Exhibit 99.4
SUBORDINATED NOTE PURCHASE AGREEMENT
THIS SUBORDINATED NOTE PURCHASE AGREEMENT (the "Agreement") is made as of
the 20th day of September, 2002, by and between Inverness Medical Innovations,
Inc. (the "Company"), a corporation organized under the laws of the state of
Delaware, with its principal offices at 00 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxxxxx 00000, and the investors whose names and addresses are set forth
on the signature pages hereto (the "Investors").
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Investors agree as follows:
SECTION 1. AUTHORIZATION OF SALE OF THE UNITS AND THE SECURITIES. Subject to the
terms and conditions of this Agreement, the Company has authorized the sale of
up to 350 units (the "Units") each consisting of (except as set forth in the
signature page hereto) (i) $60,000 in original principal amount of its
Subordinated Promissory Notes, each in the form of EXHIBIT A attached hereto
(the "Subordinated Notes"), and (ii) $40,000 in original principal amount of its
Convertible Subordinated Promissory Notes, each in the form of EXHIBIT B
attached hereto (the "Convertible Notes") (the Subordinated Notes together with
the Convertible Notes, the "Securities").
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE UNITS AND THE SECURITIES. At the
Closing (as defined in Section 3), the Company will issue and sell to each
Investor the amount of Securities set forth on the signature page to this
Agreement executed by such Investor and accepted by the Company, and each such
Investor will purchase such Securities from the Company, upon the terms and
conditions hereinafter set forth, at the purchase price of $100,000 per Unit (or
as set forth on the signature pages hereto) and for the aggregate purchase price
set forth on such Investor's signature page hereto. The obligations of each
Investor under this Agreement, and all representations, warranties and covenants
made by such Investor herein, shall be several and not joint.
SECTION 3. CLOSING; DELIVERY OF SECURITIES.
3.1 CLOSING. The closing of the purchase and sale of the Securities (the
"Closing") shall occur on September 20, 2002, or such later date selected by the
Company and agreed to by the Investors, but in any event no later than October
31, 2002 (the "Closing Date").
3.2 DELIVERY OF THE SECURITIES AT THE CLOSING. At the Closing, the
Company will issue to each Investor the Securities registered in the name of
such Investor, or in such nominee name(s) as designated by such Investor in
writing, representing the Securities being purchased by such Investor. The
name(s) in which the Securities are to be registered are set forth in the
Investor Questionnaire delivered with this Agreement. The Company's obligation
to complete the purchase and sale of the Securities being purchased hereunder
and deliver such Securities to the Investors at the Closing shall be subject to
the following conditions, any one or more of
which may be waived by the Company: (a) receipt by the Company of same-day funds
in the full amount of the purchase price for the Securities being purchased at
the Closing; (b) delivery by or on behalf of each Investor of an executed
signature page (signed by or on behalf of such Investor) to a Subordination
Agreement in form satisfactory to the Company's senior lender or lenders (the
"Senior Lender"), any other holder of Senior Obligations (as defined in the form
of Note) on or prior to the Closing Date and the Company, providing for the
joinder by such investor as a party thereto; (c) if required, receipt by the
Company of a consent from the Senior Lender to the transactions contemplated
hereby, such consent to be in form and substance satisfactory to the Company;
and (d) the accuracy in all material respects of the representations and
warranties made by the Investors and the fulfillment of those undertakings of
the Investors to be fulfilled prior to or at the Closing. The obligation of the
Investors to accept delivery of and pay for such Securities at the Closing shall
be subject to (a) the accuracy in all material respects of the representations
and warranties made by the Company herein as of the Closing Date and the
fulfillment of those undertakings of the Company to be fulfilled prior to or at
the Closing and (b) the conversion of at least 80% of the outstanding shares of
Series A Convertible Preferred Stock of the Company into shares of Common Stock.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company
hereby represents and warrants to, and covenants with, the Investors as follows:
4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; and the Company is in good standing in each other jurisdiction in
which qualification is required, except where the failure to be so qualified
will not have a Material Adverse Effect, as defined in Section 4.4.
4.2 AUTHORIZED CAPITAL STOCK. The authorized capital stock of the Company
consists of 50,000,000 shares of common stock, $.001 par value per share
("Common Stock"), and 5,000,000 shares of preferred stock, $.001 par value per
share ("Preferred Stock"), 2,666,666 of which have been designated as Series A
Convertible Preferred Stock. The Schedule 4.2 hereto sets forth the number of
shares of Preferred Stock, Common Stock and all subscriptions, warrants,
options, convertible securities, and other rights (contingent or other) to
purchase or otherwise acquire equity securities of the Company issued and
outstanding on the date referred to in such schedule. The issued and outstanding
shares of the Company's capital stock have been duly authorized and validly
issued, are fully paid and nonassessable, have been issued in compliance with
all applicable federal and state securities laws, and were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities. Except as set forth on SCHEDULE 4.2 hereto, there
are no outstanding registration rights with respect to the outstanding capital
stock of the Company. There are no voting trusts, proxies, or other agreements
or understandings with respect to the voting of the capital stock of the Company
to which the Company, or, to the Company's knowledge, any holder of five percent
(5%) or more of the outstanding capital stock of such entity, is a party.
