SC 13D/A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(a)

(Amendment No. 2)

INVERNESS MEDICAL INNOVATIONS, INC.
(Name of Issuer)

COMMON STOCK, PAR VALUE $.001 PER SHARE
(Title of Class of Securities)

46126P 10 6
(CUSIP Number)

RON ZWANZIGER
C/O INVERNESS MEDICAL INNOVATIONS, INC.
51 SAWYER ROAD, SUITE 200
WALTHAM, MA 02453
(781) 647-3900
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and Communications)

September 20, 2002
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box    o.

NOTE. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

(Continued on following pages)

(Page 1 of 13 Pages)

CUSIP No.    46126P 10 6 13D Page 2 of 13 Pages

(1)	Name of Reporting Person. I.R.S. Identification Nos. of Above Person (Entities Only) RON ZWANZIGER
(2)	Check the Appropriate Box if a Member	(a)	/ /
	of a Group*	(b)	/ /
(3)	SEC Use Only
(4)	Source of Funds* PF/OO
(5)	Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)          / /
(6)	Citizenship or Place of Organization UNITED STATES
Number of Shares Beneficially Owned by Reporting Person With		(7)	Sole Voting Power          0
		(8)	Shared Voting Power          3,505,193
		(9)	Sole Dispositive Power          0
		(10)	Shared Dispositive Power          3,505,193
(11)	Aggregate Amount Beneficially Owned by Reporting Person 3,505,193
(12)	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* /x/
(13)	Percent of Class Represented by Amount in Row (11) 22.5%
(14)	Type of Reporting Person* IN
*SEE INSTRUCTION BEFORE FILLING OUT!

CUSIP No.    46126P 10 6 13D Page 3 of 13 Pages

(1)	Name of Reporting Person. I.R.S. Identification Nos. of Above Person (Entities Only) JANET M. ZWANZIGER
(2)	Check the Appropriate Box if a Member	(a)	/ /
	of a Group*	(b)	/ /
(3)	SEC Use Only
(4)	Source of Funds* PF/OO
(5)	Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)          / /
(6)	Citizenship or Place of Organization UNITED STATES
Number of Shares Beneficially Owned by Reporting Person With		(7)	Sole Voting Power          0
		(8)	Shared Voting Power          3,505,193
		(9)	Sole Dispositive Power          0
		(10)	Shared Dispositive Power          3,505,193
(11)	Aggregate Amount Beneficially Owned by Reporting Person 3,505,193
(12)	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* /x/
(13)	Percent of Class Represented by Amount in Row (11) 22.5%
(14)	Type of Reporting Person* IN
*SEE INSTRUCTION BEFORE FILLING OUT!

CUSIP No.    46126P 10 6 13D Page 4 of 13 Pages

(1)	Name of Reporting Person. I.R.S. Identification Nos. of Above Person (Entities Only) ZWANZIGER FAMILY VENTURES, LLC
(2)	Check the Appropriate Box if a Member	(a)	/ /
	of a Group*	(b)	/ /
(3)	SEC Use Only
(4)	Source of Funds* OO
(5)	Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)          / /
(6)	Citizenship or Place of Organization DELAWARE
Number of Shares Beneficially Owned by Reporting Person With		(7)	Sole Voting Power          0
		(8)	Shared Voting Power          1,967,402
		(9)	Sole Dispositive Power          0
		(10)	Shared Dispositive Power          1,967,402
(11)	Aggregate Amount Beneficially Owned by Reporting Person 1,967,402
(12)	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* / /
(13)	Percent of Class Represented by Amount in Row (11) 12.7%
(14)	Type of Reporting Person* OO
*SEE INSTRUCTION BEFORE FILLING OUT!

This Amendment No. 2 to Schedule 13D is filed by the undersigned to amend the disclosures contained in Items 3, 4, 5, 6 and 7 of the Schedule 13D originally filed on December 31, 2001 by Ron Zwanziger, Janet Zwanziger and Zwanziger Family Ventures, LLC, as amended to date (as amended, the "Schedule 13D"). Unless specifically amended hereby, the disclosure set forth in the Schedule 13D shall remain unchanged. Capitalized terms used but not expressly defined herein shall have the meaning ascribed to them in the Schedule 13D.

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

        On November 21, 2001, pursuant to an Agreement and Plan of Split-Off and Merger dated as of May 23, 2001 (the "Split-Off and Merger Agreement"), Johnson & Johnson acquired Inverness Medical Technology, Inc. ("IMT") in a merger transaction and, simultaneously, Inverness Medical Innovations, Inc. ("Innovations"), formerly a majority-owned subsidiary of IMT, was split off from IMT as a separate, publicly-traded company (the "Split-Off and Merger"). At the effective time of the Split-Off and Merger, the outstanding shares of IMT common stock were converted into rights to receive shares of Johnson & Johnson common stock and shares of Innovations common stock, and the outstanding options and warrants to purchase shares of IMT common stock were converted into options and warrants to purchase shares of Johnson & Johnson common stock and options and warrants to purchase shares of Innovations common stock.

        As a result of the conversions described above in connection with the Split-Off and Merger, Ron Zwanziger acquired an aggregate of 14,450 shares of Innovations common stock and options to purchase an aggregate of 282,485 shares of Innovations common stock (the "Conversion Options"), Janet M. Zwanziger acquired an aggregate of 2,600 shares of Innovations common stock, and Family Ventures acquired an aggregate of 117,428 shares of Innovations common stock. On December 28, 2002, using personal funds, Ron Zwanziger exercised Conversion Options to purchase 44,000 shares of Innovations common stock at $1.11 per share, 104,000 shares of Innovations common stock at $1.24 per share, and 100,000 shares of Innovations common stock at $2.44 per share, such that Mr. Zwanziger retains Conversion Options to purchase an aggregate of 34,485 shares of Innovations common stock (the "Outstanding Conversion Options").

        Pursuant to a Restricted Stock Agreement dated as of August 15, 2001 (the "Restricted Stock Agreement") between Ron Zwanziger and Innovations, Ron Zwanziger purchased 152.741423722644 shares of Innovations common stock (the "Restricted Stock") for aggregate consideration consisting of cash in the amount of $.15 and a Promissory Note dated August 16, 2001 (the "Promissory Note") in the principal amount of $10,655,583.68 made by Mr. Zwanziger in favor of Innovations. The cash portion of the purchase price was paid with Mr. Zwanziger's personal funds. Copies of the Restricted Stock Agreement and the Promissory Note are filed as EXHIBIT 1 and EXHIBIT 2, respectively, to the Schedule 13D and are incorporated herein by reference. Immediately prior to the consummation of the Split-Off and Merger, Innovations effected a stock split with respect to the Innovations common stock (the "Stock Split"); as a result of the Stock Split, the 152.741423722644 shares of Innovations common stock owned by Mr. Zwanziger before giving effect to the Stock Split became 1,168,191 shares of Innovations common stock. See Item 6 below for additional description of the terms of the Restricted Stock Agreement and the Promissory Note.

        On December 20, 2001, Family Ventures purchased 500,000 shares of Series A Convertible Preferred Stock, par value $.001 per share, of Innovations (the "Series A Preferred Stock") for a purchase price per share of $30 in cash and an aggregate purchase price of $15,000,000 in cash. The source of funds for these purchases consisted of cash contributed by one of the members of Family Ventures and cash realized upon the sale of certain securities by Family Ventures. On September 6, 2002, Family Ventures converted 60,000 shares of the Series A Preferred Stock held by it into 120,000 shares of Innovations common stock. On September 20, 2002, Family Ventures converted the remaining 440,000 shares of Series A Preferred Stock held by it into 880,000 shares of Innovations common stock.

Page 5

Family Ventures converted its shares of Series A Preferred Stock into shares of Innovations common stock pursuant to the terms for voluntary conversion applicable to the Series A Preferred Stock and did not pay or use any funds or other consideration in making the conversions.

        On December 20, 2001, Family Ventures purchased from Innovations a subordinated promissory note in the principal amount of $10,000,000 (the "Bridge Note") and a warrant representing the right to purchase 27,594 shares of Innovations common stock (the "Bridge Warrant"); the aggregate consideration paid by Family Ventures for such purchase consisted of cash in the amount of $10,000,000. The source of funds for these purchases consisted of cash contributed by one of the members of Family Ventures and cash realized upon the sale of certain securities by Family Ventures. The Bridge Note was repaid in full in cash by Innovations on March 6, 2002.

        On December 20, 2001, Innovations granted to Ron Zwanziger a non-qualified employee stock option under the terms of Innovations' 2001 Stock Option and Incentive Plan for the purchase of 115,000 shares of Innovations common stock (the "Lock Up Option"); such grant was made in consideration of his entry into the Lock Up Agreement described in Item 6 below. On March 1, 2002, Ron Zwanziger voluntarily ceded options to purchase 50,000 shares of Innovations common stock under the Lock Up Option in consideration of an agreement by Innovations that any repurchases under the Restricted Stock Agreement would be at the then current market price rather than at cost. On December 20, 2001, Innovations granted to Family Ventures a warrant for the purchase of 385,000 shares of Innovations common stock (the "Lock Up Warrant"); such grant was made in consideration of its entry into the Lock Up Agreement described in Item 6 below. Both the option and the warrant described in this paragraph are immediately exercisable in full.

        On December 21, 2001, Family Ventures purchased 156,263 shares of Innovations common stock from Zwanziger Associates, LLC, a Delaware limited liability company ("Zwanziger Associates"), whose managers are Ron Zwanziger and Janet M. Zwanziger. The aggregate consideration delivered by Family Ventures for such purchase was a cash payment to Zwanziger Associates of $1,815,267, constituting a per share purchase price of approximately $11.62. The source of funds for this purchase consisted of cash contributed by one of the members of Family Ventures and cash realized upon the sale of certain securities by Family Ventures.

        On May 28, 2002, Family Ventures purchased from Innovations, as part of a registered public offering conducted by Innovations, 100,000 shares of Innovations common stock at a purchase price per share of $23.00. The aggregate consideration delivered by Family Ventures for such purchase was a cash payment of $2,300,000. The source of funds for these purchases consisted of cash contributed by one of the members of Family Ventures.

        On August 23, 2002, Innovations granted to Ron Zwanziger, under and pursuant to the Inverness Medical Innovations, Inc. 2001 Stock Option and Incentive Plan, an incentive stock option to purchase up to 5,065 shares of Innovations common stock (the "2002 ISO"). The 2002 ISO was granted pursuant to a voluntary salary reduction plan implemented by Innovations under which all Innovations employees were offered the opportunity to forego up to 30% of their gross salary for the third quarter of fiscal year 2002 in exchange for incentive stock options to purchase Innovations common stock. The number of shares subject to the option granted to each participating employee under the plan equals the amount of salary foregone multiplied by 3 and then divided by the closing price of Innovations common stock on the grant date. Other than salary foregone, no funds or other consideration was paid by Mr. Zwanziger for the 2002 ISO.

        On September 20, 2002, Family Ventures purchased from Innovations a 10%, six-year subordinated promissory note in the principal amount of $1,150,000 (the "Subordinated Note") and a warrant representing the right to purchase 9,200 shares of Innovations common stock (the "Subordinated Debt Warrant"); the aggregate consideration paid by Family Ventures for such purchase consisted of cash in

Page 6

the amount of $1,150,000. The source of funds for this purchase consisted of cash contributed by one of the members of Family Ventures.

        On September 20, 2002, Family Ventures purchased from Innovations a convertible 3%, six-year subordinated promissory note in the principal amount of $3,000,000 (the "Convertible Note"), the principal balance of which is currently convertible into 171,919 shares of Innovations common stock. The aggregate consideration paid by Family Ventures for the Convertible Note consisted of cash in the amount of $3,000,000. The source of funds for this purchase consisted of cash contributed by one of the members of Family Ventures.

ITEM 4. PURPOSE OF TRANSACTION.

        All of the shares of Innovations common stock beneficially owned by Ron Zwanziger, Janet M. Zwanziger and Family Ventures, as the case may be, and reported in the Schedule 13D, as amended, were acquired for investment purposes.

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.

        (a) Based upon information supplied by Innovations, 14,876,806 shares of Innovations common stock were outstanding as of September 20, 2002.

        Ron Zwanziger may be deemed to beneficially own an aggregate of 3,505,193 shares of Innovations common stock, which constitutes 22.5% of such class of securities. This total includes 1,430,641 shares of Innovations common stock registered in the name of Mr. Zwanziger and options to purchase an aggregate of 104,550 additional shares of Innovations common stock exercisable within 60 days of the date of this statement on Schedule 13D/A also registered in the name of Mr. Zwanziger. This total also includes the 1,967,402 shares of Innovations common stock beneficially owned by Family Ventures as described below, over which Mr. Zwanziger, as a manager of Family Ventures, has voting and dispositive power. This total also includes 2,600 shares of Innovations common stock owned by Mr. Zwanziger's wife, Janet M. Zwanziger, as to which he disclaims beneficial ownership. This total excludes 9,450 shares of Innovations common stock owned by a charitable foundation on whose board of directors Mr. Zwanziger and Janet M. Zwanziger, along with three others, serve as directors. Both Mr. Zwanziger and Janet M. Zwanziger have recused themselves from any discussion or consideration of the charitable foundation's disposition of these securities and they disclaim beneficial ownership of such securities. Mr. Zwanziger's beneficial ownership percentage reported above has been calculated including the options and warrants to purchase Innovations common stock that may be deemed to be beneficially owned by him and are reported in the Schedule 13D, but without including any other options, warrants, rights, or conversion privileges to purchase Innovations common stock outstanding on the date of this statement on Schedule 13D/A.

        Janet M. Zwanziger may be deemed to beneficially own an aggregate of 3,505,193 shares of Innovations common stock, which constitutes 22.5% of such class of securities. This total includes the 1,967,402 shares of Innovations common stock beneficially owned by Family Ventures as described below, over which Ms. Zwanziger, as a manager of Family Ventures, has voting and dispositive power. This total also includes 1,430,641 shares of Innovations common stock and options to purchase up to 104,550 additional shares of Innovations common stock exercisable within 60 days of the date of this statement on Schedule 13D/A that are registered in the name of Ms. Zwanziger's husband, Ron Zwanziger, as to which she disclaims beneficial ownership. Ms. Zwanziger's total beneficial ownership excludes 9,450 shares of Innovations common stock owned by a charitable foundation on whose board of directors Ms. Zwanziger and Ron Zwanziger along with three others serve as directors. Both Ms. Zwanziger and Ron Zwanziger have recused themselves from any discussion or consideration of the charitable foundation's disposition of these securities and they disclaim beneficial ownership of such securities. Ms. Zwanziger's beneficial ownership percentage reported above has been calculated

Page 7

including the options and warrants to purchase Innovations common stock that may be deemed to be beneficially owned by her and are reported in the Schedule 13D, but without including any other options, warrants, rights, or conversion privileges to purchase Innovations common stock outstanding on the date of this statement on Schedule 13D/A.

        Family Ventures beneficially owns an aggregate of 1,967,402 shares of Innovations common stock, which constitutes 12.7% of such class of securities. This total includes an aggregate of 421,794 shares of Innovations common stock issuable pursuant to warrants held by Family Ventures to purchase shares of Innovations common stock that are exercisable within 60 days of the date of this statement on Schedule 13D/A, and 171,919 shares of common stock issuable upon the conversion of convertible promissory notes that are convertible within 60 days of the date of this statement on Schedule 13D/A. Family Ventures' beneficial ownership percentage reported above has been calculated including the warrants to purchase Innovations common stock beneficially owned by it and reported in the Schedule 13D, but without including any other options, warrants, rights, or conversion privileges to purchase Innovations common stock outstanding on the date of this Schedule 13D/A.

        (b) Ron Zwanziger and Janet M. Zwanziger may be deemed to share voting and dispositive power over all 3,505,193 shares of Innovations common stock reported as beneficially owned by each of them in Item 5(a) above.

        Family Ventures has sole power to vote and dispose of the 1,967,402 shares of Innovations common stock reported as beneficially owned by it in Item 5(a) above.

        (c) See the response to Item 3 above and Item 6 below of this Schedule 13D which response is incorporated herein by reference.

        (d) Not applicable.

        (e) Not applicable.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

        The Outstanding Conversion Options consist of (i) an Incentive Stock Option granted October 17, 1995 pursuant to the Inverness Medical Technology, Inc. 1994 Incentive and Nonqualified Stock Option Plan entitling Ron Zwanziger to purchase 4,485 shares of Innovations common stock at $1.24 per share (the "1995 Conversion Option"), and (ii) an Incentive Stock Option Agreement granted February 12, 2001 pursuant to the Inverness Medical Technology, Inc. Amended and Restated 2000 Stock Option and Grant Plan entitling Ron Zwanziger to purchase 30,000 shares of Innovations common stock at $14.92 per share (the "2001 Conversion Option"). The 1995 Conversion Option was fully vested upon grant and will terminate (x) in twelve months in the event of Mr. Zwanziger's death or disability (y) immediately if Mr. Zwanziger's employment is terminated for cause or (z) in thirty days if his employment terminates without cause including by reason of retirement. The 2001 Conversion Option, which originally vested over 4 years, vested by virtue of the Split-Off and Merger in accordance with the terms of the option agreement and the underlying stock option plan. The 2001 Conversion Option will terminate (x) in twelve months in the event of Mr. Zwanziger's death, disability, or retirements, (y) immediately if Mr. Zwanziger's employment is terminated for cause or (z) in three months if his employment terminates for any other reason.

        The Lock Up Option originally entitled Ron Zwanziger to purchase up to 115,000 shares of Innovations common stock at a price per shares of $17.15 at any time prior to December 19, 2011. However, as described in Item 3 above, Mr. Zwanziger subsequently ceded his rights under the Lock Up Option as to 50,000 shares of Innovations common stock such that he is currently entitled to purchase up to 65,000 shares of Innovations common stock under the Lock Up Option. The Lock Up Option may be exercised using cash, shares of Innovations common stock or the proceeds of a

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same-day-sale of shares of Innovations common stock issued upon exercise of the option. The Lock Up Option was granted under the Inverness Medical Innovations, Inc. 2001 Stock Option and Incentive Plan.

        The Bridge Warrant entitles Family Ventures to purchase up to 27,594 shares of Innovations common stock at a price per share of $18.12 at any time prior to December 20, 2011. The Bridge Warrant may be exercised using cash or pursuant to net issuance provisions under which the number of shares of Innovations common stock issued is equal to the quotient obtained by dividing (i) the product of (x) the number of shares exercised under the warrant multiplied by (y) the excess of the then current market price per share of the Innovations common stock over the exercise price per share by (ii) the market price per share.

        The Lock Up Warrant entitles Family Ventures to purchase up to 385,000 shares of Innovations common stock at a price per share of $17.15 at any time prior to December 19, 2006. The Lock Up Warrant may be exercised using cash or pursuant to net issuance provisions under which the number of shares of Innovations common stock issued is equal to the quotient obtained by dividing (i) the product of (x) the number of shares exercised under the warrant multiplied by (y) the the excess of the then current market price per share of the Innovations common stock over the exercise price per share by (ii) the market price per share. The Lock Up Warrant contains piggy-back registration rights and, in satisfaction of those rights, Innovations registered the resale of the Innovations common stock issuable upon exercise of the Lock Up Warrant, as well as the Innovations common stock issuable under the Bridge Warrant and upon conversion of the Series A Preferred Stock, on a registration statement on Form S-3 dated June 3, 2002.

        The 2002 ISO entitles Ron Zwanziger to purchase up to 5,065 shares of Innovations common stock at $15.55 per share. The 2002 ISO, which qualifies as an incentive stock option under IRS regulations, was granted pursuant to Inverness Medical Innovations, Inc. 2001 Stock Option and Incentive Plan and will fully vest on September 30, 2002. The 2002 ISO will terminate in twelve months in the event of Mr. Zwanziger's death or disability, immediately if Mr. Zwanziger's employment is terminated for cause or in three months if his employment terminates for any other reason.

        The Subordinated Note purchased by Family Ventures has a face value of $1,150,000 and a maturity date of September 20, 2008. Interest accrues on the principal balance under the note at a rate of 10% per annum, compounding daily, and is payable in cash quarterly. The principal balance of the note and interest payments under the notes are payable either in cash or, at Innovations' election, in registered shares of Innovations common stock valued at 95% of the average closing price of the Innovations common stock on the American Stock Exchange over the ten trading days ending immediately prior to the payment date. Prepayments of principal under the Subordinated Note are subject to a penalty equal the sum of the present values (discounted at the Initial Reinvestment Rate if the prepayment occurs on or before September 20, 2004, or at the Later Reinvestment Rate if the prepayment occurs after September 20, 2004) of the remaining interest payments under the Subordinated Note, where the term "Initial Reinvestment Rate" means a percentage equal to (i) the yield on the date of such prepayment on the United States treasury bond or bill (as the case may be) with a maturity date closest to, but not later than, the maturity date of the Subordinated Note, plus (ii) one percent (1%); and the term "Later Reinvestment Rate" shall equal (x) the yield on the date of such prepayment on the United States treasury bond or bill (as the case may be) with a maturity date closest to, but not later than, the maturity date of the Subordinated Note, plus (y) four percent (4%). The Subordinated Note is by its terms subordinated to Innovations senior and mezzanine credit facilities not to exceed $150 million and certain other potential acquisition financing.

        The Subordinated Debt Warrant entitles Family Ventures to purchase up to 9,200 shares of Innovations common stock at a price per share of $13.54 at any time prior to September 20, 2012. The Subordinated Debt Warrant may be exercised using cash or pursuant to net issuance provisions under which the number of shares of Innovations common stock issued is equal to the quotient obtained by

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dividing (i) the product of the number of shares exercised under the warrant and the difference between the then current market price per share of the Innovations common stock and the exercise price per share divided by the market price per share.

        The Convertible Note purchased by Family Ventures has a face value of $3,000,000 and a maturity date of September 20, 2008. Interest accrues on the principal balance under the note at a rate of 3% per annum and is payable in cash quarterly. The principal balance of the note and interest payments under the note are payable either in cash or, at Innovations' election, in registered shares of Innovations common stock valued at 95% of the average closing price of the Innovations common stock on the American Stock Exchange over the ten trading days ending immediately prior to the payment date. Family Ventures also has the right to convert at any time all, but not less than all, of the outstanding principal amount of the Convertible Note, as well as accrued but unpaid interest thereon, into a number of shares of Innovations common stock equal to the note balance divided by $17.45. As of September 20, 2002, the Convertible Note would convert into 171,919 shares of Innovations common stock. In addition, if, after the second anniversary of the date of the Convertible Note, the average of the closing prices of the Innovations common stock on the American Stock Exchange in any consecutive thirty (30) day period is greater than $22.67 then, all of the then outstanding principal amount of this Convertible Note and accrued but unpaid interest thereon shall automatically convert into a number of shares of Innovations common stock equal to the note balance divided by $17.45. The Convertible Note is by its terms subordinated to Innovations' senior and mezzanine credit facilities not to exceed $150 million and certain other potential acquisition financing.

        As described in Item 3 above, Ron Zwanziger purchased the Restricted Stock for aggregate consideration consisting of cash in the amount of $.15 and the delivery of the Promissory Note. Pursuant to a Pledge Agreement dated as of August 16, 2001 (the "Pledge Agreement") between Mr. Zwanziger and Innovations, Mr. Zwanziger pledged the shares purchased pursuant to the Restricted Stock Agreement to Innovations as collateral to secure his obligations under the Promissory Note. After giving effect to the Stock Split, the number of shares of Innovations common stock subject to the terms and conditions of the Restricted Stock Agreement, the Promissory Note and the Pledge Agreement consist of 1,168,191 shares of Innovations common stock (the "Subject Shares").

        Under the Restricted Stock Agreement, one-third of the Subject Shares (the "Four-Year Vesting Shares") are subject to a right of Innovations to repurchase unvested Subject Shares upon a termination of Mr. Zwanziger's employment with Innovations for any reason, including on account of death, disability, retirement or discharge or resignation for any reason, voluntary or involuntary, as described therein; the Four-Year Vesting Shares vest in forty-eight equal monthly installments commencing on November 30, 2001. Two-thirds of the Subject Shares (the "Three-Year Vesting Shares") are subject to a right of Innovations to repurchase unvested Subject Shares upon a termination of Mr. Zwanziger's employment with Innovations for any reason (including retirement or discharge or resignation for any reason), other than on account of death, disability, termination without cause or constructive termination, as described therein; the Three-Year Vesting Shares vest in thirty-six equal monthly installments commencing on November 30, 2001. Upon Mr. Zwanziger's death, disability, termination without cause or constructive termination as described therein, all Three-Year Vesting Shares will vest in full. Under the Restricted Stock Agreement the purchase price per share for any such repurchase of Subject Shares by Innovations was to be the purchase price per share paid by Mr. Zwanziger for the Subject Shares so repurchased. However, as of March 1, 2002 Innovations agreed, in consideration of Mr. Zwanziger ceding options to purchase 50,000 shares of Innovations common stock, to repurchase shares pursuant to the Restricted Stock Agreement at the market price of its common stock on the date of Mr. Zwanziger's termination rather than at Mr. Zwanziger's cost.

        Mr. Zwanziger may not sell, pledge or otherwise transfer or dispose of any Subject Shares that have not vested as described above, except to certain of his family members, any trust for their benefit, any family limited partnership or family limited liability company of which the limited partners or

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members, as the case may be, consist solely of such family members, and the estate, heirs and distributees of Mr. Zwanziger or any such permitted transferee.

        The principal amount of the Promissory Note (the "Principal") is due and payable on August 16, 2006, and interest on the unpaid balance of the Principal accrues at the rate of 4.99% per annum, compounded annually, and is payable on each anniversary of the date of the Promissory Note, commencing on August 16, 2002, and at maturity. Mr. Zwanziger is also obligated to pay the Principal and accrued interest thereon with the net after-tax proceeds of any sale by him of any of the Subject Shares. Mr. Zwanziger may also pay all or part of the Principal and accrued interest thereon by delivering shares of the Innovations common stock held by Mr. Zwanziger to Innovations for their fair market value at the time of delivery, provided that the principal balance and interest owed under any promissory note used to purchase such shares or secured in whole or in part by such shares have been paid. Under the Promissory Note, Innovations shall have recourse against (i) any assets of Mr. Zwanziger up to (A) twenty-five percent (25%) of the Principal reduced by twenty-five percent (25%) of each payment of Principal made by the Mr. Zwanziger and (B) the full amount of accrued interest on the Principal and (ii) the Restricted Shares, which have been pledged pursuant to the Pledge Agreement. The Promissory Note was made by Mr. Zwanziger in favor of Innovations in replacement of the full recourse promissory note dated August 15, 2001 in the same principal amount made by Mr. Zwanziger in favor of Innovations and referred to in the Restricted Stock Agreement.

        In connection with Innovations' entry into a Mezzanine Loan Agreement dated December 20, 2001 (the "Mezzanine Loan Agreement") with Inverness Medical Switzerland GmbH, RBS Mezzanine Limited ("RBS") as arranger and agent, and certain banks and other parties, Mr. Zwanziger and Family Ventures were required to enter into a Lock Up Agreement dated December 20, 2001 with RBS, which agreement was subsequently amended and restated in its entirety by an Amended and Restated Lock Up Agreement dated as of December 20, 2001 (the "Lock Up Agreement"). Pursuant to the Lock Up Agreement, Mr. Zwanziger and Family Ventures agreed (i) during the period from December 20, 2001 through December 20, 2004, not to sell, pledge, transfer or otherwise dispose of (collectively, "Sell") any shares of Innovations common stock or any options, warrants or other securities exchangeable for or convertible into shares of Innovations common stock (collectively, "Innovations Securities") beneficially owned by them and (ii) during the period from December 20, 2004 through the date on which Innovations has made full and final payment of all amounts due under the Mezzanine Loan Agreement, not to Sell Innovations Securities representing more than an aggregate of twenty-five percent (25%) of the total number of shares of Innovations common stock represented by all of Innovations Securities beneficially owned by them on December 20, 2004, and not to Sell more than an aggregate of ten percent (10%) of such number in any twelve (12) month period, provided that neither Mr. Zwanziger nor Family Ventures may Sell any Innovations Securities at any time that Innovations is in default under the Mezzanine Loan Agreement. The Lock Up Agreement shall remain in effect until Innovations has made full and final payment of all amounts due under the Mezzanine Loan Agreement.

        Copies of the 1995 Conversion Option, the 2001 Conversion Option, the Lock Up Option, the Lock Up Warrant, the Bridge Note, the Bridge Warrant, the 2002 ISO, the Subordinated Note, the Subordinated Debt Warrant, the Convertible Note, the Restricted Stock Agreement, the Pledge Agreement, the Promissory Note and the Lock Up Agreement are attached to the Schedule 13D as exhibits pursuant to Item 7 below and are incorporated herein by reference. The descriptions of the contracts or arrangements described in this Item 6 of the Schedule 13D and the transactions contemplated thereby do not purport to be complete and are qualified in their entirety by reference to such exhibits.

        At the date hereof, Ron Zwanziger and Janet M. Zwanziger have no formal arrangement with respect to the securities of Innovations, but by virtue of their marriage, they may coordinate decisions relating to those securities, including decisions in their capacities as managers of Family Ventures.

Page 11

ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.

*Exhibit 1	Restricted Stock Agreement dated as of August 15, 2001 between Ron Zwanziger and Inverness Medical Innovations, Inc.
*Exhibit 2	Promissory Note dated August 16, 2001 made by Ron Zwanziger in favor of Inverness Medical Innovations, Inc.
*Exhibit 3	Pledge Agreement dated as of August 16, 2001 between Ron Zwanziger and Inverness Medical Innovations, Inc.
+Exhibit 4	Amended and Restated Lock Up Agreement dated as of December 20, 2001 among Ron Zwanziger, Zwanziger Family Ventures, LLC and RBS Mezzanine Limited
*Exhibit 5	Joint Filing Agreement
+Exhibit 6	Incentive Stock Option granted by Selfcare, Inc. (l/k/a Inverness Medical Technology, Inc.) to Ron Zwanziger dated October 17, 1995 (the "1995 Conversion Option")
+Exhibit 7	Incentive Stock Option Agreement between Inverness Medical Technology, Inc. and Ron Zwanziger dated February 11, 2001 (the "2001 Conversion Option")
+Exhibit 8	Subordinated Promissory Note dated December 20, 2001 made by Inverness Medical Innovations, Inc. in favor of Zwanziger Family Ventures, LLC. (the "Bridge Note")
+Exhibit 9	Warrant for the Purchase of Shares of Common Stock of Inverness Medical Innovations, Inc. dated December 20, 2001 in the name of Zwanziger Family Ventures, LLC (the "Bridge Warrant")
+Exhibit 10	Stock Option Agreement under the Inverness Medical Innovations, Inc. 2001 Stock Option and Incentive Plan granted to Ron Zwanziger dated December 20, 2001 (the "Lock Up Option")
+Exhibit 11	Warrant for the Purchase of Shares of Common Stock of Inverness Medical Innovations, Inc. dated December 20, 2001 in the name of Zwanziger Family Ventures, LLC (the "Lock Up Warrant")
+Exhibit 12	Incentive Stock Option Agreement under the Inverness Medical Innovations, Inc. 2001 Stock Option and Incentive Plan granted to Ron Zwanziger dated August 23, 2002 (the "2002 ISO")
+Exhibit 13	Subordinated Promissory Note dated September 20, 2001 made by Inverness Medical Innovations, Inc. in favor of Zwanziger Family Ventures, LLC (the "Subordinate Note")
+Exhibit 14	Warrant for the Purchase of Shares of Common Stock of Inverness Medical Innovations, Inc. dated September 20, 2001 in the name of Zwanziger Family Ventures, LLC (the "Subordinated Debt Warrant")
+Exhibit 15	Subordinated Convertible Promissory Note dated September 20, 2001 made by Inverness Medical Innovations, Inc. in favor of Zwanziger Family Ventures, LLC (the "Convertible Note")

*

Previously filed.

