AMENDED AND RESTATED ASSET PURCHASE AGREEMENT

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Exhibit 2.1

Execution Copy

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AMENDED AND RESTATED

ASSET PURCHASE AGREEMENT

dated as of May 17, 2007

among

INVERNESS MEDICAL SWITZERLAND GMBH,

PROCTER & GAMBLE INTERNATIONAL OPERATIONS, SA

and

SPD SWISS PRECISION DIAGNOSTICS GMBH

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TABLE OF CONTENTS

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ARTICLE 1 PURCHASE AND SALE.............................................. 3

Section 1.1 Purchase and Sale...................................... 3

Section 1.2 Purchased Assets....................................... 3

Section 1.3 Excluded Assets........................................ 5

Section 1.4 Liabilities Not Assumed by PGIO........................ 7

Section 1.5 Purchase Price; Allocation of Purchase Price........... 7

ARTICLE 2 CLOSING........................................................ 7

Section 2.1 Closing................................................ 7

Section 2.2 Closing Deliveries..................................... 7

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF IMS.......................... 8

Section 3.1 Organization and Existence............................. 8

Section 3.2 Power and Authority; Binding Agreement................. 9

Section 3.3 Noncontravention....................................... 9

Section 3.4 Compliance with Laws................................... 10

Section 3.5 Governmental Licenses.................................. 10

Section 3.6 Financial Statements................................... 11

Section 3.7 Absence of Changes or Events........................... 12

Section 3.8 Undisclosed Liabilities................................ 12

Section 3.9 Assets other than Real Property........................ 12

Section 3.10 [Reserved]............................................. 12

Section 3.11 Contracts.............................................. 12

Section 3.12 Intellectual Property.................................. 14

Section 3.13 Legal Proceedings...................................... 18

Section 3.14 Tax Matters............................................ 18

Section 3.15 Insurance.............................................. 18

Section 3.16 Benefit Plans.......................................... 18

Section 3.17 Employee and Labor Matters............................. 19

Section 3.18 Environmental Matters.................................. 20

Section 3.19 Transactions with Affiliates........................... 21

Section 3.20 Certain Business Practices............................. 21

Section 3.21 Regulatory Compliance.................................. 22

Section 3.22 Product Liability Claims; Product Recalls.............. 23

Section 3.23 Product Registrations.................................. 23

Section 3.24 Brokers' Fees.......................................... 24

ARTICLE 4 COVENANTS...................................................... 24

Section 4.1 Filings................................................ 24

Section 4.2 Access and Investigation............................... 24

Section 4.3 Conduct of Business.................................... 25

Section 4.4 Commercially Reasonable Efforts........................ 27

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Section 4.5 Public Announcements................................... 28

Section 4.6 Enforcement............................................ 28

Section 4.7 Inventory.............................................. 28

Section 4.8 Transfer............................................... 28

Section 4.9 Further Assurances..................................... 29

Section 4.10 Accounts Receivable.................................... 30

Section 4.11 Expenses............................................... 30

Section 4.12 Confidentiality........................................ 30

Section 4.13 [Reserved]............................................. 31

Section 4.14 Preparation for Transition............................. 31

Section 4.15 Other Subsidiaries..................................... 31

Section 4.16 Compliance with Contractual Obligations................ 32

Section 4.17 Reserved............................................... 32

Section 4.18 Unipath Purchase....................................... 32

Section 4.19 Transition Assets...................................... 32

Section 4.20 Disclosure Supplements................................. 34

ARTICLE 5 TAX MATTERS.................................................... 34

Section 5.1 Cooperation............................................ 34

Section 5.2 Apportioned Obligations................................ 34

Section 5.3 Transfer Taxes......................................... 34

Section 5.4 Tax Payments........................................... 35

ARTICLE 6 CONDITIONS TO CLOSING.......................................... 35

Section 6.1 Conditions to Each Party's Obligations................. 35

Section 6.2 Conditions to PGIO's Obligations....................... 36

Section 6.3 Conditions to IMS's Obligations........................ 38

ARTICLE 7 INDEMNIFICATION................................................ 38

Section 7.1 Indemnification of PGIO................................ 38

Section 7.2 Indemnification of IMS................................. 39

Section 7.3 Indemnification Claims................................. 40

Section 7.4 Survival............................................... 41

Section 7.5 Sole and Exclusive Remedy.............................. 42

ARTICLE 8 TERMINATION.................................................... 42

Section 8.1 Termination............................................ 42

Section 8.2 Effect of Termination.................................. 43

Section 8.3 Amendment.............................................. 43

Section 8.4 Extension; Waiver...................................... 43

ARTICLE 9 GENERAL PROVISIONS............................................. 43

Section 9.1 Notices................................................ 43

Section 9.2 Definitions............................................ 45

Section 9.3 Descriptive Headings; Certain Interpretations.......... 52

Section 9.4 Assignment............................................. 52

Section 9.5 Specific Enforcement................................... 52

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Section 9.6 Entire Agreement....................................... 52