4.3 ISSUANCE, SALE AND DELIVERY OF THE SECURITIES. The Securities being
purchased hereunder and the Common Stock issuable (a) upon conversion of the
Convertible Note (the "Conversion Shares") or (b) as repayment of the Securities
at the Maturity Date (the "Repayment Shares") have been duly authorized and,
when issued, delivered and paid for in the manner set forth in this Agreement,
will be duly authorized, validly issued, fully paid and nonassessable.
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Except as disclosed on SCHEDULE 4.3, no preemptive rights or other rights of any
stockholder of the Company or other person to subscribe for or purchase exist
with respect to the issuance and sale of the Securities or the Conversion Shares
or, if applicable, the Repayment Shares by the Company pursuant to this
Agreement. No further approval or authority of the stockholders or the Board of
Directors of the Company will be required for the issuance and sale of the
Securities or the issuance of the Conversion Shares as contemplated herein.
Assuming the accuracy of the representations and warranties made by the
Investors herein, the Company's issuance of the Securities and the Convertible
Shares, and if applicable, the Repayment Shares shall be in compliance with all
applicable federal and state securities laws. The Company will at all times
hereafter reserve and keep available, solely for issuance and delivery upon
conversion of the Convertible Note, such shares of Common Stock as from time to
time shall be issuable with respect thereto.
4.4 DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENTS. The
Company has full legal right, corporate power and authority to enter into this
Agreement and perform the transactions contemplated hereby. This Agreement has
been duly authorized, executed and delivered by the Company. The execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions herein contemplated will not violate any
provision of the organizational documents of the Company. The execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions herein contemplated will not result in the
creation of any lien, charge, security interest or encumbrance upon any assets
of the Company pursuant to the terms or provisions of, or conflict with, result
in the breach or violation of, or constitute, either by itself or upon notice or
the passage of time or both, a default under any agreement, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument to which
the Company is a party or by which the Company or any of its properties may be
bound or affected and in each case which individually or in the aggregate would
have a material adverse effect on the condition (financial or otherwise),
properties, business, or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect"), or any statute or
any authorization, judgment, decree, order, rule or regulation of any court or
any regulatory body, administrative agency or other governmental body applicable
to the Company or any of its respective properties. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body or any other third party is required for the
execution and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement, except for compliance with all federal and state
securities laws applicable to the offering and sale of the Securities and the
issuance of the Conversion Shares or, if applicable, the Repayment Shares. Upon
its execution and delivery, and assuming the valid execution thereof by the
Investors, this Agreement will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
4.5 GOOD STANDING OF SUBSIDIARIES. Each of the Company's subsidiaries has
been duly organized and is validly existing in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to
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conduct its business as conducted and as proposed to be conducted, and is duly
qualified and is in good standing as a foreign corporation in each jurisdiction
in which such qualification is required, except where the failure to be so
qualified will not have a Material Adverse Effect. All of the issued and
outstanding capital stock of each such subsidiary has been duly authorized and
validly issued, is duly paid and nonassessable and is owned by the Company only
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity except for any pledge for the benefit of the Company's (or its
subsidiaries') senior lenders; and none of the outstanding shares of capital
stock of each such subsidiary was issued in violation of any preemptive or
similar rights of any third party.
4.6 NO DEFAULTS. The Company is not in violation of or default under any
provision of its Certificate of Incorporation or Bylaws, each as amended. The
Company, and to the best of the Company's knowledge, each other party thereto,
is not in breach of or default with respect to any provision of any agreement,
judgment, decree, order, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Company is a party or by
which the Company or any of its properties are bound (each, a "Commitment"); and
there does not exist any state of facts which, with notice or lapse of time or
both, would constitute an event of default as defined in such documents on the
part of the Company, and to the best of the Company's knowledge, on the part of
each other party thereto, except for such breaches and defaults which
individually or in the aggregate would not have a Material Adverse Effect. The
Company filed with the Securities and Exchange Commission (the "Commission") all
Commitments required to be filed with its Annual Report on Form 10-K for the
year ended December 31, 2001, pursuant to Item 601 of Regulation S-K promulgated
under the Securities Act of 1933, as amended.