+

Filed herewith.

Page 12

SIGNATURE

        After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct.

/s/  RON ZWANZIGER Ron Zwanziger	Dated: September 27, 2002
/s/  JANET M. ZWANZIGER Janet M. Zwanziger	Dated: September 27, 2002
ZWANZIGER FAMILY VENTURES, LLC
By: /s/  RON ZWANZIGER Name: Ron Zwanziger Title: Manager	Dated: September 27, 2002

Page 13

QuickLinks

SIGNATURE

EX-4

                                                                       Exhibit 4

                     AMENDED AND RESTATED LOCK UP AGREEMENT



RBS Mezzanine Limited
  As Arranger and Agent
135 Bishopsgate
London EC2M 3UR


       Re: INVERNESS MEDICAL INNOVATIONS, INC. (THE "COMPANY")

Ladies and Gentlemen:

       Reference is hereby made to that certain Mezzanine Loan Agreement by and
among the Company, Inverness Medical Switzerland GmbH, certain banks, RBS
Mezzanine Limited, as arranger and agent ("RBS"), and certain other parties (the
"Mezzanine Loan Agreement"). Each of the undersigned is an owner of record and
beneficially of certain shares of the common stock, $.001 par value per share,
of the Company ("Common Stock") and securities convertible into or exchangeable
or exercisable for Common Stock. It is a requirement of the Mezzanine Loan
Agreement that the undersigned execute and deliver this agreement. The
undersigned recognize that the Mezzanine Loan Agreement will benefit the Company
by, among other things, raising additional capital for its operations. The
undersigned acknowledge that RBS and the other banks party to the Mezzanine Loan
Agreement are relying on the representations and agreements of the undersigned
contained in this agreement in entering into the Mezzanine Loan Agreement and
advancing funds to the Company thereunder.

       This agreement amends and restates in its entirety the Lock Up Agreement
among RBS and the undersigned dated December 20, 2001. This agreement shall be
effective as of December 20, 2001 and shall remain in effect until the Company
has made full and final payment of all amounts due under the Mezzanine Loan
Agreement (the "Termination Date"). For the avoidance of doubt, the Company's
obligations under the common stock purchase warrants issued in connection with
the Mezzanine Loan Agreement shall not be deemed to represent amounts due under
the Mezzanine Loan Agreement.

       In consideration of the foregoing, and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned hereby agree that the undersigned will not, without the prior
written consent of RBS (which consent may be withheld in its sole discretion),
directly or indirectly, sell, offer, contract or grant any option to sell
(including without limitation any short sale), pledge, transfer, or otherwise
dispose of (collectively, "Sell") any shares of Common Stock, options or
warrants to acquire shares of Common Stock, or securities exchangeable for or
convertible into shares of Common Stock (collectively, "Company Securities")
currently or hereafter owned either of record or beneficially by the undersigned
during the period beginning on the date of this agreement and ending on December
20, 2004. During the period from December 21, 2004 through the Termination Date,
the undersigned will not Sell Company




RBS Mezzanine Limited
  As Arranger and Agent
December __, 2001
Page 2

Securities representing more than an aggregate of twenty five percent (25%) of
the total number of shares of Common Stock represented by all of the Company
Securities owned either of record or beneficially by the undersigned on December
20, 2004, and will not Sell more than an aggregate of 10% of such number in any
twelve (12) month period, provided, however, that the undersigned will not Sell
any Company Securities at any time that the Company is in default under the
Mezzanine Loan Agreement. The undersigned consent to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of Company Securities held by the undersigned except in compliance with
the foregoing restrictions. The foregoing restrictions shall not be deemed to
prohibit the undersigned from exercising any option or warrant to purchase
Company Securities or from exercising the exchange or conversion rights of any
Company Security, provided, however, that the Company Securities received by the
undersigned as a result of any such exercise shall remain subject to the
provisions of this agreement. In addition, the foregoing restrictions shall not
be deemed to prohibit any Sale of Company Securities that results in either of
the undersigned becoming or remaining as a beneficial owner of such Company
Securities.

       Each of the undersigned hereby represents and warrants that he or it has
full power and authority to enter into this agreement. This agreement is
irrevocable and will be binding on the undersigned and the respective successors
and assigns of the undersigned.

Dated:  December 20, 2001

                                         ZWANZIGER FAMILY VENTURES, LLC


/s/ RON ZWANZIGER                        By: /s/ RON ZWANZIGER
- ----------------------------------          -----------------------------------
Ron Zwanziger                               Name: Ron Zwanziger
                                            Title: Manager

ACCEPTED AND AGREED TO:

RBS Mezzanine Limited


By: /s/ DENISE HEPWORTH
   ------------------------------
   Name: Denise Hepworth
   Title: Manager


                                       2

EX-6

                                                                       Exhibit 6


                             INCENTIVE STOCK OPTION


                                   GRANTED BY


                                 SELFCARE, INC.


                       (HEREINAFTER CALLED THE "COMPANY")


                                       TO


                                  RON ZWANZIGER


                        (HEREINAFTER CALLED THE "HOLDER")


                                    UNDER THE


                1994 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN







                                   WITNESSETH:

     For valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company hereby grants to the Holder the following Incentive
Stock Option under the 1994 Incentive and Nonqualified Stock Option Plan
(hereinafter called the "Plan"):

     SECTION 1. Subject to the terms and conditions hereinafter set forth, the
Holder is hereby given the right and option to purchase from the Company shares
of the Company's Common Stock, $.001 par value (the "Common Stock"). SCHEDULE A
attached hereto and hereby incorporated herein sets forth, with respect to this
Option, (i) its Expiration Date, (ii) its Exercise Price per share, (iii) the
maximum number of shares that the Holder may purchase upon exercise hereof, and
(iv) the Vesting Schedule. SCHEDULE A also sets forth applicable conditions
precedent to the exercise of this Option, as well as any additional terms and
conditions that the Company may wish to incorporate herein.

     Purchase of any shares hereunder shall be made by (a) cash, certified
check, bank draft or postal or express money order payable to the order of the
Company for an amount equal to the aggregate Exercise Price of such shares, or
(b) with the consent of the Company, shares of Common Stock of the Company
having a fair market value equal to the aggregate Exercise Price of such shares,
or (c) with the consent of the Company, a combination of (a) and (b). For the
purposes of the preceding sentence, the fair market value of the shares of
Common Stock so delivered to the Company shall be determined in accordance with
procedures adopted by the Board of Directors of the Company.

     SECTION 2. As a condition precedent to any exercise of this Option, the
Holder (or if any other individual or individuals are exercising this Option,
such individual or individuals) shall deliver to the Company an investment
letter in form and substance satisfactory to the Company and its counsel which
shall contain, among other things, a statement in writing that the



Option is then being exercised for the account of the Holder and only with a
view to investment in, and not for, in connection with or with a view to the
disposition of the shares with respect to which the Option is then being
exercised; that the Holder has been advised that Rule 144 of the Securities and
Exchange Commission (the "Commission"), which permits the resale, subject to
various terms and conditions, of small amounts of "restricted securities" (as
therein defined) after they have been held for two years, does not now apply to
the Company because the Company is not now required to file, and does not file,
current reports under the Securities Exchange Act of 1934 (the "Exchange Act"),
nor is there publicly available information concerning the Company substantially
equivalent to that which would be available if the Company were required to file
such reports; that the Holder understands that there is no assurance that the
Company will ever become a reporting company under the Exchange Act and that the
Company has no obligation to the Holder to do so; that the Holder and the
Holder's representatives have fully investigated the Company and the business
and financial conditions concerning it and have knowledge of the Company's then
current corporate activities and financial condition; and that the Holder
believes that the nature and amount of the shares being purchased are consistent
with the Holder's investment objectives, abilities and resources. The
restriction imposed by this Section and any investment representation made
pursuant to this Section shall be inoperative upon the registration with the
Commission of the stock subject to this Option or acquired through the exercise
of this Option.


     SECTION 3. Within a reasonable time following the receipt by the Company of
the aggregate Exercise Price for any shares to be purchased hereunder and the
investment letter referred to hereinabove, the Company will deliver or cause to
be delivered to the Holder (or if any other individual or individuals are
exercising this Option, to such individual or individuals)

                                       2




at the office of the Company a certificate or certificates for the number of
shares with respect to which the Option is then being exercised, registered in
the name of the Holder (or the name or names of the individual or individuals
exercising the Option, either alone or jointly with another person or persons
with rights of survivorship, as the individual or individuals exercising the
Option shall prescribe in writing to the Company); PROVIDED, HOWEVER, that if
any law, regulation or order of the Commission or other body having jurisdiction
in the premises shall require the Company or the Holder (or the individual or
individuals exercising this Option) to take any action in connection with the
sale of the shares then being purchased, then, subject to the other provisions
of this Section, the date on which such sale shall be deemed to have occurred
and the date for the delivery of the certificates for such shares shall be
extended for the period necessary to take and complete such action. Such
certificate or certificates shall include appropriate securities and other
legends referencing stock transfer restrictions imposed by this Option or the
Plan.

     SECTION 4. If the Company shall effect a subdivision or consolidation of
shares or other capital readjustment, the payment of a stock dividend, or other
increase or decrease in the number of shares of the Common Stock outstanding,
without receiving compensation therefore in money, services or property, then
the number, class, and per share price of shares of stock subject to this Option
shall be appropriately adjusted in such a manner as to entitle the Holder to
receive upon exercise of this Option, for the same aggregate cash consideration,
the same total number and class of shares as the Holder would have received as a
result of the event requiring the adjustment had the Holder exercised this
Option in full immediately prior to such event.

     After a merger of one or more corporations into the Company, or after a
consolidation of the Company with one or more corporations in which (i) the
Company shall be the surviving

                                       3




corporation and (ii) the stockholders of the Company prior to such merger or
consolidation hold at least fifty percent (50%) of the voting shares of the
Company after such merger or consolidation, the Holder shall, at no additional
cost, be entitled upon exercise of this Option to receive (subject to any
required action by stockholders) in lieu of the number of shares as to which
this Option shall then be so exercisable, the number and class of shares of
stock or other securities to which the Holder would have been entitled pursuant
to the terms of the agreement of merger or consolidation if, immediately prior
to such merger or consolidation, the Holder had been the holder of record of a
number of shares of Common Stock equal to the number of shares as to which this
Option is exercisable.

     If the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation, or if
there is a merger or consolidation where the Company is the surviving
corporation and the stockholders of the Company prior to such merger or
consolidation do not hold at least fifty percent (50%) of the voting shares of
the Company after such merger or consolidation occurs, or if the Company is
liquidated, or sells or otherwise disposes of all or substantially all of its
assets to another corporation while this Option remains outstanding, then (i)
subject to the provisions of clause (iii) below, after the effective date of
such merger, consolidation or sale, as the case may be, the Holder of this
Option shall be entitled, upon exercise of this Option, to receive, in lieu of
the number of shares of Common Stock as to which this Option shall then be
exercisable, the number of shares of such stock or other securities, cash or
property to which the Holder would have been entitled pursuant to the terms of
the merger, consolidation or sale if, immediately before such merger,
consolidation or sale, the Holder had been the holder of record of the number of
shares of Common Stock equal to the number of shares as to which this Option is

                                       4




exercisable; (ii) the Board of Directors may accelerate the time for the
exercise of this Option to and after a date, specified by the Board of
Directors, before the effective date of such merger, consolidation, liquidation
or sale, as the case may be; or (iii) this Option may be cancelled by the Board
of Directors as of the effective date of any such merger, consolidation,
liquidation or sale provided that (A) notice of such cancellation shall be given
to the Holder and (B) the Holder shall have the right to exercise this Option to
the extent that the same is then exercisable or, if the Directors shall have
accelerated the time for exercise of this Option, in full, during the thirty
(30) day period preceding the effective date of such merger, consolidation,
liquidation or sale.

     Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereafter
shall be made with respect to, the number or price of shares of Common Stock
then subject to this Option.

     SECTION 5. No person shall, by virtue of the granting of this Option to the
Holder, be deemed to be a holder of any shares purchasable under this Option or
to be entitled to the rights or privileges of a holder of such shares unless and
until this Option has been exercised with respect to such shares and they have
been issued pursuant to that exercise of this Option.

     The Company shall, at all times while any portion of this Option is
outstanding, reserve and keep available, out of shares of its authorized and
unissued stock or reacquired shares, a sufficient number of shares of its Common
Stock to satisfy the requirements of this Option; shall comply with the terms of
this Option promptly upon exercise of the Option rights; and shall pay

                                       5




all fees or expenses necessarily incurred by the Company in connection with the
issuance and delivery of shares pursuant to the exercise of this Option.

     SECTION 6. This Option is not transferable by the Holder otherwise than by
will or the laws of descent and distribution.

     This Option is exercisable during the Holder's lifetime, only by the Holder
and only while the Holder is an employee of the Company or of a parent or
subsidiary of the Company, except that in the event the Company terminates the
employment of the Holder without cause and other than for death or retirement in
good standing from the employ of the Company or such parent or subsidiary for
reasons of age or disability under the then established rules of such
corporation, the Holder shall have the right to exercise this Option at any time
until thirty (30) days after the date the Holder so ceases to be an employee of
the Company or such parent or subsidiary (but not later than the expiration date
of this Option) with respect to the shares which were purchasable by the Holder
by exercise of this Option at the time of such cessation of employment.

     In the event of the retirement of the Holder in good standing for reason of
age under the then established rules of the Company or a parent or subsidiary of
the Company, the Holder shall have the right to exercise this Option at any time
until thirty (30) days after such retirement (but not after the termination date
of this Option) with respect to the shares which were purchasable by the Holder
at the date of such retirement. In the event of the termination of employment of
the Holder in good standing for reason of permanent disability under the then
established rules of the Company or a parent or subsidiary of the Company or in
the event of the death of the Holder while the Holder has the right to exercise
this Option, the Holder or the Holder's executors, administrators, heirs or
legatees, as the case may be, shall have the right to exercise this Option

                                       6




at any time within one year after such termination of employment due to
permanent disability or death (but not after the termination date of this
Option) with respect to the shares which were purchasable by the Holder at the
date of such permanent disability or death. After the death of the Holder, his
executors, administrators or any person or persons to whom this Option may be
transferred by will or by the laws of descent and distribution shall have the
right to exercise this Option.

     SECTION 7. Any notice to be given to the Company hereunder shall be deemed
sufficient if addressed to the Company and delivered at the office of the
Treasurer of the Company at its principal office, or such other address as the
Company may hereafter designate, or when deposited in the mail, postage prepaid,
addressed to the attention of the Treasurer of the Company at such office or
other address.

     Any notice to be given to the Holder hereunder shall be deemed sufficient
if addressed to and delivered in person to the Holder at the address furnished
to the Company by the Holder or when deposited in the mail, postage prepaid,
addressed to the Holder at such address.

     SECTION 8. Prior to the effective date of a registration statement under
the Securities Act of 1933 covering any shares of the Company's Common Stock and
until such time as the Company shall have effected a public offering of Common
Stock, the Holder may not sell, assign, transfer, exchange, encumber or
otherwise dispose of any shares of Common Stock issued pursuant to exercise of
this Option or any interest in such shares now held or hereafter acquired by the
Holder without first giving written notice thereof to the Company identifying
the proposed transferee, the purchase price, if any, and terms of the proposed
transaction, and offering such shares to the Company for purchase by it at the
same price and on the same terms.

                                       7




Such offer shall be in writing and mailed, postage prepaid, or delivered to the
Company at its principal office.

     The Company shall have thirty (30) days after actual receipt of such offer
to notify the Holder in writing of its intention to purchase all or any part of
such shares. If the Company elects to purchase all or any part of such shares,
the Holder shall deliver the shares, free of all encumbrances, within thirty
(30) days of the date of acceptance of the offer to sell, against payment
therefor at the same price and according to the same terms as were offered by
the proposed transferee. If an offer has not been accepted by the Company as to
any or all offered shares within the time specified in this Section, then the
Holder shall have one hundred twenty (120) days within which he may transfer the
shares as to which the offer shall not have been accepted, free of the
restrictions imposed by this Section, to the proposed transferee at the same
price and according to the same terms as the Holder previously notified the
Company.

     As long as any shares are subject to the foregoing restrictions on
transfer, the purchaser of such restricted shares sold on execution or by order
of any court shall within ninety (90) days after such sale, and any executor,
administrator, legatees or heirs of the Holder's estate, or any trustee in
bankruptcy, receiver or other officer or legal representative appointed by any
court in whom title to any of such restricted shares shall have vested either by
operation of law or otherwise, shall within ninety (90) days after appointment,
offer all of such restricted shares for sale to the Company at the same price as
the Holder would have been required to offer them.

     If any transfer of restricted shares is made or attempted in violation of
the foregoing restrictions, or if restricted shares are not offered to the
Company as required hereby, the Company shall have the right to purchase such
shares from the owner thereof or his transferee at any time before or after the
transfer, as herein provided. In addition to any other legal or

                                       8




equitable remedies which it may have, the Company may enforce its rights by
actions for specific performance (to the extent permitted by law) and may refuse
to recognize any transferee as one of its stockholders for any purpose,
including, without limitation, for purposes of dividend and voting rights, until
all applicable provisions hereof have been complied with.

     SECTION 9. The Holder agrees for a period of up to one hundred eighty (180)
days from the effective date of any registration of securities of the Company
(upon request of the Company or the underwriters managing any underwritten
offering of the Company's securities) not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any shares issued
pursuant to the exercise of this Option without the prior written consent of the
Company or such underwriters, as the case may be.

     SECTION 10. This Option is subject to all laws, regulations and orders of
any governmental authority which may be applicable hereto and, notwithstanding
any of the provisions hereof, the Holder agrees that the Holder will not
exercise the Option granted hereby nor will the Company be obligated to issue
any shares of stock hereunder if the exercise thereof or the issuance of such
shares, as the case may be, would constitute a violation by the Holder or the
Company of any such law, regulation or order or any provision thereof. This
Option is and shall be subject in every respect to the provisions of the 1994
Incentive and Nonqualified Stock Option Plan of the Company, as amended from
time to time, which is incorporated herein by reference and made a part hereof.
In the event of any conflict or inconsistency between the terms hereof and those
of the Plan, the latter shall prevail.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       9




     IN WITNESS WHEREOF, the Company has caused this instrument to be executed
in its name and on its behalf as of the date of grant set forth on SCHEDULE A.

                                       SELFCARE, INC.



                                       By: /S/ RON ZWANZIGER
                                          ------------------------------
                                          President

ATTEST: (SEAL)


/S/ KENNETH D. LEGG
Clerk

                                       10







                                   SCHEDULE A

                                 SELFCARE, INC.

                      INCENTIVE STOCK OPTION GRANTED UNDER

              THE 1994 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN


1. Name of Holder:  Ron Zwanziger
2. Date of Grant:  October 17, 1995
3. Expiration Date of Option:  October 17, 2005
4. Exercise (purchase) Price per share:  $32.87
5. Maximum Number of Shares for which this Option is exercisable:  1725
6. Shares are fully vested and exercisable for ten years.



All shares purchased upon exercise of this Option are subject to (a) the rights
of the Company to repurchase such shares as set forth in Section 8 of the
Option, (b) the lockup agreement set forth in Section 9 of the Option and (c)
the other terms of the Option and the Plan.



     The undersigned Holder acknowledges receipt of the Option of which this
SCHEDULE A is a part and agrees to the terms of the Option and the Plan.



                                       /S/ RON ZWANZIGER
                                       --------------------------------

EX-7

                                                                       Exhibit 7


                       INVERNESS MEDICAL TECHNOLOGY, INC.

                              AMENDED AND RESTATED
                        2000 STOCK OPTION AND GRANT PLAN

                        INCENTIVE STOCK OPTION AGREEMENT


150,000 Shares         AWARDED FEBRUARY 12, 2001
- -------                -------------------------

     Pursuant to its Amended and Restated 2000 Stock Option and Grant Plan (the
"2000 Plan"), Inverness Medical Technology, Inc. (the "Company") hereby grants
to RON ZWANZIGER (the "Optionee") an option (the "Option") to purchase on or
prior to FEBRUARY 12, 2011 (the "Expiration Date") all or any part of 150,000
shares of Common Stock of the Company, par value $.001 per share ("Option
Shares") at a price of $30.65 per share in accordance with the schedule set
forth in SECTION 1 hereof and subject to the terms and conditions set forth
hereinafter and in the 2000 Plan. This Option shall be construed in a manner to
qualify it as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and shall be governed by the laws
of Delaware. Capitalized terms used herein but not defined herein shall have the
meanings ascribed thereto in the 2000 Plan.

     1. VESTING SCHEDULE. Subject to the provisions of SECTION 4 hereof and
SECTION 5 of the 2000 Plan, this Option shall become vested and exercisable with
respect to the following whole number of Option Shares according to the
timetable set forth below:

                                   Percentage of Shares              Cumulative
       Numbers of Years               Shares Becoming                Percentage
     After Date of Grant          Available for Exercise              Available
     -------------------          ----------------------             ----------
Less than 1 year                             0%                           0%
At least 1 year                             25%                          25%
At least 2 years                            25%                          50%
At least 3 years                            25%                          75%
At least 4 years                            25%                         100%

     2. MANNER OF EXERCISE. The Optionee may exercise this Option only in the
following manner: from time to time on or prior to the Expiration Date of this
Option, the Optionee may give written notice to the Company's Option Committee
(the "Administrator") of his election to purchase some or all of the vested
Option Shares purchasable at the time of such notice. Such notice shall specify
the number of shares to be purchased.

     Payment of the purchase price for the Option Shares may be made by one or
more of the following methods:

          (a) in cash, by certified or bank check or other instrument acceptable
     to the Administrator;





          (b) in the form of shares of Common Stock, par value $.001 per share,
     of the Company (the "Common Stock") that are not then subject to
     restrictions under any Company plan and that have been held by the Optionee
     for at least six (6) months, if permitted by the Administrator in its
     discretion. Such surrendered shares shall be valued at Fair Market Value on
     the exercise date; or

          (c) by the Optionee delivering to the Company a properly executed
     exercise notice together with irrevocable instructions to a broker to
     promptly deliver to the Company cash or a check payable and acceptable to
     the Company to pay the option purchase price; provided that in the event
     the Optionee chooses to pay the option purchase price as so provided, the
     Optionee and the broker shall comply with such procedures and enter into
     such agreements of indemnity and other agreements as the Administrator
     shall prescribe as a condition of such payment procedure.

Payment instruments will be received subject to collection. The delivery of
certificates representing the Option Shares will be contingent upon the
Company's receipt from the Optionee (or a purchaser acting in his stead in
accordance with this Option) by the Company of the full payment for the Option
Shares, as set forth above, and any agreement, statement or other evidence that
the Company may require to satisfy itself that the issuance of Option Shares to
be purchased pursuant to the exercise of this Option under the 2000 Plan and any
subsequent resale of the Option Shares will be in compliance with applicable
laws and regulations.

     If requested upon the exercise of this Option, certificates for shares may
be issued in the name of the Optionee jointly with another person or in the name
of the executor or administrator of the Optionee's estate.

     Notwithstanding any other provision hereof or of the 2000 Plan, no portion
of this Option shall be exercisable after the Expiration Date hereof.

     3. NON-TRANSFERABILITY OF OPTION. This Option shall not be transferable by
the Optionee otherwise than by will or by the laws of descent and distribution
and this Option shall be exercisable, during the Optionee's lifetime, only by
the Optionee.

     4. TERMINATION OF EMPLOYMENT. If the Optionee's employment by the Company
and its Subsidiaries is terminated, the extent to which and the period within
which the Option may be exercised shall be as set forth below.

          (a) TERMINATION BY REASON OF DEATH. If the Optionee's employment by
     the Company and its Subsidiaries is terminated by reason of death, any
     Option held by the Optionee shall become fully exercisable and may
     thereafter be exercised by the Optionee's legal representative or legatee
     for a period of 12 months (or such longer period as the Administrator shall
     specify at any time) from the date of death or until the Expiration Date,
     if earlier.

          (b) TERMINATION BY REASON OF DISABILITY. If the Optionee's employment
     by the Company and its Subsidiaries is terminated by reason of Disability,
     any Option held by the Optionee shall become fully exercisable and may
     thereafter be exercised for a period of 12 months (or such longer period as
     the Administrator shall specify at any time)

                                       2




     from the date of such termination of employment or until the Expiration
     Date, if earlier. Except as otherwise provided by the Administrator at any
     time, the death of the Optionee during the twelve (12) month period
     provided in this Section 4(b) shall extend such period for 12 months from
     the date of death or until the Expiration Date, if earlier.

          (c) TERMINATION BY REASON OF RETIREMENT. If the Optionee's employment
     by the Company and its Subsidiaries is terminated by reason of Retirement,
     any Option held by the Optionee may thereafter be exercised to the extent
     it was exercisable and the time of such termination, for a period of 12
     months (or such other period as the Administrator shall specify at any
     tune) from the date of such termination of employment or until the
     Expiration Date, if earlier.

          (d) TERMINATION FOR CAUSE. If the Optionee's employment by the Company
     and its Subsidiaries is terminated for Cause, any Option held by the
     Optionee, including any Option that is immediately exercisable at the time
     of such termination, shall immediately terminate and be of no further force
     and effect; provided, however, that the Administrator may, in its sole
     discretion, provide that such Option can be exercised for a period of up to
     30 days from the date of such termination of employment or until the
     Expiration Date, if earlier.

          (e) OTHER TERMINATION. Unless otherwise determined by the
     Administrator, if the Optionee's employment by the Company and its
     Subsidiaries is terminated for any reason other than death, Disability,
     Retirement or Cause, any Option held by the Optionee may thereafter be
     exercised, to the extent exercisable on the date of such termination of
     employment, for a period of three (3) months (or such longer period as the
     Administrator shall specify at any time) from the date of termination or
     until the Expiration Date, if earlier.

For this purpose, neither a transfer of employment from the Company to a
Subsidiary (or from a Subsidiary to the Company) nor an approved leave of
absence shall be deemed a "termination of employment."

     5. OPTION SHARES. The Option Shares are shares of Common Stock as
constituted on the date of this Option, subject to adjustment as provided in
SECTION 3 of the 2000 Plan.

     6. NO SPECIAL EMPLOYMENT RIGHTS. This Option will not confer upon the
Optionee any right with respect to continuance of employment by the Company or
its Subsidiary, nor will it interfere in any way with any right of the
Optionee's employer to terminate the Optionee's employment at any time.

     7. RIGHTS AS A SHAREHOLDER. The Optionee shall have no rights as a
shareholder with respect to any Common Stock that may be purchased by exercise
of this Option unless and until a certificate or certificates representing such
shares are duly issued and delivered to the Optionee. Except as otherwise
expressly provided in the 2000 Plan, no adjustment shall be made for dividends
or other rights for which the record date is prior to the date such share
certificate is issued.

                                       3




     8. QUALIFICATION UNDER SECTION 422. It is understood and intended that the
Option granted hereunder shall qualify as an "incentive stock option" as defined
in Section 422 of the Code. Accordingly, the Optionee understands that in order
to obtain the benefits of an incentive stock option under Section 422 of the
Code, no sale or other disposition may be made of any Option Shares acquired
upon exercise of this Option within the one-year period beginning on the day
after the day of the transfer of such Option Shares to him or her, nor within
the two-year period beginning on the day after the grant of this Option. If the
Optionee intends to dispose or does dispose (whether by sale, gift, transfer or
otherwise) of any such Option Shares within these periods, he or she will notify
the Company within thirty (30) days after such disposition.

     Options which become exercisable for the first time by the Optionee during
any calendar year will only qualify as incentive stock options under Section 422
of the Code to the extent that the aggregate fair market value of the Option
Shares underlying such Options as of the date of grant does not exceed S100,000.
Any such Options relating to Option Shares in excess of $100,000 will be treated
as nonqualified stock options under the Code.

     9. TAX WITHHOLDING. No later than the date as of which part or all of the
value of any shares of Common Stock received under the 2000 Plan first becomes
includible in the Optionee's gross income for Federal tax purposes, the Optionee
shall make arrangements with the Company in accordance with SECTION 11 of the
2000 Plan regarding the payment of any federal, state or local taxes required to
be withheld with respect to such income.

     10. THE 2000 PLAN. In the event of any discrepancy or inconsistency between
this Agreement and the 2000 Plan, the terms and conditions of the 2000 Plan
shall control.

     11. MISCELLANEOUS. Notices hereunder shall be mailed or delivered to the
Company at its principal place of business and shall be mailed or delivered to
Optionee at the address set forth below or, in either case, at such other
address as one party may subsequently furnish to the other party in writing.

                                       INVERNESS MEDICAL TECHNOLOGY, INC.



                                       By: /S/ KENNETH D. LEGG
                                          -------------------------------------
                                       Name: KENNETH D. LEGG
                                            -----------------------------------
                                       Title: EXECUTIVE VICE PRESIDENT
                                             ----------------------------------


     Receipt of the foregoing Option is acknowledged and its terms and
conditions are hereby agreed to:



                                       /S/ RON ZWANZIGER, Optionee
                                       ---------------------------------
                                       Ron Zwanziger




                                       Date:_____________________________


                                       4

EX-8

                                                                       Exhibit 8

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE TRANSFERRED UNLESS (A)
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS
FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE BORROWER MAY
REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO THE
BORROWER TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED
FOR SUCH TRANSFER.

THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND THE LENDER UNDER THIS
SUBORDINATED PROMISSORY NOTE ARE SUBJECT TO THE PROVISIONS OF THAT CERTAIN
SUBORDINATION AGREEMENT DATED ON OR ABOUT THE DATE HEREOF ENTERED INTO BY AND
AMONG THE BORROWER, THE ROYAL BANK OF SCOTLAND PLC, THE LENDER AND CERTAIN OTHER
PARTIES, AS DESCRIBED MORE FULLY IN SECTION 4(i) HEREOF.

No. N-1


                       INVERNESS MEDICAL INNOVATIONS, INC.
                          SUBORDINATED PROMISSORY NOTE


$10,000,000.00                                                December 20, 2001

       For value received, Inverness Medical Innovations, Inc., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of Zwanziger
Family Ventures, LLC (the "Lender") the principal sum of TEN MILLION DOLLARS and
NO CENTS ($10,000,000.00) (or, if less, the then outstanding principal amount
hereof), together with all accrued but unpaid interest thereon, on or before the
date (the "Maturity Date") of the earliest to occur of the following (but in any
event subject to the provisions of Section 4 hereof): (i) subject to the
extension provisions of Section 3 hereof, April 1, 2002 (as such date may be so
extended, the "Fixed Maturity Date"), (ii) a Qualified Subordinated Debt
Financing (as provided in Section 5 hereof), (iii) a Change of Control (as
provided in Section 6 hereof) or (iv) acceleration by the Lender following the
occurrence of an Event of Default (as provided in Section 7 hereof). Subject to
the provisions of Sections 1(f) and 3 hereof, interest on the outstanding
principal amount under this Note shall accrue (commencing as of December 12,
2001) at the rate of twelve percent (12%) per annum, compounded daily, and shall
be payable on each April 1, July 1, October 1 and January 1 (with the first such
payment date to be April 1, 2002), and on the Maturity Date. All interest
payable under this Note shall be calculated on the basis of a year of 365 or 366
days (as applicable) for the actual number of days elapsed. All payments
received by




the Lender hereunder shall be applied first to any cost of collection, then to
accrued but unpaid interest and then to unpaid principal.