Section 9.7 No Third-Party Beneficiaries........................... 52

Section 9.8 Counterparts........................................... 53

Section 9.9 Governing Law.......................................... 53

Section 9.10 Arbitration............................................ 53

Section 9.11 Severability........................................... 54

Section 9.12 Nonassignable Contracts................................ 54

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INDEX OF DEFINED TERMS

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--A--

Accounts Receivable....................................................... 30

Affiliate................................................................. 45

Agreement................................................................. 1

Apportioned Obligations................................................... 34

Arbitration Request....................................................... 53

--B--

Benefit Plans............................................................. 19

Bond Indenture............................................................ 36

Business Contract......................................................... 45

Business Day.............................................................. 45

Business Intellectual Property............................................ 14

Business Purchased Intellectual Property.................................. 4

Business Registered Intellectual Property................................. 45

--C--

CD Business............................................................... 1

CD Financial Statements................................................... 11

Claim Notice.............................................................. 40

Closing................................................................... 7

Closing Date.............................................................. 7

COBRA..................................................................... 19

Code...................................................................... 45

Company................................................................... 1

Confidential Information.................................................. 30

Constitutive Documents.................................................... 45

Contingent Obligation..................................................... 46

Contract.................................................................. 46

Contributed Asset......................................................... 46

Contributed CD Business................................................... 2

Contributed US CD Business................................................ 2

Contribution Agreement.................................................... 2

Control................................................................... 46

Controlled................................................................ 46

--D--

Distribution Arrangements................................................. 2

--E--

Environmental Law......................................................... 46

Environmental Liability................................................... 46

Environmental Permits..................................................... 47

ERISA..................................................................... 19

Exchange Act.............................................................. 10

Excluded Assets........................................................... 5

Excluded Businesses....................................................... 5

Excluded Contracts........................................................ 6

Excluded Liabilities...................................................... 7

--F--

FDA....................................................................... 10

FDCA...................................................................... 22

Financial Investor........................................................ 47

Finished Product Purchase Agreement....................................... 2

First Check Diagnostics Business.......................................... 47

--G--

GAAP...................................................................... 11

General Limitations....................................................... 9

Global Trademark Assignments.............................................. 47

Governmental Entity....................................................... 47

Governmental Licenses..................................................... 3

Guarantee................................................................. 2

--H--

Hazardous Materials....................................................... 47

House Marks............................................................... 6

HSR Act................................................................... 10

--I--

IMA....................................................................... 1

IMA Audited Financial Statements.......................................... 11

IMA Balance Sheet Date.................................................... 11

IMA Facilities............................................................ 47

IMA Financial Statements.................................................. 11

IMA Indemnified Party..................................................... 39

IMA Indemnity Threshold................................................... 39

IMA License Agreements.................................................... 47

IMA Services Agreement.................................................... 47

IMA Transition Services Agreement......................................... 48

IMA Unaudited Financial Statements........................................ 11

IMS....................................................................... 1

Indebtedness.............................................................. 48

Indemnified Party......................................................... 48

Indemnifying Party........................................................ 48

Intellectual Property..................................................... 48

Intellectual Property Rights.............................................. 49

IP Liens.................................................................. 14

IRS....................................................................... 19

--J--

Judgment.................................................................. 9

--K--

Knowledge................................................................. 49

Kunz...................................................................... 1

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--L--

Labeling.................................................................. 22

Lanter.................................................................... 1

Law....................................................................... 9

Legal Proceedings......................................................... 14

License Agreements........................................................ 49

Lien...................................................................... 9

Losses.................................................................... 49

--M--

Material Adverse Effect................................................... 49

Most Recent Balance Sheet................................................. 11

Most Recent Balance Sheet Date............................................ 11

--N--

Nonassignable Contract.................................................... 54

--O--

Option Agreement.......................................................... 49

Ordinary Course of Business............................................... 12

Original Agreement........................................................ 1

Outside Date.............................................................. 42

--P--

Permitted IP Liens........................................................ 49

Permitted Liens........................................................... 49

Person.................................................................... 50

PGIO...................................................................... 1

PGIO Contribution Agreement............................................... 2

PGIO Indemnified Party.................................................... 38

PGIO License Agreements................................................... 50

PGIO Services Agreement................................................... 50

PGUS...................................................................... 2

Post-Closing Tax Period................................................... 34

PRC....................................................................... 5

Pre-Closing Tax Periods................................................... 18

Product................................................................... 50

Product Agreement......................................................... 50

Product Registrations..................................................... 50

Purchased Assets.......................................................... 3

Purchased CD Business..................................................... 1,2

--R--

Representatives........................................................... 50

Restructuring............................................................. 1

Retained Contracts........................................................ 33

Retained Inventory........................................................ 6

Returned Inventory........................................................ 28

--S--

Sale...................................................................... 3

Scheduled Contracts....................................................... 12

SEC....................................................................... 10

Share..................................................................... 50

Share Transfer Agreement.................................................. 1

Shareholder Agreement..................................................... 1

Shareholders.............................................................. 50

Strategic Investor........................................................ 51

Subsequent Transfer Date.................................................. 4

Subsidiary................................................................ 51

--T--

Tax....................................................................... 51

Tax Return................................................................ 51

Third Party Claim......................................................... 51

Trademarks................................................................ 51

Transaction Agreements.................................................... 51

Transfer Taxes............................................................ 34

Transferred Employee...................................................... 51

Transition Assets......................................................... 3

Transition Period......................................................... 32

--U--

UK Newco.................................................................. 2

UK Newco Investment Agreement............................................. 52

Unipath................................................................... 2

Unipath Purchase Agreement................................................ 2

US CD LLC................................................................. 2

US Contribution Agreement................................................. 2

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AMENDED AND RESTATED ASSET PURCHASE AGREEMENT, dated as of May 17,

2007 (this "Agreement"), among Inverness Medical Switzerland GmbH, a

Swiss company ("IMS"), Procter & Gamble International Operations, SA,

a Swiss company ("PGIO") and SPD Swiss Precision Diagnostics GmbH, a

Swiss company (the "Company")

INTRODUCTION

The Company was formed on December 19, 2006 by Dominique Kunz ("Kunz")

and Marco Lanter ("Lanter"), each a resident of Switzerland, on behalf of IMS.

In connection with the formation of the Company, each of Kunz and Lanter, on

behalf of IMS, contributed CHF 10,000 to the Company and as consideration for

such contribution received one quota (one Share of the Company, representing,

immediately following such contribution, 50% of the outstanding Shares of the

Company).

Effective December 21, 2006, Kunz and IMS entered into a share

transfer agreement, pursuant to which Kunz sold to IMS and IMS purchased from

Kunz, one Share of the Company for a purchase price of CHF 10,000. Following the

consummation of such sale and purchase, each of Lanter, on behalf of IMS, and

IMS owned one quota (one Share of the Company, representing 50% of the

outstanding Shares of the Company).

On or prior to the date hereof, Lanter, on behalf of IMS, and PGIO

entered into a Share Transfer Agreement (the "Share Transfer Agreement"),

pursuant to which Lanter sold and PGIO purchased the Share of the Company owned

by Lanter, on behalf of IMS, for a purchase price of CHF 10,000. Immediately

following such sale and purchase, and effective upon the Closing, each of IMS

and PGIO own 50% of the Company's outstanding Shares.

On the Closing Date, PGIO, IMS and the Company will enter into a

shareholder agreement in a form to be mutually agreed upon (the "Shareholder

Agreement"), which shall establish the respective rights and obligations of PGIO

and IMS with respect to the Company.

IMS, Inverness Medical Innovations, Inc. ("IMA") and certain of their

Affiliates are in the business of developing, manufacturing, marketing, selling

and distributing human diagnostics and monitoring products for sale and

distribution through over-the-counter channels, including retail outlets and

emerging channels located in such retail outlets (the "CD Business").

Prior to the Closing Date, IMA and certain of its Subsidiaries

(including IMS) will restructure (the "Restructuring") their businesses.

IMS, PGIO and the Company entered into an Asset Purchase Agreement,

dated as of December 22, 2006 (the "Original Agreement"), to provide for the

sale by IMS and the purchase by PGIO of certain assets of the CD Business, and

the assumption by PGIO of certain liabilities of the CD Business, in each case,

as set forth in the Original Agreement.

IMS, PGIO and the Company desire to enter into this Agreement to amend

and restate the Original Agreement and to provide for the sale by IMS and the

purchase by PGIO on the Closing Date of certain assets of the CD Business (the

"Purchased CD Business"), subject to

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the terms set forth in this Agreement (including with respect to the Excluded

Assets and Excluded Liabilities). Simultaneously with the Closing hereunder,

PGIO will contribute the Purchased CD Business to the Company pursuant to the

PGIO Contribution Agreement (the "PGIO Contribution Agreement").

On the Closing Date, IMA will execute a guarantee (the "Guarantee"),

pursuant to which IMA guarantees all of IMS's obligations under this Agreement,

the Contributed Note (as defined in the Contribution Agreement) and the

Contribution Agreement, and all of IMS's and Unipath's respective obligations

under the Unipath Purchase Agreement.

Concurrently with the execution of this Agreement, (a) IMS is entering

into an Amended and Restated Contribution Agreement (the "Contribution

Agreement") with PGIO and the Company pursuant to which IMS will contribute to

the Company (i) cash, (ii) a promissory note in an original principal amount of

$22,326,000 and (ii) certain assets of the CD Business, and the Company will

assume certain liabilities of the CD Business, in each case, on terms and

conditions set forth in the Contribution Agreement (the "Contributed CD

Business"). Such contributions will be consummated concurrently with the Closing

hereunder; (b) SPD Development Company, Ltd. ("UK Newco"), and Unipath Limited

("Unipath") are entering into an Asset Purchase Agreement (the "Unipath Purchase

Agreement"), pursuant to which Unipath will sell and UK Newco will purchase

certain assets of the R&D Operations and the UK Call Center (each as defined in

the Unipath Purchase Agreement), and UK Newco will assume certain liabilities of

the R&D Operations and the UK Call Center, in each case, as set forth in the

Unipath Purchase Agreement (the "Purchased UK Operations"); and (c) IMA, Procter

& Gamble RHD, Inc., ("PGUS") and US CD LLC, a Delaware limited liability company

("US CD LLC"), are entering into a Contribution Agreement (the "US Contribution

Agreement") whereby IMA will contribute to the US CD LLC certain assets of the

US CD Business (as defined in the US Contribution Agreement), and the US Company

will assume certain liabilities of the US CD Business, in each case, as set

forth in the US Contribution Agreement (the "Contributed US CD Business").

On the Closing Date, the Company and IMA and certain of its

Subsidiaries will enter into a mutually agreeable finished product purchase

agreement (the "Finished Product Purchase Agreement"), pursuant to which IMA

and/or such Subsidiaries will manufacture and sell to the Company the products

described therein.

