Exhibit 10.12

 

August 16, 2001

PROMISSORY NOTE

 

FOR VALUE RECEIVED, the undersigned (“Debtor”) hereby promises to pay to
Inverness Medical Innovations, Inc. or its successor (“Payee”), at such place or
places as may be specified by Payee or any holder hereof, in legal tender of the
United States of America, the principal amount of $10,665,583.68 (the
“Principal”), with interest at the fixed rate of 4.99% per annum, compounded
annually, on the unpaid balance.  Interest shall be payable on each anniversary
of the date hereof commencing August 16, 2002.  The Principal, with accrued
interest thereon, unless earlier paid in full upon becoming due and payable
pursuant to the third paragraph of this Note, shall be due and payable on August
16, 2006 (the “Repayment Date”).

 

The Payee shall have recourse against any assets of the Debtor up to (i) 25% of
the Principal amount hereof reduced by 25% of each payment of Principal made by
or on behalf of the Debtor from any source (the “Recourse Principal”) and (ii)
the full amount of accrued interest under this Note (it being understood that
the Debtor shall be personally obligated for the payments of interest hereunder)
(the “Recourse Interest”).  In addition, the Payee shall have full recourse
against the shares of capital stock of the Payee acquired by the Debtor pursuant
to a Restricted Stock Agreement dated of even date herewith (such agreement, the
“Restricted Stock Agreement” and such shares, the “Collateral”) and the Debtor
shall pledge the Collateral pursuant to a Pledge Agreement substantially in the
form attached hereto as Exhibit A (the “Pledge Agreement”).  Prior to the
Repayment Date, the Principal, with accrued interest thereon, shall become due
and payable in whole or in part upon any sale by the Debtor of the Collateral
pursuant to the terms set forth below.  The Debtor shall pay to Payee, within
ten (10) days after receipt thereof, the net after-tax proceeds from any sales
by the Debtor of the Collateral in reduction of Principal until such time as the
Principal has been paid in full, and in connection with each such payment shall
pay accrued but unpaid interest on the amount so paid.  For purposes hereof, the
term “net after-tax proceeds” means the amount received upon any sale of the
Collateral, less brokerage commissions or underwriting discounts, other expenses
of every kind, including documentary, excise and other taxes, if any, directly
relating to the sale and an amount equal to the federal, state and local taxes
on any gain from such sale (as determined by multiplying the amount of such gain
by the combined maximum federal, state and local tax rate applicable to the sale
of the Collateral by the Debtor, taking into account the holding period for the
Collateral and any federal income tax deduction for state and local income
taxes).  All sums paid by the Debtor or otherwise received by Payee on account
of sums owing hereunder, shall be first used to satisfy interest accrued
hereunder and then used to satisfy Principal.  Amounts applied against Principal
shall be deemed to reduce the Recourse Principal on a proportionate basis.  The
foregoing notwithstanding, the proceeds received from a foreclosure sale of any
Collateral shall be first applied against any unpaid Principal that does not
constitute Recourse Principal, then against the Recourse Principal and finally
against the Recourse Interest.

 

 

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In case an Event of Default, as defined in the Pledge Agreement, shall occur,
the aggregate unpaid balance of Principal and accrued interest may be declared
to be due and payable in the manner and with the effect provided in the Pledge
Agreement.

 

To the extent permitted by law, Debtor may pay all or a portion of the principal
balance hereof and accrued interest herein by redeeming for their fair market
value at the time of redemption any shares of Common Stock of the Payee held by
the Debtor, and “paid for” by the Debtor at least six months prior to such
redemption.  For purposes of the preceding sentence, shares of Common Stock
shall be considered “paid for” only upon payment of the principal balance and
interest owed under any promissory note used to purchase such shares or secured
in whole or in part by such shares.

 

Debtor expressly waives presentment for payment, protest and demand, notice of
protest, demand and dishonor and expressly agrees that this Note may be extended
from time to time without in any way affecting the liability of Debtor.  No
delay or omission on the part of Payee in exercising any right hereunder shall
operate as a waiver of such right or of any other right under this Note.

 

This Note may from time to time be extended by Payee, with or without notice to
Debtor, and any related right may be waived, exchanged, surrendered or otherwise
dealt with, all without affecting the liability of Debtor, in each case in the
sole discretion of Payee.

 

This Note may not be changed, modified or terminated orally, but only by an
agreement in writing and signed by the Debtor and Payee.  This Note shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to conflict of law principles, and shall be binding upon the
successors and assigns of Debtor and inure to the benefit of Payee and its
successors, endorsees and assigns.

 

 

DEBTOR:

 

 

 

 

 

/s/ RON ZWANZIGER

 

Name:  Ron Zwanziger

 

 

 

Address:

 

 

 

22 Waverly Avenue

 

Newton, MA 02458

 

 

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