       This Subordinated Promissory Note is issued pursuant to, and is subject
in all respects to, that certain Note and Warrant Purchase Agreement dated as of
December 14, 2001 among the Borrower, the Lender and the other investors party
thereto (the "Purchase Agreement"), a copy of which is on file at the principal
office of the Borrower. This Subordinated Promissory Note is one of several
Subordinated Promissory Notes to be issued by the Borrower pursuant to the
Purchase Agreement, which notes are hereinafter referred to, together with this
Subordinated Promissory Note, as the "Notes." The aggregate original principal
amount of all of the Notes is $20,000,000.

       1. PAYMENT.

            (a) PRINCIPAL. All payments of principal hereunder shall be payable
in the form of Cash Payments. As used herein, a "Cash Payment" shall mean a
payment in immediately available funds in lawful money of the United States of
America.

            (b) INTEREST. All payments of any interest hereunder shall be
payable, at the sole election of the Borrower (which election the Borrower may
change from time to time), in the form of Cash Payments or in the form of shares
of the common stock, $.001 par value per share (the "Common Stock"), of the
Borrower ("Common Stock Payments") valued at ninety-five percent (95%) of the
average closing price on the American Stock Exchange (or, if the Common Stock is
not then traded on the American Stock Exchange, on such other national
securities exchange (or similar system) on which the Common Stock then trades)
of the Common Stock for the period of the ten consecutive trading days ending
immediately prior the relevant interest payment date, PROVIDED that, if the
Common Stock is not then traded on a national securities exchange (or similar
system) the Common Stock shall be valued as determined in good faith by the
Company's Board of Directors. Any election by the Borrower to make any payment
of interest in the form of a Cash Payment or a Common Stock Payment shall be
made and apply equally with respect to all Notes then outstanding. In the event
that the Borrower elects to make any payment of interest in the form of a Common
Stock Payment, the Borrower shall issue and deliver to the Lender, promptly
after the relevant interest payment date, a certificate or certificates
representing in the aggregate the number of shares of Common Stock required to
be issued to the Lender pursuant such Common Stock Payment.

            (c) LOCATION. All Cash Payments shall be made by wire transfer to
such account as the Lender may from time to time designate in writing to the
Borrower. All Common Stock Payments shall be payable at the address set forth in
Section 11 hereof or such other place as the Lender may from time to time
designate in writing to the Borrower.

            (d) PREPAYMENT. Subject to the provisions of Section 4 hereof, the
Borrower may prepay this Note at any time in full or in part, in which case any
prepayment of principal shall be accompanied by a payment of accrued interest in
respect of the principal being prepaid.

            (e) PAYMENTS PRO RATA; PARI PASSU RANKING. Whenever any payments
(whether constituting principal, interest (in the form of Cash Payments or
Common Stock

                                      -2-




Payments) or otherwise) shall be due and payable or made (whether at maturity or
by prepayment) under this Note and the other outstanding Notes, such payments
under this Note and all other outstanding Notes shall be made to the respective
holders of the outstanding Notes pro rata based on (x) in the case of payments
of principal, the respective then outstanding principal amounts of such Notes
and (y) in the case of payments of interest, the respective then outstanding
amounts of accrued but unpaid interest under such Notes, in each case after
giving effect to any conversions effected pursuant to Section 2 of this Note (or
the equivalent section of any other Note). The Notes shall rank pari passu in
right of payment. Nothing in this Section 1(e) shall limit the rights of any
Lender (as such term is used in the respective Notes) to effect a non-ratable
conversion under Section 2 (or the equivalent section) of such Lender's Note.

            (f) LATE PAYMENTS. If any amount payable hereunder (whether
constituting principal, interest or otherwise) is not paid on the date on which
such payment is due hereunder (a "Late Payment"), such Late Payment shall bear
interest, from and including the due date thereof to but excluding the date on
which Late Payment is paid, at the rate of eighteen percent (18%) per annum,
compounded daily (the "Penalty Rate"), and such interest shall be payable on
demand. In the event that a Late Payment remains unpaid for sixty (60) days
after the date thereof, the then outstanding principal amount of this Note shall
bear interest at the Penalty Rate (in lieu of, and not in addition to, the rate
provided for in the first paragraph of this Note) from and including such
sixtieth (60th) day to but excluding the date on which Late Payment is paid.
Notwithstanding anything to the contrary herein (except as provided in Section 3
hereof), upon full payment of any Late Payment, the outstanding principal amount
of this Note shall again bear interest at twelve percent (12%) per annum,
compounded daily.

       2. CONVERSION OPTION.

            (a) DEFINITIONS. As used herein, the following terms, unless the
context otherwise requires, shall have the following respective meanings:

                 (i) The term "Series A Financing" shall mean the financing or
       series of related financings (with one or more closings) contemplated by
       the Borrower to occur or commence on or about the date of this Note
       involving the issuance and sale of shares of the Series A Convertible
       Preferred Stock, $.001 par value per share (the "Series A Preferred
       Stock"), of the Borrower to various investors (the "Series A Investors").

                 (ii) The term "Series A Financing Agreements" shall mean the
       purchase agreement and related agreements entered into between the
       Borrower and the Series A Investors in connection with the Series A
       Financing.

                 (iii) The term "Series A Financing Purchase Price" shall mean
       the original purchase price per share of the Series A Preferred Stock
       issued to investors as part of the Series A Financing.

                 (iv) The term "Target Amount" shall mean $80,000,000.

                 (v) The term "Target Deficit" shall mean the dollar amount
       equal to the result of (x) the Target Amount MINUS (y) the dollar amount
       of the aggregate gross proceeds that the Borrower has received (or has
       irrevocable, binding commitments from

                                      -3-




       one or more Series A Investor to receive) on or before March 15, 2002 in
       connection with the Series A Financing.

            (b) EXERCISE OF CONVERSION OPTION. The Borrower shall notify the
Lender, on or before March 18, 2002, of the Target Deficit, if any. If, as of
March 15, 2002, the Target Deficit is a positive number, the Lender shall have
the sole option, subject to the provisions of this Section 2, to convert, on
April 1, 2002 (the "Conversion Closing Date"), all or part of the outstanding
balance, calculated as of April 1, 2002, of principal and interest payable under
this Note into shares of the Series A Preferred Stock at a conversion price per
share equal to the Series A Financing Purchase Price (the "Conversion Option"),
PROVIDED that such Conversion Option shall be exercisable by the Lender only
until the close of business on March 27, 2002 by the Lender's delivery of notice
to the Borrower on or before such date that the Lender is exercising such
Conversion Option, which notice shall specify the amount of such balance that
the Lender elects to so convert (such Lender's "Elected Conversion Balance").
The maximum aggregate amount of the outstanding balances under all of the Notes
that may be so converted shall equal the Target Deficit. If the Target Deficit
is less than the aggregate amount of all Elected Conversion Balances (as so
defined in the respective Notes) under the Notes, the portion of the outstanding
balance under any Note that shall be so converted shall be calculated and
allocated pro rata based on the respective Elected Conversion Balances under the
respective Notes (before giving effect to any conversion hereunder). As used
herein, the Lender's "Final Conversion Amount" shall be the amount of the
Lender's outstanding balance hereunder, if any, that the Lender will convert
into shares of Series A Preferred Stock as determined pursuant to the forgoing
provisions. If, by operation of the foregoing provisions, the Lender's Final
Conversion Amount is less than the Lender's Elected Conversion Balance, the
Borrower shall notify the Lender of such Final Conversion Amount by no later
than March 29, 2002.

       Any portion of the outstanding balance under this Notes that is so
converted shall be applied first to reduce accrued but unpaid interest and then
to reduce unpaid principal.

       The Company covenants that it shall reserve (i) a sufficient number of
shares of Series A Preferred Stock, based on the Series A Financing Purchase
Price, to achieve aggregate gross proceeds from the Series A Financing in an
amount equal to the Target Amount, (ii) during the period from March 15, 2002
through the Conversion Closing Date, a sufficient number of shares of Series A
Preferred Stock to enable the conversion of the Lender's Final Conversion
Amount, if any, as determined pursuant to the foregoing provisions and (iii) a
sufficient number of shares of Common Stock or other equity securities of the
Borrower to enable the Lender to exercise the conversion rights with respect to
any shares of Series A Preferred Stock issued to the Lender pursuant to its
exercise of its Conversion Option.

            (c) CONVERSION PROCEDURES. The Borrower and the Lender shall hold
the "Conversion Closing" at the offices of Foley, Hoag & Eliot LLP, One Post
Office Square, Boston, Massachusetts on the Conversion Closing Date (or at such
other time and place as the Borrower and the Lender may mutually agree). At the
Conversion Closing: (i) the Lender shall deliver this Note to the Borrower, (ii)
the Lender and the Borrower shall execute such signature pages or other relevant
joinder documents as are necessary so that the Lender shall become a party to
the Series A Financing Agreements and (iii) the Final Conversion Amount shall
automatically convert into the number of shares of Series A Preferred Stock
equal to the Final Conversion

                                      -4-




Amount DIVIDED BY the Series A Financing Purchase Price, and there shall be
issued and delivered to the Lender a certificate or certificates representing
such number of shares of Series A Preferred Stock. In the event that the Final
Conversion Amount equals the entire outstanding balance of principal and
interest payable hereunder, this Note shall be cancelled. In the event that the
Final Conversion Amount is less than the entire outstanding balance of principal
and interest payable hereunder, an allonge shall be attached to this Note
setting forth the remaining balance due hereunder after such conversion (and
this Note, with such allonge attached, shall be returned to the Lender).
Notwithstanding anything to the contrary herein, the Borrower shall not be
obligated to issue any certificate or other instrument evidencing the shares of
Series A Preferred Stock issuable upon conversion hereunder unless either this
Note has been delivered to the Borrower or the Lender has notified the Borrower
that this Note has been lost, stolen or destroyed and has executed and delivered
to the Borrower an agreement satisfactory to the Borrower to indemnify the
Borrower from any loss incurred by the Borrower in connection therewith.

            (d) CASH IN LIEU OF FRACTIONAL SHARES. No fractional share of or
interest in any equity securities of the Borrower or scrip representing
fractional shares or interests, shall be issued upon any conversion of this
Note. Instead of any fractional shares of or interest in any equity securities
of the Borrower which would otherwise be issuable upon any conversion of this
Note, the Borrower shall pay to the Lender a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the price per share at which
this Note is converted into such equity securities of the Borrower under this
Section 2.

            (e) ADJUSTMENT OF PRICES PER SHARE. All numbers and conversion
prices will be equitably and proportionally adjusted in the event of any stock
split, stock dividend, capital reorganization, combination of shares or other
recapitalization of the Borrower with respect to the Series A Preferred Stock
after the date hereof and prior to the date of any conversion.

            (f) LIMITATION ON SALES. The Lender acknowledges that this Note and
any shares of Series A Preferred Stock issued upon conversion hereunder (and any
shares of Common Stock issued hereunder or upon conversion of any such Series A
Preferred Stock) (such shares of Series A Preferred Stock and Common Stock,
together, the "Note Stock") have not been registered under the Securities Act of
1933, as now in force or hereafter amended, or any successor legislation (the
"Securities Act"), and agrees not to sell, pledge, distribute, offer for sale,
transfer or otherwise dispose of this Note or any Note Stock unless (a) there is
an effective registration statement under the Securities Act as to this Note or
such Note Stock and this Note or such Note Stock has been registered or
qualified under any applicable or state securities or "blue sky" laws then in
effect, or (b) the Company receives an opinion of counsel, satisfactory to the
Company, that such registration and qualification are not required.

       Without limiting the generality of the foregoing, unless the offering and
sale of the Note Stock to be so issued shall have been effectively registered
under the Securities Act, the Company shall be under no obligation to issue the
shares covered so issuable unless and until the Lender shall have executed an
investment letter in form and substance satisfactory to the Borrower, including
a warranty at the time of such issuance that it is acquiring such shares for its
own account, for investment and not for, with a view to, or in connection with,
the distribution or resale of any such shares, and the Lender shall be bound by
the provisions of the following

                                      -5-




legend or a legend in substantially similar form which shall be endorsed upon
the certificate(s) evidencing the Note Stock issued pursuant to such exercise:

            "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
            OF 1933, AS AMENDED ("SECURITIES ACT"), OR REGISTERED OR QUALIFIED
            UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT
            BE TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION
            STATEMENT UNDER THE SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER
            APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS FROM SUCH
            REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
            CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE
            COMPANY MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL
            ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION OR
            QUALIFICATION IS LEGALLY REQUIRED FOR SUCH TRANSFER."

       In addition, without limiting the generality of the foregoing, the
Borrower may delay issuance of the Note Stock until completion of any action or
obtaining of any consent, which the Company deems necessary under any applicable
law (including, without limitation, state securities or "blue sky" laws).

       3. EXTENDED MATURITY OPTION. The Borrower shall have the sole option,
which it may exercise at any time and from time to time by notice to the Lender,
to extend the Fixed Maturity Date to any date after April 1, 2002, PROVIDED
that, in no event shall the Fixed Maturity Date be extended to a date later than
the original maturity date of any Senior Obligations (as defined in Section 4
hereof) outstanding as of December 31, 2001. If the Fixed Maturity Date is so
extended, from and after April 1, 2002, interest on the outstanding principal
amount under this Note shall accrue at the rate of eighteen percent (18%) per
annum, compounded daily (in lieu of, and not in addition to, the rate provided
for in the first paragraph of this Note), and shall otherwise be payable as
provided in the first paragraph of this Note.

       4. SUBORDINATION.

            (a) DEFINITIONS. The following terms shall have the following
respective meanings:

                 (i) The term "Person" shall mean any natural person,
       corporation, unincorporated organization, trust, joint-stock company,
       joint venture, association, company, partnership or government, or any
       agency or political subdivision of any government.

                 (ii) The term "Senior Creditors" means any creditor or Person
       to whom the Borrower owes a Senior Obligation.

                 (iii) The term "Senior Obligations" shall mean (A) all
       principal of, and premium and interest on, and all other amounts owing or
       guaranteed by the Borrower in respect of, any indebtedness incurred or
       guaranteed by the Borrower for money borrowed

                                      -6-




       from any bank or other institutional lender now or hereafter outstanding
       or hereafter incurred (including all indebtedness incurred or guaranteed
       by the Borrower to The Royal Bank of Scotland plc ("RBS") or any of the
       other lenders under the senior and mezzanine credit facilities obtained
       or to be obtained by the Borrower and/or any of its subsidiaries in
       connection with the Acquisition (used herein as defined in the Purchase
       Agreement) (the "RBS Credit Facility"), but excluding any indebtedness
       described in clause (B) below), PROVIDED that the aggregate outstanding
       principal amount of all such indebtedness described in this clause (A)
       that shall constitute "Senior Obligations" at any time by virtue of this
       clause (A) shall not exceed $100 million, and (B) any indebtedness of the
       Borrower incurred to finance the Borrower's acquisition (by merger,
       consolidation, stock purchase or otherwise) of a Person or the Borrower's
       acquisition of all or substantially all of the assets of a Person or all
       or substantially all of the assets of a division or line of business of a
       Person (other than the Acquisition). Notwithstanding the foregoing,
       Senior Obligations shall not include indebtedness of the Borrower
       evidenced by the other Notes, all of which shall rank equally and ratably
       with this Note.

                 (iv) The term "Subordinated Creditors" shall mean the Lender
       and any Person to whom this Note is subsequently transferred (subject to
       the provisions of Section 8 hereof).

                 (v) The term "Subordinated Indebtedness" shall mean the
       outstanding principal amount and any interest accrued under this Note.

            (b) NO TRANSFER. The Subordinated Creditors will not transfer, sell
or otherwise dispose of any of the Subordinated Indebtedness except to a Person
who agrees in writing to comply with the terms of this Section 4 as a
Subordinated Creditor. Thereafter, such transferee shall be deemed to be a
Subordinated Creditor under this Section 4.

            (c) AGREEMENT TO SUBORDINATE; NO PAYMENTS ON SUBORDINATED
INDEBTEDNESS.

                 (i) The Subordinated Creditors agree that the payment of the
       Subordinated Indebtedness is hereby expressly subordinated in right of
       payment, to the extent and in the manner hereinafter set forth, to the
       prior payment in full of all Senior Obligations.

                 (ii) No payment on account of principal, interest or any other
       amount payable under this Note shall be made by the Borrower or accepted
       by the any of the Subordinated Creditors, and this Note shall not be
       redeemed or purchased directly or indirectly by the Borrower, until such
       time as all of the Senior Obligations shall have been indefeasibly paid
       in full.

            (d) LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment or
distribution of assets of the Borrower of any kind or character, whether in
cash, property or securities, (i) in connection with any liquidation,
dissolution or winding up of the Borrower, whether voluntary or involuntary
(each a "Liquidation"), (ii) in bankruptcy, insolvency or receivership, or (iii)
upon an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Borrower or otherwise:

                                      -7-




                 (i) all Senior Obligations shall first be paid in full before
       the Subordinated Creditors shall be entitled to receive any assets in
       respect of the Subordinated Indebtedness; and

                 (ii) any payment or distribution of assets of the Borrower of
       any kind or character, whether in cash, property or securities to which
       the Subordinated Creditors would otherwise be entitled shall be made by
       the Borrower or by any receiver, trustee in bankruptcy, liquidating
       trustee, agent or other person making such payment or distribution
       directly to Senior Creditors or their representative to the extent
       necessary to pay all Senior Obligations in full.

            (e) WHEN DISTRIBUTION MUST BE PAID OVER. In the event that any
Subordinated Creditor receives any payment with respect to any Subordinated
Indebtedness at a time when such payment is prohibited by Section 4(d) hereof,
such payment shall be held by such Subordinated Creditor in trust for the
benefit of, and shall be forthwith paid over and delivered to, the Senior
Creditors or their representative for application to the payment of all Senior
Obligations remaining unpaid to the extent necessary to pay the Senior
Obligations in full.

            (f) STANDSTILL. The Subordinated Creditors, for themselves and their
respective successors and assigns, agree for the benefit of the Senior Creditors
that, so long as any Senior Obligations remain outstanding, the Subordinated
Creditors will not take any action to accelerate or demand the payment of the
Subordinated Indebtedness or to institute legal proceedings to collect the
Subordinated Indebtedness prior to the earlier of (i) 180 days after receipt by
the Senior Creditors of written notice of the occurrence of any event of default
on the Subordinated Indebtedness, which event is not thereafter cured or waived
by the Subordinated Creditors prior to taking such action or (ii) the
acceleration of the Senior Obligations.

            (g) OTHER RIGHTS AND REMEDIES. In the event of any insolvency,
bankruptcy, assignment or trust mortgage for the benefit of creditors,
reorganization, whether or not pursuant to bankruptcy laws, sale of all or
substantially all of the assets, Liquidation or any other marshaling of the
assets and liabilities of the Borrower, the Subordinated Creditors will, at the
request of the Senior Creditors, file any claim, and take or refrain from taking
any other action necessary or appropriate to enforce the obligations of the
Borrower in respect of the Subordinated Indebtedness, will vote such claim at
any meeting of creditors or for any plan or with respect to any matter as the
Senior Creditors shall direct and will hold in trust for the Senior Creditors
and assign, transfer and pay over to the Senior Creditors to be applied against
all amounts owed by the Borrower to the Senior Creditors on account of Senior
Obligations, in the form received, any and all monies, dividends or other assets
received in any such proceeding, or otherwise from the Borrower, from any
guarantor or purchaser on account of the Subordinated Obligations, and will
preserve and maintain the Subordinated Obligations so that the Senior Creditors
will always have the benefit of the Subordinated Obligations as provided herein,
unless and until the Senior Obligations shall be paid in full. In the event that
the Subordinated Creditors shall fail to take or refrain from any such action as
requested or required hereunder, the Senior Creditors may, as attorney-in-fact
for the Subordinated Creditors, take or rescind such action on behalf of the
Subordinated Creditors, and the Subordinated Creditors hereby irrevocably grant
the Senior Creditors an irrevocable power of attorney, coupled with an interest,
in their name, to demand, sue for, collect and receive any and all such monies,
dividends, or other assets and give

                                       -8-




acquittance therefor and to file and enter any petition, claim, proof of claim
or other instrument of similar character and to take such other action or
refrain from taking any action as the Senior Creditors may deem necessary or
advisable for the enforcement of this Section 4. The Subordinated Creditors will
execute and deliver to the Senior Creditors such other and further powers of
attorney or other instruments as the Senior Creditors may request in order to
accomplish the foregoing.

            (h) NO COLLATERAL. The Subordinated Creditors represent that they
hold no collateral of the Borrower as security for the Subordinated
Indebtedness, and agree that in the event that they acquire any such collateral,
it shall be held in trust by them for the Senior Creditors, and they will
immediately transfer and deliver same to the Senior Creditors or assign any
rights therein to the Senior Creditors, to be held by the Senior Creditors as
security for the Senior Obligations.

            (i) SUBORDINATION AGREEMENT. Subject to clause (j) below, the rights
and obligations of the Borrower and the Lender under this Note are subject to
the provisions of the Subordination Agreement (as defined below) as if the same
were incorporated in this Note. In the event of a conflict between the terms of
this Note and the terms of the Subordination Agreement, the terms of the
Subordination Agreement shall prevail. As used herein, the term "Subordination
Agreement" shall mean the subordination agreement dated on or about December 20,
2001 entered into by and among the Borrower, The Royal Bank of Scotland plc, as
security trustee, and the Bridge Note Holders (as defined therein), as amended,
varied, supplemented, restated or novated from time to time.

            (j) INAPPLICABILITY. Notwithstanding anything to the contrary
herein, in no event shall the provisions of Sections 4(b) through 4(i) hereof or
of the Subordination Agreement apply to, or in any way limit or restrict, (i)
the Borrower's rights under Section 1(b) hereof to elect to pay accrued interest
under this Note in the form of Common Stock Payments or, if the Borrower so
elects, its obligations to make such payments in such form in accordance with
the terms of this Note, (ii) the right of the Lender to convert the outstanding
balance of principal and interest hereunder into shares of Series A Preferred
Stock as provided in Section 2 hereof, or (iii) the Borrower's obligations under
Section 5 hereof to repay all unpaid principal, together with all accrued but
unpaid interest, under this Note with the gross proceeds of any Qualified
Subordinated Debt Financing as provided in Section 5 hereof.

            (k) OTHER DEBT. The Borrower covenants that it shall cause all
indebtedness for borrowed money incurred by the Borrower after the date of this
Note (other than (x) the Senior Obligations, (y) any trade indebtedness incurred
in the ordinary course of business and (z) any indebtedness owed or incurred by
the Company to any of its direct or indirect subsidiaries or any holding company
that wholly owns, directly or indirectly, the Company) to be subordinated to the
indebtedness of the Borrower under the Notes on terms and conditions equivalent
to the terms and conditions set forth in Sections 4(b) through 4(h) hereof or
otherwise satisfactory to all of the Lenders (as such term is used and defined
in the respective Notes).

                                      -9-




       5. REPAYMENT UPON QUALIFIED SUBORDINATED DEBT FINANCING.

            (a) QUALIFIED SUBORDINATED DEBT FINANCING. As used herein, the term
"Qualified Subordinated Debt Financing" shall mean any venture capital,
institutional or other investor debt financing or series of related financings
occurring after the issuance of the Notes (i) pursuant to which the Borrower
incurs indebtedness that is subordinated to the Senior Obligations on terms and
conditions substantially equivalent to those provided for in Section 4 hereof
and (ii) in which the Borrower receives aggregate gross proceeds equal to or
greater than the then outstanding aggregate principal amount under the Notes.

            (b) REPAYMENT OF THE NOTES. Immediately upon the closing and funding
of a Qualified Subordinated Debt Financing, the Borrower shall repay all then
outstanding principal, together with all accrued but unpaid interest, under this
Note and the other Notes.

       6. REPAYMENT UPON CHANGE OF CONTROL.

            (a) CHANGE OF CONTROL. As used herein, the term "Change of Control"
shall mean any transaction or series of related transactions to which the
Borrower is a party resulting in (i) the members of the Board of Directors of
the Borrower immediately prior to the commencement of such transaction or series
of transactions constituting 50% or less of the Board of Directors of the
Borrower (or the board of directors of the surviving or acquiring corporation)
immediately following the consummation of such transaction or series of
transactions or (ii) sale of all or substantially all the assets of the
Borrower.

            (b) REPAYMENT OF THE NOTES. Immediately upon the occurrence of a
Change of Control, the Borrower shall repay all then outstanding principal,
together with all accrued but unpaid interest, under this Note and the other
Notes.

       7. DEFAULT.

            (a) EVENTS OF DEFAULT. If any of the following Events of Default
shall occur and be continuing, then the Lender may, by notice to the Borrower,
declare the entire unpaid principal amount of this Note, and all interest
accrued and unpaid hereon, to be forthwith due and payable, whereupon such
unpaid principal amount and all such accrued interest shall become and be
forthwith due and payable. As used herein, the term "EVENTS OF DEFAULT" shall
mean one or more of the following:

                 (i) The Borrower shall fail to pay any interest or principal on
       this Note when due and such failure shall continue for five (5) business
       days after written notice thereof shall have been given to the Borrower
       by the Lender;

                 (ii) The Borrower shall default in the performance of any
       material agreement or material covenant contained in this Note and such
       failure shall remain unremedied for thirty (30) business days after
       written notice thereof shall have been given to the Borrower by the
       Lender;

                 (iii) The Borrower shall be involved in any of the following:
       (i) its commencement of a voluntary bankruptcy case under Title 11 of the
       United States Code

                                      -10-




       as from time to time in effect, or by its authorizing, by appropriate
       proceedings of its Board of Directors or other governing body, the
       commencement of such a voluntary case; (ii) its filing an answer or other
       pleading admitting or failing to deny the material allegations of a
       petition filed against it commencing an involuntary bankruptcy case under
       said Title 11, or seeking, consenting to, or acquiescing in the relief
       therein provided, or by its failing seasonably to controvert the material
       allegations of any such petition; (iii) the entry of an order for relief
       in any involuntary bankruptcy case commenced under said Title 11; (iv)
       its seeking relief as a debtor under any applicable law, other than said
       Title 11, of any jurisdiction relating to the liquidation or
       reorganization of debts or to the modification or attention of the rights
       of creditors, or by its consenting to or acquiescing in such relief, (v)
       an order shall have been entered by a court of competent jurisdiction (1)
       finding the Borrower to be bankrupt or insolvent, (2) ordering or
       approving the Borrower's liquidation, reorganization or any modification
       or alteration of the rights of its creditors, or (3) assuming custody of,
       or appointing a receiver or other custodian for, all or a substantial
       part of the Borrower's property; or (vi) its making an assignment for the
       benefit of, or entering into a composition with, its creditors, or
       appointing or consenting to the appointment of a receiver or other
       custodian for all or a substantial part of its property;

                 (iv) A default shall occur and be continuing under any of the
       Senior Obligations, for more than the period of grace, if any, specified
       therein, unless such default is waived by the Senior Creditors or cured
       by the Borrower; or

                 (v) An Event of Default shall occur under any of the other
       Notes.

            (b) COLLECTION COSTS; ATTORNEY'S FEES. In the event this Note is
turned over to an attorney for collection upon the occurrence of an Event of
Default, the Borrower agrees to pay all reasonable costs of collection,
including reasonable attorney's fees and expenses and all out of pocket expenses
incurred in connection with such collection efforts.

       8. NOTE REGISTER; TRANSFER OR LOSS OF NOTE.

            (a) NOTE REGISTER. The Borrower shall keep at its principal
executive office a register (the "Note Register"), in which, subject to such
reasonable regulations as it may prescribe, but at its expense (other than
transfer taxes, if any), the Borrower shall provide for the registration and
transfer of this Note. The person or entity in whose name any registered Note
shall be registered shall be deemed and treated as the owner and holder hereof
for all purposes hereunder.

            (b) TRANSFER. This Note shall not be transferable by the Lender
without the prior written consent of the Company and shall be convertible only
by the registered owner and holder hereof.

            (c) LOSS OF NOTE. Upon receipt by the Borrower of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Note and of indemnity reasonably satisfactory to it, and upon reimbursement
to the Borrower of all reasonable expenses incidental thereto, and upon
surrender and cancellation of this Note (in case of mutilation), the

                                      -11-




Borrower will make and deliver in lieu of this Note a new Note of like tenor and
unpaid principal amount and dated as of the date to which interest has been paid
on the unpaid principal amount of this Note in lieu of which such new Note is
made and delivered.

       9. RESTRICTIONS. This Note and the securities issuable pursuant to this
Note are subject to additional restrictions on transferability set forth in the
Purchase Agreement.

       10. AMENDMENT AND WAIVER. Any provision of this Note, including, without
limitation, any subordination provision hereof, may be amended or waived with
the written consent of (a) the Borrower and (b) either (i) the Lender or (ii)
the holders of greater than fifty percent (50%) of the aggregate outstanding
principal amount of the Notes. A waiver of any right or remedy under this Note
on any occasion shall not be a bar to exercise of the same right or remedy on
any subsequent occasion or of any other right or remedy at any time.

       11. NOTICE. Any notice required or permitted to be given to the Borrower
or the Lender under this Note shall be made in writing at the address or
facsimile number of such person specified below (or such other address or
facsimile number as such person may specify in a written notice to the other
party) and shall be deemed to have been given, if delivered personally or sent
via electronic facsimile transmission with confirmation received, on the date of
delivery or, if sent via nationally recognized overnight express courier with
established tracking capability marked for delivery on the next business day, on
the earlier of the date of delivery, as demonstrated by the tracking records of
the courier, or two (2) business days after deposit of the notice with the
courier:

            if to the Borrower, to:

                Inverness Medical Innovations, Inc.
                51 Sawyer Road, Suite 200
                Waltham, MA 02153
                Facsimile: (781) 674-3939
                Attention: Ron Zwanziger, President

            with a copy to:

                Foley, Hoag & Eliot LLP
                One Post Office Square
                Boston, MA 02109
                Facsimile: (617) 832-7000
                Attention: John D. Patterson, Jr., Esq.

            if to the Lender, to:

                Zwanziger Family Ventures, LLC
                322 Waverly Avenue
                Newton, MA 02458
                Facsimile: (781) 647-3939
                Attention: Ron Zwanziger, Manager

                                      -12-




       12. MAXIMUM PERMISSIBLE RATE. In the event that any of the terms or
provisions of this Note are in conflict with applicable usury law, this Section
12 shall govern as to such terms or provisions, and this Note shall in all other
respects remain in full force and effect. If any transaction contemplated hereby
would be usurious, the aggregate of all consideration which constitutes interest
under applicable law that is contracted for, charged or received under this Note
shall under no circumstances exceed the maximum interest allowed by applicable
law. Accordingly, if interest in excess of the legal maximum is contracted for,
charged or received: (i) this Note shall be automatically reformed so that the
effective rate of interest shall be reduced to the maximum rate of interest
permitted by applicable law, and, for the purpose of determining said rate and
to the extent permitted by applicable law, all interest contracted for, charged
or received shall be amortized, prorated and spread throughout the full term of
this Note so that the effective rate of interest is uniform throughout the life
of this Note, and (ii) any excess of interest over the maximum amount allowed
under applicable law shall be applied as a credit against the then unpaid
principal amount of this Note.