On and following the Closing Date, the Company and (a) certain

Affiliates of PGIO and (b) IMA or certain Affiliates of IMA will enter into

distribution and commissionaire arrangements pursuant to which such Affiliates

of PGIO or IMA, as applicable, will distribute and act as sales agents for

products of the Company (collectively, the "Distribution Arrangements").

Capitalized terms shall have the meanings assigned to them in Section

9.2 or as otherwise provided in this Agreement.

In consideration of the foregoing and the respective representations,

warranties, covenants and agreements set forth herein, the parties hereto agree

as follows:

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ARTICLE 1

PURCHASE AND SALE

Section 1.1 Purchase and Sale. Subject to the terms and conditions of

this Agreement, PGIO agrees to purchase the Purchased Assets from IMS, and IMS

agrees to sell the Purchased Assets to PGIO, at the Closing.

Section 1.2 Purchased Assets. Except for the Excluded Assets as

provided in Section 1.3 and without duplication of the Contributed CD Business,

at the Closing and with effect as of the Closing Date (or such later date as

provided under this Section 1.2), IMS shall, or shall cause its Affiliates to,

assign, transfer, convey and deliver to PGIO, free and clear of all Liens except

Permitted Liens (the "Sale"), and PGIO shall acquire from IMS, all of the right,

title and interest of IMS in and to any and all of the assets, properties,

rights and business of the Purchased CD Business of every kind, nature, type and

description, real, personal and mixed, tangible and intangible, whether known or

unknown, fixed or unfixed, or otherwise, whether or not specifically referred to

in this Agreement and whether or not reflected on the books and records of IMS

(collectively, the "Purchased Assets"), including the following:

(i) all tangible assets, furniture, fixtures and property, if any,

used by the Transferred Employees upon the hiring of such Transferred

Employees;

(ii) the Business Contracts (other than the Excluded Contracts) not

included within the Transition Assets;

(iii) the Business Contracts included within the Transition Assets,

which shall be transferred to the Company on the applicable Subsequent

Transfer Date;

(iv) except for the Product Registrations, all licenses,

registrations, notifications, franchises, qualifications, provider numbers,

permits, approvals, clearances and authorizations issued by any

Governmental Entity that relate to the Purchased CD Business or the

Purchased Assets (collectively, the "Governmental Licenses"), in each case

to the extent transferable or assignable and subject to IMA retaining such

of the foregoing as are necessary for IMA and/or certain of its

Subsidiaries to fulfill their respective obligations under the Finished

Product Purchase Agreement, the IMA Transition Services Agreement, the

Product Agreement, the Regulatory Transition Agreement or as a distributor

under the Distribution Arrangements (the foregoing licenses, registrations,

notifications, franchises, qualifications, provider numbers, permits,

approvals, clearances and authorizations, all lists, documents, records,

information and other assets and rights of IMS or any of its Affiliates, in

each case excluding the Excluded Assets, necessary for IMA and/or its

Subsidiaries to perform such obligations being referred to hereunder as the

"Transition Assets"); provided that the Transition Assets shall be

transferred to the Company, without the payment of additional consideration

by the Company, upon the termination or expiration of the Finished Product

Purchase Agreement, the applicable Transition Period (as defined in the IMA

Transition Services Agreement) under the IMA Transition Services Agreement,

the Regulatory Transition Agreement or the term of the applicable

Distribution Agreement,

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as applicable (such applicable date, the "Subsequent Transfer Date"), in

each case to the extent transferable or assignable;

(v) all lists, documents, records, written information, computer files

and other computer readable media concerning present customers, and to the

extent reasonably available, past and potential customers, of goods or

services arising from or used in the Purchased CD Business, excluding any

of the foregoing included within the Transition Assets, which shall be

transferred to the Company on the applicable Subsequent Transfer Date;

(vi) all lists, documents, records, written information, computer

files and other computer readable media concerning present suppliers and

vendors of goods or services, and to the extent reasonably available, past

and potential suppliers and vendors, arising from or used in the Purchased

CD Business, excluding any such lists, records, written information,

computer files and other media included within the Transition Assets, which

shall be transferred to the Company on the applicable Subsequent Transfer

Date;

(vii) all product records, product data, correspondence with and to

customers of the CD Business, production records, contract files,

technical, accounting, and procedural manuals, studies, reports or

summaries relating to the general condition of the Purchased Assets, and

any confidential information which has been reduced to writing or

electronic form, to the extent that any of the foregoing relate to or arose

from the Purchased CD Business, which shall be transferred to the Company

on the applicable Subsequent Transfer Date;

(viii) all rights under express or implied warranties from the

suppliers and vendors relating to or arising out of the operation of the

Purchased CD Business, except for such rights arising out of or relating to

the manufacturing of any product of the CD Business;

(ix) to the extent related to an Assumed Liability, all claims,

warranties, guarantees, refunds, causes of action, rights of recovery,

rights of set-off and rights of recoupment of any kind and nature;

(x) all currently outstanding unfilled purchase orders and proposals

(or portions thereof) received for the purchase of inventory of the

Purchased CD Business following the termination of the Transition Period;

(xi) all (A) Intellectual Property owned by IMS or any of its

Affiliates that are exclusively used in the CD Business, including those

Trademarks of which IMS is the registered owner as set forth on Section

3.12(a) of the Disclosure Schedule, and (B) Trademarks (other than House

Marks) owned by IMS or IMA or any of their respective Subsidiaries that are

not presently exclusively used by the CD Business or any other business of

IMS or such Affiliate but that were exclusively used by the CD Business in

the past, in each case including the Business Registered Intellectual

Property (the "Business Purchased Intellectual Property");

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(xii) to the extent assignable, all rights under any non-disclosure

agreements, non-solicitation agreements and non-competition agreements

entered into with any parties, to the extent that any of the foregoing

relates to or arose from the Purchased CD Business;

(xiii) all rights and claims, including refunds, to the extent that

such rights and claims relate to or arose from the Purchased CD Business;

(xiv) all insurance policies (to the extent separable and assignable)

with respect to the CD Business, and rights, benefits, claims and proceeds

thereunder arising from or relating to the Assumed Liabilities;

(xv) other than Retained Inventory, all other tangible assets or

movable property used in connection with the Purchased CD Business, if any;

and

(xvi) all goodwill relating to the foregoing.

Section 1.3 Excluded Assets. Notwithstanding the provisions of Section

1.2, the parties hereto acknowledge and agree that the following are not

included among either the Purchased Assets or the Contributed Assets (as defined

in the Contribution Agreement) and are excluded from the Sale (collectively, the

"Excluded Assets"):

(i) the assets, properties, Contracts and rights of IMS and its

Affiliates in the Excluded Fields (which shall include, for the avoidance

of doubt, the tangible assets and real property located at Stirling,

Scotland) and the Intellectual Property of IMS and its Affiliates in the

Excluded Fields;

(ii) (A) Intellectual Property owned by third parties and licensed to

IMS or one or more of its Affiliates for use in the CD Business and which

are listed in Section 1.3(ii) of the Disclosure Schedule, (B) Intellectual

Property, other than Trademarks, not used exclusively in the CD Business,

and (C) Trademarks that have never been at any time exclusively used in the

CD Business (other than Trademarks that have been held for use in the CD

Business but have never been used by any business);

(iii) the assets, properties, Contracts and rights of IMS and its

Affiliates (including vendor and supplier contracts, information, files and

data) used in the manufacturing of the products of the CD Business,

including all tangible assets, properties, and contracts of IMS' or its

Affiliates' manufacturing facilities located in Bedford, England, Hangzhou,

People's Republic of China ("PRC") and Shanghai, PRC, excluding any product

specifications, product registrations or similar assets, used in the

conduct of the CD Business;

(iv) the assets, properties, Contracts and rights arising from or used

in IMA's and its Subsidiaries' professional diagnostics and nutritional

supplement businesses (collectively, the "Excluded Businesses");

(v) all accounts receivable, and notes receivable (if any), of any

nature arising from the Purchased CD Business existing on the Closing Date;

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(vi) all prepaid expenses and other deposits related to the Purchased

CD Business;