4.7 NO ACTIONS. Except as disclosed in the Information Documents (as
defined in Section 4.14) or in SCHEDULE 4.7, there are no legal or governmental
actions, suits or proceedings pending or, to the best of the Company's
knowledge, threatened to which the Company or any of its subsidiaries is or may
be a party or of which property owned or leased by the Company or any of its
subsidiaries is or may be subject (except for actions, suits or proceedings
which individually or in the aggregate would not be reasonably expected to have
a Material Adverse Effect) and no material labor disturbance by the employees of
the Company or any of its subsidiaries exists, or to the best of the Company's
knowledge, is imminent. Except as disclosed in SCHEDULE 4.7, neither the Company
nor any of its subsidiaries is a party to or subject to the provisions of any
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body which is material to the
Company or its business taken as a whole.
4.8 PROPERTIES. The Company and each of its subsidiaries has, as of the
applicable dates referred to therein, good and marketable title to all the
properties and assets reflected as owned by it in the financial statements
included in the Information Documents, subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except (i) those, if any, reflected in such
financial statements, (ii) those disclosed on SCHEDULE 4.8 , or (iii) those
which are not material in amount and do not adversely affect the use made and
currently proposed to be made of such property by the Company or such
subsidiary. The Company and its subsidiaries hold their leased properties under
valid and binding leases except where the failure to so hold would not have a
Material Adverse Effect. The Company and its subsidiaries own or lease all such
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properties as are material to the conduct of the Company and its subsidiaries'
business taken as a whole as presently conducted.
4.9 NO MATERIAL CHANGE. Since March 31, 2002 and except for the
transactions described on SCHEDULE 4.9 or described in the Information Documents
(as defined in Section 4.14 below), (i) the Company and its subsidiaries have
not incurred any material liabilities or obligations, indirect or contingent, or
entered into any material agreement or other transaction which is not in the
ordinary course of business; (ii) the Company and its subsidiaries have not
sustained any material loss or interference with their businesses or properties
from fire, flood, windstorm, accident or other calamity, whether or not covered
by insurance; (iii) the Company has not paid or declared any dividends or other
distributions with respect to its capital stock, and the Company and each of its
subsidiaries is not in default in the payment of principal or interest on any
outstanding debt obligations, if any; (iv) there has not been any material
change in the capital stock of the Company or any of its subsidiaries other than
the sale of the Securities hereunder; and (v) there has not been a material
adverse change in the condition (financial or otherwise), properties, business
or results of operations of the Company or any of its subsidiaries.
4.10 INTELLECTUAL PROPERTY.
(a) The Company and its subsidiaries own or have the right to use
all Intellectual Property Rights (as defined below) used by the Company and its
subsidiaries for the conduct of their respective businesses, which Intellectual
Property Rights are the only Intellectual Property Rights necessary or required
for the conduct of their respective businesses.
(b) Neither the Company nor any of its subsidiaries is in default of
any obligation to pay any material royalties or other amounts to other persons
by reason of the ownership or use of any Intellectual Property Rights by the
Company and its subsidiaries for the conduct of their respective businesses.
(c) Except as disclosed in the Information Documents or in SCHEDULE
4.10, to the best of the Company's knowledge, no Intellectual Property Right
owned by the Company or any of its subsidiaries violates or will violate any
license or infringes or will infringe any Intellectual Property Rights of
another. Except as disclosed in the Information Documents or in SCHEDULE 4.10,
to the best of the Company's knowledge, no Intellectual Property Right, product
or service marketed, sold or licensed (as licensor or as licensee) by the
Company or any of its subsidiaries, violates or will violate any license or
infringes or will infringe any Intellectual Property Rights of another, nor has
the Company or any of its subsidiaries received any notice that any of the
Intellectual Property Rights used by the Company or any of its subsidiaries for
the conduct of their respective businesses, conflicts or will conflict with the
rights of others.
(d) Except as disclosed in the Information Documents or in SCHEDULE
4.10, there are no claims pending or, to the best of the Company's knowledge,
threatened with respect to any Intellectual Property Rights necessary or
required for the conduct of the Company and its subsidiaries' businesses taken
as a whole, except any such claim as would not have a Material Adverse Effect,
nor, to the best of the Company's knowledge, does there exist any basis
therefor.
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As used herein, the term "Intellectual Property Rights" means all patents,
trademarks, service marks, trade names, copyrights, inventions, trade secrets,
know-how, proprietary processes and formulae, applications for patents,
trademarks, service marks and copyrights, and other intellectual property rights
which are material to the conduct of the Company's and its subsidiaries'
businesses taken as a whole.
4.11 COMPLIANCE. The Company has not been advised, or has no reason to
believe, that the Company or any of its subsidiaries is not conducting business
in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, except where failure to be so
in compliance would not have a Material Adverse Effect.
4.12 USE OF PROCEEDS. The Company intends to use the proceeds obtained
from the sale of the Securities hereunder for general corporate purposes
including to fund working capital and one or more acquisitions including the
acquisition of Xxxxxxx Laboratories disclosed by the Company.