       13. SEVERABILITY. In the event any one or more of the provisions of this
Note shall for any reason be held to be invalid, illegal or unenforceable, in
whole or in part or in any respect, or in the event that any one or more of the
provisions of this Note operate or would prospectively operate to invalidate
this Note, then and in any such event, such provision(s) only shall be deemed
null and void and shall not affect any other provision of this Note and the
remaining provisions of this Note shall remain operative and in full force and
effect and in no way shall be affected, prejudiced, or disturbed thereby.

       14. GOVERNING LAW. This Note shall be governed by, and construed and
enforced in accordance with, the substantive laws of The Commonwealth of
Massachusetts without regard to its principles of conflicts of laws. Any dispute
arising out of or relating to this Note shall be filed and prosecuted in any
court of competent subject matter jurisdiction located in Massachusetts. The
Borrower and the Lender hereby consent to the personal jurisdiction of such
courts over them, stipulate to the convenience, fairness and efficiency of
proceeding in such courts, and covenant not to assert any objection to
proceeding in such courts based on any alleged lack of jurisdiction or any
alleged inconvenience, unfairness or inefficiency of such courts.

       15. SATURDAYS, SUNDAYS, HOLIDAYS. If any date that may at any time be
specified in this Note as a date for the making of any payment under this Note
shall fall on Saturday, Sunday or on a day which in Massachusetts shall be a
legal holiday, then the date for the making of that payment shall be the next
subsequent day which is not a Saturday, Sunday or legal holiday.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -13-




       IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed by its duly authorized officer as of the date first above written.


                                         INVERNESS MEDICAL INNOVATIONS, INC.


                                         By: /s/ KEN LEGG
                                            -----------------------------------
                                            Name:
                                            Title:

[Corporate Seal]

ATTEST:

/s/ JAY MCNAMARA
- -----------------------------------



                                      -14-

EX-9

                                                                       Exhibit 9

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE TRANSFERRED UNLESS (A)
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS
FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE COMPANY MAY
REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED
FOR SUCH TRANSFER.


No. W-1                                                         For the Purchase
                                                             of 27,594 shares of
                                                                    Common Stock

                           WARRANT FOR THE PURCHASE OF
                             SHARES OF COMMON STOCK
                                       OF
                       INVERNESS MEDICAL INNOVATIONS, INC.


        VOID AFTER 5:00 P.M., EASTERN STANDARD TIME, ON DECEMBER 20, 2011

       Inverness Medical Innovations, Inc., a Delaware corporation (the
"Company"), hereby certifies that Zwanziger Family Ventures, LLC, or his, her or
its registered assigns (the "Registered Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company, at any time or from time to
time on or before the earlier of (a) December 20, 2011 at not later than 5:00
p.m. (Eastern Standard Time) and (b) the termination of this Warrant as provided
in Section 8 below, 27,594 shares of Common Stock, $.001 par value, of the
Company ("Common Stock"), at a purchase price of $18.12 per share. The number of
shares purchasable upon exercise of this Warrant, and the purchase price per
share, each as adjusted from time to time pursuant to the provisions of this
Warrant, are hereinafter referred to as the "Warrant Stock" and the "Purchase
Price," respectively.

       1. EXERCISE.

            (a) This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase form appended hereto
as EXHIBIT I duly executed by such Registered Holder, at the principal office of
the Company, or at such other office or agency as the Company may designate,
accompanied by payment in full, as provided in




subsection 1(b) below, of the aggregate Purchase Price payable in respect of the
number of shares of Warrant Stock purchased upon such exercise.

            (b) The aggregate Purchase Price may be paid, at the Registered
Holder's election, at any time during the term of this Warrant, (i) by cash
(including by wire transfer of immediately available funds to an account
designated by the Company) or certified or bank check in lawful money of the
United States or (ii) by exercise of the "net issuance" right described below in
this subsection 1(b) ("NET ISSUANCE"). If the Registered Holder elects the Net
Issuance method, the Company will issue Common Stock to the Registered Holder
upon exercise of this Warrant in accordance with the following formula:


                  X = Y(A-B)
                      ------
                         A

      Where: X = the number of shares of Common Stock that shall be issued to
                 the Registered Holder.

             Y = the number of shares of Common Stock requested to be exercised
                 under this Warrant.

             A = the current fair market value of one (1) share of Common
                 Stock at the time of issuance of such shares of Common Stock.

             B = the Purchase Price.

       For purposes of the above calculation, current fair market value of each
share of Common Stock shall be determined as follows:

                 (i) if the Common Stock is traded on a national securities
exchange, the fair market value shall be deemed to be the average of the closing
prices of the Common Stock over the ten (10) trading day period ending
immediately prior to the day as of which the current fair market value of the
Common Stock is being determined; or

                 (ii) if the Common Stock is traded over-the-counter, the fair
market value shall be deemed to be the product of the average of the closing bid
and asked prices of the Common Stock quoted on the NASDAQ System (or similar
system) over the ten (10) trading day period ending immediately prior to the day
as of which the current fair market value of the securities is being determined;
or

                 (iii) if at any time the Common Stock is not listed on any
national securities exchange or quoted in the NASDAQ System (or similar system)
or the over-the-counter market, the current fair market value of the Common
Stock shall be as determined in good faith by the Company's Board of Directors.

            (c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above. At such time, the person or persons in whose name or names any
certificates for Warrant Stock shall be issuable upon such

                                      -2-




exercise as provided in subsection 1(d) below shall be deemed to have become the
holder or holders of record of the Warrant Stock represented by such
certificates.

            (d) As soon as practicable after the exercise of this Warrant in
full or in part and whether by payment by cash or check or by Net Issuance, and
in any event within fifteen (15) days thereafter, the Company, at its expense,
will cause to be issued in the name of, and delivered to, the Registered Holder,
or, subject to the terms and conditions hereof, as such Registered Holder (upon
payment by such Registered Holder of any applicable transfer taxes) may direct:

                 (i) a certificate or certificates for the number of full shares
of Warrant Stock to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof, and

                 (ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, representing the right to
purchase in the aggregate the number of shares of Warrant Stock equal (without
giving effect to any adjustment therein) to the number of such shares called for
on the face of this Warrant minus the number of such shares purchased or
exercised by the Registered Holder upon such exercise as provided in subsections
1(a) and 1(b) above.

            (e) To the extent this Warrant is not previously exercised as to all
of the Warrant Stock subject hereto, and if the fair market value of one share
of Common Stock is greater than the Purchase Price then in effect, this Warrant
shall be deemed automatically exercised pursuant to the Net Issuance method as
provided in subsection 1(b) above (even if not surrendered) immediately before
its expiration. For purposes of such automatic exercise, the fair market value
of one (1) share of the Common Stock upon such expiration shall be determined
pursuant to the Net Issuance provisions of subsection 1(b). To the extent this
Warrant or any portion thereof is deemed automatically exercised pursuant to
this subsection 1(e), the Company agrees to promptly notify the Registered
Holder hereof of the number of shares of Warrant Stock, if any, that the
Registered Holder hereof is to receive by reason of such automatic exercise.

       2. ADJUSTMENTS.

            (a) If outstanding shares of the Common Stock shall be subdivided
into a greater number of shares or a dividend in Common Stock shall be paid in
respect of Common Stock, the Purchase Price in effect immediately prior to such
subdivision or at the record date of such dividend shall simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend be proportionately reduced. If outstanding shares of Common Stock shall
be combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased. When any
adjustment is required to be made in the Purchase Price, the number of shares of
Warrant Stock purchasable upon the exercise of this Warrant shall be changed to
the number determined by dividing (i) an amount equal to the

                                      -3-




number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.

            (b) If there shall occur any capital reorganization or
reclassification of the Common Stock (other than a change in par value or a
subdivision or combination as provided for in subsection 2(a) above), then, as
part of any such reorganization or reclassification, lawful provision shall be
made so that the Registered Holder of this Warrant shall have the right
thereafter to receive upon the exercise hereof the kind and amount of shares of
stock or other securities or property which such Registered Holder would have
been entitled to receive if, immediately prior to any such reorganization or
reclassification, such Registered Holder had held the number of shares of Common
Stock which were then purchasable upon the exercise of this Warrant. In any such
case, appropriate adjustment (as reasonably determined by the Board of Directors
of the Company) shall be made in the application of the provisions set forth
herein with respect to the rights and interests thereafter of the Registered
Holder of this Warrant such that the provisions set forth in this Section 2
(including provisions with respect to adjustment of the Purchase Price) shall
thereafter be applicable, in as nearly equivalent a manner as may be
practicable, in relation to any shares of stock or other securities or property
thereafter deliverable upon the exercise of this Warrant.

            (c) Subject to the provisions of Section 8, if there shall be a
merger or consolidation of the Company with or into another corporation (other
than a merger or reorganization involving only a change in the state of
incorporation of the Company or the acquisition by the Company of other
businesses where the Company survives as a going concern), or the sale of all or
substantially all of the Company's capital stock or assets to any other person,
then as a part of such transaction, provision shall be made so that the
Registered Holder shall thereafter be entitled to receive the number of shares
of stock or other securities or property of the Company, or of the successor
corporation resulting from the merger, consolidation or sale, to which the
Registered Holder would have been entitled if the Registered Holder had
exercised its rights pursuant to the Warrant immediately prior thereto. In any
such case, appropriate adjustment shall be made in the application of the
provisions of this Section 2 to the end that the provisions of this Section 2
shall be applicable after that event in as nearly equivalent a manner as may be
practicable.

            (d) When any adjustment is required to be made in the Purchase
Price, the Company shall promptly mail to the Registered Holder a certificate
setting forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such certificate shall also
set forth the kind and amount of stock or other securities or property into
which this Warrant shall be exercisable following the occurrence of any of the
events specified in this Section 2.

       3. FRACTIONAL SHARES. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the closing market price of the Common Stock on
the American Stock Exchange or, if applicable, any other national securities
exchange on the trading day immediately prior to the

                                      -4-




date of exercise or on the basis of the mean between the low bid and high asked
prices of the Common Stock on the over-the-counter market as reported by the
NASDAQ System (or similar system), whichever is applicable, or if neither is
applicable, then on the basis of the then current market value of the Common
Stock as shall be reasonably determined by the Company's Board of Directors.

       4. LIMITATION ON SALES, ETC. Each holder of this Warrant acknowledges
that this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as now in force or hereafter amended, or any successor
legislation (the "Securities Act"), and agrees not to sell, pledge, distribute,
offer for sale, transfer or otherwise dispose of this Warrant or any Warrant
Stock issued upon its exercise unless (a) there is an effective registration
statement under the Securities Act as to this Warrant or such Warrant Stock and
this Warrant or such Warrant Stock has been registered or qualified under any
applicable state securities or "blue sky" laws then in effect, or (b) the
Company receives an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required.

       Without limiting the generality of the foregoing, unless the offering and
sale of the Warrant Stock to be issued upon the particular exercise of the
Warrant shall have been effectively registered under the Securities Act, the
Company shall be under no obligation to issue the shares covered by such
exercise unless and until the Registered Holder shall have executed an
investment letter in form and substance satisfactory to the Company, including a
warranty at the time of such exercise that it is acquiring such shares for its
own account, for investment and not for, with a view to, or in connection with,
the distribution or resale of any such shares, and the holder of this Warrant
shall be bound by the provisions of the following legend or a legend in
substantially similar form which shall be endorsed upon the certificate(s)
evidencing the Warrant Stock issued pursuant to such exercise:

            "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
            OF 1933, AS AMENDED ("SECURITIES ACT"), OR REGISTERED OR QUALIFIED
            UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT
            BE TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION
            STATEMENT UNDER THE SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER
            APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS FROM SUCH
            REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
            CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE
            COMPANY MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL
            ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION OR
            QUALIFICATION IS LEGALLY REQUIRED FOR SUCH TRANSFER."

       In addition, without limiting the generality of the foregoing, the
Company may delay issuance of the Warrant Stock until completion of any action
or obtaining of any consent, which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws).

                                      -5-




       5. NOTICES OF RECORD DATE, ETC. In case:

            (a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the exercise of
this Warrant) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right; or

            (b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company; or

            (c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;

then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities at the
time deliverable upon the exercise of this Warrant) shall be entitled to
exchange their shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least ten (10) days prior to the
record date or effective date for the event specified in such notice.

       6. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such shares of Warrant Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.

       7. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.

       8. TERMINATION IN CERTAIN EVENTS. In the event of a transfer of all or
substantially all of the assets of the Company or a merger or consolidation of
the Company with or into any other entity (other than a merger the sole purpose
of which is to change the state of incorporation of the Company) or a
dissolution or winding-up or the adoption of a plan of liquidation of the

                                      -6-




Company, this Warrant shall terminate on the effective date of such transfer,
merger, consolidation, dissolution, winding-up or adoption (the "Transaction
Effective Date") and shall become null and void, PROVIDED that the Registered
Holder shall have received the prior notice with respect to such transaction or
event required by Section 5 hereof, and PROVIDED FURTHER, HOWEVER, that if this
Warrant shall not have otherwise terminated or expired, the Registered Holder
hereof shall have the right until 5:00 p.m. (Eastern Standard Time) on the day
immediately prior to the Transaction Effective Date to exercise its rights
hereunder to the extent not previously exercised.

       9. RESTRICTIONS. This Warrant and the securities issuable pursuant to
this Warrant are subject to additional restrictions on transferability set forth
in the Note and Warrant Purchase Agreement dated as of December 20, 2001 entered
into among the Company, the Registered Holder and the other investors party
thereto.

       10. WARRANT REGISTER; TRANSFERS, ETC.

            (a) The Company will maintain a register containing the names and
addresses of the Registered Holders of this Warrant. Any Registered Holder may
change its, his or her address as shown on the warrant register by written
notice to the Company requesting such change.

            (b) This Warrant shall not be transferable by the Registered Holder
without the prior written consent of the Company and shall be exercisable only
by the Registered Holder. Without the prior written consent of the Company, the
Warrant shall not be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process. Any attempted transfer, assignment, pledge, hypothecation or
other disposition of the Warrant or of any rights granted hereunder contrary to
the provisions of this Paragraph, or the levy of any attachment or similar
process upon the Warrant or such rights, shall be null and void.

            (c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; PROVIDED, HOWEVER, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.

       11. MAILING OF NOTICES, ETC. Any notice required or permitted to be given
to the Company or the Registered Holder under this Warrant shall be made in
writing at the address or facsimile number of such person specified below (or
such other address or facsimile number as such person may specify in a written
notice to the other party) and shall be deemed to have been given, if delivered
personally or sent via electronic facsimile transmission with confirmation
received, on the date of delivery or, if sent via nationally recognized
overnight express courier with established tracking capability marked for
delivery on the next business day, on the earlier of the date of delivery, as
demonstrated by the tracking records of the courier, or two (2) business days
after deposit of the notice with the courier:

                                      -7-




            if to the Company, to:

                 Inverness Medical Innovations, Inc.
                 51 Sawyer Road, Suite 200
                 Waltham, Massachusetts 02453
                 Facsimile: (781) 674-3939
                 Attention: Ron Zwanziger, President

            with a copy to:

                 Foley, Hoag & Eliot, LLP
                 One Post Office Square
                 Boston, Massachusetts 02109
                 Facsimile: (617) 832-7000
                 Attention: John D. Patterson, Jr., Esq.

if to the Registered Holder of this Warrant, to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who shall have
furnished an address to the Company in writing.

       12. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.

       13. CHANGE OR WAIVER. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.

       14. HEADINGS. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.

       15. GOVERNING LAW. This Warrant shall be governed by, and construed and
enforced in accordance with, the substantive laws of the Commonwealth of
Massachusetts without regard to its principles of conflicts of laws. Any dispute
arising out of or relating to this Warrant shall be filed and prosecuted in any
court of competent subject matter jurisdiction located in Massachusetts. The
Company and the Registered Holder hereby consent to the personal jurisdiction of
such courts over them, stipulate to the convenience, fairness and efficiency of
proceeding in such courts, and covenant not to assert any objection to
proceeding in such courts based on any alleged lack of jurisdiction or any
alleged inconvenience, unfairness or inefficiency of such courts.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -8-




       IN WITNESS WHEREOF, the undersigned has caused this Warrant to be
executed by its duly authorized officer as of the date written below.


Date: December 20, 2001                  INVERNESS MEDICAL INNOVATIONS, INC.


                                         By: /s/ KEN LEGG
                                            -----------------------------------
                                            Name:
                                            Title:

[Corporate Seal]

ATTEST:

/s/ JOSEPH MCNAMARA
- ------------------------------





                                    EXHIBIT I

                                  PURCHASE FORM

To: INVERNESS MEDICAL INNOVATIONS, INC.


    --------------------------
                                              Dated:
    --------------------------                      ---------------------------

       The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. W-____), hereby irrevocably elects to purchase _____ shares of the
Common Stock (the "Common Stock") covered by such Warrant and [CASH OR CHECK
PAYMENT: herewith tenders payment of $_____] [NET ISSUANCE: elects pursuant to
Section 1(b) of the Warrant to effect a Net Issuance], representing the full
purchase price for such shares at the price per share provided for in such
Warrant.

       The undersigned is aware that the Common Stock has not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws. The undersigned understands that the reliance by the
Company on exemptions under the Securities Act is predicated in part upon the
truth and accuracy of the statements of the undersigned in this Purchase Form.

       The undersigned represents and warrants that (1) it has been furnished
with all information which it deems necessary to evaluate the merits and risks
of the purchase of the Common Stock; (2) it has had the opportunity to ask
questions concerning the Common Stock and the Company and all questions posed
have been answered to its satisfaction; (3) it has been given the opportunity to
obtain any additional information it deems necessary to verify the accuracy of
any information obtained concerning the Common Stock and the Company; and (4) it
has such knowledge and experience in financial and business matters that it is
able to evaluate the merits and risks of purchasing the Common Stock and to make
an informed investment decision relating thereto.

       The undersigned is an "accredited investor," as such term is defined in
Rule 501 promulgated by the Securities and Exchange Commission (the "SEC") under
the Securities Act.

       The undersigned hereby represents and warrant that it is purchasing the
Common Stock for its own account for investment and not for, with a view to, or
in connection with, the distribution or resale of all or any part of the Common
Stock.

       The undersigned understands that because the Common Stock have not been
registered under the Securities Act, it must continue to bear the economic risk
of the investment for an indefinite time and the Common Stock cannot be sold
unless the Common Stock is subsequently registered under applicable federal and
state securities laws or an exemption from such registration is available.




       The undersigned agrees that it will in no event sell or distribute or
otherwise dispose of all or any part of the Common Stock unless (1) there is an
effective registration statement under the Securities Act and registration or
qualification under applicable state securities laws covering any such
transaction involving the Common Stock or (2) the Company receives an opinion of
its legal counsel (concurred in by legal counsel for the Company) stating that
such transaction is exempt from registration and qualification or the Company
otherwise satisfies itself that such transaction is exempt from registration and
qualification.

       The undersigned consents to the placing of a legend on its certificate
for the Common Stock stating that the Common Stock has not been registered and
setting forth the restriction on transfer contemplated hereby and to the placing
of a stop transfer order on the books of the Company and with any transfer
agents against the Common Stock until the Common Stock may be legally resold or
distributed without restriction.

       The undersigned understands that, at the present time, the undersigned
may not be entitled to rely on Rule 144 promulgated by the SEC under the
Securities Act for the resale or distribution of the Securities. The undersigned
understands that, except as provided in the Note and Warrant Purchase Agreement
dated as of December __, 2001 among the Company and the investors named therein
or as may otherwise have been separately and expressly agreed by the Company and
the Registered Holder, the Company has no obligation to the undersigned to
register the Common Stock under the Securities Act and has not represented that
it will register the Common Stock.

       The undersigned understands the terms and restrictions on the right to
dispose of the Common Stock set forth in the Note and Warrant Purchase
Agreement, which the undersigned has carefully reviewed. The undersigned
consents to the placing of a legend on its certificate for the Common Stock
referring to such restrictions and the placing of stop transfer orders until the
Common Stock may be transferred in accordance with the terms of such
restrictions.

       The undersigned has considered the federal and state income tax
implications of the exercise of the Warrant and the purchase and subsequent sale
of the Common Stock.


                                         --------------------------------------

                                         Dated:
                                               --------------------------------

                                      -2-

EX-10

                                                                      Exhibit 10

                             STOCK OPTION AGREEMENT


                                    UNDER THE


                       INVERNESS MEDICAL INNOVATIONS, INC.
                      2001 STOCK OPTION AND INCENTIVE PLAN


  Name of Optionee:                 Ron Zwanziger
  Number of Option Shares:          115,000
  Option Exercise Price Per Share:  $17.15
  Grant Date:                       December 20, 2001
  Expiration Date:                  December 19, 2011


       Pursuant to the Inverness Medical Innovations, Inc. 2001 Stock Option and
Incentive Plan (the "Plan") as amended through the date hereof, Inverness
Medical Innovations, Inc. (the "Company") hereby grants to the Optionee named
above an option (the "Stock Option") to purchase, on or prior to the Expiration
Date specified above, all or part of the Number of Option Shares of Common
Stock, par value $0.001 per share (the "Stock") of the Company specified above
at the Option Exercise Price Per Share specified above subject to the terms and
conditions set forth herein and in the Plan.

       1. EXERCISABILITY SCHEDULE. This Stock Option shall be exercisable at any
time or times prior to the close of business on the Expiration Date, subject to
the provisions hereof and of the Plan.

       2. MANNER OF EXERCISE.

            (a) The Optionee may exercise this Option only in the following
manner: from time to time on or prior to the Expiration Date of this Option, the
Optionee may give written notice to the Administrator of his or her election to
purchase some or all of the Option Shares purchasable at the time of such
notice. This notice shall specify the number of Option Shares to be purchased.

       Payment of the purchase price for the Option Shares may be made by one or
more of the following methods: (i) in cash, by certified or bank check or other
instrument acceptable to the Administrator; (ii) through the delivery (or
attestation to the ownership) of shares of Stock that have been purchased by the
Optionee on the open market or that have been "paid for" and beneficially owned
by the Optionee for at least six months and are not then subject to any
restrictions under any Company plan; (iii) by the Optionee delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the option purchase price, provided
that in the event the Optionee chooses to pay the option purchase price as so
provided, the Optionee and the broker shall comply with such procedures and
enter into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a




condition of such payment procedure; or (iv) a combination of (i), (ii), and
(iii) above. Payment instruments will be received subject to collection.

       The delivery of certificates representing the Option Shares will be
contingent upon the Company's receipt from the Optionee of full payment for the
Option Shares, as set forth above and any agreement, statement or other evidence
that the Company may require to satisfy itself that the issuance of Stock to be
purchased pursuant to the exercise of Options under the Plan and any subsequent
resale of the shares of Stock will be in compliance with applicable laws and
regulations. In the event the Optionee chooses to pay the purchase price by
previously-owned shares of Stock through the attestation method, the number of
shares of Stock transferred to the Optionee upon the exercise of the Option
shall be net of the Shares attested to.

            (b) Certificates for shares of Stock purchased upon exercise of this
Stock Option shall be issued and delivered to the Optionee upon compliance to
the satisfaction of the Administrator with all requirements under applicable
laws or regulations in connection with such issuance and with the requirements
hereof and of the Plan. The determination of the Administrator as to such
compliance shall be final and binding on the Optionee. The Optionee shall not be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to this Stock Option unless and until
this Stock Option shall have been exercised pursuant to the terms hereof, the
Company shall have issued and delivered the shares to the Optionee, and the
Optionee's name shall have been entered as the stockholder of record on the
books of the Company. Thereupon, the Optionee shall have full voting, dividend
and other ownership rights with respect to such shares of Stock.

            (c) The minimum number of shares with respect to which this Stock
Option may be exercised at any one time shall be 50 shares, unless the number of
shares with respect to which this Stock Option is being exercised is the total
number of shares subject to exercise under this Stock Option at the time.

            (d) Notwithstanding any other provision of this Agreement or of the
Plan, no portion of this Stock Option shall be exercisable after the Expiration
Date.

       3. INCORPORATION OF PLAN. Notwithstanding anything herein to the
contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.

       4. TRANSFERABILITY. This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution. This
Stock Option is exercisable, during the Optionee's lifetime, only by the
Optionee, and thereafter, only by the Optionee's legal representative or
legatee. Notwithstanding the foregoing, the Optionee may transfer this Stock
Option to members of his immediate family, to trusts for the benefit of such
family members, or to partnerships in which such family members are the only
partners, provided that the transferee agrees in writing with the Company to be
bound by all the terms and conditions of the Plan and this Agreement.

                                       2




       5. MISCELLANEOUS.

            (a) Notice hereunder shall be given to the Company at its principal
place of business, and shall be given to the Optionee at the address set forth
below, or in either case at such other address as one party may subsequently
furnish to the other party in writing.

            (b) This Stock Option does not confer upon the Optionee any rights
with respect to continuance of employment by the Company or any Subsidiary.

            (c) This Stock Option is not intended to be an incentive stock
option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended.


                                        For: INVERNESS MEDICAL INNOVATIONS, INC.



                                        By: /s/ DUANE L. JAMES
                                           ------------------------------------
                                           Title: Treasurer


The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.


Dated:  1/30/02                          /s/ RON ZWANZIGER
                                         --------------------------------------
                                         Optionee's Signature


                                         Optionee's name and address:

                                         Ron Zwanziger
                                         322 Waverly Avenue
                                         Newton, MA  02458

                                       3

EX-11

                                                                      Exhibit 11

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE TRANSFERRED UNLESS (A)
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS
FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE COMPANY MAY
REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED
FOR SUCH TRANSFER.


                                                                For the Purchase
                                                            of 385,000 shares of
                                                                    Common Stock

                           WARRANT FOR THE PURCHASE OF
                             SHARES OF COMMON STOCK
                                       OF
                       INVERNESS MEDICAL INNOVATIONS, INC.


        VOID AFTER 5:00 P.M., EASTERN STANDARD TIME, ON DECEMBER 19, 2006

       Inverness Medical Innovations, Inc., a Delaware corporation (the
"Company"), hereby certifies that Zwanziger Family Ventures, LLC, or its
registered assigns (the "Registered Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company, at any time or from time to time
on or before the earlier of (a) December 19, 2006 at not later than 5:00 p.m.
(Eastern Standard Time) and (b) the termination of this Warrant as provided in
Section 9 below, 385,000 shares of Common Stock, $.001 par value, of the Company
("Common Stock"), at a purchase price of $17.15 per share. The number of shares
purchasable upon exercise of this Warrant, and the purchase price per share,
each as adjusted from time to time pursuant to the provisions of this Warrant,
are hereinafter referred to as the "Warrant Stock" and the "Purchase Price,"
respectively.

       1. EXERCISE.

            (a) This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase form appended hereto
as EXHIBIT I duly executed by such Registered Holder, at the principal office of
the Company, or at such other office or agency as the Company may designate,
accompanied by payment in full, as provided in subsection 1(b) below, of the
aggregate Purchase Price payable in respect of the number of shares of Warrant
Stock purchased upon such exercise.




            (b) The aggregate Purchase Price may be paid, at the Registered
Holder's election, at any time during the term of this Warrant, (i) by cash
(including by wire transfer of immediately available funds to an account
designated by the Company) or certified or bank check in lawful money of the
United States or (ii) by exercise of the "net issuance" right described below in
this subsection 1(b) ("NET ISSUANCE"). If the Registered Holder elects the Net
Issuance method, the Company will issue Common Stock to the Registered Holder
upon exercise of this Warrant in accordance with the following formula:


                 X = Y(A-B)
                     ------
                        A

       Where: X = the number of shares of Common Stock that shall be issued to
                  the Registered Holder.

              Y = the number of shares of Common Stock requested to be
                  exercised under this Warrant.

              A = the current fair market value of one (1) share of Common
                  Stock at the time of issuance of such shares of Common Stock.

              B = the Purchase Price.

       For purposes of the above calculation, current fair market value of each
share of Common Stock shall be determined as follows:

                 (i) if the Common Stock is traded on a national securities
exchange, the fair market value shall be deemed to be the average of the closing
prices of the Common Stock over the ten (10) trading day period ending
immediately prior to the day as of which the current fair market value of the
Common Stock is being determined; or

                 (ii) if the Common Stock is traded over-the-counter, the fair
market value shall be deemed to be the product of the average of the closing bid
and asked prices of the Common Stock quoted on the NASDAQ System (or similar
system) over the ten (10) trading day period ending immediately prior to the day
as of which the current fair market value of the securities is being determined;
or

                 (iii) if at any time the Common Stock is not listed on any
national securities exchange or quoted in the NASDAQ System (or similar system)
or the over-the-counter market, the current fair market value of the Common
Stock shall be as determined in good faith by the Company's Board of Directors.

            (c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above. At such time, the person or persons in whose name or names any
certificates for Warrant Stock shall be issuable upon such exercise as provided
in subsection 1(d) below shall be deemed to have become the holder or holders of
record of the Warrant Stock represented by such certificates.

                                       2




            (d) As soon as practicable after the exercise of this Warrant in
full or in part and whether by payment by cash or check or by Net Issuance, and
in any event within fifteen (15) days thereafter, the Company, at its expense,
will cause to be issued in the name of, and delivered to, the Registered Holder,
or, subject to the terms and conditions hereof, as such Registered Holder (upon
payment by such Registered Holder of any applicable transfer taxes) may direct:

                 (i) a certificate or certificates for the number of full shares
of Warrant Stock to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof, and

                 (ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, representing the right to
purchase in the aggregate the number of shares of Warrant Stock equal (without
giving effect to any adjustment therein) to the number of such shares called for
on the face of this Warrant minus the number of such shares purchased or
exercised by the Registered Holder upon such exercise as provided in subsections
1(a) and 1(b) above.

            (e) To the extent this Warrant is not previously exercised as to all
of the Warrant Stock subject hereto, and if the fair market value of one share
of Common Stock is greater than the Purchase Price then in effect, this Warrant
shall be deemed automatically exercised pursuant to the Net Issuance method as
provided in subsection 1(b) above (even if not surrendered) immediately before
its expiration. For purposes of such automatic exercise, the fair market value
of one (1) share of the Common Stock upon such expiration shall be determined
pursuant to the Net Issuance provisions of subsection 1(b). To the extent this
Warrant or any portion thereof is deemed automatically exercised pursuant to
this subsection 1(e), the Company agrees to promptly notify the Registered
Holder hereof of the number of shares of Warrant Stock, if any, that the
Registered Holder hereof is to receive by reason of such automatic exercise.