(vii) the Contracts arising from the CD Business set forth on Section

1.3(vii) of the Disclosure Schedule (the "Excluded Contracts");

(viii) the Trademarks or trade names "Inverness," and any variants

thereof that include "Inverness," internet domain names that include

"Inverness," and the Inverness "little man" logo (collectively, the "House

Marks");

(ix) real property, buildings, structures and improvements thereon,

whether owned or leased by IMS or its Affiliates, and all fixtures and

fittings attached thereto, including all manufacturing, distribution and

administration facilities of IMS and its Affiliates;

(x) rights to refunds of Taxes paid by or on behalf of IMS or any of

its Affiliates (other than those paid by the Company);

(xi) except as provided in Section 1.2(xiv), insurance policies and

rights and benefits and claims thereunder;

(xii) tangible assets, properties, Contracts and Intellectual Property

of IMA or its Subsidiaries (including animals and cell lines) used in the

manufacturing, production and storage of reagents and other biological

materials used in the CD Business;

(xiii) all inventory, including all raw materials, work-in-process,

supplies and finished goods, including goods in transit, as sold, used or

held for use as part of the CD Business, wherever located (the "Retained

Inventory");

(xiv) all currently outstanding unfilled purchase orders and proposals

(or portions thereof) received for the purchase of inventory of the

Purchased CD Business during the period prior to the termination of the

Transition Period;

(xv) the services of any employees of IMA or its Subsidiaries (except

for Transferred Employees upon hiring of such Transferred Employees by the

Company or a Subsidiary of the Company) or assets of any employee benefit

plan, arrangement, or program maintained or contributed to by IMA or any of

its Subsidiaries with respect to any employees other than Transferred

Employees (upon the hiring of such Transferred Employees by the Company or

a Subsidiary of the Company);

(xvi) the assets, properties, Contracts and rights arising from or

used in the Purchased UK Operations, the Contributed US CD Business and the

First Check Diagnostics Business; and

(xvii) any other assets, tangible or intangible, wherever situated,

not included in the Purchased Assets, including those used in the Excluded

Businesses;

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provided that IMS and its Affiliates, upon reasonable request and to the extent

IMS or any of its Affiliates has the right to so provide, will provide the

Company reasonable access during normal business hours to the Excluded Assets

that, prior to the Closing Date, were used in the CD Business and are not being

transferred pursuant to this Agreement or the Contribution Agreement, for the

Company's use to facilitate its manufacturing, research and development and

marketing, sales and distribution activities; provided, further, that with

respect to access to the Bedford, England, Hangzhou, PRC or Shanghai, PRC

manufacturing facilities, the terms of the Finished Product Purchase Agreement

shall control and this provision shall not expand the rights set forth therein.

Section 1.4 Liabilities Not Assumed by PGIO. Notwithstanding anything

to the contrary in this Agreement, PGIO shall not assume, or in any way be

liable or responsible for any, and IMS and its Affiliates shall pay, perform and

discharge all, obligations and liabilities of them, direct or indirect, known or

unknown, fixed or unfixed, choate or inchoate, liquidated or unliquidated,

secured or unsecured, accrued, absolute, contingent or otherwise (collectively,

the "Excluded Liabilities") and IMS shall hold PGIO harmless with respect to the

Excluded Liabilities.

Section 1.5 Purchase Price; Allocation of Purchase Price. (a) In

consideration of the Sale of the Purchased Assets, on the Closing Date, IMS

shall receive $282,849,900 in cash.

(b) As soon as practicable after the Closing, PGIO shall deliver to

IMS a allocation statement, allocating such purchase price among the Purchased

Assets in accordance with Section 1060 of the Code. If within 10 days after the

delivery of such allocation statement, IMS notifies PGIO in writing that IMS

objects to the allocation set forth in such allocation statement, PGIO and IMS

shall use commercially reasonably efforts to resolve such dispute within 20

days. In the event that PGIO and IMS are unable to resolve such dispute within

20 days, PGIO and IMS shall jointly retain a nationally recognized accounting

firm to resolve the disputed items. Upon resolution of the disputed items, the

allocation reflected on such allocation statement shall be adjusted to reflect

such resolution.

ARTICLE 2

CLOSING

Section 2.1 Closing. The closing of the transactions contemplated by

this Agreement (the "Closing") shall be held at the offices of Covington &

Burling LLP, 1201 Pennsylvania Avenue, NW, Washington, DC, at 10:00 a.m. on the

date as soon as practicable, and in any event not later than two Business Days,

following satisfaction of all conditions and taking of all other actions (other

than those that by their terms are to be satisfied or taken at the Closing) set

forth in Article 6 (or, to the extent permitted by Law, waived by the parties

hereto entitled to the benefits thereof), or on such other date, and at such

other time or place, as PGIO and IMA may mutually agree in writing. The date on

which the Closing occurs is referred to in this Agreement as the "Closing Date."

Section 2.2 Closing Deliveries. (a) At the Closing, PGIO shall deliver

or cause to be delivered to IMS cash in an amount equal to $282,849,900.

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(b) At the Closing, IMS shall deliver or cause to be delivered to

PGIO:

(i) an instrument of sale, assignment or contribution in a form

reasonably satisfactory to PGIO transferring to PGIO all of IMS and its

Affiliates' right, title and interest in and to the Purchased Assets,

executed by IMS;

(ii) such other bills of sale, endorsements, assignments and other

instruments of transfer, conveyance and assignment (in a form reasonably

satisfactory to PGIO) as shall be required by Law or necessary in the

reasonable judgment of PGIO to transfer, convey and assign the Purchased

Assets to PGIO, executed by IMS;

(iii) the Guarantee, in a form reasonably acceptable to PGIO, under

which IMA guarantees all of the obligations of IMS hereunder, under the

Contributed Note and under the Contribution Agreement, and all of IMS's and

Unipath's respective obligations under the Unipath Purchase Agreement,

executed by IMA; and

(iv) the Share Transfer Agreement, executed by Lanter.

(c) At the Closing, PGIO shall deliver or cause to be delivered to the

Company:

(i) the PGIO Contribution Agreement, executed by PGIO;

(ii) such bills of sale, endorsements, assignments and other

instruments of transfer, conveyance and assignment, in each case in

substantially the same form as those delivered pursuant to Section 2.2(b)

but substituting (x) the Company for PGIO and (y) PGIO for IMS and with

such other conforming changes as PGIO and IMS shall mutually agree,

executed by PGIO; and

(iii) the Share Transfer Agreement, executed by PGIO.

(d) At the Closing, the Company shall deliver or cause to be delivered

to PGIO the PGIO Contribution Agreement, executed by the Company.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF IMS

IMS represents and warrants to the Company and PGIO as follows, as of

December 22, 2006 and as of the Closing:

Section 3.1 Organization and Existence. Each of IMS and the Company is

duly organized and validly existing under the Laws of Switzerland, has all

requisite power and authority to carry on the CD Business as now being conducted

and is duly qualified or licensed to do business and in good standing in each

jurisdiction in which the nature of the CD Business or the ownership, leasing or

operation of its properties makes such qualification or licensing necessary,

except for those jurisdictions where the failure to be so qualified or licensed

would not have a Material Adverse Effect. Other than wholly-owned Subsidiaries,

IMA has no

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Subsidiaries or Affiliates that conduct the CD Business or own Contributed

Assets other than Inverness Medical (Shanghai), Co., Ltd.