4.13 REPORTING COMPANY; LISTED SECURITIES. The Company has filed all
reports required to be filed by Sections 13(a) or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") since it became a public company on
November 21, 2001. The Company's Common Stock is listed on the American Stock
Exchange ("AMEX"). As of the Closing Date, the Company meets all the
requirements for continued listing on AMEX, and to the best of the Company's
knowledge, there is no stop order suspending the trading of the Common Stock on
AMEX or any information which would result in the Common Stock being delisted
from AMEX.
4.14 ADDITIONAL INFORMATION. The Company has made available to the
Investors a Confidential Memorandum dated August 13, 2002, a true and complete
copy of its Annual Report on Form 10-K for the year-ended December 31, 2001, its
Quarterly Reports on Form 10-Q for the quarter ended March 31, 2002 (as amended
by Form 10-Q/A filed on August 28, 2002) and for the quarter ended June 30,
2002, its current Report(s) on Form 8-K (or amendments thereto) for events dated
December 20, 2001, March 19, 2002, April 11, 2002, May 28, 2002, June 28, 2002,
July 29, 2002, August 7, 2002, August 8, 2002, August 14, 2002, August 28, 2002
and September 9, 2002, and its definitive proxy statement dated April 29, 2002,
as filed with the Securities and Exchange Commission (the "Commission")
(collectively, the "Information Documents"). As of their respective dates, the
Information Documents and any forms, reports and other documents filed by the
Company with the Commission pursuant to the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended, during the period commencing
on the date of this Agreement and ending on the last date on which the Company
is required to maintain the effectiveness of any Registration Statement (as
defined in Section 7 hereof) covering any Registrable Shares held by any
Investors, complied or will comply in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities Act") or
the Exchange Act, as the case may be, and the rules and regulations of the
Commission thereunder applicable to the Information Documents or such other
forms, reports or other documents, and none of the Information Documents
contained, and none of such other forms, reports or other documents will contain
at the time they are filed, any untrue statement of a material fact or omitted,
or will omit at the time they are filed, to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
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circumstances under which they were made, not misleading. The financial
statements of the Company (if any) included in the Information Documents comply
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the Commission with respect thereto,
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as
permitted by the rules and regulations of the Commission) and fairly present
(subject, in the case of the unaudited statements, to normal, recurring audit
adjustments, which were not individually or in the aggregate material) in all
material respects the financial position of the Company as at the dates thereof
and the results of its operations and cash flows for the periods then ended.
4.15 LEGAL OPINION. At the Closing, the Company will cause Xxxxxxx
Procter LLP, counsel to the Company, to deliver to the Investors a legal opinion
as to the matters set forth in EXHIBIT C hereto.
4.16 CERTIFICATE. At the Closing, the Company will deliver to the
Investors a certificate executed by the Chief Executive Officer or President of
the Company, dated the Closing Date, in form and substance reasonably
satisfactory to the Investors, to the effect that the representations and
warranties of the Company set forth in this Section 4 are true and correct in
all material respects as of the Closing Date, and the Company has complied in
all material respects with all the agreements and satisfied all the conditions
herein on its part to be performed or satisfied on or prior to the Closing Date.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTORS.
5.1 Each Investor, severally and not jointly represents and warrants to,
and covenants with, the Company that: (i) such Investor is knowledgeable,
sophisticated and experienced in making, and is qualified to make, decisions
with respect to investments in securities representing an investment decision
such as that involved in the purchase of the Securities and has requested,
received, reviewed and understood all information it deems relevant in making an
informed decision to purchase the Securities, including, without limitation, the
information contained in the Information Documents; (ii) such Investor is an
"accredited investor" as defined in Rule 501 of Regulation D under the
Securities Act and shall submit to the Company such further assurances of such
status as may be reasonably requested by the Company; (iii) such Investor
acknowledges that the offering of the Securities pursuant to this Agreement is
being made without registration under the Securities Act and applicable state
securities laws and has not been reviewed by the Commission or any state
regulatory authority; (iv) such Investor is acquiring the Securities set forth
on its signature page hereto for its own account for investment only and with no
present intention of distributing any of such Securities or any arrangement or
understanding with any other persons regarding the distribution of such
Securities; (v) such Investor will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Securities except in
compliance with the Securities Act, the rules and regulations thereunder and any
applicable state securities or blue sky laws; (vi) such Investor has completed
or caused to be completed the Securities Questionnaire, attached hereto as
APPENDIX I, and the answers thereto are true and correct as of the date hereof;
(vii) such Investor has, in connection with its decision to purchase the number
of Securities set forth on its signature page, not relied upon any
representations or
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other information (whether oral or written) other than as set forth in the
Information Documents and the representations and warranties of the Company
contained herein; and (viii) such Investor has had an opportunity to discuss
this investment with representatives of the Company and ask questions of them
and such questions have been answered to the full satisfaction of such Investor.