       2. ADJUSTMENTS.

            (a) If outstanding shares of the Common Stock shall be subdivided
into a greater number of shares or a dividend in Common Stock shall be paid in
respect of Common Stock, the Purchase Price in effect immediately prior to such
subdivision or at the record date of such dividend shall simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend be proportionately reduced. If outstanding shares of Common Stock shall
be combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased. When any
adjustment is required to be made in the Purchase Price, the number of shares of
Warrant Stock purchasable upon the exercise of this Warrant shall be changed to
the number determined by dividing (i) an amount equal to the number of shares
issuable upon the exercise of this Warrant immediately prior to such adjustment,
multiplied by the Purchase Price in effect immediately prior to such adjustment,
by (ii) the Purchase Price in effect immediately after such adjustment.

                                       3




            (b) If there shall occur any capital reorganization or
reclassification of the Common Stock (other than a change in par value or a
subdivision or combination as provided for in subsection 2(a) above), then, as
part of any such reorganization or reclassification, lawful provision shall be
made so that the Registered Holder of this Warrant shall have the right
thereafter to receive upon the exercise hereof the kind and amount of shares of
stock or other securities or property which such Registered Holder would have
been entitled to receive if, immediately prior to any such reorganization or
reclassification, such Registered Holder had held the number of shares of Common
Stock which were then purchasable upon the exercise of this Warrant. In any such
case, appropriate adjustment (as reasonably determined by the Board of Directors
of the Company) shall be made in the application of the provisions set forth
herein with respect to the rights and interests thereafter of the Registered
Holder of this Warrant such that the provisions set forth in this Section 2
(including provisions with respect to adjustment of the Purchase Price) shall
thereafter be applicable, in as nearly equivalent a manner as may be
practicable, in relation to any shares of stock or other securities or property
thereafter deliverable upon the exercise of this Warrant.

            (c) Subject to the provisions of Section 8, if there shall be a
merger or consolidation of the Company with or into another corporation (other
than a merger or reorganization involving only a change in the state of
incorporation of the Company or the acquisition by the Company of other
businesses where the Company survives as a going concern), or the sale of all or
substantially all of the Company's capital stock or assets to any other person,
then as a part of such transaction, provision shall be made so that the
Registered Holder shall thereafter be entitled to receive the number of shares
of stock or other securities or property of the Company, or of the successor
corporation resulting from the merger, consolidation or sale, to which the
Registered Holder would have been entitled if the Registered Holder had
exercised its rights pursuant to the Warrant immediately prior thereto. In any
such case, appropriate adjustment shall be made in the application of the
provisions of this Section 2 to the end that the provisions of this Section 2
shall be applicable after that event in as nearly equivalent a manner as may be
practicable.

            (d) When any adjustment is required to be made in the Purchase
Price, the Company shall promptly mail to the Registered Holder a certificate
setting forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such certificate shall also
set forth the kind and amount of stock or other securities or property into
which this Warrant shall be exercisable following the occurrence of any of the
events specified in this Section 2.

       3. FRACTIONAL SHARES. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the closing market price of the Common Stock on
the American Stock Exchange or, if applicable, any other national securities
exchange on the trading day immediately prior to the date of exercise or on the
basis of the mean between the low bid and high asked prices of the Common Stock
on the over-the-counter market as reported by the NASDAQ System (or similar
system), whichever is applicable, or if neither is applicable, then on the basis
of the then current

                                       4




market value of the Common Stock as shall be reasonably determined by the
Company's Board of Directors.

       4. LIMITATION ON SALES, ETC. Each holder of this Warrant acknowledges
that this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as now in force or hereafter amended, or any successor
legislation (the "Securities Act"), and agrees not to sell, pledge, distribute,
offer for sale, transfer or otherwise dispose of this Warrant or any Warrant
Stock issued upon its exercise unless (a) there is an effective registration
statement under the Securities Act as to this Warrant or such Warrant Stock and
this Warrant or such Warrant Stock has been registered or qualified under any
applicable state securities or "blue sky" laws then in effect, or (b) the
Company receives an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required.

       Without limiting the generality of the foregoing, unless the offering and
sale of the Warrant Stock to be issued upon the particular exercise of the
Warrant shall have been effectively registered under the Securities Act, the
Company shall be under no obligation to issue the shares covered by such
exercise unless and until the Registered Holder shall have executed an
investment letter in form and substance satisfactory to the Company, including a
warranty at the time of such exercise that it is acquiring such shares for its
own account, for investment and not for, with a view to, or in connection with,
the distribution or resale of any such shares, and the holder of this Warrant
shall be bound by the provisions of the following legend or a legend in
substantially similar form which shall be endorsed upon the certificate(s)
evidencing the Warrant Stock issued pursuant to such exercise:

            "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
            OF 1933, AS AMENDED ("SECURITIES ACT"), OR REGISTERED OR QUALIFIED
            UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT
            BE TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION
            STATEMENT UNDER THE SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER
            APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS FROM SUCH
            REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
            CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE
            COMPANY MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL
            ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION OR
            QUALIFICATION IS LEGALLY REQUIRED FOR SUCH TRANSFER."

       In addition, without limiting the generality of the foregoing, the
Company may delay issuance of the Warrant Stock until completion of any action
or obtaining of any consent, which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws).

       5. REGISTRATION.

                                       5



            (a) INCIDENTAL REGISTRATION; REGISTRATION PROCEDURES AND EXPENSES,
ETC.

                 (i) (A) Whenever the Company proposes to file a Registration
Statement (as defined below) at any time and from time to time, it shall, prior
to such filing, give written notice to the Registered Holder of its intention to
do so and, upon the written request of the Registered Holder, given within ten
(10) business days after the Company provides such notice (which request shall
state the intended method of disposition of the Registrable Shares (as defined
below) requested to be registered), the Company shall use its reasonable best
efforts to cause all Registrable Shares which the Company has been requested by
the Registered Holder to register to be so registered under the Securities Act
to the extent necessary to permit their sale or other disposition in accordance
with the intended methods of distribution specified in the request of the
Registered Holder; PROVIDED, HOWEVER, that the Company shall have the right to
postpone or withdraw any registration effected pursuant to this subsection 5(a)
without obligation to the Registered Holder. As used in this Warrant, the term
"Registration Statement" shall mean a registration statement filed by the
Company with the Securities and Exchange Commission (the "Commission") for a
public offering and sale of Common Stock by the Company (other than a
registration statement on Form S-8 or Form S-4, or their successors, or any
other form for a similar limited purpose, or any registration statement covering
only securities proposed to be issued in exchange for securities or assets of
another company). As used in this Warrant, the term "Registrable Shares" shall
mean (i) any Common Stock issued or issuable upon exercise of this Warrant and
(ii) any shares of Common Stock issued in respect of such shares (because of
stock splits, stock dividends, reclassifications, recapitalizations, or similar
events).

                     (B) In connection with any registration under this
subsection 5(a) involving an underwriting, the Company shall not be required to
include any Registrable Shares in such registration unless the Registered Holder
accepts the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it. If in the opinion of the managing underwriter it is
desirable because of marketing factors to limit the number of Registrable Shares
to be included in the offering, then the Company shall be required to include in
the registration only that number of Registrable Shares, if any, that the
managing underwriter believes should be included therein.

                 (ii) If and whenever the Company is required by the provisions
of this subsection 5(a) to use its reasonable best efforts to effect the
registration of any Registrable Shares under the Securities Act, the Company
shall:

                     (A) so long as such Registration Statement is effective
covering any Registrable Shares owned by the Registered Holder, furnish to the
Registered Holder such number of copies of prospectuses and such other documents
as the Registered Holder may reasonably request in order to facilitate the
public sale or other disposition of all or any of such Registrable Shares by the
Registered Holder;

                     (B) file documents required of the Company for blue sky
clearance in states specified in writing by the Registered Holder; PROVIDED,
HOWEVER, that the

                                       6




Company shall not be required to qualify to do business or consent to service of
process in any jurisdiction in which it is not so qualified or has not so
consented; and

                     (C) bear all expenses in connection with the procedures in
paragraphs (A) and (B) of this subsection 5(a)(ii) and the registration of the
Registrable Shares pursuant to such Registration Statement, and the reasonable
legal fees and expenses, if any, of one (1) counsel to the Registered Holder and
all other selling stockholders, if any, under such Registration Statement, and
except for any underwriting discounts, brokerage fees and commissions incurred
by the Registered Holder and/or such other selling stockholders, if any.

            (b) ADDITIONAL OBLIGATIONS.

                 (i) With a view to making available to the Registered Holder
the benefits of Rule 144 promulgated by the Commission under the Securities Act
(or its successor rule) ("Rule 144") and any other rule or regulation of the
Commission that may at any time permit the Registered Holder to sell the
Registrable Shares to the public without registration, the Company covenants and
agrees to: (A) make and keep public information available, as those terms are
understood and defined in Rule 144, until the earlier of (x) such date as all of
the Registered Holder's Registrable Shares may be resold within a given
three-month period pursuant to Rule 144 or any other rule of similar effect or
(y) such date as all of the Registered Holder's Registrable Shares shall have
been resold and (B) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").

                 (ii) If the Registered Holder owns Registrable Shares included
in any Registration Statement and the Company has delivered preliminary or final
prospectuses to the Registered Holder in connection therewith, and after such
delivery the prospectus is amended to comply with the requirements of the
Securities Act, the Company shall promptly notify the Registered Holder and, if
requested, the Registered Holder shall immediately cease making offers of
Registrable Shares and return all prospectuses to the Company. The Company shall
promptly provide the Registered Holder with revised prospectuses and, following
receipt of the revised prospectuses, the Registered Holder shall be free to
resume making offers of the Registrable Shares.

                 (iii) In the event that, in the judgment of the Company, it is
advisable to suspend use of a prospectus included in a Registration Statement
due to pending material developments or other events that have not yet been
publicly disclosed and as to which the Company believes public disclosure would
be detrimental to the Company, the Company shall notify the Registered Holder to
such effect, and, upon receipt of such notice, the Registered Holder shall
immediately discontinue any sales of Registrable Shares pursuant to such
Registration Statement until the Registered Holder has received copies of a
supplemented or amended prospectus or until the Registered Holder is advised in
writing by the Company that the then current prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such prospectus. Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights under

                                       7




this clause (iii) to suspend sales of Registrable Shares for a period in excess
of 90 days in any 365-day period.

                 (iv) If the Registered Holder includes any Registrable Shares
in any Registration Statement, the Registered Holder shall furnish to the
Company such information regarding the Registered Holder as the Company may
reasonably request and as shall be required in connection with any registration,
qualification or compliance referred to in this Warrant.

                 (v) The Registered Holder covenants with the Company not to
make any sale of the Registrable Shares without satisfying the prospectus
delivery requirements under the Securities Act, if any.

                 (vi) The Registered Holder covenants to provide to the Company
an updated, accurate and complete plan of distribution at all times during which
the Company is required to keep in effect any Registration Statement covering
any Registrable Shares held by the Registered Holder.

            (c) INDEMNIFICATION. For the purpose of this subsection 5(c):

                     (1) the term "Registered Holder" shall include the
            Registered Holder and any affiliate of the Registered Holder; and

                     (2) the term "Registration Statement" shall include any
            final prospectus, exhibit, supplement or amendment included in or
            relating to any Registration Statement referred to in subsection
            5(a) above.

                 (i) In the event of any registration of any Registrable Shares
under the Securities Act pursuant to this Warrant, the Company agrees to
indemnify and hold harmless the Registered Holder and each person, if any, who
controls the Registered Holder within the meaning of the Securities Act against
any losses, claims, damages, liabilities or expenses, joint or several, to which
the Registered Holder or any such controlling person may become subject, under
the Securities Act, the Exchange Act, or any other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement covering any Registrable Shares, including the
prospectus, financial statements and schedules, and all other documents filed as
a part thereof, as amended at the time of effectiveness of such Registration
Statement, including any information deemed to be a part thereof as of the time
of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rule
434, under the Securities Act, or the prospectus, in the form first filed with
the Commission pursuant to Rule 424(b) under the Securities Act, or filed as
part of such Registration Statement at the time of effectiveness if no Rule
424(b) filing is required (a "Prospectus"), or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state a material fact required to be stated in such Registration Statement,
Prospectus or any amendment or supplement thereto or necessary to make the

                                       8




statements therein, in light of the circumstances in which they were made, not
misleading, and will reimburse the Registered Holder and each such controlling
person for any legal and other expenses reasonably incurred, as such expenses
are reasonably incurred, by the Registered Holder or such controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; PROVIDED, HOWEVER, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based upon (A) an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Registration Statement, Prospectus or any amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Registered Holder expressly for use therein,
or (B) the failure of the Registered Holder to comply with subsection 5(b)(v)
hereof respecting any sale of the Registrable Shares, or (C) the inaccuracy of
any representations made by the Registered Holder in this Warrant or in any
investment representation letter executed by the Registered Holder in connection
with the issuance or exercise of this Warrant or (D) any statement or omission
in any Prospectus that is corrected in any subsequent Prospectus that was
delivered to Registered Holder prior to the pertinent sale or sales by the
Registered Holder.

                 (ii) In the event of any registration of any Registrable Shares
under the Securities Act pursuant to this Warrant, the Registered Holder thereto
will indemnify and hold harmless the Company, each of its directors, each of its
officers who sign any Registration Statement covering any Registrable Shares and
each person, if any, who controls the Company within the meaning of the
Securities Act, against any losses, claims, damages, liabilities or expenses to
which the Company, each of its directors, each of its officers who signed such
Registration Statement or controlling person may become subject, under the
Securities Act, the Exchange Act, or any other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Registered Holder) insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon (A) any failure by the Registered Holder to comply with
subsection 5(b)(v) hereof respecting any sale of the Registrable Shares, or (B)
the inaccuracy of any representation made by the Registered Holder in this
Warrant or in any investment representation letter executed by the Registered
Holder in connection with the issuance or exercise of this Warrant or (C) any
untrue or alleged untrue statement of any material fact contained in any
Registration Statement, Prospectus or any amendment or supplement thereto, or
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such Registration
Statement, Prospectus or any amendment or supplement thereto, in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Registered Holder expressly for use therein, and will reimburse
the Company, each of its directors, each of its officers who signed Registration
Statement and each such controlling person for any legal and other expense
reasonably incurred, as such expenses are reasonably incurred, by the Company,
each of its directors, each of its officers who signed such Registration

                                       9




Statement or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action.

                 (iii) Promptly after receipt by an indemnified party under this
subsection 5(c) of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this subsection 5(c), promptly notify the indemnifying
party in writing thereof, but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party for contribution or otherwise to the extent it is not actually prejudiced
as a result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all other
indemnifying parties similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions or defenses of the
indemnifying party and the indemnified party in conducting the defense of any
such action, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise participate in
the defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this subsection 5(c) for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
unless: (A) the indemnified party shall have employed such counsel in connection
with the assumption of legal defenses in accordance with the proviso to the
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel,
reasonably satisfactory to the indemnifying party, representing the indemnified
parties who are parties to such action and all other purchasers of Registrable
Shares, if any, who may be parties to such action; PROVIDED, HOWEVER, that if
any indemnified party shall have reasonably concluded that there may be a
conflict between the positions or defenses of such indemnified party and the
positions or defenses of other indemnified parties or other purchasers in
conducting the defense of any such action, the indemnified party shall have the
right to select a separate counsel to assume such legal defenses) or (B) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of action, in each of which cases the
reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party. The indemnity agreements contained in subsections 5(c)(i)
and (ii) shall not apply to amounts paid in settlement of any action if such
settlement is effected without the prior written consent of the indemnifying
party (which consent shall not be unreasonably withheld or delayed), or to
amounts paid in settlement of any action if the indemnifying party is not fully
released under such settlement from any claim or liability under such action.

                 (iv) If the indemnification provided for in this subsection
5(c) is required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to

                                       10




hold harmless an indemnified party under paragraphs (i), (ii) or (iii) of this
subsection 5(c) in respect to any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (A)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Registered Holder from the issuance of this Warrant or
(B) if the allocation provided by clause (A) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (A) above but the relative fault of the
Company and the Registered Holder in connection with the statements or omissions
or inaccuracies in the representations and warranties in this Warrant which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The respective relative benefits
received by the Company on the one hand and the Registered Holder on the other
shall be deemed to be in the same proportion as the amount paid by the
Registered Holder to the Company pursuant to this Warrant for the Registrable
Shares that were sold pursuant to any Registration Statement bears to the
difference (the "Difference") between the amount the Registered Holder paid for
such Registrable Shares and the amount received by the Registered Holder from
the sale of such Registrable Shares. The relative fault of the Company and the
Registered Holder shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company or by the Registered Holder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in paragraph (iii) of
this subsection 5(c), any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or claim.
The provisions set forth in paragraph (iii) of this subsection 5(c) with respect
to the notice of the threat or commencement of any threat or action shall apply
if a claim for contribution is to be made under this paragraph (iv); PROVIDED,
HOWEVER, that no additional notice shall be required with respect to any threat
or action for which notice has been given under paragraph (iii) for purposes of
indemnification. The Company and the Registered Holder agree that it would not
be just and equitable if contribution pursuant to this subsection 5(c) were
determined solely by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in this
paragraph. Notwithstanding the provisions of this subsection 5(c), the
Registered Holder shall not be required to contribute any amount in excess of
the amount by which the Difference exceeds the amount of any damages that the
Registered Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

                                       11




       6. NOTICES OF RECORD DATE, ETC. In case:

            (a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the exercise of
this Warrant) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right; or

            (b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company; or

            (c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;

then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities at the
time deliverable upon the exercise of this Warrant) shall be entitled to
exchange their shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least ten (10) days prior to the
record date or effective date for the event specified in such notice.

       7. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such shares of Common Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.

       8. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.

       9. TERMINATION IN CERTAIN EVENTS. In the event of a transfer of all or
substantially all of the assets of the Company or a merger or consolidation of
the Company with or into any other entity (other than a merger the sole purpose
of which is to change the state of incorporation of the Company) or a
dissolution or winding-up or the adoption of a plan of liquidation of the
Company, this Warrant shall terminate on the effective date of such transfer,
merger,

                                       12




consolidation, dissolution, winding-up or adoption (the "Transaction Effective
Date") and shall become null and void, PROVIDED that the Registered Holder shall
have received the prior notice with respect to such transaction or event
required by Section 6 hereof, and PROVIDED FURTHER, HOWEVER, that if this
Warrant shall not have otherwise terminated or expired, the Registered Holder
hereof shall have the right until 5:00 p.m. (Eastern Standard Time) on the day
immediately prior to the Transaction Effective Date to exercise its rights
hereunder to the extent not previously exercised.

       10. WARRANT REGISTER; TRANSFERS, ETC.

            (a) The Company will maintain a register containing the names and
addresses of the Registered Holders of this Warrant. Any Registered Holder may
change its, his or her address as shown on the warrant register by written
notice to the Company requesting such change.

            (b) This Warrant shall not be transferable by the Registered Holder
without the prior written consent of the Company and shall be exercisable only
by the Registered Holder. Without the prior written consent of the Company, the
Warrant shall not be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process. Any attempted transfer, assignment, pledge, hypothecation or
other disposition of the Warrant or of any rights granted hereunder contrary to
the provisions of this Paragraph, or the levy of any attachment or similar
process upon the Warrant or such rights, shall be null and void.

            (c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; PROVIDED, HOWEVER, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.

       11. MAILING OF NOTICES, ETC. Any notice required or permitted to be given
to the Company or the Registered Holder under this Warrant shall be made in
writing at the address or facsimile number of such person specified below (or
such other address or facsimile number as such person may specify in a written
notice to the other party) and shall be deemed to have been given, if delivered
personally or sent via electronic facsimile transmission with confirmation
received, on the date of delivery or, if sent via nationally recognized
overnight express courier with established tracking capability marked for
delivery on the next business day, on the earlier of the date of delivery, as
demonstrated by the tracking records of the courier, or two (2) business days
after deposit of the notice with the courier:

            if to the Company, to:

                 Inverness Medical Innovations, Inc.
                 51 Sawyer Road, Suite 200
                 Waltham, Massachusetts 02453
                 Facsimile:  (781) 674-3939
                 Attention:  Ron Zwanziger, President

                                       13




            with a copy to:

                 Foley, Hoag & Eliot, LLP
                 One Post Office Square
                 Boston, Massachusetts 02109
                 Facsimile: (617) 832-7000
                 Attention:  John D. Patterson, Jr., Esq.

if to the Registered Holder of this Warrant, to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who shall have
furnished an address to the Company in writing.

       12. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.

       13. CHANGE OR WAIVER. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.

       14. HEADINGS. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.

       15. GOVERNING LAW. This Warrant shall be governed by, and construed and
enforced in accordance with, the substantive laws of the Commonwealth of
Massachusetts without regard to its principles of conflicts of laws. Any dispute
arising out of or relating to this Warrant shall be filed and prosecuted in any
court of competent subject matter jurisdiction located in Massachusetts. The
Company and the Registered Holder hereby consent to the personal jurisdiction of
such courts over them, stipulate to the convenience, fairness and efficiency of
proceeding in such courts, and covenant not to assert any objection to
proceeding in such courts based on any alleged lack of jurisdiction or any
alleged inconvenience, unfairness or inefficiency of such courts.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       14




       IN WITNESS WHEREOF, the undersigned has caused this Warrant to be
executed by its duly authorized officer as of the date written below.


Date: As of December 20, 2001            INVERNESS MEDICAL INNOVATIONS, INC.


                                         By: /s/ DUANE L. JAMES
                                            -----------------------------------
                                            Name:
[Corporate Seal]                            Title: Treasurer


ATTEST:

/s/ J MCNAMARA
- ----------------------------------



ACCEPTED AND AGREED:

ZWANZIGER FAMILY VENTURES, LLC


By: /s/ RON ZWANZIGER
- ----------------------------------
    Name: Ron Zwanziger
    Title: Manager




                                    EXHIBIT I

                                  PURCHASE FORM

To: INVERNESS MEDICAL INNOVATIONS, INC.


    --------------------------
                                            Dated:
    --------------------------                    ----------------------------

       The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby irrevocably elects to purchase _____ shares of the Common Stock
(the "Common Stock") covered by such Warrant and [CASH OR CHECK PAYMENT:
herewith tenders payment of $_____] [NET ISSUANCE: elects pursuant to Section
1(b) of the Warrant to effect a Net Issuance], representing the full purchase
price for such shares at the price per share provided for in such Warrant.

       [THE PROVISIONS SET FORTH BELOW WILL BE REVISED APPROPRIATELY BY THE
COMPANY IN THE EVENT THAT THE SHARES OF COMMON STOCK PURCHASED BY THE
UNDERSIGNED HAVE BEEN REGISTERED UNDER THE SECURITIES ACT.]

       The undersigned is aware that the Common Stock has not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws. The undersigned understands that the reliance by the
Company on exemptions under the Securities Act is predicated in part upon the
truth and accuracy of the statements of the undersigned in this Purchase Form.

       The undersigned represents and warrants that (1) it has been furnished
with all information which it deems necessary to evaluate the merits and risks
of the purchase of the Common Stock; (2) it has had the opportunity to ask
questions concerning the Common Stock and the Company and all questions posed
have been answered to its satisfaction; (3) it has been given the opportunity to
obtain any additional information it deems necessary to verify the accuracy of
any information obtained concerning the Common Stock and the Company; and (4) it
has such knowledge and experience in financial and business matters that it is
able to evaluate the merits and risks of purchasing the Common Stock and to make
an informed investment decision relating thereto.

       The undersigned is an "accredited investor," as such term is defined in
Rule 501 promulgated by the Securities and Exchange Commission (the "SEC") under
the Securities Act.

       The undersigned hereby represents and warrant that it is purchasing the
Common Stock for its own account for investment and not for, with a view to, or
in connection with, the distribution or resale of all or any part of the Common
Stock.

       The undersigned understands that because the Common Stock have not been
registered under the Securities Act, it must continue to bear the economic risk
of the investment for an indefinite time and the Common Stock cannot be sold
unless the Common Stock is subsequently




registered under applicable federal and state securities laws or an exemption
from such registration is available.

       The undersigned agrees that it will in no event sell or distribute or
otherwise dispose of all or any part of the Common Stock unless (1) there is an
effective registration statement under the Securities Act and registration or
qualification under applicable state securities laws covering any such
transaction involving the Common Stock or (2) the Company receives an opinion of
its legal counsel (concurred in by legal counsel for the Company) stating that
such transaction is exempt from registration and qualification or the Company
otherwise satisfies itself that such transaction is exempt from registration and
qualification.

       The undersigned consents to the placing of a legend on its certificate
for the Common Stock stating that the Common Stock has not been registered and
setting forth the restriction on transfer contemplated hereby and to the placing
of a stop transfer order on the books of the Company and with any transfer
agents against the Common Stock until the Common Stock may be legally resold or
distributed without restriction.

       The undersigned understands that, at the present time, the undersigned
may not be entitled to rely on Rule 144 promulgated by the SEC under the
Securities Act for the resale or distribution of the Securities. The undersigned
understands that, except as set forth in the Warrant or as may otherwise have
been separately and expressly agreed by the Company and the Registered Holder,
the Company has no obligation to the undersigned to register the Common Stock
under the Securities Act and has not represented that it will register the
Common Stock.

       The undersigned has considered the federal and state income tax
implications of the exercise of the Warrant and the purchase and subsequent sale
of the Common Stock.


                                         --------------------------------------

                                         Dated:
                                               --------------------------------


                                       2

EX-12

                                                                      Exhibit 12


                        INCENTIVE STOCK OPTION AGREEMENT

                                    UNDER THE


                       INVERNESS MEDICAL INNOVATIONS, INC.
                      2001 STOCK OPTION AND INCENTIVE PLAN


Name of Optionee:                           Ron Zwanziger
Number of Option Shares:                    5,065
Option Exercise Price Per Share:            $15.55
Grant Date:                                 August 23, 2002
Expiration Date:                            August 22, 2012


     Pursuant to the Inverness Medical Innovations, Inc. 2001 Stock Option
Incentive Plan (the "Plan") as amended through the date hereof, Inverness
Medical Innovations, Inc. (the "Company") hereby grants to the Optionee named
above an option (the "Stock Option") to purchase, on or prior to the Expiration
Date specified above, all or part of the number of Option Shares of Common
Stock, par value $0.001 per share (the "Stock") of the Company specified above
at the Option Exercise Price per Share specified above subject to the terms and
conditions set forth herein and in the Plan.

     1. EXERCISABILITY SCHEDULE. No portion of this Stock Option may be
exercised until such portion shall have become exercisable. Except as set forth
below, and subject to the discretion of the Administrator (as defined in Section
2 of the Plan) to accelerate the exercisability schedule hereunder, this Stock
Option shall become exercisable with respect to the following number of Option
Shares on the dates indicated, so long as the Optionee remains in employment
with the Company on the Exercisability Date:



                               NUMBER OF
                           OPTION SHARES FIRST              TOTAL NUMBER OF
EXERCISABILITY DATE        BECOMING EXERCISABLE        OPTION SHARES EXERCISABLE
- -------------------        --------------------        -------------------------
                                                     
September 30, 2002             5,065 (100%)                 5,065     (100%)



     Once exercisable, this Stock Option shall continue to be exercisable at any
time or times prior to the close of business on the Expiration Date, subject to
the provisions hereof and of the Plan.

     2. MANNER OF EXERCISE.

          (a) The Optionee may exercise this Option only in the following
     manner: from time to time on or prior to the Expiration Date of this
     Option, the Optionee may give written notice to the Administrator of his or
     her election to purchase some or all



     of the Option Shares purchasable at the time of such notice. This notice
     shall specify the number of Option Shares to be purchased.

          Payment of the purchase price for the Option Shares may be made by one
     or more of the following methods: (i) in cash, by certified or bank check
     or other instrument acceptable to the Administrator; (ii) through the
     delivery (or attestation to the ownership) of shares of Stock that have
     been purchased by the Optionee on the open market or that have been "paid
     for" and beneficially owned by the Optionee for at least six months and are
     not then subject to any restrictions under any Company plan; (iii) by the
     Optionee delivering to the Company a properly executed exercise notice
     together with irrevocable instructions to a broker to promptly deliver to
     the Company cash or a check payable and acceptable to the Company to pay
     the option purchase price, provided that in the event the Optionee chooses
     to pay the option purchase price as so provided, the Optionee and the
     broker shall comply with such procedures and enter into such agreements of
     indemnity and other agreements as the Administrator shall prescribe as a
     condition of such payment procedure; or (iv) a combination of (i), (ii),
     and (iii) above. Payment instruments will be received subject to
     collection.

          The delivery of certificates representing the Option Shares will be
     contingent upon the Company's receipt from the Optionee of full payment for
     the Option Shares, as set forth above and any agreement, statement or other
     evidence that the Company may require to satisfy itself that the issuance
     of Stock to be purchased pursuant to the exercise of Options under the Plan
     and any subsequent resale of the shares of Stock will be in compliance with
     applicable laws and regulations. In the event the Optionee chooses to pay
     the purchase price by previously-owned shares of Stock through the
     attestation method, the number of shares of Stock transferred to the
     Optionee upon the exercise of the Option shall be net of the Shares
     attested to.

          (b) Certificates for shares of Stock purchased upon exercise of this
     Stock Option shall be issued and delivered to the Optionee upon compliance
     to the satisfaction of the Administrator with all requirements under
     applicable laws or regulations in connection with such issuance and with
     the requirements hereof and of the Plan. The determination of the
     Administrator as to such compliance shall be final and binding on the
     Optionee. The Optionee shall not be deemed to be the holder of, or to have
     any of the rights of a holder with respect to, any shares of Stock subject
     to this Stock Option unless and until this Stock Option shall have been
     exercised pursuant to the terms hereof, the Company shall have issued and
     delivered the shares to the Optionee, and the Optionee's name shall have
     been entered as the stockholder of record on the books of the Company.
     Thereupon, the Optionee shall have full voting, dividend and other
     ownership rights with respect to such shares of Stock.

          (c) The minimum number of shares with respect to which this Stock
     Option may be exercised at any one time shall be 10 shares, unless the
     number of shares with respect to which this Stock Option is being exercised
     is the total number of shares subject to exercise under this Stock Option
     at the time.






          (d) Notwithstanding any other provision of this Agreement or of the
     Plan, no portion of this Stock Option shall be exercisable after the
     Expiration Date.

     3. TERMINATION OF EMPLOYMENT. If the Optionee's employment by the Company
or a Subsidiary (as defined in the Plan) is terminated, no additional Option
Shares shall become exercisable following the date of termination and the period
within which to exercise the exercisable portion of the Option may be subject to
earlier termination as set forth below.

          (a) TERMINATION DUE TO DEATH. If the Optionee's employment terminates
     by reason of death, any Option held by the Optionee shall become fully
     exercisable and may thereafter be exercised by the Optionee's legal
     representative or legatee for a period of twelve months from the date of
     death or until the Expiration Date, if earlier.

          (b) TERMINATION DUE TO DISABILITY. If the Optionee's employment
     terminates by reason of disability (as determined by the Administrator),
     any Option held by the Optionee shall become fully exercisable and may
     thereafter be exercised by the Optionee for a period of twelve months from
     the date of termination or until the Expiration Date, if earlier. The death
     of the Optionee during the twelve-month period provided in this Section
     3(b) shall extend such period for another twelve months from the date of
     death or until the Expiration Date, if earlier.