Section 3.2 Power and Authority; Binding Agreement. Each of IMS and

the Company has all requisite power and authority to execute and deliver this

Agreement, to consummate the transactions contemplated hereby and to perform its

obligations hereunder, and has, or on the Closing Date will have, the requisite

power and authority to enter into each of the Transaction Agreements to which it

is a party and to perform its obligations thereunder. This Agreement is a valid

and binding obligation of each of IMS and the Company, enforceable against each

of them in accordance with its terms, except as the same may be limited by

bankruptcy, insolvency, reorganization, moratorium or other Laws affecting the

rights of creditors generally and subject to the rules of Law governing (and all

limitations on) specific performance, injunctive relief and other equitable

remedies (the "General Limitations"). When executed, each other Transaction

Agreement to which either of IMS or the Company is a party will be the valid and

binding obligation of each of IMS and the Company enforceable against each of

them in accordance with its terms, except as the same may be limited by the

General Limitations. Except as set forth in Section 3.2 of the Disclosure

Schedule, no other act, approval or proceedings on the part of IMS or the

Company is, or will be, required to authorize the execution and delivery of this

Agreement and the other Transaction Agreements to which either of them is a

party or the consummation of the transactions contemplated hereby and thereby.

Section 3.3 Noncontravention. (a) Except as set forth in Section

3.3(a) of the Disclosure Schedule, the execution and delivery by IMS or the

Company of this Agreement and the other Transaction Agreements to which either

of them is a party, and the consummation of the transactions contemplated hereby

and thereby and the compliance by either of them with the provisions hereof and

thereof do not and will not result in the creation of any lien, pledge, claim,

charge, mortgage, encumbrance or other security interest of any kind, whether

arising by Contract or by operation of Law (a "Lien"), in or upon any of the

properties or assets of IMS or its Affiliates that are material to the conduct

of the CD Business. Except as set forth in Section 3.3(a) of the Disclosure

Schedule, the execution and delivery by IMS or the Company of this Agreement and

the other Transaction Agreements to which either of them is a party, and the

consummation of the transactions contemplated hereby and thereby and the

compliance by either of them with the provisions hereof and thereof do not and

will not (i) conflict with or result in any violation or default (with or

without notice or lapse of time or both) under, (ii) give rise to a right of, or

result in, termination or cancellation of, or acceleration of any obligation

under, (iii) result in a loss of a material benefit under, or (iv) give rise to

any increased, additional, accelerated or guaranteed rights or entitlements

under, any provision of (A) the Constitutive Documents of IMS or the Company,

(B) any material Business Contract to which IMS or any of its Affiliates or the

Company is a party or is bound by, or any Purchased Assets are bound by or

subject, or under which IMS or any of its Affiliates or the Company has material

rights or benefits or (C) subject to the governmental filings and other matters

referred to in Section 3.3(b), any constitution, act, statute, law (including

common law), ordinance, treaty, rule or regulation of any Governmental Entity (a

"Law") or any judgment, order or decree (a "Judgment"), in each case applicable

to IMS or any of its Affiliates or the Contributed Assets or the Purchased

Assets, or the Company.

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(b) No consent, approval, license, permit, order or authorization of,

registration, declaration or filing with, or notice to, any Governmental Entity

is required by or with respect to IMS or the Company in connection with the

execution and delivery of this Agreement, the other Transaction Agreements to

which either of them is a party, the consummation of the transactions

contemplated hereby or thereby or the compliance by IMS or the Company with the

provisions hereof and thereof, except (i) for filings required under, and

compliance with other applicable requirements of, the Hart Scott Rodino

Antitrust Improvements Act of 1976 (the "HSR Act"), and any similar competition

filing with any Governmental Entity, if applicable to this Agreement, the other

Transaction Agreements and the transactions contemplated hereby and thereby;

(ii) the filing with the Securities and Exchange Commission (the "SEC")of such

reports under the Securities Exchange Act of 1934, as amended (the "Exchange

Act"), as may be required in connection with this Agreement and the other

Transaction Agreements and the transactions contemplated hereby and thereby;

(iii) filings with, and notices and submissions to, the United States Food and

Drug Administration (the "FDA"); (iv) such filings as may be required to

transfer the ownership of Intellectual Property Rights; and (v) such other

consents, approvals, orders, authorizations, registrations, declarations,

filings and notices, the failure of which to be obtained or made individually or

in the aggregate would not impair in any material respect the ability of IMS or

the Company to perform its obligations under this Agreement or prevent or

materially impede or delay the consummation of the transactions contemplated

hereby.

Section 3.4 Compliance with Laws. Except as set forth in Section 3.4

of the Disclosure Schedule, IMS and its Affiliates are in compliance in all

material respects with all applicable Laws and Judgments. Except as set forth in

Section 3.4 of the Disclosure Schedule, since January 1, 2004 neither IMS nor

any of its Affiliates has received a written notice from a Governmental Entity

alleging a possible violation by it of any applicable Law or Judgment applicable

to the CD Business. Notwithstanding the foregoing, this Section 3.4 shall not

constitute a representation or warranty as to intellectual property, tax,

employee benefit plan, environmental or the specific regulatory matters covered

in Sections 3.21, 3.22 and 3.23 which are limited to those representations and

warranties set forth in Sections 3.12, 3.14, 3.16, 3.17, 3.18, 3.21, 3.22 and

3.23, respectively.

Section 3.5 Governmental Licenses. IMS and its Affiliates validly hold

and have in full force and effect all Governmental Licenses that are material to

the conduct of the CD Business, and neither IMS nor any of its Affiliates is in

violation (other than an immaterial violation) of, or default (with or without

notice or lapse of time or both) (other than an immaterial default) under, or

event giving to any other Person any right of termination, amendment or

cancellation of, any Governmental License material to the conduct of the CD

Business. Each of IMS and its Affiliates is in compliance in all material

respects with the terms and conditions of all Governmental Licenses issued to or

held by it that are material to the CD Business, and such Governmental Licenses

will not be subject to suspension, modification, revocation or nonrenewal as a

result of the execution and delivery of this Agreement or the other Transaction

Agreements to which either of them is a party or the consummation of the

transactions contemplated hereby and thereby. No proceeding is pending or, to

the Knowledge of IMS or IMA, threatened seeking the revocation or limitation of

any Governmental License that is material to the conduct of the CD Business.

Section 3.5 of the Disclosure Schedule lists each Governmental License held by

IMS or its Subsidiaries that is material to the conduct of the CD Business,

except for any licenses related to, or necessary for, the manufacture or storage

of

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the products of the CD Business. Except as set forth therein, all of the

Governmental Licenses listed in Section 3.5 of the Disclosure Schedule are held

in the name of IMS or its Affiliates, and none are held in the name of any

current or former director, officer, employee, independent contractor or

consultant of IMS or its Affiliates or agents or otherwise on behalf of IMS or

its Affiliates. Except for those Governmental Licenses retained by IMS pursuant

to Section 1.2(vi) of the Contribution Agreement in order to perform the

obligations under the Finished Product Purchase Agreement or as set forth in

Section 3.5 of the Disclosure Schedule, all Governmental Licenses that are

material to the conduct of the CD Business are transferable to the Company.

Notwithstanding the foregoing, this Section 3.5 shall not constitute a

representation or warranty as to the specific regulatory matters covered in

Sections 3.21 and 3.23.

Section 3.6 Financial Statements. (a) Section 3.6(a) of the Disclosure

Schedule refers to the audited consolidated balance sheets of IMA as of December

31, 2005 (the "IMA Balance Sheet Date"), and December 31, 2004 and audited

statements of income and cash flows of IMA for each of the fiscal years ending

on such dates, together with any notes thereto and accountant's reports thereon

(collectively, the "IMA Audited Financial Statements"), and the unaudited

consolidated balance sheet of IMA as of September 30, 2006 and the unaudited

statement of income of IMA for the period ending on such date (collectively, the

"IMA Unaudited Financial Statements" and together with the IMA Audited Financial

Statements, the "IMA Financial Statements"). Except as disclosed in Section

3.6(a) of the Disclosure Schedule, the IMA Financial Statements fairly present,

in all material respects, the consolidated financial position and results of

operations and cash flows of IMA for the periods and as of the dates referred to

in the IMA Financial Statements, all in accordance with United States generally

accepted accounting principles, consistently applied ("GAAP") (except, in the

case of the IMA Unaudited Financial Statements, for the absence of footnotes and

normal year-end adjustments that are not material individually or in the

aggregate). The IMA Financial Statements are consistent in all material respects

with the books and records of IMA, subject, in the case of the IMA Unaudited

Financial Statements, to normal year-end adjustments that are not material

individually or in the aggregate.