5.2 Each Investor hereby covenants with the Company not to make any sale
of the Registrable Shares (as hereinafter defined) without satisfying the
prospectus delivery requirements under the Securities Act, if any.
5.3 Each Investor further represents and warrants to, and covenants with,
the Company that (i) such Investor has full right, power, authority and capacity
to enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution, delivery
and performance of this Agreement, (ii) if such Investor is an entity, such
Investor is duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, (iii) the execution, delivery and
performance of this Agreement by such Investor and the consummation by such
Investor of the transactions contemplated by this Agreement will not (A) if such
Investor is an entity, violate any provision of the organizational documents of
such Investor or (B) conflict with, result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a
default under any material agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which such Investor is a party
or, any statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or other
governmental body applicable to such Investor, (iv) no consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body is required on the part of such Investor for
the execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement, (v) upon the execution and delivery
of this Agreement, this Agreement shall constitute a valid and binding
obligation of such Investor enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and (vi) there is not in effect any order
enjoining or restraining such Investor from entering into or engaging in any of
the transactions contemplated by this Agreement.
5.4 Each Investor recognizes that an investment in the Securities and the
Convertible Shares and, if applicable, the Repayment Shares is speculative and
involves a high degree of risk, including a risk of total loss of such
Investor's investment.
5.5 All of the information provided to the Company or its agents or
representatives by such Investor concerning such Investor's suitability to
invest in the Company and the representations and warranties of such Investor
contained herein, are complete, true and correct as of the date hereof. Such
Investor understands that the Company is relying on the statements contained
herein to establish an exemption from registration under federal and state
securities laws.
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5.6 The address set forth on the Investor's signature page hereto is the
Investor's true and correct domicile.
5.7 Each Investor covenants to provide 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 such Investors.
5.8 Each Investor understands and agrees that each Subordinated Note,
each Convertible Note and each certificate or other document evidencing any of
the Securities or any Convertible Shares, or if applicable, Repayment Shares
shall be endorsed with a legend in substantially the form set forth below as
well as any other legends required by applicable law, and such Investor
covenants that such Investor shall not transfer any Subordinated Note, any
Convertible Note or any shares of Common Stock represented by any such
certificate or other document without complying with the restrictions on
transfer described in the legends endorsed on such certificate:
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.
SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investors herein and in any certificates or documents delivered pursuant
hereto or in connection therewith shall survive following the delivery to the
Investors of the Securities being purchased and the payment therefor.
SECTION 7. REGISTRATION OF COMMON STOCK.
7.1 REGISTRATION PROCEDURES AND EXPENSES. The Company shall:
(a) following the Closing Date, prepare and file with the SEC one or
more registration statements relating to the resale pursuant to Rule 415 under
the Securities Act of the Registrable Shares (as defined below) by the Investors
from time to time on AMEX or the facilities of any other national securities
exchange or automated quotation system on which the Common Stock is then traded
or in privately-negotiated transactions, and specifically excluding underwritten
offerings. "Registrable Shares" shall mean (i) the Conversion Shares, (ii) the
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Repayment Shares, and if applicable, (iii) any shares of Common Stock issued in
respect of such shares (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events);
(b) subject to receipt of necessary information from the Investors,
(i) in the case of the Repayment Shares, use its commercially reasonable efforts
to cause a Registration Statement (as defined in Section 7.3 below) to be
declared effective by the Commission on or prior to the date on which the
Registrable Shares covered by such Registration Statement are issued by the
Company and (ii) in the case of the Conversion Shares, use its commercially
reasonable efforts to cause a Registration Statement to be declared effective by
the Commission on or prior to the six (6) month anniversary of the Closing
hereunder.
(c) promptly and in good faith respond to all of the Commission's
comments on each Registration Statement, and within two (2) business days of
receipt of an indication from the Commission that it has no further comments,
request acceleration of the effectiveness of the registration at the earliest
practicable time;
(d) prepare and file with the Commission such amendments and
supplements to each Registration Statement and the prospectuses used in
connection therewith as may be necessary to keep such Registration Statement
effective until the earlier of (i) the date on which the Investors may sell all
the Registrable Shares covered by such Registration Statement that are then held
by the Investors in accordance with paragraph (k) of Rule 144 under the
Securities Act ("Rule 144"), or (ii) such time as all the Registrable Shares
covered by such Registration Statement have been sold pursuant to a registration
statement;
(e) so long as a Registration Statement is effective covering the
resale of Registrable Shares owned by the Investors, furnish to the Investors
such number of copies of prospectuses and such other documents as the Investors
may reasonably request in order to facilitate the public sale or other
disposition of all or any of such Registrable Shares by the Investors;
(f) file documents required of the Company for blue sky clearance in
states specified in writing by the Investors; provided, however, that the
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
(g) bear all expenses in connection with the procedures in
paragraphs (a) through (f) of this Section 7.1 and the registration of the
Registrable Shares pursuant to the Registration Statements, and reasonable legal
fees and expenses, if any, of one (1) counsel to all of the Investors whose
shares are registered, and except for any underwriting discounts, brokerage fees
and commissions incurred by the Investors, if any.