          (c) TERMINATION FOR CAUSE. If the Optionee's employment terminates for
     Cause, any Option held by the Optionee shall terminate immediately and be
     of no further force and effect. For purposes hereof, "Cause" shall mean a
     vote by the Board resolving that the Optionee shall be dismissed as a
     result of (i) any material breach by the Optionee of any agreement between
     the Optionee and the Company; (ii) the conviction of or plea of nolo
     contendere by the Optionee to a felony or a crime involving moral
     turpitude; or (iii) any material misconduct or willful and deliberate
     non-performance (other than by reason of disability) by the Optionee of the
     Optionee's duties to the Company.

          (d) OTHER TERMINATION. If the Optionee's employment terminates for any
     reason other than death, disability or Cause, and unless otherwise
     determined by the Administrator, any Option held by the Optionee may be
     exercised, to the extent exercisable on the date of termination, for a
     period of three months from the date of termination or until the Expiration
     Date, if earlier. Any Option that is not exercisable at such time shall
     terminate immediately and be of no further force or effect.

     The Administrator's determination of the reason for termination of the
Optionee's employment shall be conclusive and binding on the Optionee and his or
her representatives or legatees.

     4. INCORPORATION OF PLAN. Notwithstanding anything herein to the contrary,
this Stock Option shall be subject to and governed by all the terms and
conditions of the





Plan. Capitalized terms in this Agreement shall have the meaning specified in
the Plan, unless a different meaning is specified herein.

     5. TRANSFERABILITY. This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution. This
Stock Option is exercisable, during the Optionee's lifetime, only by the
Optionee, and thereafter, only by the Optionee's legal representative or
legatee.

     6. STATUS OF THE STOCK OPTION. This Stock Option is intended to qualify as
an "incentive stock option" under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), but the Company does not represent or warrant
that this Option qualifies as such. The Optionee should consult with his or her
own tax advisors regarding the tax effects of this Option and the requirements
necessary to obtain favorable income tax treatment under Section 422 of the
Code, including, but not limited to, holding period requirements. If the
Optionee intends to dispose or does dispose (whether by sale, gift, transfer or
otherwise) of any Option Shares within the one-year period beginning on the date
after the transfer of such shares to him or her, or within the two-year period
beginning on the day after the grant of this Stock Option, he or she will notify
the Company within 30 days after such disposition.

     7. TAX WITHHOLDING. The Optionee shall, not later than the date as of which
the exercise of this Stock Option becomes a taxable event for Federal income tax
purposes, pay to the Company or make arrangements satisfactory to the
Administrator for payment of any Federal, state, and local taxes required by law
to be withheld on account of such taxable event. Subject to the written
instructions from the Administrator, the Optionee may have the minimum required
tax withholding obligation satisfied, in whole or in part, by (i) authorizing
the Company to withhold from shares of Stock to be issued, or (ii) transferring
to the Company, a number of shares of Stock with an aggregate Fair Market Value
that would satisfy the withholding amount due.

     8. MISCELLANEOUS.

          (a) Notice hereunder shall be given to the Company at its principal
     place of business, and shall be given to the Optionee at the address set
     forth below, or in either case at such other address as one party may
     subsequently furnish to the other party in writing.

          (b) This Stock Option does not confer upon the Optionee any rights
     with respect to continuance of employment by the Company or any Subsidiary.






                                       For: INVERNESS MEDICAL
                                            INNOVATIONS, INC.



                                       By: /S/ DUANE L. JAMES
                                          ------------------------------------
                                       Vice President of Finance and Treasurer

The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.



Dated:      SEPTEMBER 27, 2002         /S/ RON ZWANZIGER
                                       ---------------------------------------
                                       Optionee's Signature


                                       Optionee's name and address:

EX-13

                                                                     Exhibit 13

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE TRANSFERRED UNLESS (A)
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS
FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE BORROWER MAY
REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
THE BORROWER TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY
REQUIRED FOR SUCH TRANSFER.

THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND THE LENDER UNDER THIS
SUBORDINATED PROMISSORY NOTE ARE SUBJECT TO THE PROVISIONS OF ONE OR MORE
SUBORDINATION AGREEMENTS DATED AS OF SEPTEMBER 20, 2002 ENTERED INTO BY AND
AMONG THE BORROWER, ONE OR MORE OF THE BORROWER'S SENIOR LENDERS (OR
REPRESENTATIVES THEREOF), ONE OR MORE HOLDERS OF SENIOR OBLIGATIONS (AS DEFINED
HEREIN), THE LENDER AND CERTAIN OTHER PARTIES, AS DESCRIBED MORE FULLY IN
SECTION 2(i) HEREOF.

THIS SUBORDINATED PROMISSORY NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT
("OID"). THE TREASURER OF THE BORROWER, WHO CAN BE REACHED AT THE ADDRESS OF THE
BORROWER PROVIDED IN SECTION 9 HEREOF, TEL NO. (781) 647-3900, WILL MAKE
AVAILABLE TO THE HOLDER HEREOF UPON REQUEST THE ISSUE PRICE, THE AMOUNT OF OID,
THE ISSUE DATE AND THE YIELD TO MATURITY.

No. SPN-132

                       INVERNESS MEDICAL INNOVATIONS, INC.
                          SUBORDINATED PROMISSORY NOTE

$1,150,000                                                    September 20, 2002

       For value received, Inverness Medical Innovations, Inc., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of Zwanziger
Family Ventures, LLC (the "Lender") the principal sum of ONE MILLION ONE HUNDRED
FIFTY THOUSAND DOLLARS and NO CENTS ($1,150,000) (or, if less, the then
outstanding principal amount hereof), together with all accrued but unpaid
interest thereon, on or before the date (the "Maturity Date") of the earliest to
occur of the following (but in any event subject to the provisions of Section 2
hereof): (i) September 20, 2008 (the "Fixed Maturity Date"), (ii) a Change of
Control (as provided in Section 3 hereof) or (iii) acceleration by the Lender
following the occurrence of an Event of Default (as provided in Section 4
hereof). Subject to the provisions of Section 1(g) and 2(a) hereof, interest on
the outstanding principal amount under this Note shall accrue at the rate of ten
percent (10%) per annum, compounded daily, and shall




be payable in arrears on each October 1, January 1, April 1 and July 1 (with the
first such payment date to be October 1, 2002) (each a "Quarterly Interest
Payment Date"), and on the Maturity Date. All interest payable under this Note
shall be calculated on the basis of a year of 365 or 366 days (as applicable)
for the actual number of days elapsed. All payments received by the Lender
hereunder shall be applied first to any cost of collection, then to accrued but
unpaid interest and then to unpaid principal.

       This Subordinated Promissory Note is issued pursuant to, and is subject
in all respects to, that certain Subordinated Note and Warrant Purchase
Agreement dated as of September 20, 2002 among the Borrower, the Lender and the
other investors party thereto (the "Purchase Agreement"), a copy of which is on
file at the principal office of the Borrower. This Subordinated Promissory Note
is one of several Subordinated Promissory Notes to be issued by the Borrower
pursuant to the Purchase Agreement, which notes are hereinafter referred to,
together with this Subordinated Promissory Note, as the "Notes." The aggregate
original principal amount of all of the Notes is not more than $25,000,000.

       1. PAYMENT.

            (a) PRINCIPAL. All payments of principal hereunder shall be made
either in the form of Cash Payments (as defined below) or, if the Borrower so
elects as provided in Section 2 hereof, in the form of Common Stock Payments (as
defined below). As used herein, (i) a "Cash Payment" shall mean a payment in
immediately available funds in lawful money of the United States of America and
(ii) a "Common Stock Payment" shall mean a payment in the form of registered
shares of the common stock, $.001 par value per share (the "Common Stock"), of
the Borrower valued per share at ninety-five percent (95%) of the average
closing price of the Common Stock on the American Stock Exchange (or, if the
Common Stock is not then traded on the American Stock Exchange, on such other
national securities exchange (or similar nationally recognized automated
quotation system or market, such as the Nasdaq Stock Market) on which the Common
Stock then trades) for the period of the ten consecutive trading days ending
immediately prior to the relevant principal or interest payment date. For
purposes of a Common Stock Payment, registered shares shall be deemed to be
shares of Common Stock that are registered for resale under the Securities Act
or 1933, as amended, upon receipt of such shares by the Lender.

            (b) INTEREST. All payments of any interest hereunder shall be made
in immediately available funds in lawful money of the United States of America.

            (c) PREPAYMENT. Subject to the provisions of Section 2 hereof, the
Borrower may prepay this Note at any time in whole or in part, in which case any
prepayment of principal shall be accompanied by a payment of accrued interest in
respect of the principal being prepaid and a lump sum payment of the applicable
penalty amount (the "Prepayment Penalty"). The Prepayment Penalty shall equal
the sum of the present values (discounted at the Initial Reinvestment Rate if
the prepayment occurs on or before September 20, 2004, or at the Later
Reinvestment Rate if the prepayment occurs after September 20, 2004) of the
Remaining Interest Payments in respect of the principal amount of this Note
being prepaid. For purposes of calculating the "Remaining Interest Payments",
(a) the number and timing of remaining interest




payments shall be the same as if the amount prepaid were not prepaid and the
Note were held to maturity and (b) the interest rate shall be:

            (i) if this Note is prepaid on or before September 20, 2004, a
       percentage (not less than zero) equal to (I) ten percent (10%), less (II)
       the Initial Reinvestment Rate (as defined below); or

            (ii) if this Note is prepaid after September 20, 2004, a percentage
       (not less than zero) equal to (I) ten percent (10%), less (II) the Later
       Reinvestment Rate (as defined below).

       For purposes of this Section 1(c), the term "Initial Reinvestment Rate"
shall mean a percentage equal to (i) the yield (calculated using the so-called
"ask price" published in the Wall Street Journal or an equivalent quotation
system if such information is not then available) on the date of such prepayment
on the United States treasury bond or bill (as the case may be) with a maturity
date closest to, but not later than, the Fixed Maturity Date, plus (ii) one
percent (1%); and the term "Later Reinvestment Rate" shall equal (x) the yield
(calculated using the so-called "ask price" published in the Wall Street Journal
or an equivalent quotation system if such information is not then available) on
the date of such prepayment on the United States treasury bond or bill (as the
case may be) with a maturity date closest to, but not later than, the Fixed
Maturity Date, plus (y) four percent (4%).

       All payments of Prepayment Penalty hereunder shall be made, at the sole
election of the Borrower, either in the form of Cash Payments or in the form of
Common Stock Payments.

            (d) COMMON STOCK PAYMENTS. Any election by the Borrower to make any
payment of principal or Prepayment Penalty in the form of a Cash Payment or a
Common Stock Payment shall be made and apply equally with respect to all Notes
then outstanding. In the event that the Borrower elects to make any payment of
principal or Prepayment Penalty in the form of a Common Stock Payment, the
Borrower shall issue and deliver to the Lender, promptly after the relevant
principal or Prepayment Date, a certificate or certificates representing in the
aggregate the number of shares of Common Stock required to be issued to the
Lender pursuant to such Common Stock Payment. Notwithstanding anything to the
contrary in this Note, the Borrower shall make a Cash Payment in lieu of any
fractional share that the Borrower would otherwise be required to issue and
deliver to the Lender pursuant to any Common Stock Payment.

            (e) LOCATION. All Cash Payments shall be made by wire transfer or
check payable to such account as the Lender may from time to time designate in
writing to the Borrower. All Common Stock Payments shall be payable at the
address set forth in Section 9 hereof or such other place as the Lender may from
time to time designate in writing to the Borrower.

            (f) PAYMENTS PRO RATA; PARI PASSU RANKING. Whenever any payments
(whether constituting principal, interest, Prepayment Penalty or otherwise, and
whether in the form of Cash Payments or Common Stock Payments)) shall be due and
payable or made (whether at maturity, by prepayment or otherwise) under this
Note and the other Notes, such payments under the Notes shall be made to the
respective holders of the Notes pro rata based on




(x) in the case of payments of principal, Prepayment Penalty or other amounts
(other than interest), the respective then outstanding principal amounts of the
Notes and (y) in the case of payments of interest, the respective then
outstanding amounts of accrued but unpaid interest under the Notes. The Notes
shall rank pari passu with one another in right of payment.

            (g) LATE PAYMENTS. If any amount payable hereunder (whether
constituting principal, interest, Prepayment Penalty or otherwise) is not paid
on the date on which such payment is due hereunder (a "Late Payment"), such Late
Payment shall bear interest, from and including the due date thereof to but
excluding the date on which such Late Payment is paid, at the rate of eighteen
percent (18%) per annum, compounded daily (the "Penalty Rate"), and such
interest shall be payable on demand. In the event that a Late Payment remains
unpaid for sixty (60) days after the date thereof, the then outstanding
principal amount of this Note shall bear interest at the Penalty Rate (in lieu
of, and not in addition to, the rate provided for in the first paragraph of this
Note) from and including such sixtieth (60th) day to but excluding the date on
which such Late Payment is paid. Notwithstanding anything to the contrary
herein, upon full payment of any Late Payment, the outstanding principal amount
of this Note shall again bear interest at ten percent (10%) per annum,
compounded quarterly, as provided in the first paragraph of this Note.

       2. SUBORDINATION.


            (a) DEFINITIONS. The following terms shall have the following
respective meanings:

                 (i) The term "Other Subordinated Notes" shall mean those
       certain convertible subordinated promissory notes and subordinated
       promissory notes in an aggregate principal amount not exceeding $15
       million issued on or about September 20, 2002.

                 (ii) The term "Person" shall mean any natural person,
       corporation, unincorporated organization, trust, joint-stock company,
       joint venture, association, company, partnership or government, or any
       agency or political subdivision of any government.

                 (iii) The term "Senior Creditors" means any creditor or Person
       to whom the Borrower owes a Senior Obligation.

                 (iv) The term "Senior Obligations" shall mean (A) all principal
       of, and premium and interest on, and all other amounts owing or
       guaranteed by the Borrower in respect of, any indebtedness incurred or
       guaranteed by the Borrower for money borrowed from any lender now or
       hereafter outstanding or hereafter incurred (including without limitation
       all indebtedness incurred or guaranteed by the Borrower or any of its
       subsidiaries to (1) The Royal Bank of Scotland plc ("RBS"), RBS Mezzanine
       Limited ("RBS Mezzanine") or any or their affiliates, or any of the other
       lenders, under (a) the senior credit agreement with RBS and certain other
       lenders dated as of December 20, 2001, providing for term loan credit
       facilities in the aggregate amount of $52,500,000 and a revolving credit
       facility in the amount of $7,500,000 (as amended, the "RBS Senior




       Credit Facility"), and (b) a mezzanine loan agreement with RBS Mezzanine
       Limited and certain other lenders dated as of December 20, 2001,
       providing for a mezzanine term loan credit facility in the amount of
       $10,000,000 (as amended, the "RBS Mezzanine Credit Facility" and,
       together with the RBS Senior Credit Facility, the "RBS Credit Facility"),
       and (2) one or more senior credit facilities with GE Capital Healthcare
       Financial Services, Inc. or any of its affiliates or other lenders
       entered into to, among other things, refinance the RBS Senior Credit
       Facility, but excluding any other indebtedness described in clause (B)
       below), PROVIDED that the aggregate outstanding principal amount of all
       such indebtedness described in this clause (A) that shall constitute
       "Senior Obligations" at any time by virtue of this clause (A) shall not
       exceed $150 million, and (B) any indebtedness of the Borrower incurred to
       finance the Borrower's acquisition (by merger, consolidation, stock
       purchase or otherwise) of a Person or the Borrower's acquisition of all
       or substantially all of the assets of a Person or all or substantially
       all of the assets of a division or line of business of a Person.
       Notwithstanding the foregoing, the Senior Obligations shall not include
       (w) any trade indebtedness incurred in the ordinary course of business,
       (x) any indebtedness of the Borrower to any direct or indirect subsidiary
       or other affiliate of the Borrower, (y) any indebtedness of the Borrower
       that, by its terms, states that such indebtedness shall be subordinated
       to, or rank pari passu with, the Notes (or any class of indebtedness of
       the Borrower that includes the Notes) in right of payment, and (z)
       indebtedness of the Borrower evidenced by the other Notes and the Other
       Subordinated Notes, all of which, in the case of this clause (z), shall
       rank equally and ratably with this Note.

                 (v) The term "Subordinated Creditors" shall mean the Lender and
       any Person to whom this Note is subsequently transferred (subject to the
       provisions of Section 6 hereof).

                 (vi) The term "Subordinated Indebtedness" shall mean the
       outstanding principal amount and any interest accrued under this Note.

            (b) NO TRANSFER. The Subordinated Creditors will not transfer, sell
or otherwise dispose of any of the Subordinated Indebtedness except to a Person
who agrees in writing to comply with the terms of this Section 2 as a
Subordinated Creditor. Thereafter, such transferee shall be deemed to be a
Subordinated Creditor under this Section 2.

            (c) AGREEMENT TO SUBORDINATE; NO PAYMENTS ON SUBORDINATED
INDEBTEDNESS.

                 (i) The Subordinated Creditors agree that the payment of the
       Subordinated Indebtedness is hereby expressly subordinated in right of
       payment, to the extent and in the manner hereinafter set forth, to the
       prior payment in full of all Senior Obligations.

                 (ii) No payment on account of principal or any other amount
       payable under this Note shall be made by the Borrower or accepted by any
       of the Subordinated Creditors, and this Note shall not be redeemed or
       purchased directly or indirectly by the Borrower, until such time as all
       of the Senior Obligations shall have been indefeasibly paid in full;
       provided that, notwithstanding anything to the contrary contained herein
       or in




       any agreements evidencing Senior Obligations, so long as no default or
       event of default exists under a Senior Obligation, the Borrower shall
       pay, and the Subordinated Creditors may accept, the interest required to
       be paid in cash on each Quarterly Interest Payment Date.

            (d) LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment or
distribution of assets of the Borrower of any kind or character, whether in
cash, property or securities, (i) in connection with any liquidation,
dissolution or winding up of the Borrower, whether voluntary or involuntary
(each a "Liquidation"), (ii) in bankruptcy, insolvency or receivership, or (iii)
upon an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Borrower or otherwise:

                 (i) all Senior Obligations shall first be paid in full before
       the Subordinated Creditors shall be entitled to receive any assets in
       respect of the Subordinated Indebtedness; and

                 (ii) any payment or distribution of assets of the Borrower of
       any kind or character, whether in cash, property or securities to which
       the Subordinated Creditors would otherwise be entitled shall be made by
       the Borrower or by any receiver, trustee in bankruptcy, liquidating
       trustee, agent or other person making such payment or distribution
       directly to Senior Creditors or their representative to the extent
       necessary to pay all Senior Obligations in full.

            (e) WHEN DISTRIBUTION MUST BE PAID OVER. In the event that any
Subordinated Creditor receives any payment with respect to any Subordinated
Indebtedness at a time when such payment is prohibited by Section 2(d) hereof,
such payment shall be held by such Subordinated Creditor in trust for the
benefit of, and shall be forthwith paid over and delivered to, the Senior
Creditors or their representative for application to the payment of all Senior
Obligations remaining unpaid to the extent necessary to pay the Senior
Obligations in full.

            (f) STANDSTILL. The Subordinated Creditors, for themselves and their
respective successors and assigns, agree for the benefit of the Senior Creditors
that, so long as any Senior Obligations remain outstanding, the Subordinated
Creditors will not take any action to accelerate or demand the payment of the
Subordinated Indebtedness or to institute legal proceedings to collect the
Subordinated Indebtedness (other than to provide notice to the Borrower of any
event of default on the Subordinated Indebtedness, provided that such notice
does not constitute any such acceleration, demand or institution of legal
proceedings) prior to the earlier of (i) 180 days after receipt by the Senior
Creditors of written notice of the occurrence of any event of default on the
Subordinated Indebtedness, which event is not thereafter cured or waived by the
Subordinated Creditors prior to taking such action or (ii) the acceleration of
the Senior Obligations.

            (g) OTHER RIGHTS AND REMEDIES. In the event of any insolvency,
bankruptcy, assignment or trust mortgage for the benefit of creditors,
reorganization, whether or not pursuant to bankruptcy laws, sale of all or
substantially all of the assets, Liquidation or any other marshaling of the
assets and liabilities of the Borrower, the Subordinated Creditors will, at the
request of the Senior Creditors, file any claim, and take or refrain from taking
any other action




necessary or appropriate to enforce the obligations of the Borrower in respect
of the Subordinated Indebtedness, will vote such claim at any meeting of
creditors or for any plan or with respect to any matter as the Senior Creditors
shall direct and will hold in trust for the Senior Creditors and assign,
transfer and pay over to the Senior Creditors to be applied against all amounts
owed by the Borrower to the Senior Creditors on account of Senior Obligations,
in the form received, any and all monies, dividends or other assets received in
any such proceeding, or otherwise from the Borrower, from any guarantor or
purchaser on account of the Subordinated Obligations, and will preserve and
maintain the Subordinated Obligations so that the Senior Creditors will always
have the benefit of the Subordinated Obligations as provided herein, unless and
until the Senior Obligations shall be paid in full. In the event that the
Subordinated Creditors shall fail to take or refrain from any such action as
requested or required hereunder, the Senior Creditors may, as attorney-in-fact
for the Subordinated Creditors, take or rescind such action on behalf of the
Subordinated Creditors, and the Subordinated Creditors hereby irrevocably grant
the Senior Creditors an irrevocable power of attorney, coupled with an interest,
in their name, to demand, sue for, collect and receive any and all such monies,
dividends, or other assets and give acquittance therefor and to file and enter
any petition, claim, proof of claim or other instrument of similar character and
to take such other action or refrain from taking any action as the Senior
Creditors may deem necessary or advisable for the enforcement of this Section 2.
The Subordinated Creditors will execute and deliver to the Senior Creditors such
other and further powers of attorney or other instruments as the Senior
Creditors may request in order to accomplish the foregoing.

            (h) NO COLLATERAL. The Subordinated Creditors represent that they
hold no collateral of the Borrower as security for the Subordinated
Indebtedness, and agree that in the event that they acquire any such collateral,
it shall be held in trust by them for the Senior Creditors, and they will
immediately transfer and deliver same to the Senior Creditors or assign any
rights therein to the Senior Creditors, to be held by the Senior Creditors as
security for the Senior Obligations.

            (i) SUBORDINATION AGREEMENT. Subject to clause (j) below, the rights
and obligations of the Borrower and the Lender under this Note are subject to
the provisions of the Subordination Agreement (as defined below) as if the same
were incorporated in this Note. In the event of a conflict between the terms of
this Note and the terms of the Subordination Agreement, the terms of the
Subordination Agreement shall prevail; provided, however, that in no event shall
the Subordination Agreement prohibit the payment by the Borrower of the cash
interest payments due and payable by the Borrower to the Lender hereunder during
any period in which there does not exist a default or event of default with
respect to any of the Senior Obligations. As used herein, the term
"Subordination Agreement" shall mean one or more subordination and/or
inter-creditor agreements dated on or about September 20, 2002 entered into by
and among the Borrower, The Royal Bank of Scotland plc and certain other
parties, as amended, varied, supplemented, restated or novated from time to
time, and as joined in by or on behalf of the holders of the Notes as parties
thereto.

            (j) INAPPLICABILITY. Notwithstanding anything to the contrary
herein, in no event shall the provisions of Sections 2(b) through 2(i) hereof or
of the Subordination Agreement apply to, or in any way limit or restrict, the
Borrower's rights to make payments under this Note in the form of Common Stock
Payments in accordance with the terms of this Note.




            (k) OTHER DEBT. The Borrower covenants that it shall cause all
indebtedness for borrowed money incurred by the Borrower after the date of this
Note (other than (w) the Notes and the other Subordinated Notes (which shall be
pari passu with this Note), (x) the Senior Obligations, (y) any trade
indebtedness incurred in the ordinary course of business and (z) any
indebtedness owed or incurred by the Borrower to any of its direct or indirect
subsidiaries or any holding company that wholly owns, directly or indirectly,
the Borrower) to be subordinated to the indebtedness of the Borrower under the
Notes on terms and conditions equivalent to the terms and conditions set forth
in Sections 2(b) through 2(h) hereof or otherwise satisfactory to holders of
greater than fifty percent (50%) of the aggregate principal amount outstanding
under the Notes.

       3. REPAYMENT UPON CHANGE OF CONTROL.

            (a) CHANGE OF CONTROL. As used herein, the term "Change of Control"
shall mean any transaction or series of related transactions to which the
Borrower is a party resulting in (i) the members of the Board of Directors of
the Borrower immediately prior to the commencement of such transaction or series
of transactions constituting 50% or less of the Board of Directors of the
Borrower (or the board of directors of the surviving or acquiring corporation)
immediately following the consummation of such transaction or series of
transactions or (ii) the sale of all or substantially all the assets of the
Borrower.

            (b) REPAYMENT OF THE NOTES. Immediately upon the occurrence of a
Change of Control, the Borrower shall repay all then outstanding principal,
together with all accrued but unpaid interest and an amount equal to the
Prepayment Penalty calculated as of the date of such Change in Control, in each
case, under this Note and the other Notes.

       4. DEFAULT.

            (a) EVENTS OF DEFAULT. If any of the following Events of Default
shall occur and be continuing, then the Lender may, by notice to the Borrower,
declare the entire unpaid principal amount of this Note and all interest accrued
and unpaid hereon, to be forthwith due and payable, whereupon such unpaid
principal amount and all such accrued interest shall become and be forthwith due
and payable; provided, further, that upon the occurrence of an Event of Default
described in clause (iii) below, the entire principal amount and all interest
accrued and unpaid thereon, shall immediately and automatically become and be
due and payable. As used herein, the term "Events of Default" shall mean one or
more of the following:

                 (i) The Borrower shall fail to pay any interest or principal on
       this Note when due and such failure shall continue for five (5) business
       days after written notice thereof shall have been given to the Borrower
       by the Lender;

                 (ii) The Borrower shall default in the performance of any
       material agreement or material covenant contained in this Note or the
       Subordinated Note and Warrant Purchase Agreement of even date herewith
       and such failure shall remain unremedied for thirty (30) business days
       after written notice thereof shall have been given to the Borrower by the
       Lender;




                 (iii) The Borrower shall be involved in any of the following:
       (i) its commencement of a voluntary bankruptcy case under Title 11 of the
       United States Code as from time to time in effect, or by its authorizing,
       by appropriate proceedings of its Board of Directors or other governing
       body, the commencement of such a voluntary case; (ii) its filing an
       answer or other pleading admitting or failing to deny the material
       allegations of a petition filed against it commencing an involuntary
       bankruptcy case under said Title 11, or seeking, consenting to, or
       acquiescing in the relief therein provided, or by its failing seasonably
       to controvert the material allegations of any such petition; (iii) the
       entry of an order for relief in any involuntary bankruptcy case commenced
       under said Title 11; (iv) its seeking relief as a debtor under any
       applicable law, other than said Title 11, of any jurisdiction relating to
       the liquidation or reorganization of debts or to the modification or
       attention of the rights of creditors, or by its consenting to or
       acquiescing in such relief, (v) an order shall have been entered by a
       court of competent jurisdiction (1) finding the Borrower to be bankrupt
       or insolvent, (2) ordering or approving the Borrower's liquidation,
       reorganization or any modification or alteration of the rights of its
       creditors, or (3) assuming custody of, or appointing a receiver or other
       custodian for, all or a substantial part of the Borrower's property; or
       (vi) its making an assignment for the benefit of, or entering into a
       composition with, its creditors, or appointing or consenting to the
       appointment of a receiver or other custodian for all or a substantial
       part of its property;

                 (iv) A default shall occur and be continuing under any of the
       Senior Obligations, for more than the period of grace, if any, specified
       therein, unless such default is waived by the Senior Creditors or cured
       by the Borrower; or

                 (v) An Event of Default shall occur under any of the other
       Notes.

            (b) COLLECTION COSTS; ATTORNEY'S FEES. In the event this Note is
turned over to an attorney for collection upon the occurrence of an Event of
Default, the Borrower agrees to pay all reasonable costs of collection,
including reasonable attorney's fees and expenses and all out-of-pocket expenses
incurred in connection with such collection efforts.

       5. LIMITATION ON SALES. The Lender acknowledges that this Note and any
shares of Common Stock issuable pursuant to the terms of this Note (the "Note
Stock") have not been registered under the Securities Act of 1933, as now in
force or hereafter amended, or any successor legislation (the "Securities Act"),
and agrees not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of this Note or any Note Stock unless (a) there is an
effective registration statement under the Securities Act as to this Note or
such Note Stock and this Note or such Note Stock has been registered or
qualified under any applicable state securities or "blue sky" laws then in
effect, or (b) the Company receives an opinion of counsel, satisfactory to the
Company, that such registration and qualification are not required.

       Without limiting the generality of the foregoing, unless the offering and
sale of the Note Stock to be so issued shall have been effectively registered
under the Securities Act, the Company shall be under no obligation to issue the
shares covered so issuable unless and until the Lender shall have executed an
investment letter in form and substance satisfactory to the Borrower, including
a warranty at the time of such issuance that it is acquiring such shares for its




own account, for investment and not for, with a view to, or in connection with,
the distribution or resale of any such shares, and the Lender shall be bound by
the provisions of the following legend or a legend in substantially similar form
which shall be endorsed upon the certificate(s) evidencing the Note Stock issued
pursuant to such exercise:

            "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
            OF 1933, AS AMENDED ("SECURITIES ACT"), OR REGISTERED OR QUALIFIED
            UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT
            BE TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION
            STATEMENT UNDER THE SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER
            APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS FROM SUCH
            REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
            CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE
            COMPANY MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL
            REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO
            REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED FOR SUCH
            TRANSFER."

       In addition, without limiting the generality of the foregoing, the
Borrower may delay issuance of the Note Stock until completion of any action or
the obtaining of any consent which, in either case, the Company deems necessary
under any applicable law (including, without limitation, state securities or
"blue sky" laws).

       6. NOTE REGISTER; TRANSFER OR LOSS OF NOTE.

            (a) NOTE REGISTER. The Borrower shall keep at its principal
executive office a register (the "Note Register"), in which, subject to such
reasonable regulations as it may prescribe, but at its expense (other than
transfer taxes, if any), the Borrower shall provide for the registration and
transfer of this Note. The person or entity in whose name any registered Note
shall be registered shall be deemed and treated as the owner and holder hereof
for all purposes hereunder.

            (b) TRANSFER. This Note shall not be transferred separately from the
corresponding Warrant issued to the Lender under the terms of the Purchase
Agreement. In connection with any transfer of this Note (i) the transferee shall
make and deliver to the Borrower representations, warranties and covenants
substantially similar to those contained in Section 5 of the Purchase Agreement;
and (ii) the transferor shall reimburse the Borrower for all expenses incurred
in connection with the transfer. Any attempted transfer, assignment, pledge,
hypothecation or other disposition of this Note or of any rights granted
hereunder contrary to the provisions of this clause (b), or the levy of any
attachment or similar process upon this Note or such rights, shall be null and
void.

            (c) LOSS OF NOTE. Upon receipt by the Borrower of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Note and of indemnity




reasonably satisfactory to it, and upon reimbursement to the Borrower of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
this Note (in case of mutilation), the Borrower will make and deliver in lieu of
this Note a new Note of like tenor and unpaid principal amount and dated as of
the date to which interest has been paid on the unpaid principal amount of this
Note in lieu of which such new Note is made and delivered.