(b) Section 3.6(b) of the Disclosure Schedule sets forth the unaudited

pro forma balance sheet (the "Most Recent Balance Sheet") of CD Business as of

September 30, 2006 (the "Most Recent Balance Sheet Date"), and the unaudited pro

forma statements of revenues and direct expenses of the CD Business for the

period then ended (the financial statements collectively, the "CD Financial

Statements"). Except as set forth in Section 3.6(b) of the Disclosure Schedule,

the CD Financial Statements (i) are consistent with the books and records of IMS

and IMA, (ii) have been prepared in accordance with GAAP and (iii) present

fairly the pro forma financial condition, results of operations of the CD

Business as of the respective dates thereof and for the periods referred to

therein, subject to normal year-end adjustments that are not material

individually or in the aggregate.

(c) IMA maintains a system of internal accounting controls sufficient

to provide reasonable assurance that: (i) transactions are executed in

accordance with management's general or specific authorizations; (ii)

transactions are recorded as necessary to permit preparation of financial

statements in accordance with GAAP and to maintain asset accountability; (iii)

access to assets is permitted only in accordance with management's general or

specific authorization; and (iv) the recorded accountability for assets is

compared with the

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existing assets at reasonable intervals and appropriate actions are taken with

respect to any differences.

Section 3.7 Absence of Changes or Events. Since the IMA Balance Sheet

Date, (a) except as set forth in Section 3.7 of the Disclosure Schedule, the CD

Business has been conducted only in the ordinary course of business consistent

with past practice (the "Ordinary Course of Business"), (b) there has occurred

no Material Adverse Effect, and (c) other than as set forth in Section 3.7 of

the Disclosure Schedule, none of IMA and its Subsidiaries has taken any actions

that, if taken after the date of this Agreement, would constitute a breach of

any of the covenants set forth in Section 4.3(a), (b) and (c).

Section 3.8 Undisclosed Liabilities. Except with respect to their

respective obligations under this Agreement, the Contribution Agreement, the

other Transaction Agreements and the Contributed Note, neither IMS nor IMA has

liabilities or obligations relating to the CD Business (in each case whether

known, absolute, contingent, accrued or otherwise), except for such liabilities

and obligations (a) to the extent shown on the Most Recent Balance Sheet, (b)

incurred in the Ordinary Course of Business since the Most Recent Balance Sheet

Date, (c) under the Business Contracts, other than liabilities and obligations

due to any material breaches or non-performance thereunder, or (d) listed in

Section 3.8 of the Disclosure Schedule.

Section 3.9 Assets other than Real Property. Except as set forth in

Section 3.9 of the Disclosure Schedule, (a) each of IMS and IMA owns outright

and has good and marketable title to all of the tangible Purchased Assets free

and clear of all Liens; (b) other than the Excluded Assets and together with the

assets contributed by IMA to the Company pursuant to the Contribution Agreement,

the Company's rights under the IMA License Agreements, the Finished Product

Purchase Agreement, the Distribution Arrangements and the IMA Transition

Services Agreement, the Purchased Assets constitute all of the assets,

properties, permits, rights, agreements and other Contract rights and interests

that are necessary to enable the Company after the Closing to operate the CD

Business in a manner consistent with the manner in which the CD Business is

currently being operated; (c) the Sale will vest good and marketable title in

and to the tangible Purchased Assets in PGIO free and clear of all Liens except

for Permitted Liens; and (d) the consummation of the transactions contemplated

by the PGIO Contribution Agreement will vest good and marketable title in and to

the tangible Purchased Assets in the Company free and clear of all Liens except

for Permitted Liens. To the Knowledge of IMS or IMA, the tangible Contributed

Assets are in good operating condition and repair and none of such tangible

assets that are material to the conduct of the CD Business is in need of

maintenance or repairs except for ordinary, routine maintenance and repairs that

are not material in nature or cost.

Section 3.10 [Reserved].

Section 3.11 Contracts. (a) Section 3.11(a) of the Disclosure Schedule

sets forth a true, accurate and complete list of each Business Contract

(collectively, "Scheduled Contracts") to which IMA, IMS or any of their

respective Subsidiaries is a party that (x) is material to the CD Business; (y)

provides for aggregate annual payments, or has a value in excess, of fifty

thousand dollars ($50,000); or (z) falls within one or more of the following

categories:

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(i) Contracts under which IMA, IMS or any of their respective

Subsidiaries own, have under license, have a right to acquire (by option or

otherwise), have a right to use or exercise (including any covenant not to

sue or other similar right of forbearance), or otherwise Control, or have

any other right or interest in or to any Intellectual Property that is

necessary to the conduct of the CD Business as currently conducted;

(ii) Contracts with any labor union or similar representative covering

any Transferred Employee;

(iii) Contracts under which products of the CD Business are

manufactured or distributed by IMA, IMS or any of their respective

Subsidiaries, including any distribution agreements, wholesalers,

manufacturing and supply agreements and Contracts with managed care

organizations or Governmental Entities; and

(iv) Contracts limiting or restraining IMA, IMS or any of their

respective Subsidiaries in any material respect from engaging or competing

in any business of the CD Business with any Person or from purchasing any

products, services or inventory from any third parties.

Notwithstanding the foregoing, neither IMA nor IMS shall be required to set

forth on the aforementioned Section 3.11(a) of the Disclosure Schedule any

Contract relating to IMA's and certain of its Subsidiaries' manufacturing of

products of the CD Business, including Contracts to purchase raw materials,

components or supplies, Contracts to supply or procure reagents or other

biological components and Contracts with subcontractors, suppliers or service

providers used in the conduct of such manufacturing activity.

(b) Except as indicated in Section 3.11(b) of the Disclosure Schedule,

IMA has delivered or made available to PGIO complete and correct copies of all

written Scheduled Contracts, including all amendments, modifications and

material waivers relating thereto.

(c) Each Scheduled Contract is in full force and effect in accordance

with the terms thereof and constitutes a legal, valid and binding agreement of

IMA, IMS or one or more of their respective Subsidiaries, as applicable, and is

enforceable in accordance with its terms by IMA, IMS or such Subsidiaries, as

applicable, against each counterparty thereto, except as the same may be limited

by General Limitations. IMA, IMS and their respective Subsidiaries, as

applicable, have performed in all material respects all of their obligations,

and are not in default under, any Business Contract. To IMS's or IMA's

Knowledge, except as indicated in Section 3.11(c) of the Disclosure Schedule, no

other party to any Business Contract is in material breach of or default under

such Business Contract.

(d) Except as set forth in Section 3.11(d) of the Disclosure Schedule,

neither IMA nor IMS has any Knowledge that any party to any Scheduled Contract

(i) intends to either terminate or not renew such Scheduled Contract, or (ii)

has or intends to submit to IMA, IMS or any of their respective Subsidiaries any

claim of material breach by any such party with respect to the performance of

its obligations under any such Scheduled Contract.

(e) Section 3.11(e) of the Disclosure Schedule sets forth a true,

accurate and complete list of the Scheduled Contracts for which third party

consents are required to assign

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such Business Contracts to the Company. Subject to the receipt of the third

party consents listed on Section 3.11(e) of the Disclosure Schedule and Closing,

the Company will succeed to all rights, title and interests of IMA, IMS or their

respective Subsidiaries under each such Contract without the necessity to obtain

the consent of any other Person(s) to the assignment of such Contract.

(f) None of the Business Contracts have been entered into by IMA, IMS

or any of their respective Subsidiaries other than in its or their Ordinary

Course of Business (other than agreements in settlement of any investigation,

claim, action, suit, complaint, dispute, audit, demand, litigation or judicial,

administrative or arbitration proceeding (collectively, "Legal Proceedings")

listed on Section 3.13 of the Disclosure Schedule) and other than on an arm's

length basis.