7.2 ADDITIONAL OBLIGATIONS OF THE PARTIES.
(a) With a view to making available to the Investors the benefits of
Rule 144 (or its successor rule) and any other rule or regulation of the
Commission that may at any time permit the Investors to sell the Registrable
Shares to the public without registration, the Company covenants and agrees to:
(i) make and keep public information available, as those
10
terms are understood and defined in Rule 144, until the earlier of (A) such date
as all of the Investors' Registrable Shares may be resold pursuant to paragraph
(k) of Rule 144 or any other rule of similar effect or (B) such date as all of
the Investors' Registrable Shares shall have been resold and (ii) file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and under the Exchange Act.
(b) If the Company has delivered preliminary or final prospectuses
to the Investors who own Registrable Shares included in any Registration
Statement (each a "Selling Investor") and after having done so the prospectus is
amended to comply with the requirements of the Securities Act, the Company shall
promptly notify the Selling Investors and, if requested, the Selling Investors
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the Selling
Investors with revised prospectuses and, following receipt of the revised
prospectuses, the Selling Investors shall be free to resume making offers of the
Registrable Shares.
(c) In the event that, in the good faith judgment of the Company
after consultation with the Company's outside legal counsel, 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 all investors to such effect, and, upon
receipt of such notice, each such Selling Investor shall immediately discontinue
any sales of Registrable Shares pursuant to such Registration Statement until
such Selling Investor has received copies of a supplemented or amended
prospectus or until such Selling Investor 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. Each Investor acknowledges and agrees that the
existence, content and receipt of any such notice may constitute material
non-public information and such Investor agrees to keep the existence, content
and receipt of any such notice confidential. Notwithstanding anything to the
contrary herein, the Company shall not exercise its rights under this Section
7.2(c) to suspend sales of Registrable Shares for a period in excess of 90 days
in any 365-day period.
(d) Each Investor including Registrable Shares in any Registration
Statement shall furnish to the Company such information regarding such Investor
as the Company may reasonably request and as shall be required in connection
with any registration, qualification or compliance referred to in this
Agreement.
7.3 INDEMNIFICATION. For the purpose of this Section 7.3:
(i) the term "Investors" shall include the Investors and any
affiliate of the Investors; and
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to
any Registration Statement referred to in Section 7.1.
11
(a) In the event of any registration of any Registrable Shares under
the Securities Act pursuant to this Agreement, the Company agrees to indemnify
and hold harmless each of the Selling Investors with respect thereto and each
person, if any, who controls any such Selling Investor within the meaning of the
Securities Act, against any losses, claims, damages, liabilities or expenses,
joint or several, to which any such Selling Investor 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 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 statements therein, in light of the circumstances in which
they were made, not misleading, and will reimburse the Selling Investors and
each such controlling person for any legal and other expenses reasonably
incurred, as such expenses are reasonably incurred, by the Selling Investors 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 (i) 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 a Selling
Investor expressly for use therein, or (ii) the failure of a Selling Investor to
Comply with Section 5.2 hereof respecting sale of the Registrable Shares, or
(iii) any statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to a Selling Investor prior to the
pertinent sale or sales by such Selling Investor.
(b) In the event of any registration of any Registrable Shares under
the Securities Act pursuant to this Agreement, each Selling Investor severally
and not jointly, with respect 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 such Selling Investor) insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon (i) any failure by such
Selling Investor to comply with Section 5.2
12
hereof respecting the sale of the Registrable Shares or (ii) 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 such Selling Investor
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 Statement or such controlling person
in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action. Notwithstanding the
foregoing, no Selling Investor shall be liable pursuant to this Section 7.3(b)
for an aggregate amount in excess of actual proceeds from the sale of his, her
or its Registrable Shares.
(c) Promptly after receipt by an indemnified party under this
Section 7.3 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 Section 7.3, 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 Section 7.3 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
unless: (i) 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 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)
13
or (ii) 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 Section 7.3(a) and (b)
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.