       7. HEADINGS. The headings in this Note are for purposes of reference only
and shall not limit or otherwise affect the meaning of any provision of this
Note.

       8. AMENDMENT AND WAIVER. Any provision of this Note, including, without
limitation, any subordination provision hereof, may be amended or waived with
the written consent of (a) the Borrower and (b) either (i) the Lender or (ii)
the holders of greater than fifty percent (50%) of the aggregate principal
amount outstanding under the Notes. A waiver of any right or remedy under this
Note on any occasion shall not be a bar to exercise of the same right or remedy
on any subsequent occasion or of any other right or remedy at any time.

       9. NOTICE. Any notice required or permitted to be given to the Borrower
or the Lender under this Note shall be made in writing at the address or
facsimile number of such person specified below (or such other address or
facsimile number as such person may specify in a written notice to the other
party) and shall be deemed to have been given, if delivered personally or sent
via electronic facsimile transmission with confirmation received, on the date of
delivery or, if sent via nationally recognized overnight express courier with
established tracking capability marked for delivery on the next business day, on
the earlier of the date of delivery, as demonstrated by the tracking records of
the courier, or two (2) business days after deposit of the notice with the
courier:

            if to the Borrower, to:

                 Inverness Medical Innovations, Inc.
                 51 Sawyer Road, Suite 200
                 Waltham, MA 02153
                 Facsimile: (781) 674-3939
                 Attention: Ron Zwanziger, President

            with a copy to:

                 Inverness Medical Innovations, Inc.
                 51 Sawyer Road, Suite 200
                 Waltham, MA 02153
                 Facsimile: (781) 674-3939
                 Attention: Paul T. Hempel, General Counsel




            and to:

                 Goodwin Procter LLP
                 Exchange Place
                 Boston, MA 02109
                 Facsimile: (617) 523-1231
                 Attention: Scott F. Duggan, Esq.

if to the Lender, to the address furnished to the Company in writing by the last
holder of this Note who shall have furnished an address to the Company in
writing.

                 U.S. Boston Capital Corporation
                 55 Old Bedford Road
                 Lincoln North
                 Lincoln, Massachusetts  01773
                 Facsimile: (617) 259-1116
                 Attention: Willard L. Umphrey

            and to:

                 Foley Hoag LLP
                 155 Seaport Boulevard
                 Boston, Massachusetts  02210
                 Facsimile: (617) 832-7000
                 Attention:  Peter Rosenblum, Esq.

       10. MAXIMUM PERMISSIBLE RATE. In the event that any of the terms or
provisions of this Note are in conflict with applicable usury law, this Section
10 shall govern as to such terms or provisions, and this Note shall in all other
respects remain in full force and effect. If any transaction contemplated hereby
would be usurious, the aggregate of all consideration which constitutes interest
under applicable law that is contracted for, charged or received under this Note
shall under no circumstances exceed the maximum interest allowed by applicable
law. Accordingly, if interest in excess of the legal maximum is contracted for,
charged or received: (i) this Note shall be automatically reformed so that the
effective rate of interest shall be reduced to the maximum rate of interest
permitted by applicable law, and, for the purpose of determining said rate and
to the extent permitted by applicable law, all interest contracted for, charged
or received shall be amortized, prorated and spread throughout the full term of
this Note so that the effective rate of interest is uniform throughout the life
of this Note, and (ii) any excess of interest over the maximum amount allowed
under applicable law shall be applied as a credit against the then unpaid
principal amount of this Note.

       11. SEVERABILITY. In the event any one or more of the provisions of this
Note shall for any reason be held to be invalid, illegal or unenforceable, in
whole or in part or in any respect, or in the event that any one or more of the
provisions of this Note operate or would prospectively operate to invalidate
this Note, then and in any such event, such provision(s) only shall be deemed
null and void and shall not affect any other provision of this Note and the
remaining




provisions of this Note shall remain operative and in full force and effect and
in no way shall be affected, prejudiced, or disturbed thereby.

       12. GOVERNING LAW. This Note shall be governed by, and construed and
enforced in accordance with, the substantive laws of The Commonwealth of
Massachusetts without regard to its principles of conflicts of laws. Any dispute
arising out of or relating to this Note shall be filed and prosecuted in any
court of competent subject matter jurisdiction located in Massachusetts. The
Borrower and the Lender hereby consent to the personal jurisdiction of such
courts over them, stipulate to the convenience, fairness and efficiency of
proceeding in such courts, and covenant not to assert any objection to
proceeding in such courts based on any alleged lack of jurisdiction or any
alleged inconvenience, unfairness or inefficiency of such courts.

       13. SATURDAYS, SUNDAYS, HOLIDAYS. If any date that may at any time be
specified in this Note as a date for the making of any payment under this Note
shall fall on Saturday, Sunday or on a day which in Massachusetts shall be a
legal holiday, then the date for the making of that payment shall be the next
subsequent day which is not a Saturday, Sunday or legal holiday.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




       IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed by its duly authorized officer as of the date first above written.

                                         INVERNESS MEDICAL INNOVATIONS, INC.


                                         By: /s/ Anthony J. Bernardo
                                            -----------------------------------
                                            Name: Anthony J. Bernardo
                                            Title: Vice President and
                                                   Chief Operating Officer



ATTEST:

/s/ PAUL T. HEMPEL
- -----------------------------------
Paul T. Hempel, Secretary



Accepted and agreed to as of this 20th day of September, 2002.


Lender's Name: Zwanziger Family Ventures, LLC

By: Pear Tree Partners Management, LLC as General Partner for
    Pear Tree Partners, L.P., Attorney in Fact
    pursuant to Section 5.9(b) of the Purchase Agreement

    By: /s/ WILLARD L. UMPHREY
       -----------------------------------------------------
       Willard L. Umphrey and/or Kathryn M. Collings
       Its:  Manager

EX-14

                                                                     Exhibit 14

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE TRANSFERRED UNLESS (A)
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS
FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE COMPANY MAY
REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
THE COMPANY TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY
REQUIRED FOR SUCH TRANSFER.

No. W(SPN)-132                                                  For the Purchase
                                                              of 9,200 shares of
                                                                    Common Stock

                           WARRANT FOR THE PURCHASE OF
                             SHARES OF COMMON STOCK
                                       OF
                       INVERNESS MEDICAL INNOVATIONS, INC.


       VOID AFTER 5:00 P.M., EASTERN STANDARD TIME, ON SEPTEMBER 20, 2012

       Inverness Medical Innovations, Inc., a Delaware corporation (the
"Company"), hereby certifies that Zwanziger Family Ventures, LLC, or his, her or
its registered assigns (the "Registered Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company, at any time or from time to
time on or before the earlier of (a) September 20, 2012 at not later than 5:00
p.m. (Eastern Standard Time) and (b) the termination of this Warrant as provided
in Section 8 below, 9,200 shares of Common Stock, $.001 par value, of the
Company ("Common Stock"), at a purchase price of $13.54 per share. The number of
shares purchasable upon exercise of this Warrant, and the purchase price per
share, each as adjusted from time to time pursuant to the provisions of this
Warrant, are hereinafter referred to as the "Warrant Stock" and the "Purchase
Price," respectively. This Warrant and the associated Subordinated Promissory
Note (the "Note") held by the Registered Holder have been issued by the Company
to the Registered Holder in respect of the Units (as defined in the Purchase
Agreement (as defined below)) purchased by the Registered Holder (the "Purchased
Units") under the Subordinated Note and Warrant Purchase Agreement dated as of
September 20, 2002 (the "Purchase Agreement") among the Company, the Registered
Holder and the other investors party thereto.



       1. EXERCISE

            (a) This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase form appended hereto
as EXHIBIT I duly executed by such Registered Holder, at the principal office of
the Company, or at such other office or agency as the Company may designate,
accompanied by payment in full, as provided in subsection 1(b) below, of the
aggregate Purchase Price payable in respect of the number of shares of Warrant
Stock purchased upon such exercise.

            (b) The aggregate Purchase Price may be paid, at the Registered
Holder's election, at any time during the term of this Warrant, (i) by cash
(including by wire transfer of immediately available funds to an account
designated by the Company) or certified or bank check in lawful money of the
United States or (ii) by exercise of the "net issuance" right described below in
this subsection 1(b) ("NET ISSUANCE"). If the Registered Holder elects the Net
Issuance method, the Company will issue Common Stock to the Registered Holder
upon exercise of this Warrant in accordance with the following formula:

                 X = Y(A-B)
                     -----
                       A

       Where: X = the number of shares of Common Stock that shall be issued
                  to the Registered Holder.

              Y = the number of shares of Common Stock requested to be
                  exercised under this Warrant.

              A = the current fair market value of one (1) share of Common
                  Stock at the time of issuance of such shares of Common Stock.

              B = the Purchase Price.

       For purposes of the above calculation, current fair market value of each
share of Common Stock shall be determined as follows:

                 (i) if the Common Stock is traded on the American Stock
Exchange or another national securities exchange, the fair market value shall be
deemed to be the average of the closing prices of the Common Stock over the ten
(10) trading day period ending immediately prior to the day as of which the
current fair market value of the Common Stock is being determined; or

                 (ii) if the Common Stock is traded over-the-counter, the fair
market value shall be deemed to be the average of the closing bid and asked
prices of the Common Stock quoted on the NASDAQ System (or similar system) over
the ten (10) trading day period ending immediately prior to the day as of which
the current fair market value of the securities is being determined; or




                 (iii) if at any time the Common Stock is not listed on any
national securities exchange or quoted in the NASDAQ System (or similar system)
or the over-the-counter market, the current fair market value of the Common
Stock shall be as determined in good faith by the Company's Board of Directors.

            (c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above. At such time, the person or persons in whose name or names any
certificates for Warrant Stock shall be issuable upon such exercise as provided
in subsection 1(d) below shall be deemed to have become the holder or holders of
record of the Warrant Stock represented by such certificates.

            (d) As soon as practicable after the exercise of this Warrant in
full or in part and whether by payment by cash or check or by Net Issuance, and
in any event within fifteen (15) days thereafter, the Company, at its expense,
will cause to be issued in the name of, and delivered to, the Registered Holder,
or, subject to the terms and conditions hereof, as such Registered Holder (upon
payment by such Registered Holder of any applicable transfer taxes) may direct:

                 (i) a certificate or certificates for the number of full shares
of Warrant Stock to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof, and

                 (ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, representing the right to
purchase in the aggregate the number of shares of Warrant Stock equal (without
giving effect to any adjustment therein) to the number of such shares called for
on the face of this Warrant minus the number of such shares purchased or
exercised by the Registered Holder upon such exercise as provided in subsections
1(a) and 1(b) above.

            (e) To the extent this Warrant is not previously exercised as to all
of the Warrant Stock subject hereto, and if the fair market value of one share
of Common Stock is greater than the Purchase Price then in effect, this Warrant
shall be deemed automatically exercised pursuant to the Net Issuance method as
provided in subsection 1(b) above (even if not surrendered) immediately before
its expiration. For purposes of such automatic exercise, the fair market value
of one (1) share of the Common Stock upon such expiration shall be determined
pursuant to the Net Issuance provisions of subsection 1(b). To the extent this
Warrant or any portion thereof is deemed automatically exercised pursuant to
this subsection 1(e), the Company agrees to promptly notify the Registered
Holder hereof of the number of shares of Warrant Stock, if any, that the
Registered Holder hereof is to receive by reason of such automatic exercise.

            (f) The Registered Holder (including any valid transferee of this
Warrant) is entitled to the registration rights set forth in the Purchase
Agreement with respect to the Warrant Stock.




       2. ADJUSTMENTS.

            (a) If outstanding shares of the Common Stock shall be subdivided
into a greater number of shares or a dividend in Common Stock shall be paid in
respect of Common Stock, the Purchase Price in effect immediately prior to such
subdivision or at the record date of such dividend shall simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend be proportionately reduced. If outstanding shares of Common Stock shall
be combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased. When any
adjustment is required to be made in the Purchase Price pursuant to this
subsection 2(a), the number of shares of Warrant Stock purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing
(i) an amount equal to the number of shares issuable upon the exercise of this
Warrant immediately prior to such adjustment, multiplied by the Purchase Price
in effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment.

            (b) If there shall occur any capital reorganization or
reclassification of the Common Stock (other than a change in par value or a
subdivision or combination as provided for in subsection 2(a) above), then, as
part of any such reorganization or reclassification, lawful provision shall be
made so that the Registered Holder of this Warrant shall have the right
thereafter to receive upon the exercise hereof the kind and amount of shares of
stock or other securities or property which such Registered Holder would have
been entitled to receive if, immediately prior to any such reorganization or
reclassification, such Registered Holder had held the number of shares of Common
Stock which were then purchasable upon the exercise of this Warrant. In any such
case, appropriate adjustment (as reasonably determined by the Board of Directors
of the Company) shall be made in the application of the provisions set forth
herein with respect to the rights and interests thereafter of the Registered
Holder of this Warrant such that the provisions set forth in this Section 2
(including provisions with respect to adjustment of the Purchase Price) shall
thereafter be applicable, in as nearly equivalent a manner as may be
practicable, in relation to any shares of stock or other securities or property
thereafter deliverable upon the exercise of this Warrant.

            (c) Subject to the provisions of Section 8, if there shall be a
merger or consolidation of the Company with or into another corporation (other
than a merger or reorganization involving only a change in the state of
incorporation of the Company or the acquisition by the Company of other
businesses where the Company survives as a going concern), or the sale of all or
substantially all of the Company's capital stock or assets to any other person,
then as a part of such transaction, provision shall be made so that the
Registered Holder shall thereafter be entitled to receive the number of shares
of stock or other securities or property of the Company, or of the successor
corporation or the parent of such successor corporation, as the case may be,
resulting from the merger, consolidation or sale, to which the Registered Holder
would have been entitled if the Registered Holder had exercised its rights
pursuant to the Warrant immediately prior thereto. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section 2
to the end that the provisions




of this Section 2 shall be applicable after that event in as nearly equivalent a
manner as may be practicable.

            (d) When any adjustment is required to be made in the Purchase
Price, the Company shall promptly mail to the Registered Holder a certificate
setting forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such certificate shall also
set forth the kind and amount of stock or other securities or property into
which this Warrant shall be exercisable following the occurrence of any of the
events specified in this Section 2.

            (e) Notwithstanding anything in this Warrant to the contrary, in no
event shall the Purchase Price be decreased to less than $.001.

       3. FRACTIONAL SHARES. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the closing market price of the Common Stock on
the American Stock Exchange or, if applicable, any other national securities
exchange on the trading day immediately prior to the date of exercise or on the
basis of the average of the low bid and high asked prices of the Common Stock on
the over-the-counter market as reported by the NASDAQ System (or similar
system), whichever is applicable, or if neither is applicable, then on the basis
of the then current market value of the Common Stock as shall be reasonably
determined by the Company's Board of Directors.

       4. LIMITATION ON SALES. Each holder of this Warrant acknowledges that
this Warrant and the Warrant Stock have not been registered under the Securities
Act of 1933, as now in force or hereafter amended, or any successor legislation
(the "Securities Act"), and agrees not to sell, pledge, distribute, offer for
sale, transfer or otherwise dispose of this Warrant or any Warrant Stock issued
upon its exercise unless (a) there is an effective registration statement under
the Securities Act as to this Warrant or such Warrant Stock and this Warrant or
such Warrant Stock has been registered or qualified under any applicable state
securities or "blue sky" laws then in effect, or (b) the Company receives an
opinion of counsel, which opinion and counsel shall each be reasonably
satisfactory to the Company, that such registration and qualification are not
required.

       Without limiting the generality of the foregoing, unless the offering and
sale of the Warrant Stock to be issued upon the particular exercise of the
Warrant shall have been effectively registered under the Securities Act, the
Company shall be under no obligation to issue the shares covered by such
exercise unless and until the Registered Holder shall have executed an
investment letter in form and substance satisfactory to the Company, including a
warranty at the time of such exercise that it is acquiring such shares for its
own account, for investment and not for, with a view to, or in connection with,
the distribution or resale of any such shares, and the holder of this Warrant
shall be bound by the provisions of the following legend or a legend in
substantially similar form which shall be endorsed upon the certificate(s)
evidencing the Warrant Stock issued pursuant to such exercise:




            "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
            OF 1933, AS AMENDED ("SECURITIES ACT"), OR REGISTERED OR QUALIFIED
            UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT
            BE TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION
            STATEMENT UNDER THE SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER
            APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS FROM SUCH
            REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
            CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE
            COMPANY MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL
            REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO
            REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED FOR SUCH
            TRANSFER."

       In addition, without limiting the generality of the foregoing, the
Company may delay issuance of the Warrant Stock until completion of any action
or obtaining of any consent, which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws).

       5. NOTICES OF RECORD DATE, ETC. In case:

            (a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the exercise of
this Warrant) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right; or

            (b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company; or

            (c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;

then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities at the
time deliverable upon the exercise of this Warrant) shall be entitled to
exchange their shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification,




consolidation, merger, transfer, dissolution, liquidation or winding-up. Such
notice shall be mailed at least ten (10) days prior to the record date or
effective date for the event specified in such notice.

       6. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such shares of Warrant Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.

       7. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.

       8. TERMINATION IN CERTAIN EVENTS. In the event of a transfer of all or
substantially all of the assets of the Company or a merger or consolidation of
the Company with or into any other entity (other than a merger or consolidation
the sole purpose of which is to change the state of incorporation of the Company
or a merger or consolidation transaction in which the stockholders of the
Company immediately prior to such transaction own more than 50% of the voting
stock or total equity interest of the surviving entity immediately after the
transaction) or a dissolution or winding-up or the adoption of a plan of
liquidation of the Company, this Warrant shall terminate on the effective date
of such transfer, merger, consolidation, dissolution, winding-up or adoption
(the "Transaction Effective Date") and shall become null and void, provided that
the Registered Holder shall have received the prior notice with respect to such
transaction or event required by Section 5 hereof, and provided further,
however, that if this Warrant shall not have otherwise terminated or expired,
the Registered Holder hereof shall have the right until 5:00 p.m. (Eastern
Standard Time) on the day immediately prior to the Transaction Effective Date to
exercise its rights hereunder to the extent not previously exercised.

       9. HEADINGS. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.

       10. WARRANT REGISTER; TRANSFERS, ETC.

            (a) The Company will maintain a register containing the names and
addresses of the Registered Holders of this Warrant. Any Registered Holder may
change its, his or her address as shown on the warrant register by written
notice to the Company requesting such change.

            (b) This Warrant shall not be transferred separately from the
corresponding Note issued to the Lender under the terms of the Purchase
Agreement. In connection with any transfer of this Warrant (i) the transferee
shall make and deliver to the Company representations, warranties and covenants
substantially similar to those contained in Section 5 of the Purchase Agreement;
and (ii) the transferor shall reimburse the Company for all expenses incurred in




connection with the transfer. Any attempted transfer, assignment, pledge,
hypothecation or other disposition of this Warrant or of any rights granted
hereunder contrary to the provisions of this clause (b), or the levy of any
attachment or similar process upon this Warrant or such rights, shall be null
and void.

            (c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; PROVIDED, HOWEVER, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.

       11. MAILING OF NOTICES, ETC. Any notice required or permitted to be given
to the Company or the Registered Holder under this Warrant shall be made in
writing at the address or facsimile number of such person specified below (or
such other address or facsimile number as such person may specify in a written
notice to the other party) and shall be deemed to have been given, if delivered
personally or sent via electronic facsimile transmission with confirmation
received, on the date of delivery or, if sent via nationally recognized
overnight express courier with established tracking capability marked for
delivery on the next business day, on the earlier of the date of delivery, as
demonstrated by the tracking records of the courier, or two (2) business days
after deposit of the notice with the courier:

            if to the Company, to:

                Inverness Medical Innovations, Inc.
                51 Sawyer Road, Suite 200
                Waltham, Massachusetts 02453
                Facsimile:  (781) 674-3939
                Attention:  Ron Zwanziger, President

            with a copy to:

                Inverness Medical Innovations, Inc.
                51 Sawyer Road, Suite 200
                Waltham, Massachusetts 02453
                Facsimile:  (781) 674-3939
                Attention:  Paul T. Hempel, General Counsel

            and a copy to:

                Goodwin Procter LLP
                Exchange Place
                Boston, Massachusetts 02109
                Facsimile: (617) 523-1231
                Attention:  Scott F. Duggan, Esq.

if to the Registered Holder of this Warrant, to the address furnished to the
Company in writing




by the last Registered Holder of this Warrant who shall have furnished an
address to the Company in writing with a copy to:

                U.S. Boston Capital Corporation
                Lincoln North
                Lincoln, MA 01773
                Facsimile: (617) 259-1166
                Attention:  Willard L. Umphrey

and

                Foley, Hoag & Eliot
                155 Seaport Boulevard
                Boston, MA 02210
                Facsimile: (617) 832-7000
                Attention:  Peter Rosenblum, Esq.

       12. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.

       13. CHANGE OR WAIVER. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.

       14. GOVERNING LAW. This Warrant shall be governed by, and construed and
enforced in accordance with, the substantive laws of the Commonwealth of
Massachusetts without regard to its principles of conflicts of laws. Any dispute
arising out of or relating to this Warrant shall be filed and prosecuted in any
court of competent subject matter jurisdiction located in Massachusetts. The
Company and the Registered Holder hereby consent to the personal jurisdiction of
such courts over them, stipulate to the convenience, fairness and efficiency of
proceeding in such courts, and covenant not to assert any objection to
proceeding in such courts based on any alleged lack of jurisdiction or any
alleged inconvenience, unfairness or inefficiency of such courts.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




       IN WITNESS WHEREOF, the undersigned has caused this Warrant to be
executed by its duly authorized officer as of the date written below.


Date: As of September 20, 2002           INVERNESS MEDICAL INNOVATIONS, INC.


                                         By: /s/ Anthony J. Bernardo
                                            -----------------------------------
                                            Name: Anthony J. Bernardo
                                            Title: Vice President and
                                                   Chief Operating Officer


ATTEST:

/s/ PAUL T. HEMPEL
- ----------------------------------
Paul T. Hempel, Secretary

Accepted and agreed to as of this 20th day of September, 2002.


Initial Registered Holder's Name: Zwanziger Family Ventures, LLC

By: Pear Tree Partners Management, LLC as General Partner for
    Pear Tree Partners, L.P., Attorney in Fact
    pursuant to Section 5.9(b) of the Purchase Agreement

    By: /s/ WILLARD L. UMPHREY
       --------------------------------------------------
       Willard L. Umphrey and/or Kathryn M. Collings
       Its:  Manager





                                    EXHIBIT I

                                  PURCHASE FORM

To:  INVERNESS MEDICAL INNOVATIONS, INC.


     ----------------------------
                                               Dated:
     ----------------------------                     -------------------------

       The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. W(SPN)-____), hereby irrevocably elects to purchase _____ shares of
the Common Stock (the "Common Stock") covered by such Warrant and [CASH OR CHECK
PAYMENT: herewith tenders payment of $_____] [NET ISSUANCE: elects pursuant to
Section 1(b) of the Warrant to effect a Net Issuance], representing the full
purchase price for such shares at the price per share provided for in such
Warrant.

       The undersigned is aware that the Common Stock has not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws. The undersigned understands that the reliance by the
Company on exemptions under the Securities Act is predicated in part upon the
truth and accuracy of the statements of the undersigned in this Purchase Form.

       The undersigned represents and warrants that (1) it has been furnished
with all information which it deems necessary to evaluate the merits and risks
of the purchase of the Common Stock; (2) it has had the opportunity to ask
questions concerning the Common Stock and the Company and all questions posed
have been answered to its satisfaction; (3) it has been given the opportunity to
obtain any additional information it deems necessary to verify the accuracy of
any information obtained concerning the Common Stock and the Company; and (4) it
has such knowledge and experience in financial and business matters that it is
able to evaluate the merits and risks of purchasing the Common Stock and to make
an informed investment decision relating thereto.

       The undersigned hereby represents and warrant that it is purchasing the
Common Stock for its own account for investment and not for, with a view to, or
in connection with, the distribution or resale of all or any part of the Common
Stock.

       The undersigned understands that because the Common Stock have not been
registered under the Securities Act, it must continue to bear the economic risk
of the investment for an indefinite time and the Common Stock cannot be sold
unless the Common Stock is subsequently registered under applicable federal and
state securities laws or an exemption from such registration is available.

       The undersigned agrees that it will in no event sell or distribute or
otherwise dispose of all or any part of the Common Stock unless (1) there is an
effective registration statement under the Securities Act and registration or
qualification under applicable state securities laws covering any such
transaction involving the Common Stock or (2) the Company receives an opinion of
its legal counsel (concurred in by legal counsel for the Company) stating that
such transaction is




exempt from registration and qualification or the Company otherwise satisfies
itself that such transaction is exempt from registration and qualification.

       The undersigned consents to the placing of a legend on its certificate
for the Common Stock stating that the Common Stock has not been registered and
setting forth the restriction on transfer contemplated hereby and to the placing
of a stop transfer order on the books of the Company and with any transfer
agents against the Common Stock until the Common Stock may be legally resold or
distributed without restriction.

       The undersigned understands that, at the present time, the undersigned
may not be entitled to rely on Rule 144 promulgated by the SEC under the
Securities Act for the resale or distribution of the Securities. The undersigned
understands that, except as provided in the Subordinated Note and Warrant
Purchase Agreement dated as of September 20, 2002 among the Company and the
investors named therein or as may otherwise have been separately and expressly
agreed by the Company and the Registered Holder, the Company has no obligation
to the undersigned to register the Common Stock under the Securities Act and has
not represented that it will register the Common Stock.

       The undersigned understands the terms and restrictions on the right to
dispose of the Common Stock set forth in the Subordinated Note and Warrant
Purchase Agreement, which the undersigned has carefully reviewed. The
undersigned consents to the placing of a legend on its certificate for the
Common Stock referring to such restrictions and the placing of stop transfer
orders until the Common Stock may be transferred in accordance with the terms of
such restrictions.

       The undersigned has considered the federal and state income tax
implications of the exercise of the Warrant and the purchase and subsequent sale
of the Common Stock.



                                          -------------------------------------

                                          Dated:
                                                -------------------------------

EX-15

                                                                     Exhibit 15


                                                                  EXECUTION COPY

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE TRANSFERRED UNLESS (A)
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS
FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE BORROWER MAY
REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
THE BORROWER TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY
REQUIRED FOR SUCH TRANSFER.

THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND THE LENDER UNDER THIS
SUBORDINATED CONVERTIBLE PROMISSORY NOTE ARE SUBJECT TO THE PROVISIONS OF ONE OR
MORE SUBORDINATION AGREEMENTS DATED AS OF SEPTEMBER 20, 2002 ENTERED INTO BY AND
AMONG THE BORROWER, ONE OR MORE OF THE BORROWER'S SENIOR LENDERS (OR
REPRESENTATIVES THEREOF), ONE OR MORE HOLDERS OF SENIOR OBLIGATIONS (AS DEFINED
HEREIN), THE LENDER AND CERTAIN OTHER PARTIES, AS DESCRIBED MORE FULLY IN
SECTION 3(i) HEREOF.

No. SPN-3B

                       INVERNESS MEDICAL INNOVATIONS, INC.
                    SUBORDINATED CONVERTIBLE PROMISSORY NOTE

$3,000,000                                                    September 20, 2002

       For value received, Inverness Medical Innovations, Inc., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of ZWANZIGER
FAMILY VENTURES, LLC (the "Lender") the principal sum of THREE MILLION DOLLARS
and NO CENTS ($3,000,000) (or, if less, the then outstanding principal amount
hereof), together with all accrued but unpaid interest thereon, on or before the
date (the "Maturity Date") of the earliest to occur of the following (but in any
event subject to the provisions of Section 3 hereof): (i) September 20, 2008
(the "Fixed Maturity Date"), (ii) a Change of Control (as provided in Section 4
hereof) or (iii) acceleration by the Lender following the occurrence of an Event
of Default (as provided in Section 5 hereof). Subject to the provisions of
Section 1(f) and 2(a) hereof, interest on the outstanding principal amount under
this Convertible Note shall accrue at the rate of three percent (3%) per annum,
and shall be payable in arrears on each October 1, January 1, April 1 and July 1
(with the first such payment date to be October 1, 2002) (each a "Quarterly
Interest Payment Date"), and on the Maturity Date. All interest payable under
this Subordinated Convertible Promissory Note shall be calculated on the basis
of a year of 365 or 366 days (as applicable) for the actual number of days
elapsed. All payments received by the Lender hereunder shall be




applied first to any cost of collection, then to accrued but unpaid interest and
then to unpaid principal.

       This Subordinated Convertible Promissory Note is issued pursuant to, and
is subject in all respects to, that certain Subordinated Note Purchase Agreement
dated as of September 20, 2002 among the Borrower, the Lender and the other
investors party thereto a copy of which is on file at the principal office of
the Borrower (the "Purchase Agreement"). This Subordinated Convertible
Promissory Note is one of several Subordinated Convertible Promissory Notes to
be issued by the Borrower pursuant to the Purchase Agreement, which notes are
hereinafter referred to, together with this Subordinated Convertible Promissory
Note, as the "Convertible Notes." The aggregate original principal amount of all
of the Convertible Notes is not more than $14,000,000.

       1. PAYMENT.

            (a) PRINCIPAL. All payments of principal hereunder shall be made
either in the form of Cash Payments (as defined below) or, if the Lender so
elects as provided in Section 2 hereof, in the form of Common Stock Payments (as
defined below) or any combination thereof. As used herein, (i) a "Cash Payment"
shall mean a payment in immediately available funds in lawful money of the
United States of America and (ii) a "Common Stock Payment" shall mean a payment
in the form of registered shares of the common stock, $.001 par value per share
(the "Common Stock"), of the Borrower valued per share at ninety-five percent
(95%) of the average closing price of the Common Stock on the American Stock
Exchange (or, if the Common Stock is not then traded on the American Stock
Exchange, on such other national securities exchange (or similar nationally
recognized automated quotation system or market, such as the Nasdaq Stock
Market, on which the Common Stock then trades) for the period of the ten (10)
consecutive trading days ending immediately prior to the Maturity Date. For
purposes of a Common Stock Payment, registered shares shall be deemed to be
shares of Common Stock that are registered for resale under the Securities Act
of 1933, as amended, upon receipt of such shares by the Lender.

            (b) INTEREST. All payments of any interest hereunder shall be made
in immediately available funds in lawful money of the United States of America.

            (c) COMMON STOCK PAYMENTS. Any election by the Borrower to make any
payment of principal in the form of a Cash Payment or a Common Stock Payment
shall be made and apply equally with respect to all Convertible Notes then
outstanding. In the event that the Borrower elects to make any payment of
principal in the form of a Common Stock Payment, the Borrower shall issue and
deliver to the Lender, promptly after the Maturity Date, a certificate or
certificates representing in the aggregate the number of shares of Common Stock
required to be issued to the Lender pursuant to such Common Stock Payment.
Notwithstanding anything to the contrary in this Convertible Note, the Borrower
shall make a Cash Payment in lieu of any fractional share that the Borrower
would otherwise be required to issue and deliver to the Lender pursuant to any
Common Stock Payment.

            (d) LOCATION. All Cash Payments shall be made by wire transfer or
check payable to such account as the Lender may from time to time designate in
writing to the

                                       2




Borrower. All Common Stock Payments shall be payable at the address set forth in
Section 10 hereof or such other place as the Lender may from time to time
designate in writing to the Borrower.