(g) Except as set forth in Section 3.11(g) of the Disclosure Schedule,

the Scheduled Contracts do not contain any provision that provides for automatic

termination upon the occurrence of the transactions contemplated hereby or for

the right of any party to any such Contract to terminate, accelerate or receive

any payment or other more favorable terms and conditions upon occurrence of the

transactions contemplated hereby.

(h) Except as set forth in Section 3.11(h) of the Disclosure Schedule,

there are no Persons holding a power of attorney on behalf of IMS, IMA or any of

their respective Subsidiaries that would enable such Persons to sell, lease or

otherwise encumber any Purchased Asset.

Section 3.12 Intellectual Property. (a) Section 3.12(a) of the

Disclosure Schedule sets forth, as of the date hereof, a complete and accurate

list of all Business Registered Intellectual Property. "Business Intellectual

Property" means (i) Business Contributed Intellectual Property (as defined in

the Contribution Agreement), (ii) Business Purchased Intellectual Property and

(iii) all other Intellectual Property constituting Inverness Licensed IP and

Inverness Licensed Trademarks (each as defined in the IMA License Agreements).

Except to the extent indicated in Section 3.12(a) of the Disclosure Schedule,

all Business Intellectual Property is either (x) owned by, or subject to an

obligation of sole and exclusive assignment to, IMS or IMA or one of their

respective Subsidiaries free and clear of all Liens or other exceptions to title

that affect such Business Intellectual Property or restrict the use by IMS or

IMA or any of their respective Subsidiaries of the Business Intellectual

Property in any way or require IMS or IMA or any of their respective

Subsidiaries to make any payment or give anything of value as a condition to its

use in any way of such Business Intellectual Property (collectively, "IP

Liens"), except in each case for Permitted IP Liens or (y) Controlled but not

owned by IMS or IMA or one of their respective Subsidiaries pursuant to a

license from, or a similar agreement with, a third party free and clear, to the

Knowledge of IMS and IMA, of all IP Liens except for Permitted IP Liens. To the

Knowledge of IMS or IMA, with respect to all Business Intellectual Property

owned by IMS or IMA or one of their respective Subsidiaries that are United

States patents or applications subject to a terminal disclaimer against another

patent or application, each such patent or application has been and remains

commonly owned with the patent or application it is terminally disclaimed

against since the terminal disclaimer was filed with the United States Patent

Office. Except to the extent indicated in Section 3.12(a) of the Disclosure

Schedule, IMS or IMA or one of their respective Subsidiaries is (A) the sole

owner of all Business Contributed

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Intellectual Property and all Business Purchased Intellectual Property and (B)

the sole owner or sole and exclusive licensee (as the case may be) of all

Inverness Licensed IP and Inverness Licensed Trademarks. There are no actions

pending or, to the Knowledge of IMS or IMA, threatened with regard to the

ownership or Control by IMS or IMA or one of their respective Subsidiaries of

any Business Intellectual Property. Except as specified in Section 3.12(a) of

the Disclosure Schedule, each of IMS and IMA has the legal power to convey or

license (as applicable) to the Company all of its or its Subsidiaries' right,

title and interest that is being conveyed or licensed in and to the Business

Intellectual Property. No Business Intellectual Property will terminate or cease

to be valid Intellectual Property by reason of the execution and delivery of

this Agreement by IMS and IMA, the performance of IMS and IMA of their

obligations hereunder, or the consummation by IMS and IMA of the transactions

contemplated hereby.

(b) Except as disclosed in Section 3.12(b) of the Disclosure Schedule,

to the Knowledge of IMS or IMA, there is no unauthorized use, infringement,

misappropriation or violation of any of the Business Intellectual Property by

any Person.

(c) Except as disclosed in Section 3.12(c) of the Disclosure Schedule,

there are no pending or, to the Knowledge of IMS or IMA, threatened written

claims that the CD Business has infringed or is infringing any Intellectual

Property of any Person. Except for any third-party Intellectual Property

referred to in Section 3.12(c) of the Disclosure Schedule, to the Knowledge of

IMS or IMA, there are no patents or patent applications of any third party that

claim the same subject matter as a patent or patent application included in the

Business Intellectual Property that could reasonably serve as the basis for an

interference proceeding involving a patent or patent application included in the

Business Intellectual Property.

(d) (i) The patent applications owned by IMS or IMA or one of their

respective Subsidiaries and included in the Business Intellectual Property and,

to the Knowledge of IMS or IMA, the patent applications licensed by any third

party to IMS or IMA or one of their respective Subsidiaries and included in the

Business Intellectual Property, are pending and have not been abandoned, and

have been and continue to be prosecuted. All patents, registered Trademarks and

applications for Trademarks owned by IMS or IMA or one of their respective

Subsidiaries and included in the Business Intellectual Property and, to the

Knowledge of IMS or IMA, all patents, registered Trademarks and applications for

Trademarks licensed by any third party to IMS or IMA or one of their respective

Subsidiaries and included in the Business Intellectual Property, have been duly

registered or filed with or issued by the appropriate Governmental Entity, all

necessary affidavits of continuing use have been timely filed, and all necessary

maintenance fees timely paid to continue all such rights in effect. Except as

set forth on Section 3.12(d)(i) of the Disclosure Schedule, none of the patents

owned by IMS or IMA or one of their respective Subsidiaries and included in the

Business Intellectual Property and, to the Knowledge of IMS or IMA, none of the

patents licensed by any third party to IMS or IMA or one of their respective

Subsidiaries and included in the Business Intellectual Property, have expired or

been declared invalid, in whole or in part, by any Governmental Entity. Except

as set forth in Section 3.12(d) of the Disclosure Schedule, there are no ongoing

interferences, oppositions, reissues, or reexaminations or other proceedings

that could result in a loss or limitation of a patent right or claim involving

any of the patents or patent applications owned by IMS or IMA or one of their

respective Subsidiaries and included in the Business Intellectual Property. To

the Knowledge of IMS or IMA, there are no ongoing interferences,

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oppositions, reissues, or reexaminations or other proceedings that could result

in a loss or limitation of a patent right or claim involving any of the patents

or patent applications licensed by any third party to IMS or IMA or one of their

respective Subsidiaries and included in the Business Intellectual Property.

(ii) To the Knowledge of IMS or IMA, (A) the patents included in the

Business Intellectual Property have not been declared invalid or

unenforceable by any court, (B) there is no reason to believe that any

patent included in the Business Intellectual Property and material to the

CD Business would be declared invalid or unenforceable by a court, and (C)

each of IMS and IMA has met its duty of candor as required under 37 C.F.R.

1.56 and complied with analogous Laws outside the United States requiring

disclosure of references. To the Knowledge of IMS or IMA, each of the

patents and patent applications included in the Business Intellectual

Property that were filed by IMS or IMA or one of their respective

Subsidiaries properly identifies each and every inventor of the claims

thereof as determined in accordance with the Laws of the jurisdiction in

which such patent is issued or such patent application is pending.

(iii) Each inventor named on the patents and patent applications

included in the Business Intellectual Property that were filed by IMS or

IMA or one of their respective Subsidiaries, alone or together with any

joint owners, has executed an agreement agreeing to assign or actually

assigning his or her entire right, title and interest in and to such patent

or patent application, and the inventions embodied and claimed therein, to

IMS or IMA or such Subsidiary, alone or together with any joint owners as

appropriate, except as indicated in Section 3.12(a) of the Disclosure

Schedule. To the Knowledge of IMS or IMA, no such inventor has any

contractual or other obligation that would preclude any such assignment or

otherwise conflict with the obligations of such inventor to IMS or IMA or

such Subsidiary.

