  Appropriate Period

  	
  the meaning given by paragraph 15(2) of Schedule 9;

  
	
   

  	
   

  	
   

  
	
   

  	
  Associated Company

  	
  in relation to the Company:

   

  (i)                          any
  company which has Control of the Company;

   

  (ii)                       any company (other than a Participating Company) which is under
  the Control of any company referred to in (i) above;

  
	
   

  	
   

  	
   

  
	
   

  	
  Board

  	
  the board of directors for the time being of the
  Company or a duly authorised committee of it;

  
	
   

  	
   

  	
   

  
	
   

  	
  Cause

  	
  means fraud, embezzlement, material dishonesty,
  conviction of a felony or crime involving moral turpitude, or a material
  breach or a material failure to perform or a material negligence in the
  performance of the duties of employment;

  
	
   

  	
   

  	
   

  
	
   

  	
  Close Company

  	
  the meaning given by section 414 (1) of
  the Taxes Act as varied by paragraph 8 of Schedule 9; 

  
	
   

  	
   

  	
   

  
	
   

  	
  the Company

  	
  Inverness Medical Innovations Inc (registered no.
  3391092 8100);

  
	
   

  	
   

  	
   

  
	
   

  	
  Control

  	
  means the power of a person to secure:

   

  (i)                             by means of the holding of shares or the possession of voting
  power in or in relation to that or any other body corporate; or

   

  (ii)                          by virtue of any power conferred by the articles of association or
  other document regulating that or any other body corporate,

   

  that the affairs of the first mentioned body
  corporate are conducted in accordance with the wishes of that person;

  
	
   

  	
   

  	
   

  
	
   

  	
  Date of Grant

  	
  with respect to an Option the date on which the
  Grantor grants it under Rule 2.4;

  
	
   

  	
   

  	
   

  
	
   

  	
  Discretionary Share Option Plan

  	
  a share option plan, other than a savings-related
  share option plan, in which participation is at the discretion of the grantor
  of options under that plan;

  

 

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  Eligible Employee

  	
  any person who at the Date of Grant:

   

  (i)                                     is an employee or director of a Participating Company on terms
  which, in either case, require him to devote substantially the whole of his
  working time to his duties as such and, in the case of a director, no less
  than 25 hours per week (excluding meal breaks); and

   

  (ii)                                  is not precluded from participating in the Plan by paragraph 8 of Schedule 9;
  

  
	
   

  	
   

  	
   

  
	
   

  	
  Employees’ Share Plan

  	
  a scheme for encouraging or facilitating the holding
  of shares or debentures in a company by or for the benefit of:

   

  (i)                                    the bona fide employees or former employees of the company, the
  company’s subsidiary or holding company or a subsidiary of the company’s
  holding company; or

   

  (ii)                                 the wives, husbands, widows, widowers or children or step-children
  under the age of 18 of such employees or former employees;

  
	
   

  	
   

  	
   

  
	
   

  	
  Exercise Price

  	
  the total amount payable on the exercise of an
  Option, whether in whole or in part, being an amount equal to the relevant
  Option Price multiplied by the number of Shares in respect of which the
  Option is exercised;

  
	
   

  	
   

  	
   

  
	
   

  	
  Grantor

  	
  in relation to an Option, the Person who granted it;

  
	
   

  	
   

  	
   

  
	
   

  	
  Incumbent Director

  	
  any duly elected member of the Board on the date
  this Plan was approved, as well as any subsequently elected member of the
  Board if such person’s election was approved by or such person was nominated
  for election by either (a) a vote of at least a majority of the
  Incumbent Directors or (b) a vote of at least a majority of the
  Incumbent Directors who are members of a nominating committee comprised, in
  the majority, of Incumbent Directors; provided that any  person who initially joins the Board in
  connection with an actual or threatened election contest or proxy
  solicitation on behalf of a person other than the Board shall not be considered
  an Incumbent Director.