(d) If the indemnification provided for in this Section 7.3 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) of this Section 7.3 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 (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Investors from the sale of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but the relative
fault of the Company and the Selling Investors in connection with the statements
or omissions or inaccuracies in the representations and warranties in this
Agreement 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 Selling
Investors on the other shall be deemed to be in the same proportion as the
amount paid by the Selling Investors to the Company pursuant to this Agreement
for the Registrable Shares that were sold pursuant to any Registration Statement
bears to the difference (the "Difference") between the amount the Selling
Investors paid for such Registrable Shares and the amount received by the
Selling Investors from the sale of such Registrable Shares. The relative fault
of the Selling Investors shall be determined by reference to, among other
things, whether the untrue or alleged 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 Selling Investors 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 (c) of this
Section 7.3, 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 (c) of this Section 7.3 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 (d); PROVIDED,
HOWEVER, that no additional notice shall be required with respect to any threat
or action for which notice has been given under paragraph (c) for purposes of
indemnification. The Company and the Investors agree that it would not be just
and equitable if contribution pursuant to this Section 7.3 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 Section 7.3, the Selling Investors 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 Selling Investors
14
have 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.
7.4 INFORMATION RIGHTS. Until the Notes are repaid in full or converted,
as applicable, the Company shall furnish to each Investor the following reports:
(a) within ninety (90) days after the end of each fiscal year of the
Company, an audited consolidated balance sheet of the Company and its
subsidiaries, if any, as of the end of such fiscal year, the related audited
consolidated statements of income, stockholders' equity and cash flows for the
fiscal year then ended, and the auditors' report thereon;
(b) within forty-five (45) days after the end of each fiscal
quarter, an unaudited consolidated balance sheet of the Company and its
subsidiaries, if any, and the related unaudited consolidated statements of
income, stockholders' equity and cash flows, prepared in accordance with
generally accepted accounting principles and certified by the Chief Financial
Officer of the Company; and
(c) simultaneously with delivery to its Stockholders, the Company
will furnish any annual report, proxy statement or other report or communication
sent to is stockholders generally.
SECTION 8. NOTICES. Any notice required or permitted to be given to a party
under this Agreement shall be made in writing at the address or facsimile number
of the party specified below (or such other address or facsimile number as the
party 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.
00 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxxxxxx, President
with a copy to:
Inverness Medical Innovations, Inc.
00 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
15
and to:
Xxxxxxx Xxxxxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
if to the Investors, at their addresses as set forth on their
respective signature pages to this Agreement.
SECTION 9. CHANGES. After the Closing, this Agreement may not be modified or
amended, and no provision hereof may be waived, except pursuant to an instrument
in writing, signed by (a) the Company and (b) the holders of greater than sixty
six and two-thirds percent (66 2/3%) of the aggregate principal amount
outstanding under the Securities. Prior to the Closing, this Agreement may not
be modified or amended, and no provision hereof may be waived, except pursuant
to an instrument in writing, signed by (a) the Company and (b) the subscribers
to greater than sixty six and two-thirds percent (66 2/3%) of the Units then
subscribed for.
SECTION 10. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
SECTION 11. SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
SECTION 12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts, without giving
effect to its principles of conflicts of law. Any dispute arising out of or
relating to this Agreement or the Securities shall be filed and prosecuted in
any court of competent subject matter jurisdiction located in Massachusetts. The
Company and each of the Investors 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.
SECTION 13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but both of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other party.
SECTION 14. ENTIRE AGREEMENT. This Agreement (including the attachments hereto)
contains the entire agreement of the parties with respect to the subject matter
hereof and supersedes and is in full substitution for any and all prior oral or
written agreements and understandings between them related to such subject
matter, and neither party hereto shall be liable or bound to the other party
hereto in any manner with respect to such subject matter by any representations,
indemnities, covenants or agreements except as specifically set forth herein.
16
IN WITNESS WHEREOF, the parties hereto have caused this Subordinated Note
Purchase Agreement to be executed by their duly authorized representatives shown
below as of the date first written above.
/s/ XXXX XXXXXX
--------------------------------
Witness PERRY PARTNERS, L.P.
By: Perry Corp., Managing General Partner
By: /s/ XXXXXXX XXXXXXXXXXX
---------------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Chief Financial Officer
Address: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
UNITS TO BE PURCHASED
----------------------------------------------------------------------------------------------------------------------
Subordinated Note
in the Original Principal Convertible Note in the Aggregate Purchase Price in
Number of Units Amount Set Forth Below Original Principal Amount Set U.S. Dollars for Units to be
Forth Below Purchased
----------------------------------------------------------------------------------------------------------------------
22 $1,320,000 $880,000 $2,200,000
----------------------------------------------------------------------------------------------------------------------
[SIGNATURE PAGE CONTINUES]
/s/ XXXX XXXXXX
--------------------------------
Witness PERRY PARTNERS INTERNATIONAL, INC.