            (e) PAYMENTS PRO RATA; PARI PASSU RANKING. Whenever any payments
(whether constituting principal, interest or otherwise, and whether in the form
of Cash Payments or Common Stock Payments)) shall be due and payable or made
(whether at maturity or otherwise) under this Convertible Note and the other
Convertible Notes, such payments under the Convertible Notes shall be made to
the respective holders of the Convertible Notes pro rata based on (x) in the
case of payments of principal or other amounts (other than interest), the
respective then outstanding principal amounts of the Convertible Notes and (y)
in the case of payments of interest, the respective then outstanding amounts of
accrued but unpaid interest under the Convertible Notes. The Convertible Notes
shall rank pari passu with one another in right of payment.

            (f) LATE PAYMENTS. If any amount payable hereunder (whether
constituting principal, interest or otherwise) is not paid on the date on which
such payment is due hereunder (a "Late Payment"), such Late Payment shall bear
interest, from and including the due date thereof to but excluding the date on
which such Late Payment is paid, at the rate of eighteen percent (18%) per
annum, compounded daily (the "Penalty Rate"), and such interest shall be payable
on demand. In the event that a Late Payment remains unpaid for sixty (60) days
after the date thereof, the then outstanding principal amount of this
Convertible Note shall bear interest at the Penalty Rate (in lieu of, and not in
addition to, the rate provided for in the first paragraph of this Convertible
Note) from and including such sixtieth (60th) day to but excluding the date on
which such Late Payment is paid. Notwithstanding anything to the contrary
herein, upon full payment of any Late Payment, the outstanding principal amount
of this Convertible Note shall again bear interest at three percent (3%) per
annum, compounded quarterly, as provided in the first paragraph of this
Convertible Note.

       2. CONVERSION.

            (a) RIGHT TO CONVERT. At any time prior to the Maturity Date, the
Lender shall have the right, but not the obligation, by written notice to the
Company, to convert all, but not less than all, of the outstanding principal
amount of the Note and accrued but unpaid interest thereon (the "Note Value")
into a number of shares (the "Conversion Shares") of Common Stock of the Company
equal to the Note Value divided by $17.45, subject to adjustment as provided
below (the "Conversion Price"). Upon conversion of this Note, the Lender shall
surrender this Note at the office of the Company duly endorsed to the Company or
accompanied by proper instruments of transfer. Upon such surrender and delivery
of such notice and this Note, Lender shall be entitled to receive a certificate
or certificates representing in the aggregate the number of Conversion Shares
required to be issued to the Lender pursuant to this Section 2, interest on this
Note shall cease to accrue and this Note shall be cancelled and shall not
thereafter be deemed to be outstanding. Subject to receipt of the original of
this Note, the Company shall, as soon as practicable thereafter, deliver, or
cause to be delivered, to the Lender or to the nominee for the Lender at its
address set forth in the Lender's written notice, a certificate or other
evidence of the Conversion Shares in the amount described herein.

                                       3




            (b) MANDATORY. If, after the second anniversary of the date of this
Note, the average of the closing prices of the Common Stock on the American
Stock Exchange (or, if the Common Stock is not then traded on the American Stock
Exchange, on such other national securities exchange (or similar system, such as
the Nasdaq Stock Market, on which the Common Stock then trades) in any
consecutive thirty (30) day period is greater than $22.67 then, all of the then
outstanding principal amount of this Note and accrued but unpaid interest
thereon shall automatically convert to Conversion Shares, without any further
action on the last day of such 30-day period (the "Auto Conversion Date"), and
such conversion will be deemed effective on the Auto Conversion Date regardless
of whether this Note shall be surrendered to the Company and the rights of the
Lender hereunder (other than the right to receive the Conversion Shares) shall
cease, and the Lender will be deemed to be the holder of the Conversion Shares
as of the Auto Conversion Date. In the event of such a conversion, this Note
shall be cancelled and the principal of this Note shall cease to accrue
interest.

            (c) ADJUSTMENT PROVISIONS.

                 (i) The number and character of shares of Conversion Shares
       issuable upon conversion of this Note (or any shares of stock or other
       securities or property at the time receivable or issuable upon conversion
       of this Note) and the Conversion Price therefor, are subject to
       adjustment upon occurrence of the following events between the date this
       Note is issued and the date upon which this Note is longer outstanding:

                      (A) ADJUSTMENT FOR STOCK SPLITS, STOCK DIVIDENDS,
            RECAPITALIZATIONS, ETC. The Conversion Price of this Note and the
            number of Conversion Shares issuable upon conversion of this Note
            (or any shares of stock or other securities at the time issuable
            upon conversion of this Note) shall each be proportionally adjusted
            to reflect any stock dividend, stock split, reverse stock split,
            reclassification, recapitalization or other similar event affecting
            the number of outstanding shares of Conversion Shares (or such other
            stock or securities).

                      (B) ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER.
            If after the date of this Note (x) there shall be any reorganization
            of the Company (or of any other entity the stock or other securities
            of which are at the time receivable on the conversion of this Note)
            or (y) the Company (or any such entity) shall consolidate with or
            merge into another entity or convey all or substantially all of its
            assets to another entity and then distribute the proceeds to its
            shareholders, then, and in each such case, the Lender, upon the
            conversion of this Note at any time after the consummation of such
            reorganization, consolidation, merger or conveyance, shall be
            entitled to receive, in lieu of the stock or other securities and
            property receivable upon the conversion of this Note prior to such
            consummation, the stock or other securities or property to which the
            Lender would have been entitled upon the consummation of such
            reorganization, consolidation, merger or conveyance if the Lender
            had converted this Note immediately prior thereto, all subject to
            further adjustment as provided in this Note, and the successor or
            purchasing entity in such reorganization, consolidation, merger or
            conveyance (if other than the Company) shall duly execute and
            deliver to the Lender a supplement hereto acknowledging such
            entity's obligations under

                                       4




            this Note; and in each such case, the terms of the Note shall be
            applicable to the shares of stock or other securities or property
            receivable upon the conversion of this Note after the consummation
            of such reorganization, consolidation, merger or conveyance.

                 (ii) NOTICE OF ADJUSTMENTS. The Company shall promptly give
       written notice of each adjustment or readjustment of the Conversion Price
       or the number of shares of Conversion Shares or other securities issuable
       upon conversion of this Note. The notice shall describe the adjustment or
       readjustment and show in reasonable detail the facts on which the
       adjustment or readjustment is based.

                 (iii) NO CHANGE NECESSARY. The form of this Note need not be
       changed because of any adjustment in the Conversion Price or in the
       number of shares of Conversion Shares issuable upon its conversion.

            (d) RESERVATION OF STOCK. If at any time the number of shares of
Conversion Shares or other securities issuable upon conversion of this Note
shall not be sufficient to effect the conversion of this Note, the Company will
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Conversion Shares or other
securities issuable upon conversion of this Note as shall be sufficient for such
purpose.

       3. SUBORDINATION.

            (a) DEFINITIONS. The following terms shall have the following
respective meanings:

                 (i) The term "Other Subordinated Notes" shall mean those
       certain convertible subordinated promissory notes in an aggregate
       principal amount not exceeding $25,000,000 issued on or about September,
       2002 and the Subordinated Promissory Notes to be issued by the Borrower
       pursuant to the Purchase Agreement.

                 (ii) The term "Person" shall mean any natural person,
       corporation, unincorporated organization, trust, joint-stock company,
       joint venture, association, company, partnership or government, or any
       agency or political subdivision of any government.

                 (iii) The term "Senior Creditors" means any creditor or Person
       to whom the Borrower owes a Senior Obligation.

                 (iv) The term "Senior Obligations" shall mean (A) all principal
       of, and premium and interest on, and all other amounts owing or
       guaranteed by the Borrower or any of its subsidiaries in respect of, any
       indebtedness incurred or guaranteed by the Borrower or any of its
       subsidiaries for money borrowed from any bank or other institutional
       lender now or hereafter outstanding or hereafter incurred (including
       without limitation all indebtedness incurred or guaranteed by the
       Borrower or any of its subsidiaries to (1) The Royal Bank of Scotland plc
       ("RBS"), RBS Mezzanine Limited ("RBS Mezzanine") or any or their
       affiliates, or any of the other lenders, under (a) the

                                       5




       senior credit agreement with RBS and certain other lenders dated as of
       December 20, 2001, providing for term loan credit facilities in the
       aggregate amount of $52,500,000 and a revolving credit facility in the
       amount of $7,500,000 (as amended, the "RBS Senior Credit Facility"), and
       (b) a mezzanine loan agreement with RBS Mezzanine Limited and certain
       other lenders dated as of December 20, 2001, providing for a mezzanine
       term loan credit facility in the amount of $10,000,000 (as amended, the
       "RBS Mezzanine Credit Facility" and, together with the RBS Senior Credit
       Facility, the "RBS Credit Facility"), (2) one or more senior credit
       facilities with GE Capital Healthcare Financial Services, Inc. or any of
       its affiliates or other lenders entered into to, among other things,
       refinance the RBS Senior Credit Facility, but excluding any other
       indebtedness described in clause (B) below), PROVIDED that the aggregate
       outstanding principal amount of all such indebtedness described
       in this clause (A) that shall constitute "Senior Obligations" at any time
       by virtue of this clause (A) shall not exceed $150 million, and (B) any
       indebtedness of the Borrower incurred to finance the Borrower's
       acquisition (by merger, consolidation, stock purchase or otherwise) of a
       Person or the Borrower's acquisition of all or substantially all of the
       assets of a Person or all or substantially all of the assets of a
       division or line of business of a Person. Notwithstanding the foregoing,
       the Senior Obligations shall not include (w) any trade indebtedness
       incurred in the ordinary course of business, (x) any indebtedness of the
       Borrower to any direct or indirect subsidiary or other affiliate of the
       Borrower, (y) any indebtedness of the Borrower that, by its terms, states
       that such indebtedness shall be subordinated to, or rank pari passu with,
       the Convertible Notes (or any class of indebtedness of the Borrower that
       includes the Convertible Notes) in right of payment, and indebtedness of
       the Borrower evidenced by the other Convertible Notes and the Other
       Subordinated Notes, all of which shall rank equally and ratably with this
       Convertible Note.

                 (v) The term "Subordinated Creditors" shall mean the Lender and
       any Person to whom this Convertible Note is subsequently transferred
       (subject to the provisions of Section 7 hereof).

                 (vi) The term "Subordinated Indebtedness" shall mean the
       outstanding principal amount and any interest accrued under this
       Convertible Note.

            (b) NO TRANSFER. The Subordinated Creditors will not transfer, sell
or otherwise dispose of any of the Subordinated Indebtedness except to a Person
who agrees in writing to comply with the terms of this Section 3 as a
Subordinated Creditor. Thereafter, such transferee shall be deemed to be a
Subordinated Creditor under this Section 3.

            (c) AGREEMENT TO SUBORDINATE; NO PAYMENTS ON SUBORDINATED
INDEBTEDNESS.

                 (i) The Subordinated Creditors agree that the payment of the
       Subordinated Indebtedness is hereby expressly subordinated in right of
       payment, to the extent and in the manner hereinafter set forth, to the
       prior payment in full of all Senior Obligations.

                 (ii) No payment on account of principal or any other amount
       payable under this Convertible Note shall be made by the Borrower or
       accepted by any of the

                                       6




       Subordinated Creditors, and this Convertible Note shall not be redeemed
       or purchased directly or indirectly by the Borrower, until such time as
       all of the Senior Obligations shall have been indefeasibly paid in full;
       provided that, notwithstanding anything to the contrary contained herein
       or in any agreements evidencing Senior Obligations, so long as no default
       or event of default exists under a Senior Obligation, the Borrower shall
       pay, and the Subordinated Creditors may accept, the interest required to
       be paid in cash on each Quarterly Interest Payment Date.

            (d) LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment or
distribution of assets of the Borrower of any kind or character, whether in
cash, property or securities, (i) in connection with any liquidation,
dissolution or winding up of the Borrower, whether voluntary or involuntary
(each a "Liquidation"), (ii) in bankruptcy, insolvency or receivership, or (iii)
upon an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Borrower or otherwise:

                 (i) all Senior Obligations shall first be paid in full before
       the Subordinated Creditors shall be entitled to receive any assets in
       respect of the Subordinated Indebtedness; and

                 (ii) any payment or distribution of assets of the Borrower of
       any kind or character, whether in cash, property or securities to which
       the Subordinated Creditors would otherwise be entitled shall be made by
       the Borrower or by any receiver, trustee in bankruptcy, liquidating
       trustee, agent or other person making such payment or distribution
       directly to Senior Creditors or their representative to the extent
       necessary to pay all Senior Obligations in full.

            (e) WHEN DISTRIBUTION MUST BE PAID OVER. In the event that any
Subordinated Creditor receives any payment with respect to any Subordinated
Indebtedness at a time when such payment is prohibited by Section 3(d) hereof,
such payment shall be held by such Subordinated Creditor in trust for the
benefit of, and shall be forthwith paid over and delivered to, the Senior
Creditors or their representative for application to the payment of all Senior
Obligations remaining unpaid to the extent necessary to pay the Senior
Obligations in full.

            (f) STANDSTILL. The Subordinated Creditors, for themselves and their
respective successors and assigns, agree for the benefit of the Senior Creditors
that, so long as any Senior Obligations remain outstanding, the Subordinated
Creditors will not take any action to accelerate or demand the payment of the
Subordinated Indebtedness or to institute legal proceedings to collect the
Subordinated Indebtedness (other than to provide notice to the Borrower of any
event of default on the Subordinated Indebtedness, provided that such notice
does not constitute any such acceleration, demand or institution of legal
proceedings) prior to the earlier of (i) 180 days after receipt by the Senior
Creditors of written notice of the occurrence of any event of default on the
Subordinated Indebtedness, which event is not thereafter cured or waived by the
Subordinated Creditors prior to taking such action or (ii) the acceleration of
the Senior Obligations.

            (g) OTHER RIGHTS AND REMEDIES. In the event of any insolvency,
bankruptcy, assignment or trust mortgage for the benefit of creditors,
reorganization, whether or not pursuant

                                       7




to bankruptcy laws, sale of all or substantially all of the assets, Liquidation
or any other marshaling of the assets and liabilities of the Borrower, the
Subordinated Creditors will, at the request of the Senior Creditors, file any
claim, and take or refrain from taking any other action necessary or appropriate
to enforce the obligations of the Borrower in respect of the Subordinated
Indebtedness, will vote such claim at any meeting of creditors or for any plan
or with respect to any matter as the Senior Creditors shall direct and will hold
in trust for the Senior Creditors and assign, transfer and pay over to the
Senior Creditors to be applied against all amounts owed by the Borrower to the
Senior Creditors on account of Senior Obligations, in the form received, any and
all monies, dividends or other assets received in any such proceeding, or
otherwise from the Borrower, from any guarantor or purchaser on account of the
Subordinated Obligations, and will preserve and maintain the Subordinated
Obligations so that the Senior Creditors will always have the benefit of the
Subordinated Obligations as provided herein, unless and until the Senior
Obligations shall be paid in full. In the event that the Subordinated Creditors
shall fail to take or refrain from any such action as requested or required
hereunder, the Senior Creditors may, as attorney-in-fact for the Subordinated
Creditors, take or rescind such action on behalf of the Subordinated Creditors,
and the Subordinated Creditors hereby irrevocably grant the Senior Creditors an
irrevocable power of attorney, coupled with an interest, in their name, to
demand, sue for, collect and receive any and all such monies, dividends, or
other assets and give acquittance therefor and to file and enter any petition,
claim, proof of claim or other instrument of similar character and to take such
other action or refrain from taking any action as the Senior Creditors may deem
necessary or advisable for the enforcement of this Section 3. The Subordinated
Creditors will execute and deliver to the Senior Creditors such other and
further powers of attorney or other instruments as the Senior Creditors may
request in order to accomplish the foregoing.

            (h) NO COLLATERAL. The Subordinated Creditors represent that they
hold no collateral of the Borrower as security for the Subordinated
Indebtedness, and agree that in the event that they acquire any such collateral,
it shall be held in trust by them for the Senior Creditors, and they will
immediately transfer and deliver same to the Senior Creditors or assign any
rights therein to the Senior Creditors, to be held by the Senior Creditors as
security for the Senior Obligations.

            (i) SUBORDINATION AGREEMENT. Subject to clause (j) below, the rights
and obligations of the Borrower and the Lender under this Convertible Note are
subject to the provisions of the Subordination Agreement (as defined below) as
if the same were incorporated in this Convertible Note. In the event of a
conflict between the terms of this Convertible Note and the terms of the
Subordination Agreement, the terms of the Subordination Agreement shall prevail;
provided, however, that in no event shall the Subordinated Agreement prohibit
the payment by the Borrower of the cash interest payments due and payable by the
Borrower to the Lender hereunder during any period in which there does not exist
a default or event of default with respect to any of the Senior Obligations. As
used herein, the term "Subordination Agreement" shall mean one or more
subordination and/or inter-creditor agreements dated on or about September 20,
2002 entered into by and among the Borrower, The Royal Bank of Scotland plc, and
certain other parties, as amended, varied, supplemented, restated or novated
from time to time, and as joined in by or on behalf of the holders of the
Convertible Notes as parties thereto.

                                       8




            (j) INAPPLICABILITY. Notwithstanding anything to the contrary
herein, in no event shall the provisions of Sections 3(b) through 3(i) hereof or
of the Subordination Agreement apply to, or in any way limit or restrict, the
Borrower's rights to make payments under this Convertible Note in the form of
Common Stock Payments in accordance with the terms of this Convertible Note.

            (k) OTHER DEBT. The Borrower covenants that it shall cause all
indebtedness for borrowed money incurred by the Borrower after the date of this
Convertible Note (other than (w) the other Notes and the other Subordinated
Notes (which shall be pari passu with this Convertible Note), (x) the Senior
Obligations, (y) any trade indebtedness incurred in the ordinary course of
business and (z) any indebtedness owed or incurred by the Borrower to any of its
direct or indirect subsidiaries or any holding company that wholly owns,
directly or indirectly, the Borrower) to be subordinated to the indebtedness of
the Borrower under the Convertible Notes on terms and conditions equivalent to
the terms and conditions set forth in Sections 3(b) through 3(h) hereof or
otherwise satisfactory to holders of greater than sixty six and two-thirds
percent (66 2/3%) of the aggregate principal amount outstanding under the
Convertible Notes.

       4. REPAYMENT UPON CHANGE OF CONTROL.

            (a) CHANGE OF CONTROL. As used herein, the term "Change of Control"
shall mean any transaction or series of related transactions to which the
Borrower is a party resulting in (i) the members of the Board of Directors of
the Borrower immediately prior to the commencement of such transaction or series
of transactions constituting 50% or less of the Board of Directors of the
Borrower (or the board of directors of the surviving or acquiring corporation)
immediately following the consummation of such transaction or series of
transactions or (ii) the sale of all or substantially all the assets of the
Borrower.

            (b) REPAYMENT OF THE CONVERTIBLE NOTES. Immediately upon the
occurrence of a Change of Control, the Borrower shall repay all then outstanding
principal, together with all accrued but unpaid interest calculated as of the
date of such Change in Control, in each case, under this Convertible Note and
the other Convertible Notes.

       5. DEFAULT.

            (a) EVENTS OF DEFAULT. If any of the following Events of Default
shall occur and be continuing, then the Lender may, by notice to the Borrower,
declare the entire unpaid principal amount of this Convertible Note and all
interest accrued and unpaid hereon, to be forthwith due and payable, whereupon
such unpaid principal amount and all such accrued interest shall become and be
forthwith due and payable; provided, further, that upon the occurrence of an
Event of Default described in clause (iii) below, the entire principal amount
and interest accrued and unpaid thereon, shall immediately and automatically
become and be due and payable. As used herein, the term "Events of Default"
shall mean one or more of the following:

                 (i) The Borrower shall fail to pay any interest or principal on
       this Convertible Note when due and such failure shall continue for five
       (5) business days after written notice thereof shall have been given to
       the Borrower by the Lender;

                                       9




                 (ii) The Borrower shall default in the performance of any
       material agreement or material covenant contained in this Convertible
       Note or the Purchase Agreement of even date herewith and such failure
       shall remain unremedied for thirty (30) business days after written
       notice thereof shall have been given to the Borrower by the Lender;

                 (iii) The Borrower shall be involved in any of the following:
       (i) its commencement of a voluntary bankruptcy case under Title 11 of the
       United States Code as from time to time in effect, or by its authorizing,
       by appropriate proceedings of its Board of Directors or other governing
       body, the commencement of such a voluntary case; (ii) its filing an
       answer or other pleading admitting or failing to deny the material
       allegations of a petition filed against it commencing an involuntary
       bankruptcy case under said Title 11, or seeking, consenting to, or
       acquiescing in the relief therein provided, or by its failing seasonably
       to controvert the material allegations of any such petition; (iii) the
       entry of an order for relief in any involuntary bankruptcy case commenced
       under said Title 11; (iv) its seeking relief as a debtor under any
       applicable law, other than said Title 11, of any jurisdiction relating to
       the liquidation or reorganization of debts or to the modification or
       attention of the rights of creditors, or by its consenting to or
       acquiescing in such relief, (v) an order shall have been entered by a
       court of competent jurisdiction (1) finding the Borrower to be bankrupt
       or insolvent, (2) ordering or approving the Borrower's liquidation,
       reorganization or any modification or alteration of the rights of its
       creditors, or (3) assuming custody of, or appointing a receiver or other
       custodian for, all or a substantial part of the Borrower's property; or
       (vi) its making an assignment for the benefit of, or entering into a
       composition with, its creditors, or appointing or consenting to the
       appointment of a receiver or other custodian for all or a substantial
       part of its property;

                 (iv) A default shall occur and be continuing under any of the
       Senior Obligations, for more than the period of grace, if any, specified
       therein, unless such default is waived by the Senior Creditors or cured
       by the Borrower; or

                 (v) An Event of Default shall occur under any of the other
       Convertible Notes.

            (b) COLLECTION COSTS; ATTORNEY'S FEES. In the event this Convertible
Note is turned over to an attorney for collection upon the occurrence of an
Event of Default, the Borrower agrees to pay all reasonable costs of collection,
including reasonable attorney's fees and expenses and all out-of-pocket expenses
incurred in connection with such collection efforts.

       6. LIMITATION ON SALES. The Lender acknowledges that this Convertible
Note and any shares of Common Stock issuable pursuant to the terms of this
Convertible Note (the "Convertible Note Stock") have not been registered under
the Securities Act of 1933, as now in force or hereafter amended, or any
successor legislation (the "Securities Act"), and agrees not to sell, pledge,
distribute, offer for sale, transfer or otherwise dispose of this Convertible
Note or any Convertible Note Stock unless (a) there is an effective registration
statement under the Securities Act as to this Convertible Note or such
Convertible Note Stock and this Convertible Note or such Convertible Note Stock
has been registered or qualified under any applicable state

                                       10




securities or "blue sky" laws then in effect, or (b) the Company receives an
opinion of counsel, satisfactory to the Company, that such registration and
qualification are not required.

       Without limiting the generality of the foregoing, unless the offering and
sale of the Convertible Note Stock to be so issued shall have been effectively
registered under the Securities Act, the Company shall be under no obligation to
issue the shares covered so issuable unless and until the Lender shall have
executed an investment letter in form and substance satisfactory to the
Borrower, including a warranty at the time of such issuance that it is acquiring
such shares for its own account, for investment and not for, with a view to, or
in connection with, the distribution or resale of any such shares, and the
Lender shall be bound by the provisions of the following legend or a legend in
substantially similar form which shall be endorsed upon the certificate(s)
evidencing the Convertible Note Stock issued pursuant to such exercise:

            "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
            OF 1933, AS AMENDED ("SECURITIES ACT"), OR REGISTERED OR QUALIFIED
            UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT
            BE TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION
            STATEMENT UNDER THE SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER
            APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS FROM SUCH
            REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
            CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE
            COMPANY MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL
            REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO
            REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED FOR SUCH
            TRANSFER."

       In addition, without limiting the generality of the foregoing, the
Borrower may delay issuance of the Convertible Note Stock until completion of
any action or the obtaining of any consent which, in either case, the Company
deems necessary under any applicable law (including, without limitation, state
securities or "blue sky" laws).

       7. CONVERTIBLE NOTE REGISTER; TRANSFER OR LOSS OF CONVERTIBLE NOTE.

            (a) CONVERTIBLE NOTE REGISTER. The Borrower shall keep at its
principal executive office a register (the "Convertible Note Register"), in
which, subject to such reasonable regulations as it may prescribe, but at its
expense (other than transfer taxes, if any), the Borrower shall provide for the
registration and transfer of this Convertible Note. The person or entity in
whose name any registered Convertible Note shall be registered shall be deemed
and treated as the owner and holder hereof for all purposes hereunder.

            (b) TRANSFER. This Convertible Note shall not be transferred
separately from the corresponding Note issued to the Lender under the terms of
the Purchase Agreement. In connection with any transfer of this Convertible Note
(i) the transferee shall make and deliver to the Borrower representations,
warranties and covenants substantially similar to those contained

                                       11




in Section 5 of the Purchase Agreement; and (ii) the transferor shall reimburse
the Borrower for all expenses incurred in connection with the transfer. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
this Convertible Note or of any rights granted hereunder contrary to the
provisions of this clause (b), or the levy of any attachment or similar process
upon this Convertible Note or such rights, shall be null and void.

            (c) LOSS OF CONVERTIBLE NOTE. Upon receipt by the Borrower of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Convertible Note and of indemnity reasonably satisfactory to
it, and upon reimbursement to the Borrower of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Convertible Note (in case
of mutilation), the Borrower will make and deliver in lieu of this Convertible
Note a new Convertible Note of like tenor and unpaid principal amount and dated
as of the date to which interest has been paid on the unpaid principal amount of
this Convertible Note in lieu of which such new Convertible Note is made and
delivered.

       8. HEADINGS. The headings in this Convertible Note are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Convertible Note.

       9. AMENDMENT AND WAIVER. Any provision of this Convertible Note,
including, without limitation, any subordination provision hereof, may be
amended or waived with the written consent of (a) the Borrower and (b) either
(i) the Lender or (ii) the holders of greater than two-thirds of the aggregate
principal amount outstanding under the Convertible Notes. A waiver of any right
or remedy under this Convertible Note on any occasion shall not be a bar to
exercise of the same right or remedy on any subsequent occasion or of any other
right or remedy at any time.

       10. NOTICE. Any notice required or permitted to be given to the Borrower
or the Lender under this Convertible Note shall be made in writing at the
address or facsimile number of such person specified below (or such other
address or facsimile number as such person may specify in a written notice to
the other party) and shall be deemed to have been given, if delivered personally
or sent via electronic facsimile transmission with confirmation received, on the
date of delivery or, if sent via nationally recognized overnight express courier
with established tracking capability marked for delivery on the next business
day, on the earlier of the date of delivery, as demonstrated by the tracking
records of the courier, or two (2) business days after deposit of the notice
with the courier:

            if to the Borrower, to:

                 Inverness Medical Innovations, Inc.
                 51 Sawyer Road, Suite 200
                 Waltham, MA 02153
                 Facsimile: (781) 674-3939
                 Attention: Ron Zwanziger, President

                                       12




            with a copy to:

                 Inverness Medical Innovations, Inc.
                 51 Sawyer Road, Suite 200
                 Waltham, MA 02153
                 Facsimile: (781) 674-3939
                 Attention: Paul T. Hempel, General Counsel

            and to:

                 Goodwin Procter LLP
                 Exchange Place
                 Boston, MA 02109
                 Facsimile: (617) 523-1231
                 Attention: Scott F. Duggan, Esq.

if to the Lender, to the address furnished to the Company in writing by the last
holder of this Convertible Note who shall have furnished an address to the
Company in writing.

                 Zwanziger Family Ventures
                 322 Waverly Avenue
                 Newton, MA  02458
                 Facsimile:  617-647-3939
                 Attention:  Ron Zwanziger

       11. MAXIMUM PERMISSIBLE RATE. In the event that any of the terms or
provisions of this Convertible Note are in conflict with applicable usury law,
this Section 11 shall govern as to such terms or provisions, and this
Convertible Note shall in all other respects remain in full force and effect. If
any transaction contemplated hereby would be usurious, the aggregate of all
consideration which constitutes interest under applicable law that is contracted
for, charged or received under this Convertible Note shall under no
circumstances exceed the maximum interest allowed by applicable law.
Accordingly, if interest in excess of the legal maximum is contracted for,
charged or received: (i) this Convertible Note shall be automatically reformed
so that the effective rate of interest shall be reduced to the maximum rate of
interest permitted by applicable law, and, for the purpose of determining said
rate and to the extent permitted by applicable law, all interest contracted for,
charged or received shall be amortized, prorated and spread throughout the full
term of this Convertible Note so that the effective rate of interest is uniform
throughout the life of this Convertible Note, and (ii) any excess of interest
over the maximum amount allowed under applicable law shall be applied as a
credit against the then unpaid principal amount of this Convertible Note.

       12. SEVERABILITY. In the event any one or more of the provisions of this
Convertible Note shall for any reason be held to be invalid, illegal or
unenforceable, in whole or in part or in any respect, or in the event that any
one or more of the provisions of this Convertible Note operate or would
prospectively operate to invalidate this Convertible Note, then and in any such
event, such provision(s) only shall be deemed null and void and shall not affect
any other provision of this Convertible Note and the remaining provisions of
this Convertible Note shall

                                       13




remain operative and in full force and effect and in no way shall be affected,
prejudiced, or disturbed thereby.

       13. GOVERNING LAW. This Convertible Note shall be governed by, and
construed and enforced in accordance with, the substantive laws of The
Commonwealth of Massachusetts without regard to its principles of conflicts of
laws. Any dispute arising out of or relating to this Convertible Note shall be
filed and prosecuted in any court of competent subject matter jurisdiction
located in Massachusetts. The Borrower and the Lender hereby consent to the
personal jurisdiction of such courts over them, stipulate to the convenience,
fairness and efficiency of proceeding in such courts, and covenant not to assert
any objection to proceeding in such courts based on any alleged lack of
jurisdiction or any alleged inconvenience, unfairness or inefficiency of such
courts.

       14. SATURDAYS, SUNDAYS, HOLIDAYS. If any date that may at any time be
specified in this Convertible Note as a date for the making of any payment under
this Convertible Note shall fall on Saturday, Sunday or on a day which in
Massachusetts shall be a legal holiday, then the date for the making of that
payment shall be the next subsequent day which is not a Saturday, Sunday or
legal holiday.

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       IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed by its duly authorized officer as of the date first above written.

                                         INVERNESS MEDICAL INNOVATIONS, INC.


                                         By: /s/ ANTHONY J. BERNARDO
                                            -----------------------------------
                                            Name:  Anthony J. Bernardo
                                            Title: Vice President and
                                                   Chief Operating Officer

ATTEST:

/s/ PAUL T. HEMPEL
- ------------------------------------
Paul T. Hempel
Secretary


Accepted and agreed to as of this 20th day of September, 2002.


Lender's Name: Zwanziger Family Ventures, LLC


By: /s/ RON ZWANZIGER
    ----------------------------
Name:  Ron Zwanziger
Title: Manager