  
	
   

  	
   

  	
   

  
	
   

  	
  Market Value

  	
  in relation to a Share on any day its market value,
  determined in accordance with Part VIII of the Taxation of Chargeable
  Gains Act 1992 and agreed in advance with the Inland Revenue Shares
  Valuation;

  
	
   

  	
   

  	
   

  
	
   

  	
  Material Interest

  	
  the meaning given by section 187 (3) of
  the Taxes Act; 

  

 

11

 

	
   

  	
  Member of a Consortium

  	
  the meaning given by section 187 (7) of
  the Taxes Act;

  
	
   

  	
   

  	
   

  
	
   

  	
  Option

  	
  a right to acquire Shares under the Plan which is
  either subsisting or is proposed to be granted;

  
	
   

  	
   

  	
   

  
	
   

  	
  Option Exercise Date

  	
  the date when the exercise of an Option is effective
  because it complies with Rules 6.2 and 6.3;

  
	
   

  	
   

  	
   

  
	
   

  	
  Option Price

  	
  the price per Share at which a Participant may
  acquire Shares on the exercise of an Option determined under Rule 3;

  
	
   

  	
   

  	
   

  
	
   

  	
  Participant

  	
  any Eligible Employee to whom an Option has been
  granted, or (where the context requires) his personal representatives;

  
	
   

  	
   

  	
   

  
	
   

  	
  Participating Company

  	
  (i)                          the Company; and

   

  (ii)                       any other company which is under the Control of the Company, is a
  Subsidiary of the Company and is for the time being designated by the Board
  as a Participating Company; 

  
	
   

  	
   

  	
   

  
	
   

  	
  Person

  	
  any individual, corporation, partnership, limited
  liability company, trust or other entity of whatever nature;

  
	
   

  	
   

  	
   

  
	
   

  	
  Plan

  	
  the Inverness Medical Innovations Inc Inland Revenue
  Approved Option Plan in its present form or as from time to time amended in
  accordance with the Rules;

  
	
   

  	
   

  	
   

  
	
   

  	
  Rules

  	
  these rules as amended from time to time;

  
	
   

  	
   

  	
   

  
	
   

  	
  Schedule 9

  	
  Schedule 9 to the Taxes Act;

  
	
   

  	
   

  	
   

  
	
   

  	
  Share

  	
  a fully paid ordinary share in the capital of the
  Company which satisfies paragraphs 10 to 14 of Schedule 9;

  
	
   

  	
   

  	
   

  
	
   

  	
  Specified Anniversary

  	
  in respect of an Option or any part of it, the date
  or dates, specified by the Company at the Date of Grant, on which the Option
  (or part of it) shall first become exercisable;

  
	
   

  	
   

  	
   

  
	
   

  	
  Subsidiary

  	
  a company is a subsidiary of another company if:

   

  (i)                          that other company:

   

  (a)                        is a member of it and controls the composition of its board of
  directors; or

   

  (b)                       holds more than half in nominal value of its equity share capital;
  or

   

  (ii)                       the first mentioned company is a subsidiary of any company which
  is that other’s subsidiary; 

  

 

12

 

	
   

  	
  Taxes Act

  	
  the Income and Corporation Taxes Act 1988; and

  
	
   

  	
   

  	
   

  
	
   

  	
  Variation

  	
  in relation to the equity share capital of the
  Company a capitalisation issue, an offer or invitation made by way of rights,
  a subdivision, a consolidation or reduction, or any other variation.

  

 

13

 

INVERNESS MEDICAL INNOVATIONS
INC.

 

RULES OF THE

INVERNESS MEDICAL INNOVATIONS
INC.

INLAND REVENUE APPROVED

OPTION PLAN

 

Approved by the Inland Revenue on
27 March 2003 under Reference: X22502/PC

 

Adopted by the Board on 10 March 2003
as authorised by the Inverness Medical Innovations Inc. 2001 Stock Option and
Incentive Plan

 

 

CONTENTS

 

	
  Rule

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  GRANT
  OF OPTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  OPTION
  PRICE

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  PLAN
  LIMIT

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  RIGHTS OF EXERCISE AND LAPSE
  OF OPTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  EXERCISE OF OPTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  ADJUSTMENT OF OPTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  EXCHANGE OF OPTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  ADMINISTRATION

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  AMENDING THE PLAN

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  GENERAL

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Appendix - Definitions

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