By: Perry Corp., Investment Manager
By: /s/ XXXXXXX XXXXXXXXXXX
---------------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Chief Financial Officer
Address: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
UNITS TO BE PURCHASED
----------------------------------------------------------------------------------------------------------------------
Subordinated Note
in the Original Principal Convertible Note in the Aggregate Purchase Price in
Number of Units Amount Set Forth Below Original Principal Amount Set U.S. Dollars for Units to be
Forth Below Purchased
----------------------------------------------------------------------------------------------------------------------
53 $3,180,000 $2,120,000 $5,300,000
----------------------------------------------------------------------------------------------------------------------
[SIGNATURE PAGE CONTINUES]
/s/ C XXXXX XXXXXXXXX FAMILY VENTURES, LLC
---------------------------
Witness
By: /s/ XXX XXXXXXXXX
-------------------------------------
Name: Xxx Xxxxxxxxx
Title: Manager
Address: 000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
UNITS TO BE PURCHASED
----------------------------------------------------------------------------------------------------------------------
Subordinated Note
in the Original Principal Convertible Note in the Aggregate Purchase Price in
Number of Units Amount Set Forth Below Original Principal Amount Set U.S. Dollars for Units to be
Forth Below Purchased
----------------------------------------------------------------------------------------------------------------------
None $3,000,000 $3,000,000
----------------------------------------------------------------------------------------------------------------------
[SIGNATURE PAGE CONTINUES]
----------------------------- The Xxx Xxxxxxxxx 2001 Charitable
Witness Remainder Trust
By: /s/ XXXXX XXXXXXXXX
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Trustee
Address: 00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
UNITS TO BE PURCHASED
----------------------------------------------------------------------------------------------------------------------
Subordinated Note
in the Original Principal Convertible Note in the Aggregate Purchase Price in
Number of Units Amount Set Forth Below Original Principal Amount Set U.S. Dollars for Units to be
Forth Below Purchased
----------------------------------------------------------------------------------------------------------------------
$4,500,000 None $4,500,000
----------------------------------------------------------------------------------------------------------------------
[SIGNATURE PAGE CONTINUES]
Accepted and Agreed to by:
INVERNESS MEDICAL INNOVATIONS, INC.
By: /s/ XXXXX X. XXXXX
-----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance and Treasurer
[SIGNATURE PAGE TO THE PURCHASE AGREEMENT]
EXHIBIT A
Intentionally Omitted
EXHIBIT B
Intentionally Omitted
EXHIBIT C
The opinion of the Company's legal counsel shall address the following matters,
as of the Closing Date:
1. The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware and has the requisite corporate power to
own and operate its properties and assets and to carry on its business as
described in the Annual Report on Form 10-K for the year ended December 31,
2001.
2. Based upon your representations, warranties and covenants set forth in
the Agreement and the representations, warranties and covenants of certain
purchasers of other subordinated notes to be issued on or about the date hereof,
the offer, issuance and sale of the Notes and the Warrants pursuant to the terms
of the Transaction Agreements are exempt from registration under Securities Act.
3. Except as contemplated by the Transaction Agreements, to our
knowledge, no consent, approval or authorization of or designation, declaration
or filing with any federal or
Massachusetts governmental authority is required
to be obtained or made by the Company for (i) the execution and delivery of the
Transaction Agreements, (ii) the offer, sale or issuance of the Notes, or (iii)
the consummation of any other transaction contemplated by the Transaction
Agreements to occur at the Closing, with the exception of: (1) the filing of one
or more Form Ds with the SEC, (2) the filing of appropriate notices with blue
sky authorities, (3) the filing of one or more Registration Statements pursuant
to the registration rights provisions contained in the Purchase Agreement, (4)
the filing of an additional shares listing application with AMEX and (5) the
disclosure of such transactions in periodic reports to be filed by the Company
under the Securities Exchange Act of 1934, as amended.
4. The Company has all requisite corporate power to execute and deliver
the Transaction Agreements and to carry out all of its obligations thereunder,
including the sale and issuance of the Notes, in accordance with the terms of
the Transaction Agreements.
5. Each of the Transaction Agreements has been duly and validly
authorized by all necessary corporate action, and has been executed and
delivered by, and constitutes a valid and binding agreement of, the Company and
is enforceable against the Company in accordance with its terms.
6. The Notes, when issued, sold and delivered against payment therefor in
accordance with the provisions of the Agreement, will be validly issued, fully
paid and nonassessable, and, upon issuance and payment therefor in accordance
with the terms of the Notes, the Conversion Shares and the Repayment Shares will
be validly issued, fully paid and non-assessable.
7. The execution and delivery of the Transaction Agreements by the
Company, and the issuance of the Notes, the Conversion Shares and the Repayment
Shares, as contemplated by such documents (i) do not result in a violation by
the Company of federal or
Massachusetts law; or (ii) do not conflict, and will
not (assuming no amendments to any of the
following after the date hereof) conflict with or result in a breach or default
by the Company of any of the terms or provisions of: (A) the Certificate of
Incorporation or the Bylaws of the Company, or (B) to our knowledge, any
existing federal or
Massachusetts court order, judgment or decree applicable to
the Company in existence on the date hereof.
EXHIBIT D
Intentionally Omitted