(e) Section 3.12(e) of the Disclosure Schedule sets forth a true,

complete and accurate list of all Contracts with respect to any options, rights,

licenses or interests of any kind relating to Business Intellectual Property

that have been granted (i) by a third party to IMS or IMA or any of their

respective Subsidiaries, or (ii) by IMS or IMA or any of their respective

Subsidiaries to any other Person (in the case of either clauses (i) or (ii)

above, other than agreements commonly generated in the Ordinary Course of

Business (including software licenses for generally available software, employee

assignment agreements, nondisclosure agreements, consulting agreements, material

transfer agreements, clinical trial agreements and evaluation agreements) that

individually and in the aggregate have not caused and would not reasonably be

expected to cause a Material Adverse Effect). In addition, Section 3.12(e) of

the Disclosure Schedule sets forth a true, complete and accurate list of all

Contracts under which IMS or IMA or any of their respective Subsidiaries is

obligated to make to, or receives from third parties payments (in any form,

including royalties, license fees, milestones and other contingent payments) for

use of any Business Intellectual Property. Other than as set forth on Section

3.12(e) of the Disclosure Schedule, no royalties, license fees or other payment

obligations are owed to any Person in connection with the exercise of

Intellectual Property Rights in the conduct of the CD Business after the Closing

Date by IMS or IMA or any of their respective Subsidiaries under any Contract

(other than Contracts relating to "off the shelf" commercially available

software) to which any of them are a party. Each of IMS and IMA and their

respective Subsidiaries is in compliance in all material respects with the terms

of all

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Contracts set forth on Section 3.12(e) of the Disclosure Schedule and, to the

Knowledge of IMS or IMA, each of the licensees and licensors, as the case may

be, is in compliance in all material respects with all such Contracts, and there

are no material disputes or proceedings threatened or pending regarding the

same.

(f) The Business Intellectual Property constitutes all the

Intellectual Property necessary and sufficient to conduct the CD Business as

currently conducted; provided, that this Section 3.12(f) shall not constitute a

non-infringement representation (which non-infringement representation is the

subject of Section 3.12(g) below).

(g) Except as disclosed in Section 3.12(g) of the Disclosure Schedule,

to the Knowledge of IMS or IMA, the operation of the CD Business does not, and

as a result of Closing will not, infringe on or violate the rights of any Person

under any Intellectual Property.

(h) Each of IMS and IMA and their respective Subsidiaries has taken

reasonable steps to protect the confidentiality of the confidential information

and trade secrets included in the Business Intellectual Property, including by

entering into Contracts that generally require licensees, contractors and other

third persons with access to such trade secrets to keep such trade secrets

confidential.

(i) Each of IMS and IMA uses reasonable procedures designed to ensure

the recording and maintenance of all know-how that is included in the Business

Intellectual Property and material to the conduct of the CD Business.

(j) All former and current employees, consultants and contractors of

IMS or IMA or any of their respective Subsidiaries (i) having access to the

Business Intellectual Property have executed and delivered to IMS or IMA or the

relevant Subsidiary an agreement regarding the protection of the confidential

information included in the Business Intellectual Property and (to the extent

required by any customer or business partner or IMS or IMA) confidential

information of IMS's or IMA's customers or business partners made available to

such employees, consultants or contractors and (ii) who were involved in, or who

contributed to, the creation or development of any Business Intellectual

Property have executed and delivered to IMS or IMA or the relevant Subsidiary an

agreement regarding the assignment by such employees, consultants and

contractors to IMS or IMA (or the relevant Subsidiary) of any and all Business

Intellectual Property; and true and complete copies of all such agreements have

been made available to PGIO. Each of IMS and IMA and their respective

Subsidiaries has secured from all former and current employees, consultants and

contractors who were involved in, or who contributed to, the creation or

development of the subject matter of any patents that are included in Business

Intellectual Property that is owned by IMS or IMA or the relevant Subsidiary,

valid written assignments of the rights to such contributions that may be owned

by such persons or that IMS or IMA or the relevant Subsidiary does not already

own by other agreement or operation of Law, including obtaining valid written

assignments from the inventors of any and all pending patent applications.

(k) Under any and all Contracts under which a third party has granted

IMA, IMS or any of their respective Subsidiaries any Intellectual Property

Rights that are used in the CD Business and on which IMA, IMS or such Subsidiary

relies to allow its Subsidiaries of which IMA, IMS or such Subsidiary owns 50%

or more of the voting equity to exercise the Intellectual Property Rights

thereunder, the Company shall have the right to exercise (subject to

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the terms and conditions in the Transaction Documents) such Intellectual

Property Rights for so long as IMS owns 50% or more of the interest in the

Company.

Section 3.13 Legal Proceedings. Except as disclosed in Section 3.13 of

the Disclosure Schedule, (a) neither IMS nor IMA is, or since January 1, 2004

has it been, a party to, or to its Knowledge threatened with, any material Legal

Proceeding with respect to or in connection with the CD Business, (b) to the

Knowledge of IMS or IMA, there are no facts or circumstances that would

reasonably be expected to give rise to any material Legal Proceeding with

respect to or in connection with the CD Business and (c) there are no Judgments

outstanding against IMS or IMA with respect to or in connection with the CD

Business.

Section 3.14 Tax Matters. Except as set forth in Section 3.14 of the

Disclosure Schedule (with paragraph references corresponding to those set forth

below):

(a) All Tax Returns required to be filed by IMS or IMA, and any

affiliated, combined, consolidated or unitary group of which IMS or IMA is or

has been a member, have been timely filed, except where failure to file would

not have a Material Adverse Effect.

(b) Each of IMS and IMA has timely paid all Taxes which were required

to have been paid on or prior to the date hereof, the nonpayment of which could

result in a Lien on any Purchased Asset. Each of IMS and IMA has established, in

accordance with GAAP, adequate reserves for the payment of, and will timely pay,

all Taxes which arise from or with respect to the Purchased Assets or the

operation of the CD Business and are incurred or attributable to taxable periods

(or portions thereof) prior to the Closing (the "Pre-Closing Tax Periods"), the

nonpayment of which would result in a Lien on any Purchased Asset.

(c) Each of IMS and IMA has withheld and paid all Taxes required by

Law to have been withheld and paid and has complied in all respects with all

rules and regulations relating to the withholding or remittance of Taxes

(including employee-related Taxes), except where failure to so withhold, pay or

comply would not impose a liability or other obligation on the Company.

Section 3.15 Insurance. IMS and IMA maintain, with respect to the CD

Business, or under contractual arrangements is named as an additional insured

in, policies or binders of fire, liability (including product liability),

workers' compensation, vehicular and other insurance customarily maintained by

Persons engaged in businesses similar to the CD Business. A true, correct and

complete list of such policies insuring the CD Business is set forth in Section

3.15 of the Disclosure Schedule. Such policies and binders are in full force and

effect.

Section 3.16 Benefit Plans. (a) Section 3.16(a) of the Disclosure

Schedule contains a list of all written plans, programs, or arrangements

maintained by IMS or IMA or any of their respective Subsidiaries, in each case

as and to the extent related to the CD Business, or providing benefits to

employees of the CD Business, or under which IMS or IMA or any of their

respective Subsidiaries, in each case as and to the extent related to the CD

Business, or providing benefits to employees of the CD Business, has or may have

any obligation to contribute, with respect to any employee of them, whether such

plan, program or arrangement is formal or informal, written or unwritten, and

whether or not such plan, program, or arrangement is an

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"employee benefit plan" subject to the Employee Retirement Income Security Act

of 1974, as amended ("ERISA") (collectively, the "Benefit Plans"). The Company

will not be responsible for any existing or future liability under any Benefit

Plan.

(b) Each of IMS and IMA has made available to or provided to PGIO true

and complete copies of: (i) each Benefit Plan that is an "employee welfare

benefit plan" under Section 3(1) of ERISA; (ii) each Benefit Plan that is an

"employee pension benefit plan" under Section 3(2) of ERISA; (iii) the most

recent annual report required to be filed, including Form 5500, for each Benefit

Plan described under clauses (i) and (ii) of this Section 3.16(b); (iv) the

current summary plan description and any material modifications thereto; and

(iv) the most recent determination or opinion letter received from the Internal

Revenue Service (the "IRS") upon which IMS and IMA are entitled to rely with

respect to a Benefit Plan described under clause (ii) of this Section 3.16(b)

that is intended to be tax-qualified under Section 401(a) of the Code, or the

application therefor, if such letter has not bee